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Claim for Psychological Injury Should Have Been Upheld—Retail Employee Was Directed to Submit False Reserve Orders for a Product to Deceive Manufacturer

The Workers’ Compensation Law Judge (WCLJ) found a retail employee suffered compensable psychological injury because he was directed by a supervisor to submit false reserve orders for a product in order to deceive the manufacturer.  The Workers’ Compensation Board disagreed and disallowed the claim. The Third Department reinstated the claim, finding the Board’s conclusion was not supported by substantial evidence:

The WCLJ found claimant’s testimony to be credible and determined, among other things, that he had been directed by a supervisor to submit false reserve orders in order to deceive the manufacturer and that credit card numbers were included in the reserve orders. The WCLJ concluded that claimant sustained a mental injury as a result of “the stress of being directed to engage in deceptive business practices” and that this stress was greater than that experienced in the normal work environment because “[p]ressure to engage in unethical and illegal practices . . . cannot be considered a normal work environment.” The Board subsequently disallowed the claim, finding that, because all of the employees in claimant’s department were pressured to place reserve orders and were given the same instruction, claimant’s stress was not greater than that of similarly situated workers.

We reject this analysis. The Board neither contradicted nor commented upon the findings of the WCLJ that claimant’s supervisors directed him to engage in a deceptive business practice by submitting falsified reserve orders, and it did not exercise its power to reject the underlying credibility determinations … . Thus, the remaining basis for the Board’s conclusion that claimant was not subjected to stress greater than that experienced in a normal workplace is that other employees were similarly directed to engage in wrongful conduct. This analysis is untenable; the imprimatur of “normal” cannot be placed upon a workplace where an employee is directed to carry out a deceptive, unethical or potentially illegal practice because an employer also gave that direction to other employees … . The mere fact that other employees may have received the same instruction cannot support this conclusion. Here, there was no other evidence from which it may be concluded that directions to place false reserve orders constituted part of a normal work environment for similarly situated employees. The employer’s witnesses testified that corrective action — including termination — had been taken when similar practices occurred at the store in the past, and claimant testified that he would have been fired for such conduct in other upscale department stores where he had previously worked. Accordingly, we find that the Board’s determination is not supported by substantial evidence … . Matter of Cox v Saks Fifth Ave., 2015 NY Slip Op 06003, 3rd Dept 7-9-15

 

Two-to-Five-Foot Fall from Edge of Roof to Scaffolding Supported Labor Law 240 (1) Cause of Action

The Third Department determined a two-to-five foot fall from the edge of a roof to scaffolding properly survived summary judgment on the Labor Law 240(1) cause of action:

Liability under Labor Law § 240 (1) arises when a worker’s injuries are “‘the direct consequence of a failure to provide adequate protection against a risk arising from a physically significant elevation differential'” … . Ordinarily, the adequacy of a safety device is a question of fact, unless the device “‘collapses, slips or otherwise fails to perform its function of supporting the worker'” … .

The distance that Scribner fell from the roof ledge to the scaffolding is disputed. Claimant alleged, in the bill of particulars, that the scaffolding was two feet below the ledge, while Scribner and the project supervisor asserted in their deposition testimony that the scaffolding was four to five feet below the ledge. Regardless of whether the height differential was two, four or five feet, Scribner’s fall is the type of elevation-related risk to which Labor Law § 240 (1) applies … .

The parties’ submissions also raise a question of fact as to whether the scaffolding afforded … adequate protection and, if not, whether the absence of an appropriate safety device was the proximate cause of his injuries … . Scribner v State of New York, 2015 NY Slip Op 05993, 3rd Dept 7-9-15

 

Wall Surrounding the Edge of a Roof Is Not a Safety Device

Reversing Supreme Court, the Third Department determined plaintiff’s injury was elevation-related and therefore was covered under Labor Law 240(1).  Plaintiff was standing on a building-roof using hand signals to guide a crane when he fell from the roof. Supreme Court reasoned plaintiff could have accomplished his job while staying away from the edge of the roof and, therefore, the accident was not elevation-related within the meaning of the statute. The Third Department rejected that reasoning and noted that the parapet wall around the edge of the roof was part of the structure of the building and could not, therefore, be considered a safety device:

Supreme Court determined that his injuries did not flow from an elevation-related hazard, as plaintiff was not “required to work at an elevation” and could have stayed away from the edge of the roof by directing the crane operator via cell phone … . This determination, however, ran against the undisputed proof that plaintiff had to work somewhere on the roof in order to signal the crane operator and that hand signaling was the usual method of doing so … . His decision to employ an accepted method of signaling while performing necessary work on the roof, even if a safer method existed, constituted nothing more than “comparative fault that is not a defense under the statute”… .

… A parapet wall surrounded the edge of the roof, but “a permanent appurtenance to a building does not normally constitute the functional equivalent of a scaffold or other safety device within the meaning of the statute” … . Salzer v Benderson Dev. Co., LLC, 2015 NY Slip Op 06001, 3rd Dept 7-9-15

 

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Estate of Mortgage-Holder Is a Necessary Party In a Foreclosure Proceeding

The Third Department determined that the estate of one of the mortgage-holders was a necessary party in a foreclosure proceeding. The court explained the relevant law:

“In an action to foreclose a mortgage, all parties having an interest, including persons holding title to the subject premises, must be made a ‘party . . . to the action'” … . Although defendant did not specifically raise the argument that decedent’s estate was a necessary party to the instant action, “the absence of a necessary party may be raised at any stage of the proceedings, by any party or by the court on its own motion” … . …. [W]here two individuals are the co-holders of a mortgage and one dies, the plaintiffs in a related foreclosure action would be the living mortgagee — or, in this case, his assignee … — and the personal representative of the deceased mortgagee … .

Here, given the lack of evidence that the corpus and distribution of decedent’s estate have previously been determined, such determination for the first time could inequitably affect decedent’s estate … . We find that decedent’s estate is therefore a necessary party to this action, as “[t]he rights, interests and equities of all of the parties claiming an interest in the mortgaged premises . . . should be settled and determined before any judgment of foreclosure and sale is entered” … . Bayview Loan Servicing, LLC v Sulyman, 2015 NY Slip Op 05989, 3rd Dept 7-9-15

 

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In the Absence of Prejudice to Defendants, It Was Not Error to Allow Evidence of a Theory of Liability Not Explicitly Referenced in the Complaint and Bill of Particulars

The Third Department determined evidence of a theory of liability that was not explicitly included in the pleadings and bill of particulars was not error. The theory was implicit in the pleadings and the defendants could not have been surprised by the related evidence. The court noted it would have been better had the plaintiffs moved to conform the pleadings to the evidence:

Generally, a party is limited to presenting evidence at trial that supports a cause of action or theory of recovery that was either pleaded in the complaint or asserted in the bill of particulars … . However, evidence concerning a specific theory or injury not mentioned in the bill of particulars may nonetheless avoid exclusion where such proof necessarily flows from the information conveyed in the pleadings and where the defendants should have been aware of the basis thereof… .

The contested theory of liability in this case is based on the allegedly erroneous interpretation of plaintiff’s February CT scan by Beatty (hereinafter referred to as the Beatty theory). It is worth noting that, because the complaint and bills of particulars do not contain an express articulation of the Beatty theory, the better practice certainly would have been for plaintiff to seek leave to amend his pleadings in advance of trial or at least have moved to conform the pleadings to the proof after the trial was underway. However, we nonetheless find that Supreme Court’s determinations allowing plaintiff to advance the Beatty theory at trial, including permitting plaintiff’s expert to offer testimony on the theory, do not constitute reversible error. In our view, the complaint— * * * which reference[s] the February CT scan as a basis for a departure from accepted medical practice — [was] sufficient to notify defendants of the Beatty theory and, as such, permit that theory of liability to be advanced at trial without prejudice. Simply put, we are unpersuaded by defendants’ position that they were not aware of the Beatty theory as a basis for a potential finding of medical malpractice. Boyer v Kamthan, 2015 NY Slip Op 05983, 3rd Dept 7-9-15

 

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Substantial Evidence Did Not Support Maltreatment Report

The Third Department determined the Commissioner of Children and Family Services should have granted the petition to expunge and amend as unfounded a maltreatment report maintained by the Central Register of Child Abuse and Maltreatment. Although the denial could properly be based upon hearsay and double hearsay, the maltreatment finding was not based upon substantial evidence:

To establish maltreatment, the agency was required to show by a fair preponderance of the evidence that the physical, mental or emotional condition of the child had been impaired or was in imminent danger of becoming impaired because of a failure by petitioner to exercise a minimum degree of care in providing the child with appropriate supervision or guardianship … . Our review is limited to assessing whether the determination is supported by substantial evidence, meaning “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact”… .

Here, the proof introduced against petitioner consisted solely of the investigation progress notes and a Family Court order from 1998 that adjudicated petitioner to have neglected another son. The progress notes were prepared by a child protective services caseworker and include her accounts of interviews with numerous individuals, including the child and his therapist, that led her to the conclusion that maltreatment had occurred. Neither the caseworker nor her interview subjects testified before the Administrative Law Judge, however, and the progress notes reflect that the child bore no marks or evident injuries as a result of the maltreatment. In contrast to this meager evidentiary showing, petitioner and his wife both testified and denied that any maltreatment had occurred. Petitioner also asserted, without contradiction, that he was physically incapable of engaging in some of the claimed maltreatment, such as lifting the 110-pound child with one hand. His wife further stated that the child admitted to her that he was lying about the alleged maltreatment. The record suggests a reason why the child might be prompted to lie, as a bitter custody dispute between petitioner and the child’s mother has led to numerous unfounded reports of mistreatment regarding petitioner.

Like any administrative determination, one made after an expungement hearing may be based solely upon hearsay evidence — or even double hearsay evidence — in the appropriate case … . As such, “our concern is not the hearsay nature of the evidence, but whether it is sufficiently relevant and probative to constitute substantial evidence” … . Hearsay evidence will not satisfy that standard if the facts it purportedly establishes are “seriously controverted” … . Serious controversy is precisely what surrounds the hearsay evidence here, given the hearing testimony that the maltreatment had not occurred and that the child had recanted his claims, the proof that motivations may have existed for the child to fabricate the maltreatment, and the total lack of physical evidence suggesting that it occurred. We accordingly agree with petitioner that substantial evidence does not support the challenged determination, which must be annulled as a result … . Matter of Gerald HH. v Carrion, 2015 NY Slip Op 05982, 3rd Dept 7-9-15

 

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Area in the Vicinity of the Indian Point Nuclear Power Facility Properly Classified as a Statutorily Protected Environmental Habitat

The Third Department affirmed the Secretary of State’s expansion of a statutory “significant coastal fish and wildlife habitat area” along the Hudson River in the vicinity of the Indian Point nuclear power facility.  The petitioner, the owner of Indian Point, sought to have the designation of the area as a statutorily protected environmental habitat annulled. The Third Department (1) explained a court’s powers when reviewing an agency’s interpretation of its own regulations; (2) determined the agency did not engage in formal rulemaking (which would be subject to the stringent procedural requirements of the State Administrative Procedure Act); and (3) determined certain documents were properly withheld re: petitioner’s Freedom of Information Law (FOIL) requests:

When an agency interprets a regulation that it promulgated, deference is afforded to that agency’s interpretive approach unless it is “irrational or unreasonable” … . To this end, the promulgating agency’s interpretation may not be adjudged irrational simply because other rational constructions of the regulatory provision in question exist …, nor because the promulgating agency’s reading of the relevant regulatory language either broadens its plain-language scope … or amounts to a “strict[ly] literal interpretation” … . Furthermore, “the determination of an agency acting pursuant to its authority and within its area of expertise is[, similarly,] entitled to judicial deference” … . In contrast, an agency’s interpretation of one of its own regulations is not entitled to deference if that interpretation contradicts the plain language of the regulation (see Matter of Elcor Health Servs. v Novello, 100 NY2d at 280), and an agency may be deemed to have acted irrationally if an interpretation of a regulation marks an unsubstantiated departure from the agency’s previous position on a given subject … . * * *

State Administrative Procedure Act § 102 (2) (a) (i), in pertinent part, defines a “[r]ule” as “the whole or part of each agency statement, regulation or code of general applicability that implements or applies law.” In contrast, State Administrative Procedure Act § 102 (2) (b) (iv) excludes from this statutory definition “forms and instructions, interpretive statements and statements of general policy which in themselves have no legal effect but are merely explanatory.” While “there is no clear bright line between a ‘rule’ or ‘regulation’ and an interpretative policy,” an agency does not engage in formal rulemaking when the practical effect of an agency’s updated policy is that a discrete group of regulated entities or individuals likely will be subjected to a greater degree of regulatory scrutiny than are the majority of those regulated by the agency … . When an agency engages in a course of regulatory action that amounts to formal rulemaking but does not comply with the procedural requirements of State Administrative Procedure Act article 2, that regulatory action must be annulled … .

We agree with respondents that the habitat boundaries’ modification that gave rise to Hudson Highlands did not amount to formal rulemaking.  * * *

In response to petitioners’ discovery and Freedom of Information Law requests, respondents withheld a small number of documents pursuant to Public Officers’ Law § 87 (2) (g), which allows for “people within an agency to exchange opinions, advice and criticism freely and frankly, without the chilling prospect of public disclosure” … . Supreme Court correctly concluded that “respondents’ interest in maintaining the confidentiality of the records and in allowing the candid exchange of ‘opinions, advice and criticism'” was valid and outweighed petitioners’ interest in having them. Petitioners argue that respondents waived the deliberative process privilege by describing the agencies’ decision-making process within the scientists’ affidavits. We find petitioners’ claims that respondents have waived the deliberative process privilege to be unpersuasive … . Matter of Entergy Nuclear Indian Point 2, LLC v New York State Dept. of State, 2015 NY Slip Op 05988, 3rd Dept 7-9-15

 

People Could Not Show Good Cause for the Nearly Five-Year Pre-Indictment Delay—Indictment Dismissed

The Third Department, over a dissent, determined, in a child pornography case, the nearly five-year delay between when defendant’s computer was seized and defendant questioned (2009) and the indictment (2013) required dismissal of the indictment. The case was not complex and no additional information beyond that gathered in 2009 was needed to indict. The People therefore did not demonstrate good cause for the extensive delay:

The parties agree that there has been a protracted preindictment delay that places the burden on the People to establish good cause for that delay … . The People state in their brief that there are no issues of fact regarding the issue before this Court and the record on appeal provides an adequate basis to determine whether the protracted delay was justified.

In determining whether there is an undue delay, the trial court must consider “(1) the extent of the delay; (2) the reason for the delay; (3) the nature of the underlying charge; (4) whether or not there has been an extended period of pretrial incarceration; and (5) whether or not there is any indication that the defense has been impaired by reason of the delay” … . Here, although defendant was not incarcerated during the period of delay and the nature of the charges are serious, the extent of the delay was clearly extensive. The People attribute the delay to the fact that the matter was initially referred to the office of the United States Attorney for the Northern District of New York for prosecution, and point to vague references of personnel changes within that office, as well as that office’s decision, at some point, not to prosecute.

This was not a complex legal matter and the record establishes that no further evidence was needed in order to charge defendant beyond that gathered in the 2009 … .  People v Montague, 2015 NY Slip Op 05721, 3rd Dept 7-2-15

 

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Defendants Ordered to Dismantle and Remove Boathouses Built Without Permits/Immediate Neighbors Had Standing to Bring an Action to Enjoin the Zoning Violations

The Third Department, in a full-fledged opinion by Justice Egan, determined that boathouses constructed without permits (required by the New York State Uniform Fire Prevention and Building Code [SBC] and the Village of Lake Placid/Town of North Elba Land Use Code [LUC]) must be completely dismantled and removed.  The defendants were aware from the start that proceeding with the building of the boathouses without permits would be at their own risk. The permits were ultimately denied. The opinion is extensive and much of it is devoted to explaining the litigation/appeal history and refuting defendants’ arguments (not addressed here).  With respect to the finding that the neighbors had standing to bring an action to enjoin the asserted zoning violations re: one of the parcels (referred to as the “children’s parcel”), the court wrote:

As a threshold matter, Supreme Court correctly concluded that the neighbors have standing to challenge the asserted zoning violations and to seek injunctive relief against the children. Although municipal officials indeed are tasked with enforcing zoning ordinances within their boundaries (see Town Law § 268 [2]), this “does not prevent . . . private property owner[s] who suffer[] special damages from maintaining an action seeking to enjoin the continuance of the violation and obtain damages to vindicate [their] discrete, separate identifiable interest[s]” … . To establish standing to maintain a private common-law action to enjoin zoning violations, a private plaintiff must establish that, due to the defendant’s activities, he or she will sustain special damages that are “different in kind and degree from the community generally” and that the asserted interests fall “within the zone of interest to be protected” by the statute or ordinance at issue … .

To that end, the neighbors both alleged and submitted proof that they own land (improved with single-family homes) on either side of the children’s parcel and that the children’s boathouse was built without the permits required by the LUC and SBC. The neighbors also demonstrated that the children’s boathouse violates various provisions of the LUC, including those governing set-backs and prohibiting accessory structures on land that lacks a principal building (see Joint Village of Lake Placid/Town of North Elba Land Use Code part IV, art III, § 4; art V, appendix F [II]). Where, as here, the offending premises are immediately adjacent to the neighbors’ property, “a loss of value may be presumed from the depreciation of the character of the immediate neighborhood, and the [neighbors] need not allege specific injury” … . We find that the neighbors’ specific allegations of close proximity give rise to an inference of damage and injury, thereby permitting them to maintain action No. 2. Moreover, the neighbors have demonstrated that their interests fall within the “zone of interest” protected by the LUC, in that violations thereof adversely affect their privacy and property values … . Indeed, we recognized as much in our prior decision permitting the neighbors to intervene, concluding that they “have an interest in the litigation by virtue of their status as owners of adjoining premises” … . Town of N. Elba v Grimditch, 2015 NY Slip Op 05740, 3rd Dept 7-2-15

 

Transcriber of Administrative Hearings Was an Employee Entitled to Unemployment Insurance Benefits—Appeals Board Not Required to Follow or to Explain Why It Didn’t Follow an “Unappealed” Ruing by an Administrative Law Judge

The Third Department determined claimant, who transcribed administrative hearings for “The Mechanical Secretary,” was an employee entitled to unemployment insurance benefits. The court noted that the unemployment insurance appeals board was not required to explain why it did not follow a prior “unappealed” ruling by an administrative law judge which went the other way:

“Whether an employment relationship exists within the meaning of the unemployment insurance law is a question of fact, no one factor is determinative and the determination of the [Board], if supported by substantial evidence on the record as a whole, is beyond further judicial review even though there is evidence in the record that would have supported a contrary conclusion” … . “An employer- employee relationship exists when the evidence shows that the employer exercises control over the results produced or the means used to achieve the results” … . Here, the record establishes that The Mechanical Secretary advertised for transcriber positions. The president would interview the applicants and assess the quality of their work. The transcriber was required to have certain equipment, but The Mechanical Secretary would loan the transcriber a transcription machine if needed. The Mechanical Secretary arranged to have the work delivered to and picked up from the transcribers within a certain area. In claimant’s case, however, because she did not live in close proximity to the company, she was required to pick her work up at its office and to return the completed work to that office by 9:00 a.m. Claimant was occasionally reimbursed for her travel expenses. Significantly, The Mechanical Secretary set the nonnegotiable pay rate, supplied all the paper needed by the transcribers, and reviewed the final product for mistakes and would correct any minor mistakes or, where the mistakes were significant, send it back to be corrected by the transcriber. Furthermore, The Mechanical Secretary had to be notified if a transcriber was going to take any vacation. Given the evidence produced, we find that there is substantial evidence to support the Board’s finding that The Mechanical Secretary exercised a sufficient degree of control over claimant’s work to establish an employment relationship … .

We are unpersuaded by The Mechanical Secretary’s contention that the Board was bound by a prior unappealed Administrative Law Judge decision that found medical transcribers that it had used to be independent contractors. Claimant, who is not a medical transcriber, was not involved in that prior proceeding such that there was a full and fair opportunity for her to contest the decision, nor is the Board “required to conform to the precedent established in the prior unappealed decision or offer a rational explanation for not doing so” … . Matter of Ingle (The Mech. Secretary, Inc.–Commissioner of Labor), 2015 NY Slip Op 05553, 3rd Dept 6-25-15

 

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