KNAVEL, VICTORIA v. WEST SENECA CENTRAL SCHOOL DIST. ( 2017 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
832
CA 15-02176
PRESENT: PERADOTTO, J.P., CARNI, DEJOSEPH, NEMOYER, AND CURRAN, JJ.
IN THE MATTER OF VICTORIA KNAVEL, PATRICIA LENOX,
WILLIAM K. MAY AND SUSAN DRABIK, ON BEHALF OF
THEMSELVES AND CERTAIN OTHER RETIRED EMPLOYEES OF
WEST SENECA CENTRAL SCHOOL DISTRICT FORMERLY IN
CSEA BARGAINING UNIT, PETITIONERS-APPELLANTS,
V MEMORANDUM AND ORDER
WEST SENECA CENTRAL SCHOOL DISTRICT, DR. MARK J.
CRAWFORD, SUPERINTENDENT OF SCHOOLS, AND WEST
SENECA CENTRAL SCHOOL DISTRICT BOARD OF EDUCATION,
RESPONDENTS-RESPONDENTS.
STEVEN A. CRAIN AND DAREN J. RYLEWICZ, CIVIL SERVICE EMPLOYEES
ASSOCIATION, INC., ALBANY (AARON E. KAPLAN OF COUNSEL), FOR
PETITIONERS-APPELLANTS.
HODGSON RUSS LLP, BUFFALO (AARON M. SAYKIN OF COUNSEL), FOR
RESPONDENTS-RESPONDENTS.
Appeal from a judgment (denominated order) of the Supreme Court,
Erie County (John L. Michalski, A.J.), entered April 13, 2015 in a
proceeding pursuant to CPLR article 78. The judgment granted the pre-
answer cross motion of respondents to dismiss the petition and
dismissed as moot the motion of petitioners for leave to amend the
petition.
It is hereby ORDERED that the judgment so appealed from is
reversed on the law without costs, the cross motion is denied, the
petition is reinstated, respondents are granted 20 days from service
of the order of this Court with notice of entry to serve and file an
answer, and the matter is remitted to Supreme Court, Erie County, for
a determination of the motion for leave to amend the petition.
Memorandum: Petitioners, who are retired employees of respondent
West Seneca Central School District (District) and under the age of 65
years old, commenced this CPLR article 78 proceeding seeking to annul
respondents’ determination to discontinue the practice of offering
“Under Age 65 retirees” the option of carrying their health insurance
through the District’s active employee Blue Cross/Blue Shield plan.
During their employment with the District, petitioners were covered
under a collective bargaining agreement between the District and the
Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO
(CSEA), which allowed petitioners to enroll in the same Blue
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Cross/Blue Shield health insurance and Guardian dental insurance plans
available to the District’s current employees, at their own expense.
On June 5, 2014, the District mailed to “Retirees Under age 65
carrying BlueCross BlueShield Health Insurance” an undated letter
stating “that effective July 1, 2014, West Seneca Central School
District will no longer offer Under Age 65 retirees the option of
carrying their health insurance through the active employee Blue Cross
Blue Shield plan.” On June 18, 2014, following a meeting with
affected retirees, the District issued to “retirees under age 65
Carrying BlueCross BlueShield Health Insurance” a letter stating that
“the District has decided to extend your ability to participate in the
CSEA Health Insurance Plan until August 1, 2014.” On July 31, 2014,
the District cancelled insurance coverage for retirees under age 65.
According to petitioners, the District’s actions violated the “Retiree
Health Insurance Moratorium Law” (L 2009, ch 504, § 1, part B, § 14).
Petitioners moved for leave to amend the petition and, in lieu of
filing an answer, respondents cross-moved to dismiss the petition on
the ground that it was barred by the four-month statute of limitations
(see CPLR 217 [1]). Supreme Court granted the cross motion and
dismissed the petition, further concluding that petitioners’ motion to
amend was moot. We reverse.
Initially, we and our dissenting colleagues agree that the
“determination to be reviewed” in this proceeding is the decision
embodied in the undated letter sent on June 5, 2014 (CPLR 217 [1]).
We note that respondents correctly concede that they bear the burden
of establishing in the first instance that the proceeding was not
timely commenced within the applicable four-month statute of
limitations (see id.; Matter of Bill’s Towing Serv., Inc. v County of
Nassau, 83 AD3d 698, 699).
Respondents contend that the date of mailing, rather than the
date of receipt by petitioners, of the undated letter to petitioners
notifying them of the discontinuance of their participation in the
District’s health insurance plan, was the event which began the
running of the statute of limitations. In order to apply the date of
mailing to the analysis, which involves a constructive notice test, it
is necessary to make the legal conclusion, as a threshold matter, that
the determination at issue was “quasi-legislative” in nature (see
Matter of Owners Comm. on Elec. Rates v Public Serv. Commn. of State
of N.Y., 76 NY2d 779, 780, revg on dissenting op of Levine, J., 150
AD2d 45, 51-54). Respondents contend that the undated letter is
properly characterized as a “quasi-legislative” decision, that actual
notice is not required, and that constructive notice by mailing was
sufficient to commence the four-month limitations period. We
recognize that at oral argument of this appeal petitioners’ counsel
joined in the legal conclusion that the determination was “quasi-
legislative.” However, this Court is not bound by an erroneous
concession of counsel or the parties with respect to a legal principle
and such “concession does not . . . relieve us from the performance of
our judicial function and does not require us to adopt the proposal
urged upon us” (People v Berrios, 28 NY2d 361, 366-367). “When an
issue or claim is properly before the court, the court is not limited
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to the particular legal theories advanced by the parties, but rather
retains the independent power to identify and apply the proper
construction of governing law” (Kamen v Kemper Fin. Servs., 500 US 90,
99). We simply cannot turn a blind eye to the unsubstantiated and
patently erroneous legal conclusion offered by the parties on this
record (see generally Arcadia, Ohio v Ohio Power Co., 498 US 73, 77,
reh denied 498 US 1075). We have no quarrel with a litigant conceding
an issue of fact (see Elston v Canty, 15 AD3d 990, 990), or conceding
that a bill of particulars is sufficiently specific (see Griswold v
Kurtz, 80 AD2d 983, 983), or waiving a beneficial right (see Mitchell
v New York Hosp., 61 NY2d 208, 214). Those types of concessions do
not intrude upon the judicial function of correctly identifying and
applying the law to the facts.
A quasi-legislative-type administrative determination is one
having an impact far beyond the immediate parties at the
administrative stage (see Owners Comm. on Elec. Rates, 150 AD2d at 53
[Levine, J.]; Matter of Plainview-Old Bethpage Congress of Teachers v
New York State Health Ins. Plan, 140 AD3d 1329, 1331). Thus, where a
quasi-legislative determination is challenged, “actual notice of the
challenged determination is not required in order to start the statute
of limitations clock” (Matter of School Adm’rs Assn. of N.Y. State v
New York State Dept. of Civ. Serv., 124 AD3d 1174, 1176, lv denied 26
NY3d 904). The policy underlying the rule is that actual notice to
the general public is not practicable (see Owners Comm. on Elec.
Rates, 150 AD2d at 53). Instead, the statute of limitations begins to
run once the administrative agency’s quasi-legislative determination
of the issue becomes “readily ascertainable” to the complaining party
(Matter of Riverkeeper, Inc. v Crotty, 28 AD3d 957, 962).
On the other hand, where the public at large is not impacted by a
determination, actual notice, commonly in the form of receipt of a
letter or other writing containing the final and binding
determination, is required to commence the statute of limitations (see
Matter of Essex County v Zagata, 91 NY2d 447, 453; New York State
Assn. of Counties v Axelrod, 78 NY2d 158, 165-166).
Here, the only evidence submitted by respondents with respect to
the determination to discontinue the practice of permitting “Under Age
65 retirees” the option of carrying their health insurance through the
District’s Blue Cross/Blue Shield plan was the undated letter that was
signed by the “Assistant Superintendent, Human Resources.” That
letter makes no mention of any meeting of, or resolution by,
respondent West Seneca Central School District Board of Education
(Board of Education) at which the participation of “Under Age 65
retirees” in the health insurance plan was discussed or voted upon.
The Assistant Superintendent does not mention the authority, if any,
upon which he issued the letter. The undated letter does not identify
when the determination was made or by whom it was made. The letter
does not indicate that it was the Assistant Superintendent’s decision
to make or that he was acting at the direction of the Board of
Education or respondent Dr. Mark J. Crawford, Superintendent of
Schools (Superintendent).
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In other words, respondents wholly failed to submit any evidence
establishing the process that resulted in the issuance of the undated
letter, and the record is otherwise devoid of any evidence of the
nature of the process giving rise to the determination. In our view,
all of those facts and factual shortcomings are critical to the
analysis. Moreover, respondents do not explain how dropping the
letter in the mailbox made the determination “readily ascertainable”
to anyone—and more particularly to the individual
petitioners/retirees.
The determination clearly had no impact upon the public at large,
and respondents have wholly failed to establish that actual notice to
the affected persons would be impracticable or unduly burdensome.
Indeed, in their moving papers, respondents failed to quantify the
number of affected “Under Age 65 retirees.” Even assuming, arguendo,
that a District resident or taxpayer sought to challenge the
determination, we note that respondents fail to explain how the
undated letter, privately addressed and mailed only to “Under Age 65
retirees,” would be “readily ascertainable” to a resident or taxpayer
in the District so as to commence the running of the statute of
limitations with respect to such a challenge. Nor do respondents
explain how an “Under Age 65 retiree” would be expected to know that
he or she was aggrieved by the undated letter when nothing further in
the way of notice was given by respondents other than dropping the
letter in a mailbox (cf. School Adm’rs Assn. of N.Y. State, 124 AD3d
at 1177-1178).
We thus conclude that respondents failed to meet their burden of
establishing that the challenged determination was “quasi-legislative”
and, therefore, that the “readily ascertainable” constructive notice
test should be applied herein (Riverkeeper, Inc., 28 AD3d at 962; see
School Adm’rs Assn. of N.Y. State, 124 AD3d at 1176-1177).
We further conclude that our decision in Matter of Jones v Board
of Educ. of Watertown City Sch. Dist. ([appeal No. 2], 30 AD3d 967),
is inapplicable to the facts presented here. In Jones, the Board of
Education passed a resolution that required retirees to contribute to
their health insurance premiums. The impacted retirees were informed
of the resolution in a letter from the Superintendent of the subject
school district that was mailed to and received by the petitioners.
Jones concluded that the mailing of the letter—not receipt—was the
triggering event for commencing the limitations period (id. at 968-
969). Nonetheless, Jones did not address the issue whether the
determination was “quasi-legislative.” Nor did it resolve the
question of why the subject school board’s resolution was not the
triggering event in that case. Even assuming, arguendo, that the
Jones Court considered the determination to be of a “quasi-
legislative” nature, in our view it may very well have been that the
Jones Court concluded that a school board’s public meeting, published
resolution, and mailing—in combination—made the determination “readily
ascertainable” (see School Adm’rs Assn. of N.Y. State, 124 AD3d at
1176-1177). However, inasmuch as Jones neither explicitly addressed
nor resolved those issues, we conclude that it has no precedential
value toward the resolution of this appeal on the facts before us.
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Lastly, inasmuch as respondents, in our view, failed to meet
their burden to establish when the four-month statute of limitations
commenced, the burden did not shift to petitioners to establish any
particular date of individual receipt of the undated letter. In any
event, respondents failed to establish any dates of receipt by
petitioners in their moving papers.
Finally, we further conclude that “[t]he grant of an extension of
time to comply with the final determination was merely incidental to
that determination and did not affect” the time at which the statute
of limitations began to run (Matter of S.S. Canadiana Preserv. Socy. v
Boardman, 262 AD2d 961, 962 [internal quotation marks omitted]; see
Matter of Metropolitan Package Store Assn. v Duffy, 143 AD2d 832, 833,
lv denied 73 NY2d 705).
CARNI and DEJOSEPH, JJ., concur; PERADOTTO, J.P., concurs in the
following memorandum: I agree with petitioners that Supreme Court
erred in granting respondents’ pre-answer cross motion to dismiss the
petition as time-barred and denying as moot petitioners’ motion for
leave to amend the petition. However, inasmuch as my rationale for
reaching that conclusion differs from the plurality, I concur in the
result only.
There is no dispute that this CPLR article 78 proceeding is
governed by the statute of limitations period set forth in CPLR 217
(1), which requires that a petitioner commence the proceeding
“ ‘within four months after the determination to be reviewed becomes
final and binding upon the petitioner’ ” (Walton v New York State
Dept. of Corr. Servs., 8 NY3d 186, 194). “An administrative
determination becomes ‘final and binding’ when two requirements are
met: completeness (finality) of the determination and exhaustion of
administrative remedies. ‘First, the agency must have reached a
definitive position on the issue that inflicts actual, concrete injury
and second, the injury inflicted may not be . . . significantly
ameliorated by further administrative action or by steps available to
the complaining party’ ” (id. at 194). Here, the undated letter
indicating that respondent West Seneca Central School District
(District) would no longer offer retirees under age 65 the option of
carrying health insurance through the active employee Blue Cross/Blue
Shield plan constituted respondents’ definitive position on that
issue, which could not have been “ ‘significantly ameliorated by
further administrative action or by steps available to
[petitioners]’ ” (id.; see Matter of School Adm’rs Assn. of N.Y. State
v New York State Dept. of Civ. Serv., 124 AD3d 1174, 1177, lv denied
26 NY3d 904). Contrary to petitioners’ contention, the District’s
subsequent action in granting an extension to affected retirees with
respect to the effective date of the final determination “was merely
incidental to that determination” and did not affect its finality
(Matter of S.S. Canadiana Preserv. Socy. v Boardman, 262 AD2d 961,
962; see School Adm’rs Assn. of N.Y. State, 124 AD3d at 1177-1178;
Matter of Metropolitan Package Store Assn. v Duffy, 143 AD2d 832, 833,
lv denied 73 NY2d 705).
I nonetheless agree with petitioners that respondents failed to
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meet their initial burden of establishing that the petition was
untimely because the time to commence the proceeding had expired,
which required that respondents establish, inter alia, when the
statute of limitations began to run (see generally Matter of Village
of Westbury v Department of Transp. of State of N.Y., 75 NY2d 62, 73;
Larkin v Rochester Hous. Auth., 81 AD3d 1354, 1355). Initially, the
nature of the determination must be ascertained in order to resolve
when the statute of limitations began to run. I agree with the
parties and the dissent that respondents’ decision to no longer offer
retirees under age 65 the option of carrying health insurance through
the active employee plan was a quasi-legislative determination (see
Matter of Owners Comm. on Elec. Rates v Public Serv. Commn. of State
of N.Y., 76 NY2d 779, 780, revg on dissenting op of Levine, J., 150
AD2d 45, 51-54; see generally School Adm’rs Assn. of N.Y. State, 124
AD3d at 1175-1176). The nature of the determination, i.e., the
decision of a school district to discontinue offering certain of its
retirees enrollment access to a particular health insurance plan, has
none of the hallmarks of quasi-judicial decision-making (see Vincent
C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book
7B, CPLR C7801:2).
“In the context of quasi-legislative determinations . . . ,
actual notice of the challenged determination is not required in order
to start the statute of limitations clock; rather, the statute of
limitations begins to run once the administrative agency’s ‘definitive
position on the issue [becomes] readily ascertainable’ to the
complaining party” (School Adm’rs Assn. of N.Y. State, 124 AD3d at
1176-1177; see Owners Comm. on Elec. Rates, 150 AD2d at 53 [Levine,
J., dissenting]). Thus, a quasi-legislative determination becomes
binding, and the statute of limitations begins to run, on the date
that the aggrieved party is constructively notified of the challenged
determination, i.e., when that determination becomes readily
ascertainable to the aggrieved party (see School Adm’rs Assn. of N.Y.
State, 124 AD3d at 1176-1177; see generally Village of Westbury, 75
NY2d at 72).
Respondents assert that the statute of limitations began to run
on June 5, 2014, when they mailed the undated letter to the affected
retirees, and that the proceeding was commenced on October 10, 2014
after expiration of the four-month statute of limitations period.
While respondents established that they mailed the undated letter,
both their submissions and the case upon which they rely, Matter of
Jones v Board of Educ. of Watertown City Sch. Dist. (30 AD3d 967,
968-969), fail to explain how that action alone, i.e., placing the
letter in the custody of the United States Postal Service on June 5,
2014 for regular delivery, could have rendered the determination
contained in that letter readily ascertainable to the affected
retirees on that same date. The record does not establish that
respondents undertook any other notification procedures to disseminate
the subject information that would have adequately provided
petitioners with constructive notice of the District’s determination
on that date (cf. Owners Comm. on Elec. Rates, 150 AD2d at 52 [Levine,
J., dissenting]; School Adm’rs Assn. of N.Y. State, 124 AD3d at 1177-
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1178). The email received by the District’s personnel supervisor from
a Blue Cross/Blue Shield representative on June 9, 2014, which was
submitted by respondents in support of their cross motion, contained
only hearsay statements from unidentified retirees that they were
going to lose coverage after June 30, 2014. Those hearsay statements
are insufficient to establish that the determination was readily
ascertainable to petitioners by the date of the email, which would
also render the petition untimely (see generally Feis v A.S.D. Metal &
Mach. Shop, 234 AD2d 504, 505; R. Bernstein Co. v Popolizio, 97 AD2d
735, 735). Inasmuch as respondents failed to meet their initial
burden on the cross motion in that regard, I conclude that the court
erred in dismissing the petition as time-barred. It is on that basis
alone that I agree with the plurality to reverse the judgment, deny
respondents’ cross motion, reinstate the petition, and grant
respondents 20 days from service of the order of this Court with
notice of entry to serve and file an answer. I likewise agree with
the plurality that the matter must be remitted to Supreme Court to
determine petitioners’ motion for leave to amend the petition.
NEMOYER and CURRAN, JJ., dissent and vote to affirm in the
following memorandum: We respectfully dissent. We agree with our
colleagues that the “determination to be reviewed” is the decision of
respondent West Seneca Central School District (District) embodied in
the undated letter sent by the District to petitioners on June 5, 2014
(CPLR 217 [1]). We disagree with our colleagues, however, on the
issue whether the record demonstrates that the determination became
“final and binding” upon petitioners when the letter was sent (id.).
In our view, inasmuch as the nature of the action taken by the
District was quasi-legislative, the undisputed date of the
determination’s mailing is, as a matter of public policy, the accrual
date (see Matter of Best Payphones, Inc. v Department of Info. Tech. &
Telecom. of City of N.Y., 5 NY3d 30, 34; Matter of Owners Comm. on
Elec. Rates v Public Serv. Commn. of State of N.Y., 150 AD2d 45, 53-54
[Levine, J., dissenting], revd on dissenting op of Levine, J., 76 NY2d
779). Accordingly, the four-month statute of limitations applicable
to the instant CPLR article 78 proceeding began to run when the
District sent the undated letter on June 5, 2014, notifying
petitioners of the District’s determination (see Matter of Jones v
Board of Educ. of Watertown City Sch. Dist., 30 AD3d 967, 968-969; see
generally Matter of Village of Westbury v Department of Transp. of
State of N.Y., 75 NY2d 62, 72-73). Inasmuch as this proceeding was
commenced on October 10, 2014, we conclude that the petition is time-
barred (see Jones, 30 AD3d at 969; see also Matter of Paterson v New
York State Teachers’ Retirement Sys., 25 AD3d 899, 899-900).
We respectfully disagree with the plurality’s conclusion that the
nature of the action taken was something other than quasi-legislative.
That conclusion is of the plurality’s own making inasmuch as it was
not raised in any of the parties’ briefs, and petitioners conceded at
oral argument of this appeal that the determination is
quasi-legislative. The plurality relies in part upon the case People
v Berrios (28 NY2d 361, 366-367), which is rooted in principles of
criminal and constitutional law safeguarding “[t]he public interest
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that a result be reached which promotes a well-ordered society . . .
in every criminal proceeding” (Young v United States, 315 US 257,
259). We respectfully submit that the plurality’s application of such
principles to civil cases overlooks our long-established precedent in
civil cases excluding from consideration issues conceded at oral
argument (see Elston v Canty, 15 AD3d 990, 990; Griswold v Kurtz, 80
AD2d 983, 983), or in a party’s brief (see De Lang v Doctors Hosp., 29
AD2d 735, 735), as well as precedent that otherwise allows the parties
in a civil case to chart their own litigation course, including by
circumscribing the issues presented (see Hasselback v 2055 Walden
Ave., Inc., 139 AD3d 1385, 1387; Quilty v Cormier, 115 AD3d 1229,
1230; see also Mitchell v New York Hosp., 61 NY2d 208, 214). The
plurality also relies on the case Kamen v Kemper Fin. Servs. (500 US
90, 99), in which an issue was raised only in a reply brief and was
argued to have been waived. That is not the situation here inasmuch
as none of the parties has raised the issue addressed by the
plurality.
We agree with our concurring colleague that there is nothing
about the District’s determination that fits the quasi-judicial
category (see New York City Health & Hosps. Corp. v McBarnette, 84
NY2d 194, 203 n 2, rearg denied 84 NY2d 865; Matter of Town of
Waterford v Water Pollution Control Bd., 5 NY2d 171, 183; see also
Matter of Venes v Community Sch. Bd. of Dist. 26, 43 NY2d 520, 525;
Matter of Halperin v City of New Rochelle, 24 AD3d 768, 770, appeal
dismissed 6 NY3d 890, lv denied 7 NY3d 708), and we conclude that the
determination fits comfortably within precedent holding that similar
actions are quasi-legislative in nature (see Owners Comm. on Elec.
Rates, 150 AD2d at 52 [Levine, J., dissenting]; see also Lenihan v
City of New York, 58 NY2d 679, 681; Jones, 30 AD3d at 968-969). We
respectfully disagree with the plurality’s speculative basis for
distinguishing Jones, which expressly measured the statute of
limitations from when the letter was “sent” (Jones, 30 AD3d at 968),
and which thereby did not require actual notice as would be necessary
for quasi-judicial action.
While our concurring colleague agrees that the District need show
only that petitioners had constructive notice, as opposed to actual
notice, of the District’s decision, she concludes that the District
did not meet its burden. She concludes that the District needed to
show that it undertook other notification procedures to disseminate
the information. That, too, is a point of view that has not been
raised by the parties. Even if we assume for the sake of argument
that the law requires other notification procedures, we conclude that
the accrual date for the statute of limitations still would be the
undisputed date of the final determination under review, i.e., June 5,
2014 (see Matter of School Adm’rs Assn. of N.Y. State v New York State
Dept. of Civ. Serv., 124 AD3d 1174, 1178, lv denied 26 NY3d 904).
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For the reasons given, we would affirm the judgment.
Entered: April 28, 2017 Frances E. Cafarell
Clerk of the Court