Claim of Kennedy v. New York City Department of Corrections

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: June 30, 2016 522067
________________________________
In the Matter of the Claim of
STEVEN KENNEDY,
Claimant,
v
NEW YORK CITY DEPARTMENT OF
CORRECTIONS, MEMORANDUM AND ORDER
Respondent.
WORKERS' COMPENSATION BOARD,
Respondent.
RELLA & ASSOCIATES, P.C.,
Appellant.
________________________________
Calendar Date: May 25, 2016
Before: Peters, P.J., McCarthy, Egan Jr., Lynch and Devine, JJ.
__________
Rella & Associates, PC, Sleepy Hollow (Matthew T. Keller of
counsel), for appellant.
Eric T. Schneiderman, Attorney General, New York City
(Donya Fernandez of counsel), for Workers' Compensation Board,
respondent.
__________
Peters, P.J.
Appeal from a decision of the Workers' Compensation Board,
filed December 23, 2015, which, among other things, determined
the amount of counsel fees due to claimant's counsel.
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Claimant, who resides in Brooklyn, was injured in the line
of duty as a correction officer in Queens in July 2012. On
August 17, 2012, claimant's counsel, Gerarda M. Rella of Rella &
Associates, P.C., filed a claim for workers' compensation
benefits on his behalf. Rella also submitted a motion for a
change of venue that was supported by a handwritten note signed
by claimant requesting that his hearings be held in the City of
White Plains, Westchester County. The note asserted that the
requested venue "was the most efficient hearing point in the
state" and that he "wish[ed] to limit the amount of time lost
from work for attendance at hearings." A Workers' Compensation
Law Judge (hereinafter WCLJ) denied the change of venue request,
finding that claimant's place of residence, Brooklyn, was the
proper venue. The WCLJ further concluded that the request for
venue in White Plains was without reasonable grounds and
unsupported by any evidence in the record and, thus, frivolous.
Noting that Rella's identical request on behalf of another
claimant prior to this request had previously been rejected as
frivolous and that Rella had been warned that venue is not
established for the convenience of the attorney, the WCLJ imposed
a penalty on Rella of $500 pursuant to Workers' Compensation Law
§ 114-a (3) (ii). The Workers' Compensation Board agreed and
increased the penalty to $750 pursuant to Workers' Compensation
Law § 114-a (3) (ii), based upon Rella's continuing conduct in
filing identical improper and groundless applications for venue
changes despite prior adverse Board rulings, as well as Rella's
pursuit of invalid arguments on administrative appeal to the
Board in this matter. Rella filed a notice of appeal from that
Board decision but never perfected the appeal, and did not pay
the penalty.
Rella thereafter submitted an application for counsel fees
in the amount of $15,215 and, after a hearing, the WCLJ concluded
that Rella's failure to pay the penalty was a dilatory tactic
that warranted a reduction of the fee request to $10,000 (see 12
NYCRR 300.17 [f]). On Rella's appeal, the Board further found
that Rella had "exaggerated the work performed in this matter"
and that "a significant amount of work was performed for
[Rella's] benefit (not the claimant's)," and also took into
consideration that Rella had failed to pay the $750 penalty. The
Board concluded that the $10,000 fee awarded was excessive and
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reduced it to $5,000 "for the less than 20 . . . hours [Rella
actually] worked."1 Rella appeals.
We affirm. It is well established that "[t]he Board has
the authority pursuant to Workers' Compensation Law § 114-a (3)
(ii) to impose a penalty against a claimant's attorney for
submitting, without reasonable grounds, a change of venue
request, a procedural motion that is deemed to be a proceeding
under the statute" (Matter of Vallecillo v New York City Dept. of
Corr., 134 AD3d 1384, 1385 [2015]; see Matter of Batchelor v NYC
Dept. of Corr., 123 AD3d 1366, 1366 [2014]; Matter of Banton v
New York City Dept. of Corr., 112 AD3d 1195, 1196-1197 [2013]).
Here, Rella does not challenge the Board's imposition of a
penalty against him or its amount but, instead, claims that there
was an indefinite stay of his obligation to pay that penalty
until a final decision was rendered by this Court, and the Board
had no authority to reduce counsel fees based on his failure to
pay that penalty. We disagree with both assertions. First,
Rella did not perfect his appeal of the Board's decision imposing
the penalty, as he should have and has done in numerous other
matters (see e.g. Matter of Vallecillo v New York City Dept. of
Corr, 134 AD3d at 1384-1385; Matter of Banton v New York City
Dept. of Corr., 112 AD3d at 1196-1197). We concur with the
Board's conclusion that there is no stay of a penalty imposed by
the Board on an attorney pursuant to Workers' Compensation Law
§ 114-a (3) (ii), and find that Rella's contention that he could
simply delay his obligation and withhold payment is not supported
by any legal authority.2
1
Rella had claimed to have worked 25 hours on the
application for counsel fee form, later amended to 28 hours.
2
Rella's arguments premised upon the inapplicability of
Workers' Compensation Law § 23 to his penalty are misplaced, as
the Board did not rely on that statute in concluding that there
was no stay of the penalty. As relevant here, this statute
protects claimants by providing that an appeal to this Court or
to the Court of Appeals does not operate as a stay of "the
payment of compensation required by the terms of an award" or the
payment of medical and related costs (Workers' Compensation Law
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We similarly reject Rella's contention that the Board had
no authority to reduce his counsel fees based, in part, on his
failure to pay the penalty. Pursuant to Workers' Compensation
Law § 24, counsel fees must be approved by the Board and "become
a lien upon the compensation awarded" (see Matter of Pickering v
Car Win Const., Inc., 133 AD3d 1068, 1068 [2015], appeal
dismissed, lv denied 26 NY3d 1139 [2016]; see also Matter of
Crosby v State of N.Y. Workers' Compensation Bd., 57 NY2d 305,
310 [1982]). The Board may approve counsel fees "in an amount
commensurate with the services rendered and having due regard for
the financial status of the claimant and whether the attorney
. . . engaged in dilatory tactics or failed to comply in a timely
manner with board rules. In no case shall the fee be based
solely on the amount of the award" (12 NYCRR 300.17 [f]). The
Board is vested with "broad discretion with regard to the
approval of counsel fees" and its award will not be disturbed by
this Court except upon a showing that it is arbitrary and
capricious or an abuse of discretion (Matter of Pavone v
Ambassador Transp., Inc., 26 AD3d 645, 646-647 [2006]; see Matter
of Grasso v Brewster Cent. School Dist., 81 AD3d 1060, 1061
[2011]). No such showing has been made here.
Moreover, under these circumstances, we find that the Board
was fully authorized to conclude that Rella's failure for over 18
months to pay the fine imposed by the Board in 2013 was a
"dilatory tactic[]" (12 NYCRR 300.17 [f]) which it properly took
into consideration in its counsel fee award. Contrary to Rella's
argument, in response to his application for Board review of the
counsel fee award, the Board acted within its discretion and
authority in further reducing that award upon consideration of
the relevant factors, including whether the fee was "commensurate
with the services rendered" (12 NYCRR 300.17 [f]; see Matter of
Grasso v Brewster Cent. School Dist., 81 AD3d at 1061; Matter of
Pavone v Ambassador Transp., Inc., 26 AD3d at 646-647). As the
§ 23). Nothing in that statute suggests that an attorney against
whom the Board imposes a penalty pursuant to Workers'
Compensation Law § 114-a (3) (ii) is accorded a stay until an
appeal is taken to this Court and a decision is rendered on
challenges to subsequent issues raised in the case.
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record supports the Board's determination that Rella's fee
request was based upon "improperly inflated" or "exaggerated"
claims of work performed on claimant's behalf, and that the fee
awarded by the WCLJ was excessive, we see no basis upon which to
disturb the Board's fee award of $5,000 for the 20 hours of work
performed by Rella.
McCarthy, Egan Jr., Lynch and Devine, JJ., concur.
ORDERED that the decision is affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court