| Swergold v Cuomo |
| 2010 NY Slip Op 01568 [70 AD3d 1290] |
| February 25, 2010 |
| Appellate Division, Third Department |
| Nathaniel M. Swergold et al., Appellants, et al., Plaintiffs, vAndrew M. Cuomo, as Attorney General of the State of New York, et al., Defendants, andThomas P. DiNapoli, as Comptroller of the State of New York, et al.,Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Denise A. Hartman of counsel), forrespondents.
Spain, J. Appeal from an order of the Supreme Court (Connolly, J.), entered May 13, 2009 inAlbany County which, among other things, partially granted defendants' cross motion to dismissthe amended complaint.
This appeal arises out of a dispute between plaintiffs, attorneys claiming entitlement topublic pension benefits for their work as counsel to various municipalities while at the same timemaintaining private law practices, and defendants, the entities investigating the propriety ofthose claims. In April 2008, defendant Comptroller announced new regulations for defendantNew York State and Local Employees' Retirement System that define how local governmentsand school districts should classify professional service providers. Notably, the regulations now[*2]provide that if any professional individual's employer "has acontract, retainer or other agreement to provide professional services to [a municipality], it shallbe presumed that the individual is an independent contractor and not an employee" of themunicipality (2 NYCRR 315.3 [c] [2] [iii]). As a result of the application of these newregulations, plaintiffs' memberships in the Retirement System were invalidated.
Plaintiffs thereafter commenced the instant action. In their first amended complaint,plaintiffs set forth numerous causes of action against defendant Attorney General and defendantOffice of the New York State Attorney General (hereinafter collectively referred to as theAttorney General), the Comptroller and defendant Office of the Comptroller of the State of NewYork (hereinafter collectively referred to as the Comptroller), and the Retirement Systemseeking, among other things, (1) declaratory judgments determining that defendants have noauthority to investigate, reduce or terminate plaintiffs' retirement benefits and that the proceduresused by defendants are contrary to statute and in violation of NY Constitution, article V, §7, and (2) injunctive relief permanently prohibiting the aforementioned investigations, reductionsor terminations. Plaintiffs moved for temporary injunctive relief and defendants, arguing afailure to state a cause of action, lack of standing, mootness, prematurity and failure to exhaustavailable administrative remedies, cross-moved to dismiss plaintiffs' first amended complaint.Plaintiffs opposed the cross motion and, in turn, cross-moved for leave to amend their complainta second time so as to add additional plaintiffs and remove the Attorney General as a defendantin the action.
Supreme Court denied plaintiffs' motion for temporary injunctive relief, denied plaintiffs'cross motion for leave to amend their complaint a second time and essentially granteddefendants' cross motion dismissing causes of action 1 through 16 in the amended complaint.However, while dismissing the injunctive relief sought in the second and sixth causes of action,the court found that sufficient facts were alleged to illustrate due process violations and, as such,partially converted said causes of action into a proceeding pursuant to CPLR article 78; the courtalso granted leave to serve an amended petition to add other individuals who it is alleged havehad their Retirement System benefits adversely affected without due process. Thus, the onlysurviving portions of plaintiffs' first amended complaint are two causes of action seekinginjunctive relief in their new form as a proceeding pursuant to CPLR article 78. PlaintiffsNathaniel W. Swergold and William M. Cullen (hereinafter collectively referred to as plaintiffs)now appeal, as limited by their brief, from so much of the order as dismissed their claimsbrought against the Comptroller and the Retirement System (hereinafter collectively referred toas defendants).[FN*]
In light of a recent order of Supreme Court issued subsequent to the filing of this appeal(see Hoover v DiNapoli, Sup Ct, Albany County, Sept. 22, 2009, Connolly, J., index No.2414-09), the Deputy Comptroller for the Division of Retirement Services in the Comptroller'soffice submitted an affidavit to this Court on behalf of defendants attesting that they are revokingtheir prior determinations issued to plaintiffs and that "[n]o credits will be revoked unless anduntil plaintiffs have an adequate opportunity to be heard in a formal administrative hearing heldpursuant to Retirement and Social Security Law § 74." We interpret this affidavit asrestoring all of plaintiffs' service credits and guaranteeing them the right to a timely hearing anda predetermination of their membership status in the Retirement System even though they havenot yet applied for retirement (see e.g. Matter of Cole-Hatchard v McCall, 4 AD3d 715,715-716 [2004]; Marsh v New York State & Local Employees' Retirement Sys., 291AD2d 713, 714 [2002]). Accordingly, plaintiffs' claims pertaining to the alleged deprivation oftheir due process rights—namely those arguments related to the dismissal and/orconversion of their second, sixth and fourteenth causes of action—have been renderedmoot to the extent that they sought restoration of plaintiffs' benefits pending a hearing (seeMatter of Hearst Corp. v Clyne, 50 NY2d 707, 714-715 [1980]; Matter of Schulz v Stateof New York, 182 AD2d 3, 5 [1992], appeal dismissed 80 NY2d 924 [1992], lvdenied 80 NY2d 761 [1992]).
Any other due process challenge, as well as plaintiffs' arguments that the unilateralrevocation of their membership in the Retirement System is otherwise unconstitutional, arepremature, given that their credits have been restored pending hearings. Should defendantsultimately conclude that plaintiffs were properly enrolled in the Retirement System, plaintiffswill not be aggrieved. As it is not the proper exercise of our review power to offer advisoryopinions, plaintiffs' first, fifth and ninth causes of action—all expressly premised on arevocation or diminution of plaintiffs' retirement benefits—must be dismissed as they stateclaims that are not yet ripe for judicial review (see American Ins. Assn. v Chu, 64 NY2d379, 385-386 [1985], appeal dismissed and cert denied 474 US 803 [1985]; NewYork Pub. Interest Research Group v Carey, 42 NY2d 527, 529-530 [1977]; Matter ofNational Fuel Gas Distrib. Corp. v Public Serv. Commn. of State of N.Y., 71 AD3d62, 64 [2009]). Likewise, those challenges to thevalidity of the new rules insofar as they are applied to determine that plaintiffs are independentcontractors instead of employees (plaintiffs' tenth and eleventh causes of action) or applied todiminish earned credits (twelfth, thirteenth and sixteenth causes of action), as well as theirfifteenth cause of action protesting the retroactive application of the new rules to plaintiffs, arenot ripe for judicial review inasmuch as the result and propriety of application of the new rules tothese plaintiffs is not yet finally determined (see Saratoga County Chamber of Commerce vPataki, 275 AD2d 145, 158-159 [2000]; see also Matter of Deem v New York State &Local Retirement Sys., 44 AD3d 1235, 1235 [2007], lv denied 9 NY3d 818 [2008]).
Finally, we address plaintiffs' contention that Supreme Court erred in denying their crossmotion for leave to amend their complaint a second time. A trial court's decision on anapplication for leave to amend will not be overturned absent a clear abuse of discretion(see CPLR 3025 [b]; Leclaire v Fort Hudson Nursing Home, Inc., 52 AD3d1101, 1102 [2008]; Smith v Haggerty, 16 AD3d 967, 967 [2005]). Here, the causes ofaction proposed in the second amended complaint suffer from the same jurisdictionaldeficiencies found in the first amended complaint. Accordingly, inasmuch as the proposedamended complaint also would have been dismissed in its entirety, plaintiffs' challenge to thedenial of their motion to amend is moot.
Mercure, J.P., Malone Jr., Stein and Garry, JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as denied defendants' cross motion withrespect to the second and sixth causes of action and converted said claims into a proceedingpursuant to CPLR article 78; said causes of action dismissed; and, as so modified, affirmed.
Footnote *: Thus, the Attorney General isnot a party to this appeal and plaintiffs' eighth cause of action—against the AttorneyGeneral—is not before us. Further, plaintiff John B. Hogan did not appeal and the actionhas apparently been discontinued as to plaintiffs Paul A. Martineau and Terence E. Smolev.Accordingly, no issue is before us with regard to the third, fourth or seventh causes of actionalleged in the first amended complaint on behalf of those plaintiffs.