Summary
In Bello v Roswell Park Cancer Inst. (5 NY3d 170), the petitioners were awarded back pay pursuant to Civil Service Law § 77.
Summary of this case from IN RE OLY BUS CP v. CONTRACT DISPUTE RES. BD. OF N.Y.Opinion
118.
Argued June 1, 2005.
Decided June 29, 2005.
APPEAL, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered March 19, 2004. The Appellate Division order, insofar as appealed from, affirmed an amended judgment of the Supreme Court, Erie County (John A. Michalek, J.), entered in a proceeding pursuant to CPLR article 78, to the extent that it awarded petitioners predecision interest at the rate of 9% per annum on their awards of back pay.
Matter of Bello v. Roswell Park Cancer Inst., 5 AD3d 1017, reversed.
Eliot Spitzer, Attorney General, Albany ( Robert M. Goldfarb, Caitlin J. Halligan, Daniel Smirlock and Wayne L. Benjamin of counsel), for appellants.
Offermann, Cassano, Greco, Slisz Adams, LLP, Buffalo ( Josephine A. Greco and Kevin P. Wicka of counsel), for respondents.
Before: Chief Judge KAYE and Judges G.B. SMITH, CIPARICK, ROSENBLATT, GRAFFEO and READ concur.
OPINION OF THE COURT
We hold that an award of back pay pursuant to Civil Service Law § 77 may not include predecision interest.
Facts and Procedural History
Petitioners are research scientists who were laid off by the Roswell Park Cancer Institute (RPCI), a state institute under the management and control of the Department of Health. They brought a CPLR article 78 proceeding against RPCI, the Department, and several other state agencies and officials (collectively, the State), challenging the layoffs. Supreme Court held that the layoffs were unlawful and that petitioners were entitled to back pay with interest on each installment "from the date it was incurred, if such designation is possible or from a single reasonable intermediate date."The Appellate Division modified Supreme Court's judgment in a way not relevant here, and otherwise affirmed. The State appeals, pursuant to leave granted by this Court, challenging only the predecision interest award. We now reverse the Appellate Division's order insofar as it is appealed from.
Discussion
Prejudgment or predecision interest generally was not available at common law ( see Monessen Southwestern R. Co. v. Morgan, 486 US 330, 337). Before the adoption of the Civil Practice Law and Rules, interest was allowed in New York in certain kinds of cases, sometimes without statutory authority ( see former Civ Prac Act § 480; Flamm v. Noble, 296 NY 262; Wilson v. City of Troy, 135 NY 96), but today interest is purely a creature of statute ( see CPLR 5001; Matter of Meloni v. Goord, 267 AD2d 977, 978 [4th Dept 1999]). The controlling statute in this case is Civil Service Law § 77, which provides:
"Any officer or employee who is removed from a position in the service of the state or of any civil division thereof in violation of the provisions of this chapter, and who thereafter is restored to such position by order of the supreme court, shall be entitled to receive and shall receive from the state or such civil division, as the case may be, the salary or compensation which he would have been entitled by law to have received in such position but for such unlawful removal, from the date of such unlawful removal to the date of such restoration, less the amount of any unemployment insurance benefits he may have received during such period. Such officer or employee shall be entitled to a court order to enforce the payment of such salary or compensation."
The State argues that interest is unavailable in this case because section 77 makes no mention of it. Petitioners argue that a right to interest is implicit in the statute's reference to "compensation"; they say that a claimant who is deprived for a period of time of money that he or she is entitled to cannot be fully compensated unless interest is awarded. We agree with the State, and reject petitioners' argument.
The statute does not just create a general right to "compensation"; it is specific about what a claimant "shall be entitled to receive." It speaks of "salary or compensation" — indicating that "compensation" refers to bonuses or other nonsalary forms of payment. It provides for the deduction of unemployment insurance benefits. Until 1985, it also provided for deduction of "compensation which [the reinstated employee] may have earned in any other employment or occupation" (Civil Service Law former § 77), thus adopting the common-law "mitigation of damages" rule. When the statute was amended to eliminate the mitigation requirement, the amendment did not contain any provision for interest. We conclude that a legislature giving such careful attention to the components of a back pay award would have added the words "with interest" if it had intended interest to be awarded.
In interpreting section 77, we give some weight to the fact that it provides for recoveries against "the state" as well as "any civil division thereof." To the extent that it allows recovery against the State, the statute waives the State's sovereign immunity. Such waivers are to be strictly construed, "waiver of immunity by inference being disfavored." ( Sharapata v. Town of Islip, 56 NY2d 332, 336; see Krohn v. New York City Police Dept., 2 NY3d 329, 338.) This rule reinforces our reluctance to find an implicit provision for interest in a statute that makes no mention of it.
Petitioners argue that it is unfair to deny them interest on money that has been wrongly withheld from them. There is force in this argument, but we may not rewrite the statute to achieve more "fairness" than the Legislature chose to enact. The Legislature did not have to permit recovery of back pay at all; nor did it have to eliminate the mitigation requirement — a feature of the statute that will, in some cases, give wrongly terminated employees a substantial windfall. Having allowed for back pay, and having eliminated the requirement of mitigation, the Legislature did no more.
Finally, petitioners argue that they are entitled to interest under CPLR 5001 (a), which says: "Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property." We find this argument to be without merit. Petitioners are not suing for breach of contract or for injury to or interference with any property. They are suing to enforce the right to back pay given to them by Civil Service Law § 77, and that statute does not provide for predecision interest.
Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and the case remitted to Supreme Court with directions to delete the award of predecision interest.
Order, insofar as appealed from, reversed, etc.