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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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Complaint Against Highest Bidder on Real Property Which Subsequently Refused to Execute the Contract of Sale Properly Dismissed—No Agreement Which Satisfied the Statute of Frauds and No Part Performance

The Third Department affirmed Supreme Court’s dismissal of the complaint seeking specific performance of a real estate contract or damages for breach of contract.  Defendant executed and delivered the bidding package and the required down payment, bid on the property on line and was the highest bidder.  When the contract of sale was delivered to the defendant, the defendant refused to execute it.  Supreme Court dismissed the complaint because there was no agreement which satisfied the statute of frauds and there was no part performance.  The court explained the relevant analytical criteria:

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The statute of frauds provides, as relevant here, that a contract for the sale of real property “is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged” (General Obligations Law § 5-703 [2]). To satisfy that statute, the memorandum “must designate all parties, identify and describe the subject matter and state all of the essential terms of a complete agreement” … . The memorandum is not required to be contained in one document; separate “signed and unsigned writings [can] be read together, provided that they clearly refer to the same subject matter or transaction,” contain all of the essential terms of a binding contract …, and the “unsigned writing [was] prepared by the party to be charged” .. . At least one document signed by the party to be charged must “establish[] a contractual relationship between the parties,” with the unsigned documents referring on their face to the same transaction … . * * *

A contract may be enforced, despite failing to comply with the statute of frauds, “in cases of part performance” (General Obligations Law § 5-703 [4]). When analyzing part performance for potential invocation of equitable principles, courts should only consider the actions and detrimental reliance of the party seeking enforcement of the contract … . Additionally, the conduct must be “unequivocally referable” to the alleged agreement … . Post Hill LLC v E Tetz & Sons Inc, 2014 NY Slip Op 08089, 3rd Dept 11-20-14

 

Employer Did Not Submit Employee Benefit Plan as Required by Workers’ Compensation Law 25 (4) (c)—Therefore the Employer Was Entitled to Reimbursement Only for the Workers’ Compensation Benefits Paid to the Employee and Not for the Amounts Paid Under the Employee Benefit Plan

The Third Department determined the employer was entitled to reimbursement only of the amount paid to an injured employee as worker’s compensation benefits, and not for the payments to the injured employee from a supplement (employee benefit) plan which paid the difference between the worker’s salary and the benefits:

The employer argues that the Board erred in applying Workers’ Compensation Law § 25 (4) (c), rather than subdivision (4) (a) of that section, in resolving its reimbursement request. Section 25 (4) (c) requires that employers seeking reimbursement for benefits paid to an injured employee pursuant to an employee benefit “plan . . . [that] provide[s] that the injured employee . . . shall be limited in the amount of benefits or payments thereunder if he or she shall be entitled to [workers’ compensation] benefits under this chapter” must file “proof of the terms of [the employee benefit] plan . . . before award of compensation is made” (Workers’ Compensation Law § 25 [4] [c]…). This Court has held that an employer’s right to “seek credits against schedule awards for moneys paid pursuant to an employee benefit plan . . . stems from Workers’ Compensation Law § 25 (4) (c) and is limited by the restrictions in that provision” … . We concluded that subdivision (4) (a), which imposes no requirement to file the terms of a plan and, indeed, “makes no reference to proof of plan terms[,] . . . was not intended to address moneys paid from an employee benefit plan” …

Here, …the employer’s workers’ compensation supplement plan limited the amount of benefits that an employee with a work-related injury would receive as compared to an employee entitled to benefits under the employer’s short-term disability plan–essentially deducting workers’ compensation benefits from the amount paid in salary under the short-term disability plan. Even considering the workers’ compensation supplement plan alone, we conclude that the injured employee is limited in the amount of benefits paid “thereunder”–meaning from the plan itself–if he or she is awarded workers’ compensation benefits (Workers’ Compensation Law § 25 [4] [c]). While the employee initially receives his or her full salary from the supplement plan, if the employer is reimbursed out of a workers’ compensation award, then the employee has received less in (or is “limited in the amount of”) benefits from the supplement plan itself due to his or her entitlement to those workers’ compensation benefits. Thus, Workers’ Compensation Law § 25 (4) (c) is applicable and, inasmuch as the employer admittedly failed to file proof of the terms of the plan prior to the first award of benefits, the Board properly determined that the employer’s right to compensation was limited to the amount paid to claimant as workers’ compensation benefits… . NYS Workers’ Compensation Bd v Bast Hatfield Inc, 2014 NY Slip Op 08082, 3rd Dept 11-20-14

 

Workers’ Compensation Board’s Recovery of a Portion of Benefits Paid by the Board to an Injured Employee from the Special Disability Fund Did Not Operate to Satisfy the Board’s Judgment Against the Employer Re: those Benefits (Which the Employer Failed to Pay)

The Third Department determined that the Workers’ Compensation Board’s recovery from the Special Disability Fund (SDF) of a portion of the amount of a judgment against an employer did not operate to satisfy the judgment against the employer.  The judgment represented workers’ compensation benefits owed by the employer to an injured employee and paid by the Board:

In 2010, the Legislature added a clause to Workers’ Compensation Law § 50 (3-a) (7) (b) to provide that, … where a member fails to pay a levied assessment, the member “shall be deemed in default” (see L 2010, ch 56, part R, § 4). Once in default, the member is subject to the enforcement mechanism contained in Workers’ Compensation Law § 26, which provides, in pertinent part, that, where the employer defaults “in the payment of any compensation due under an award,” plaintiff may file, among other things, a certified copy of the decision awarding compensation and “thereupon judgment must be entered” … . * * *

When plaintiff [the Workers’ Compensation Board] was reimbursed by the SDF — which is also funded through plaintiff … it was essentially deprived of the ability to levy an assessment therefor. Thus, the judgment at issue here is intended to assist in recovering the money that plaintiff paid …, as plaintiff is authorized to do under Workers’ Compensation Law § 50 (5) (g). In sum, notwithstanding defendant’s claim that Supreme Court’s order results in a double recovery for plaintiff, given the statutory scheme, we conclude that no impermissible benefit to plaintiff results. Accordingly, we find that plaintiff’s judgment was not satisfied by reimbursement payments made by the SDF and, therefore, defendant’s motion for the filing of a satisfaction piece was properly denied. NYS Workers’ Compensation Bd v Bast Hatfield Inc, 2014 NY Slip Op 08082, 3rd Dept 11-20-14

 

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Fabricated Checks Using Defendant’s Name and Signature Were Not “Forged Instruments”

The Third Department affirmed the dismissal of forgery charges because, although the defendant fabricated the checks at issue, the defendant did not portray herself as someone other than herself in executing the checks:

…[A] “… person is guilty of criminal possession of a forged instrument in the second degree when, with knowledge that it is forged and with intent to defraud, deceive or injure another, he [or she] utters or possesses any forged instrument of a kind” as described under Penal Law § 170.10 (Penal Law § 170.25). A forged instrument is defined as a “written instrument which has been falsely made, completed or altered” (Penal Law § 170.00 [7]). Importantly, a person “‘falsely makes’ a written instrument when he [or she] makes . . . [an] instrument, which purports to be an authentic creation of its ostensible maker . . ., but which is not such either because the ostensible maker . . . is fictitious or because, if real, he [or she] did not authorize the making . . . thereof” … . Determining whether a document is forged “does not depend so much on whether it contains a falsehood, but on whether, on its face, it misrepresents its authenticity” … .

Defendant did not attempt to portray herself as someone other than herself in executing the checks … . Nor does this case present a situation in which defendant made out the checks without attaining the requisite authorization from another individual … . Thus, the checks at issue in this matter “were not falsely made,” as provided in the forgery statute … . Defendant’s fabrication of the checks bearing her name and address, as the purported bank account holder, makes her the ostensible maker … and the placement of defendant’s signature on the checks renders defendant the actual maker of the checks. Where, as here, the ostensible maker and the actual maker of the written instrument are the same person, the alleged crime of criminal possession of a forged instrument in the second degree must be dismissed … . People v Zeller, 2014 NY Slip Op 08068, 3rd Dept 11-20-14

 

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Criteria for Sexual Harassment Lawsuit Against Employer Explained

The Third Department determined plaintiff had raised questions of fact about whether her employer was aware of and condoned the alleged harassment, allowing her sexual harassment suit to go forward.  The court explained the relevant analytical criteria:

Pursuant to Executive Law § 296 (1) (a), it is “an unlawful discriminatory practice [] [f]or an employer . . ., because of an individual’s . . . sex, . . . to discriminate against such individual in compensation or in terms, conditions or privileges of employment” … . An employee may succeed on a sexual harassment claim pursuant to Executive Law § 296 (1) (a) upon establishing that he or she is a member of a protected group, is subjected to unwelcome sexual harassment based on his or her gender that affects a term, condition or privilege of his or her employment, and that the employer “knew or should have known of the harassment and failed to take remedial action” … . An employer will be liable for “an employee’s discriminatory act [where] the employer became a party to it by encouraging, condoning, or approving it,” and the term condonation includes, as relevant here, “[a]n employer’s calculated inaction in response to discriminatory conduct” … . Tidball v Schenectady City Sch Dist, 2014 NY Slip Op 08092, 3rd Dept 11-20-14

 

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