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Motion to Intervene Should Have Been Granted—Criteria Explained

The Third Department determined that the church elders’ motion to intervene should have been granted.  The church at issue had been funded by the man after whom the church was named more than one hundred years ago. The petitioner sought to have the restrictions on the fund removed so that it could be used to support any local Presbyterian church, rather than just the church founded with the fund. The elders of the church founded with the fund sought to intervene:

“Intervention is liberally allowed by courts, permitting persons to intervene in actions where they have a bona fide interest in an issue involved in that action” … . “Whether intervention is sought as a matter of right under CPLR 1012 (a), or as a matter of discretion under CPLR 1013, is of little practical significance since a timely motion for leave to intervene should be granted, in either event, where the intervenor has a real and substantial interest in the outcome of the proceedings” … .

Here, decedent was a wealthy philanthropist who funded the construction of a church building, and he provided trust funds that have benefitted that church for over 100 years. The congregation provided some proof reflecting that decedent may have intended assistance to the church bearing his name to have precedence over any particular denominational affiliation. Although it is premature to determine whether the congregation will prevail, nonetheless the congregation will be impacted by this proceeding and should be afforded the opportunity to present its position. Matter of Jermain, 2014 NY Slip Op 08274, 3rd Dept 11-26-14

 

Failure to Provide Meaningful Employee Assistance in Preparing for the Hearing Was a Constitutional, Not Merely Regulatory, Violation Requiring Expungement—Criteria Discussed in Some Depth

The Third Department determined the failure to provide the inmate with meaningful assistance leading up to his hearing required the annulment of the determination.  The court further determination that the failure was of constitutional, not merely regulatory, dimensions requiring expungement.  The issues were discussed in unusual depth:

…[P]etitioner was not provided meaningful employee assistance and that he was prejudiced thereby. Departmental regulations require that an inmate who is confined pending a superintendent’s hearing is to be provided an assistant (see 7 NYCRR 251-4.1 [d]; 254.4). The assistant’s role is to, among other things, “interview witnesses and to report the results of his [or her] efforts to the inmate” (7 NYCRR 251-4.2). The record reflects that petitioner’s girlfriend and the other individual involved provided signed written statements to correction officials and State Police investigators implicating petitioner. Although petitioner requested that his assistant interview the two women to ascertain whether their statements were truthful and voluntary and provided his assistant with a list of questions to ask them, the record reveals that no interview took place and the Hearing Officer made no attempt to remedy the deficiency when petitioner raised the issue at the disciplinary hearing. Thus, the determination must be annulled.

Petitioner further asserts that the determination should be expunged, while respondent argues that the matter should be remitted for a new hearing because this was a regulatory, not constitutional, violation. Notably, the “right to assistance is a right of constitutional dimension” … and the failure to provide assistance is a violation of 7 NYCRR 251-4.2. In this regard, our precedent is not entirely consistent, nor have we clearly articulated the appropriate factors relevant to whether expungement, rather than remittal, is warranted when a petitioner has been denied meaningful employee assistance … . We have, however, held that constitutional violations related to a Hearing Officer’s failure to investigate a witness’s refusal to testify or the outright denial of the right to call a witness results in expungement …, while regulatory violations of such right do not … .

In the case before us, petitioner’s employee assistant took no steps whatsoever to interview the requested witnesses and ask the questions posed by petitioner, and this failure clearly prejudiced petitioner by impeding his ability to assert a defense to the charges. In our view, where, as here, the denial of meaningful employee assistance is absolute and without reasonable explanation, and the Hearing Officer does not attempt to remedy the deficiencies, such denial is comparable to those instances in which we have found a constitutional violation relative to the outright denial of a witness or the failure to ascertain the basis of a witness’s refusal to testify. Thus, under these circumstances, we find the denial of meaningful employee assistance to be a constitutional violation requiring expungement of all references to the matter from petitioner’s record. Matter of Rivera v Prack, 2014 NY Slip Op 08297, 3rd Dept 11-26-14

 

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If the Action Challenging Governmental Action Could Have Been Brought in an Article 78 Proceeding, No Matter How the Action Is Labelled, the Four-Month Statute of Limitations Applies

The collection of assessments by the defendant from hydroelectric power plants was deemed illegal in a federal lawsuit brought by a hydroelectric power plant.  Plaintiff, a different hydroelectric power plant, thereafter sought return of the assessments it had paid for six years (between 2002 and 2008) in an action for unjust enrichment.  The Third Department determined that action could have been brought as an Article 78 proceeding challenging the assessments as they were imposed.  Therefore the four-month Article 78 statute of limitations applied, rendering the action untimely:

…Supreme Court erred in applying a six-year statute of limitations because, even though plaintiffs have now labeled their cause of action as one for unjust enrichment, they could have raised their claim for refunds in a CPLR article 78 proceeding challenging each annual assessment, for which the applicable statute of limitations is four months (see CPLR 217 [1]).

“Where, as here, governmental activity is being challenged, the immediate inquiry is whether the challenge could have been advanced in a CPLR article 78 proceeding” … . Thus, whether plaintiffs’ “claims are subject to the four-month statute of limitations period under CPLR article 78 . . . turns on whether the parties’ rights could have been resolved in an article 78 proceeding” … . Indeed, the analysis does not depend upon how plaintiffs label their claims but, rather, we “must look to the underlying claim and the nature of the relief sought and determine whether such claim could have been properly made in another form” … . The purpose of this rule, which results in the imposition of a short statute of limitations to governmental action, is to ensure “that the operation of government [will] not be trammeled by stale litigation and stale determinations” … . Northern Elec Power Co LP v Hudson River-Black Riv Regulating District, 2014 NY Slip Op 08280, 3rd Dept 11-26-14

 

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Retroactive Application of New Regulations Affecting the Revocation of Driver’s Licenses for Alcohol- and Drug-Related Convictions or Incidents Okay—No Vested Right Re: License to Drive

The Third Department determined the new regulations concerning the effect of alcohol- or drug-related convictions or incidents can be applied retroactively because they do not affect a vested right:

“Retroactive statutes are those which impair vested rights or alter past transactions or considerations” … . Here, however, petitioner’s driver’s license is not generally viewed as a vested right, but merely a personal privilege subject to reasonable restrictions and revocation by respondent under her discretionary powers (see Vehicle and Traffic Law §§ 510 [c]; 1192 [2]…). Thus, respondent remained free to apply her most recent regulations when exercising her discretion in deciding whether to grant or deny petitioner’s application for relicensing. This is especially so in light of the rational, seven-month moratorium placed on all similarly-situated applicants for relicensing — i.e., persons with three or more alcohol-related driving convictions (see NY Reg, Mar. 13, 2013 at 46…). Furthermore, inasmuch as the revised regulations operated only to nominally change the effect of petitioner’s past acts on his future eligibility to obtain a driver’s license and was not imposed as punishment but, rather, to promote public safety, respondent’s application of 15 NYCRR 136.5 (b) (2) was proper under these circumstances (see … State Administrative Procedure Act § 202 [6]). Matter of Scism v Fiala, 2014 NY Slip Op 08283, 3rd Dept 11-26-14

 

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Court Review of Elimination of Pension Benefits Proper Even though the Administrative Hearing Had Not Yet Been Held—No Need to Exhaust Administrative Remedies Where the Petition Does Not Raise an Issue of Fact that Should Initially Be Determined in the Administrative Hearing

The Third Department determined petitioner, a physician who served four school districts, could seek court review of the comptroller’s removal of his service credits (on the ground petitioner was an independent contractor, not an employee) and the consequent elimination of pension benefits, before an administrative hearing had been held:

“It is well settled that the Comptroller is vested with the exclusive authority to determine all applications for retirement benefits” … . Judicial review is limited to ascertaining whether the Comptroller’s determination is supported by substantial evidence in the record as a whole, in which case the determination must be upheld … .

Moreover, as a general rule, “one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law” … . However, there are exceptions to the exhaustion doctrine, including where “resort to an administrative remedy would be futile or when its pursuit would cause irreparable injury” or where “an agency’s action is challenged as either unconstitutional or wholly beyond its grant of power” … . * * *

…[W]e find that the allegations in the petition do not raise an issue of fact that “‘should initially be addressed to the administrative agency having responsibility so that the necessary factual record can be established'” … . Under these circumstances, we conclude that petitioner has a cognizable constitutional claim regarding the prehearing removal of his service credits and cancellation of his retirement application that is ripe for our review and survives respondents’ motion to dismiss … . Matter of Kravitz v DiNapoli, 2014 NY Slip Op 08284, 3rd Dept 11-26-14

 

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Incidents of Ownership Awarded Hospital-Services-Tenant in Lease Entitled Tenant to Exemption from Real Property Tax

The Third Department determined that the tenant of a building used for hospital services was entitled to an exemption from real property tax because the tenant assumed many incidents of ownership.  The town argued that the tenant was not entitled to any exemption because it was not the true owner of the building:

As relevant here, RPTL 420-a mandates that “[r]eal property owned by a corporation or association organized or conducted exclusively for . . . hospital . . . purposes, and used exclusively for carrying out thereupon one or more of such purposes . . . shall be exempt from taxation” (RPTL 420-a [1] [a] [emphasis added]). Land and buildings are separately defined as taxable forms of real property (see RPTL 102 [12] [a], [b]), and a landlord and tenant may agree to their separate ownership … . The mere labeling of a tenant as “owner,” however, is not conclusive for real property taxation purposes … . Rather, the question of ownership turns on whether the lease agreement confers incidents of ownership upon the tenant or whether the landlord retains such dominion and control over the property that it must be deemed the beneficial owner for tax purposes … .

Here, the lease expressly vests title to all improvements on the property in petitioner as owner and grants petitioner significant incidents of ownership. For example, petitioner is entitled to claim depreciation on the improvements and is insured to the full extent of its interest in the building. In the event of substantial destruction of the improvements, petitioner has the right to determine whether to rebuild and, in the event of condemnation proceedings, petitioner is to receive the value of its present interest in the improvements. Petitioner also has the sole right to contest any tax assessment of the property, obtain a mortgage on the improvements, which it has done, and remove the improvements at the end of the lease term. Title to the improvements and the right to remove them vest in the landlord only in the event that petitioner abandons them at the termination of the lease. Finally, it is undisputed that the landlord does not retain any control over petitioner’s operation of its improvements as a health care facility. Matter of United Health Servs Hosps Inc v Assessor of the Town of Vestal, 2014 NY Slip Op 08275, 3rd Dept 11-26-14

 

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Commissioner, Due to His Prior Involvement with Discipline of the Petitioner, Should Have Disqualified Himself from Review of the Hearing Officer’s Disciplinary Recommendation and from the Rendering a Final Judgment

In a detailed decision addressing many aspects of administrative law rarely mentioned in the case law (and not described here), the Third Department determined the commissioner of accounts for the city, because of his involvement in earlier related proceedings concerning the petitioner, should have disqualified himself from reviewing the hearing officer’s final determination and rendering a final judgmet in a disciplinary action against the petitioner:

We do … find merit to petitioner’s claim that the Commissioner — having investigated petitioner’s initial allegations of preferential assessment treatment, concluded that such allegations were unfounded, preferred the resulting charges of misconduct and insubordination against petitioner and testified at petitioner’s disciplinary hearing in support of such charges — should have disqualified himself from reviewing the Hearing Officer’s recommendation and rendering a final determination in this matter. Regardless of whether disciplinary charges are pursued in the judicial or administrative realm, “[t]he participation of an independent, unbiased adjudicator in the resolution of disputes is an essential element of due process of law, guaranteed by the Federal and State Constitutions” … . Although a particular individual’s involvement or participation in the disciplinary process does not automatically compel his or her recusal, the case law makes clear that “individuals who are personally or extensively involved in the disciplinary process should disqualify themselves from reviewing the recommendations of a Hearing Officer and from acting on the charges” … . Accordingly, “when an officer institutes charges of misconduct and testifies at [the] ensuing hearing, that officer, in the interest of fairness, must disqualify [himself or] herself from reviewing the Hearing Officer’s recommendations and rendering a final determination” … . Matter of Zlotnick v City of Saratoga Springs, 2014 NY Slip Op 08289, 3rd Dept 11-26-14

 

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Employees Terminated Pursuant to Civil Service Law 73 Are, as a Matter of Due Process, Entitled to a Posttermination Hearing

The Third Department determined that petitioner, who had been terminated from his position as a state college police officer, was entitled to a posttermination hearing.  To deny his request for the hearing denied petitioner due process:

…[T]he failure to conduct a posttermination hearing was violative of his right to due process. Employees who are terminated from their positions pursuant to Civil Service Law § 73 “are entitled to a full posttermination hearing” … . Respondents speculate that it is unlikely that petitioner could produce medical evidence establishing his fitness to occupy his position as of the date of his termination from employment. If we were to accept respondents’ reasoning, it would allow an agency that is intent on terminating an employee to arbitrarily decide whether a posttermination hearing was necessary, a determination which flies in the face of existing law. The rationale for providing petitioner with a posttermination hearing is to afford him a final opportunity to present proof demonstrating how his mental condition changed, if at all, and whether he is able to perform his job duties as of the date of his termination … . To deny petitioner’s request for a posttermination hearing was constitutionally infirm and, therefore, remittal of this matter is necessary for the completion of such administrative proceedings … . Matter of Jiminez-Reyes v State of New York, 2014 NY Slip Op 08273, 3rd Dept 11-26-14

 

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Proof Requirements for Constructive Possession of Contraband Explained

The Third Department explained the criteria for constructive possession.  The fact that others might have access to the contraband does not disprove constructive possession, contraband can be possessed jointly with others:

“Where, as here, the People proceed upon the theory of constructive possession, they bear the burden of establishing that defendant exercised dominion and control over the contraband or the area where the contraband was found”… . Such possession may be shown through direct or circumstantial evidence, and does not require proof that no one else had access to the contraband or the premises … . While mere presence in the same location where contraband is found does not prove constructive possession …, the evidence here established that defendant–who was wearing only boxer shorts when he was found and identified one of the bedrooms where contraband was found as the one where he kept his clothes and belongings–was not merely present in the residence by happenstance at the time of the search, but lived there. When found, he was lying in close proximity to the laundry basket that contained the disassembled weapon, as though he had just placed it there. Further, shortly before the search, he had been seen in physical possession of a weapon by witnesses who identified him as the individual who fired a black handgun in the direction of a vehicle, and, later on the day of the shooting, another witness saw him holding a black semiautomatic pistol. Accordingly, the evidence went beyond defendant’s mere presence in the residence at the time of the search and established “a particular set of circumstances from which a jury could infer possession” of the contraband … . The fact that some of the contraband was found in defendant’s brother’s bedroom and other parts of the house to which family members also had access does not preclude a finding of constructive possession, as such possession may be joint, and all of the items were “readily accessible and available” to defendant… . People v McGough, 2014 NY Slip Op 08269, 3rd Dept 11-26-14

 

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Separation and Modification Agreements Did Not Comply with the Child Support Standards Act

The Third Department determined the parties’ separation and modification agreements did not comply with the Child Support Standards Act (CSSA).  The court explained the flaws:

If an agreement or stipulation entered into between the parties “deviates from the basic child support obligation, the agreement or stipulation must specify the amount that such basic child support obligation would have been and the reason or reasons that such agreement or stipulation does not provide for payment of that amount. Such provision may not be waived by either party or counsel” (Domestic Relations Law § 240 [1-b] [h]…).

Here, the original separation and settlement agreement indicated that the parties had been advised of the provisions of the CSSA and that the amount of child support calculated in compliance therewith would be presumptively valid; the agreement further set forth the applicable statutory percentage for three children (29%) and the parties’ respective incomes and indicated that the husband’s child support obligation would be adjusted upon the cessation of the agreed-upon maintenance payments (see Domestic Relations Law § 240 [1-b] [b] [5] [vii] [C]). The agreement did not, however, indicate what the presumptive amount of child support would be, nor did it set forth the reasons for deviating therefrom. Similar deficiencies exist with respect to the provisions governing the parties’ pro rata share of childcare and medical expenses and, to our analysis, none of the foregoing deficiencies was cured by the subsequent modification agreement. Although the modification agreement acknowledged a departure from the presumptive pro rata share of each party’s childcare expenses and purported to explain the basis for the deviation therefrom, the agreement was silent as to what the presumptive pro rata percentages would be under the CSSA and failed to set forth the income and other financial data supporting the basis for such deviation. Malone v Malone, 2014 NY Slip Op 08281, 3rd Dept 11-26-14

 

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