Opinion
No. 2007–2590.
2013-04-22
In the Matter of the Application of the UNION ENDICOTT CENTRAL SCHOOL DISTRICT, Petitioner, For an Order Staying Arbitration Pursuant to Article 75 of the CPLR, v. Endicott Teachers' Association on behalf of Joanne Peters, Respondents. In the Matter of the Union Endicott Central School District, Petitioner, For an Order Vacating Arbitration Decision Pursuant to Article 75 of the CPLR and for an Order Staying the implementation and enforcement of the Decision of the Arbitrator Pursuant to CPLR 2201 Endicott Teachers Association, Erik Herr as President of the Endicott Teachers' Association, and Joanne Peters, Respondents. Union Endicott Central School District and the Board of Education of the Union Endicott Central School District, Plaintiffs, Joanne peters, Defendant. In the Matter of the Union Endicott Central School District, Petitioner, For an Order Vacating Arbitration Decision Pursuant to Article 75 of the CPLR and for an Order Staying the implementation and enforcement of the Decision of the Arbitrator Pursuant to CPLR 2201 v. Endicott Teachers Association, Erik Herr as President of the Endicott Teachers' Association, and Joanne Peters, Respondents. Union Endicott Central School District and the Board of Education of the Union Endicott Central School District, Plaintiffs, v. Joanne Peters, Defendant.
The Law Firm of Frank W. Miller, by Frank W. Miller, Esq., of Counsel, East Syracuse, Counsel for Union Endicott Central School District. Nysut, Office of the General Counsel, by Richard E. Casagrande, Esq., and Marilyn Raskin–Ortiz, Esq., of Counsel, Latham, for Joanne Peters, Endicott Teachers' Association, Erik Herr as President of the Endicott Teachers' Association.
The Law Firm of Frank W. Miller, by Frank W. Miller, Esq., of Counsel, East Syracuse, Counsel for Union Endicott Central School District. Nysut, Office of the General Counsel, by Richard E. Casagrande, Esq., and Marilyn Raskin–Ortiz, Esq., of Counsel, Latham, for Joanne Peters, Endicott Teachers' Association, Erik Herr as President of the Endicott Teachers' Association.
Hinman, Howard & Kattell, LLP, bY Thomas W. Cusimano, Jr., Esq., of Counsel, Binghamton, for Joanne Peters.
FERRIS D. LEBOUS, J.
This Decision & Order addresses four applications involving one civil action and one special proceeding. All these matters relate to teacher Joanne Peters' former employment with the Union–Endicott Central School District and her entitlement to retirement benefits and retiree health insurance under a Collective Bargaining Agreement.
First, the Union–Endicott Central School District (“School District”) filed a Notice of Petition and Petition for an Order pursuant to CPLR § 7511 vacating and/or modifying an arbitration award issued July 23, 2012 (Index No.2012–2766).
In the alternative, the School District seeks a stay of the enforcement of said award.
During oral argument, the parties agreed that the School District should have brought this petition under the existing proceeding, namely Index No.2007–2590. Thereafter, the parties entered into a Stipulation pursuant to CPLR § 103(c) so ordered by this court on April 22, 2013, wherein it was agreed, among other things, “[t]hat all papers heretofore filed under Index No.2012–2766 shall for all purposes be deemed to have been filed under Index No.2007–2590.” However, for continuity sake, the court will continue to refer herein to the papers under the Index Numbers as they were originally designated, but with the understanding that pursuant to said Stipulation that any application made under Index No.2012–2766 is deemed to have been made under Index No.2007–2590. Additionally, the court has added the caption of Index No.2007–2590 to this Decision & Order.
Second, the School District moves to amend the complaint in the related civil action (Index No.2007–2431) to add a fifth and sixth cause of action pertaining to the faithless servant doctrine and common law defenses, respectively, to argue that Ms. Peters should be barred from receiving any benefits from the School District.
Third, also in the related civil action (Index No.2007–2431), defendant Peters moves to compel discovery. However, during oral argument, defendant's counsel indicated that the motion to compel discovery was withdrawn.
Fourth, again in the related civil action (Index No.2007–2431), the Association moves for leave to intervene and upon intervention denial of the motion to amend or in the alternative to dismiss the newly added fifth and sixth causes of action.
BACKGROUND
A chronology of events has been exhaustively set forth in prior trial court decisions and prior appellate decisions in two other matters involving these parties and need not be repeated here.
Suffice it to say that Joanne Peters was a teacher for the Union–Endicott Central School District (hereinafter “School District”) since 1990. In 2006, Ms. Peters became the subject of an investigation into stolen school property. On March 2, 2007, before the investigation was completed, Ms. Peters tendered her resignation to the Board of Education of the School District stating her intent to resign effective June 30, 2007. The Board of Education decided to delay the processing of Ms. Peters' retirement pending determinations on the criminal charges and disciplinary charges.
Union Endicott Cent. School Dist. v. Endicott Teachers' Assn., 25 Misc.3d 1210[A] [Sup Ct, Broome County 2009]; Matter of Union–Endicott Cent. School Dist. [Endicott Teachers' Assn.], 59 AD3d 799 (3d Dept 2009); Matter of Peters v. Union–Endicott Cent. School Dist., 77 AD3d 1236 (3d Dept 2010).
Two grievances were filed relating to the Board of Education's decision to delay the processing of Ms. Peters' retirement (hereinafter “Grievance No.1”) and denial of Ms. Peters' retiree health insurance (hereinafter “Grievance No.2”).
Under Index No.2007–2590, this court directed a stay of arbitration of Grievance # 1 (Order dated February 1, 2008), but ordered arbitration of Grievance # 2 (Decision & Order dated October 6, 2009; see Union Endicott Cent. School Dist. v. Endicott Teachers' Assn., 25 Misc.3d 1210[A] ).
Under another action, Ms. Peters commenced a separate hybrid contract/Article 78 action to preserve her ability to enforce insurance benefits in the event the court did not order arbitration on Grievance # 2 (Index No.2008–2351). The merits of Index No.2008–2351 have never been reached because the court did, in fact, order arbitration on Grievance # 2 (Decision & Order October 6, 2009).
Appeals were taken from this court's decisions on both Grievance # 1 and Grievance # 2 issued under Index No.2007–2590. On February 11, 2009, the Third Department affirmed this court's finding that the delay in processing of the retirement application was not arbitrable as the CBA did not contain an express agreement to arbitrate the issue. As such, arbitration could not be compelled of Grievance # 1 (Matter of Union–Endicott Cent. School Dist. [Endicott Teachers' Assn.], 59 AD3d 799 [3d Dept 2009] ).
The parties also appealed this court's Decision & Order dated October 6, 2009 compelling arbitration of Grievance # 2. The Third Department affirmed this court's determination that the denial of retiree health benefits was arbitrable (Matter of Peters v. Union–Endicott Cent. School Dist., 77 AD3d 1236 [3d Dept 2010] ). Ultimately, the arbitration hearings on this issue of Ms. Peters' health insurance were held on November 2, 2011 and March 8, 2012. On July 23, 2012, arbitrator Louis Patack issued an Opinion and Award. It is this award which the School District now seeks to vacate and/or modify.
DISCUSSION
I. PETITION
By way of this petition, the School District seeks to vacate the arbitration award upon various grounds including: (1) the arbitrator failed to consider the issue of Ms. Peters' misconduct in issuing the award as allegedly instructed by the Third Department; (2) the arbitrator improperly considered evidence regarding the history of negotiations by and between the parties; (3) the arbitrator exceeded his lawful authority when he received evidence other than that which was derived from recorded negotiation sessions; (4) the arbitrator failed to give proper legal effect to a prior Education Law § 3020–a proceeding; and (5) the arbitrator improperly ruled that the Board of Education was not required to approve a retirement.
The School District's request for a stay of the enforcement and implementation of the underlying arbitration award pending litigation will be addressed separately hereinbelow.
It is well-settled that courts may overturn an arbitration award that violates a strong public policy (CPLR § 7511[b][1] & [5] ). There are very limited grounds for vacating an arbitration award including when “[a]n arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made” (CPLR § 7511[b][1][iii]; emphasis added). Additionally, it is an accepted tenet that “[a] court cannot examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one. Indeed, even in circumstances where an arbitrator makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice [citations omitted]” ( Matter of New York State Correctional Officers & Police Benevolent Assn. v. State of New York, 94 N.Y.2d 321, 326 [1999] ).
The School District's primary argument in support of it's petition is that the arbitrator failed to consider the issue of Ms. Peters' misconduct as allegedly instructed by the Third Department. The School District argues this failure equates to the arbitrator having engaged in misconduct in rendering his award and constitutes a ground for vacating the same under CPLR § 7511(b)(1)(i) and (iii).
In opposition, the Association contends that prior to the arbitration the parties entered into a stipulation of the issues and manner in which the faithless servant doctrine would be addressed and that the arbitrator's award is consistent with said stipulation. Furthermore, the Association argues that any attempt to move discussion of the faithless servant doctrine from the arbitration arena into the civil action is an attempted repudiation of the CBA and an improper collateral attack thereon.
The court finds the School District's argument that the arbitrator failed to consider or address the faithless servant doctrine to be fundamentally flawed. A review of the record clearly reflects that the arbitrator did consider whether the doctrine applied under the CBA and held that it did not. The Third Department did not mandate that the arbitrator apply the doctrine but merely stated that “[t]he issue of the effect, if any, of Peters' alleged misconduct on her entitlement to benefits goes to the merits of her grievance, not to its arbitrability” (Matter of Peters v. Union–Endicott Cent. School Dist., 77 AD3d at 1240). The arbitrator clearly considered the effect and ruled that the doctrine was outside the scope of the CBA and thus outside its purview (Matter of Bolin v. Nassau County Bd. of Coop. Educ. Servs., 52 AD3d 704 [2d Dept 2008] ). Thus, the arbitrator found that the “effect, if any” of the faithless servant doctrine was none. Moreover, as outlined by the Association, the parties had entered into a stipulation at the arbitration hearing that the School District would offer evidence of Ms. Peters' alleged misconduct only if the arbitrator determined that the doctrine applied and because he did not so rule no such evidence was accepted.
The School District's remaining arguments to vacate/modify the arbitrator's award are likewise rejected. Suffice it to say, the court has reviewed the School District's additional arguments that the arbitrator exceeded his authority by considering evidence of negotiating history; received evidence other than that which was derived from recorded negotiation sessions; failed to give proper legal effect of prior Education Law § 3020–a proceeding; and improperly ruled that the Board of Education was not required to approve a retirement. As noted by the Association's arguments in opposition in both its submissions and oral argument, the overriding theme to the School District's arguments here is its theory that the arbitrator's failure to agree with the School District constitutes misconduct or partiality (Affirmation in Opposition, ¶ 22). The court finds the School District's contentions in this regard to be without merit.
In sum, this court finds that the School District's petition for vacatur and/or modification of the arbitration award dated July 23, 2012 is denied.
II. STAY
In the alternative, the School District's petition also contains a request for a stay of enforcement and implementation of the arbitration award.
It is well-settled that “[t]he party seeking a preliminary injunction must demonstrate a probability of success on the merits, danger of irreparable injury in the absence of an injunction and a balance of equities in its favor [citations omitted]” (Nobu Next Door, LLC v. Fine Arts Hous., Inc., 4 NY3d 839, 840 [2005];CPLR § 6301).
On the issue of likelihood of success, the School District contends that it will be successful in the pending civil action (Index No.2007–2431) which offers it a forum to present the faithless servant doctrine as a basis on which to prevent Ms. Peters from receiving heath insurance benefits. The School District argues that case law supports “the forfeiture of insurance benefits as a remedy on a claim based on the ‘faithless servant doctrine” ‘ (School District's Memorandum of Law in Support of Petition, p 7 [emphasis added] ). To the contrary, the Association argues that the School District has had a full and fair opportunity to litigate all issues that ended with the arbitration award. The court finds the School District has not met the “particularly high” burden of establishing ultimate success on the merits (Sync Realty Group, Inc. v. Rotterdam Ventures, Inc., 63 AD3d 1429, 1430 [3d Dept 2009] ). The School District cited no authority in which the faithless servant doctrine is deemed a cause of action rather than a defense. While that is not to say the School District might not be successful on that or another theory, the court can not simply find that there is a probability or likelihood of such success.
In any event, even if the court were to have found a probability of success, the School District has failed to establish irreparable harm. With respect to irreparable harm, the School District asserts that it will have “little or no chance” of recouping payments. In the first instance, the court notes that the School District offers no evidentiary proof in support of this assertion. In any event, the School District's argument that it may never recoup payments, even if true, is insufficient to support provisional relief. As stated by the Third Department, “[e]ven if [petitioner] ultimately prevails on the merits, those damages can be readily computed and [petitioner] will be fully compensated. It is for that reason that monetary damages simply are not irreparable and are an insufficient harm to support the issuing of an injunction [citations omitted]” (Winkler v. Kingston Hous. Auth., 238 A.D.2d 711, 712 [3d Dept 1997]; McCall v. State, 215 A.D.2d 1, 5 [3d Dept 1995] ).
Finally, as to a balancing of the equities, each party asserts it is the victim of this ongoing and unending litigation. In this court's view, the equities lie in simply abiding by those decisions and/or awards that have been issued. The arbitration award speaks for itself and this court has now rejected the School District's attempts to vacate and/or modify the same. Additionally, the court rejects the School District's argument that a stay would maintain the status quo. The court finds that the School District altered the status quo in the first instance years ago when it refused to provide health insurance benefits to a retiree. By denying the School District's request for a stay, the court is placing the parties back to their original positions. For these reasons, the court finds that the equities lie in allowing said award to be enforced. Thus, the court finds that the equities dictate against a stay.
For the reasons stated, the School District's application for a stay is denied.
III. MOTION TO INTERVENE (Index 2007–2431)
The Association seeks permission to intervene in the pending civil action commenced by the School District against Ms. Peters. Upon such intervention, the Association further seeks either a denial of the School District's motion to amend the complaint or, in the alternative, if said motion to amend is granted then dismissal of the newly added fifth and sixth claims. Ms. Peters has consented to intervention by the Association, while the School District opposes the intervention.
A motion for intervention by permission is governed by CPLR § 1013 which states, in pertinent part, as follows:
[u]pon timely motion, any person may be permitted to intervene in any action ... when the person's claim or defense and the main action have a common question of law or fact. In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party.
The court finds that there is a common question of law, namely whether Ms. Peters' alleged misconduct, if true, impairs her entitlement to retiree health insurance benefits under the CBA and arbitration award. Moreover, the court finds that intervention will not unduly delay determination of the action nor is there any potential for substantial prejudice to any original party. Most importantly, however, the court finds that the Association, as intervenor, has a real and substantial interest in the outcome of the main action. Given the history of these matters, it is beyond cavil that the Association has a real and substantial interest in addressing any litigation by the School District which seeks to alter the related arbitration award or involves the CBA. Stated another way, the Association has an interest in preserving the CBA which it believes covers all terms and conditions of employment with the School District and which the School District is attempting to reform in the civil action (Index No.2007–2431).
In view of the foregoing, the Association's motion to intervene in Index No.2007–2431 is granted.
IV. MOTION TO AMEND
The School District moves to amend the complaint in the related civil action (Index No.2007–2431) to add a fifth and sixth cause of action pertaining to the faithless servant doctrine and common law defenses, respectively, to argue that Ms. Peters should be barred from receiving any benefits from the School District. The School District also argues that this motion was spurred by a footnote in the arbitrator's Opinion and Award that stated the District's claims regarding the faithless servant doctrine “are better suited for a lawsuit than a grievance arbitration proceeding” (School District's Exhibit A, p 29, n 9).
The law is well-settled that in the absence of prejudice to the defendant, a motion to amend should generally be granted in absence of prejudice resulting from delay (CPLR § 3025). However, the decision whether to grant leave to amend a pleading is left to the discretion of the trial court, and in exercising such discretion the court is to “[c]onsider how long the amending party was aware of the facts upon which the motion was predicated, whether the amendment is meritorious, and whether a reasonable excuse for the delay was offered [citations omitted]” (Romeo v. Arrigo, 254 A.D.2d 270, 270 [2d Dept 1998]; Rose v. Velletri, 202 A.D.2d 566, 567 [2d Dept 1994] ). Here, the court finds that the School District has unreasonably delayed in seeking to add the proposed claims. Despite the arbitrator's footnote comment in his Award, this matter has been ongoing since 2007 and the School District could have and should have made this application prior to this time. Moreover, the court agrees with the Association's position that the proposed amendment is merely a collateral attack on the arbitration award. For the reasons stated hereinabove, the court finds that motion to amend is denied.
CONCLUSION
In accordance with the forgoing:
(1)the School District's petition pursuant to CPLR § 7511 vacating and/or modifying an arbitration award issued July 23, 2012 is DENIED (Index No.2012–2766 & Index No.2007–2590);
(2)the School District's application for a stay of enforcement and implementation of the arbitration award dated July 23, 2012 is DENIED (Index No.2012–2766 & Index No.2007–2590);
(3)the Association's motion for leave to intervene in the related civil action is GRANTED (Index No.2007–2431);
(4)the School District's motion to amend the complaint in the related civil action is DENIED (Index No.2007–2431); and
(5)defendant Peters' motion to compel discovery is deemed withdrawn (Index No.2007–2431).
This Decision constitutes an order of the court. The mailing of a copy of this Decision and Order by this court shall not constitute notice of entry.
It is so ordered.