| Matter of Jensen-Dooling v New York State Teachers' RetirementSys. |
| 2009 NY Slip Op 09101 [68 AD3d 1264] |
| December 10, 2009 |
| Appellate Division, Third Department |
| In the Matter of Diana Jensen-Dooling, Respondent, v New YorkState Teachers' Retirement System, Appellant. |
—[*1] James R. Sandner, New York State United Teachers, Latham (James D. Bilik of counsel), forrespondent.
McCarthy, J. Appeal from a judgment of the Supreme Court (Ceresia, Jr., J.), entered August6, 2009 in Albany County, which granted petitioner's application, in a proceeding pursuant toCPLR article 78, to annul a determination of respondent denying petitioner credit for certainyears of service.
Petitioner worked for the Monroe 2-Orleans Board of Cooperative Educational Services(hereinafter BOCES) from 1974 until 2001. In 2001, petitioner began working—throughBOCES—on Project Lead The Way (hereinafter PLTW), a program of preengineeringcourses for middle and high school students promoted by a private, not-for-profit corporationcalled Project Lead The Way, Inc. (hereinafter PLTW, Inc.).
An investigation occurred into whether petitioner and others were entitled to retirementcredit in respondent for work rendered in connection with PLTW (see Matter of Blais v NewYork State Teachers' Retirement Sys., 68 AD3d 1266 [2009] [decided herewith]). In July2006, respondent issued a preliminary determination that petitioner was not entitled to retirementcredit because her work on PLTW was not teaching service and was not rendered to BOCES.After petitioner was provided an opportunity to submit evidence to refute the determination,[*2]respondent again concluded that the work that petitionerperformed was not teaching service creditable in respondent, and petitioner's service was notrendered to BOCES. Therefore, petitioner was denied retirement credit for the relevant period.Petitioner sought review of respondent's determination in this CPLR article 78 proceeding.Supreme Court granted the petition, finding that it was arbitrary and capricious for respondent toconduct a de novo review of petitioner's employee status and remitted the matter to respondentfor further proceedings. We reverse.
"[Respondent's] statutory responsibility, supported by broad public policy considerations,requires that it take all necessary steps to insure the financial integrity of the pension fund"(Matter of Galanthay v New York State Teachers' Retirement Sys., 50 NY2d 984, 986[1980]; see Education Law § 525). Indeed, as "even an award of benefitserroneously made in good faith would affect the integrity of the public retirement system, thepresence or absence of good faith on the part of the employer is irrelevant in determiningwhether an error occurred" (Matter of Blais v New York State Teachers' RetirementSys., 68 AD3d at 1268, citing Matter of Galanthay v New York State Teachers'Retirement Sys., 50 NY2d at 986). As respondent rendered its determination without ahearing, our review is limited to ascertaining whether the determination is arbitrary andcapricious or without a rational basis (see Matter of Maillard v New York State Teachers' Retirement Sys., 57AD3d 1299, 1300 [2008], lv denied 12 NY3d 705 [2009]; Matter of Moraghan vNew York State Teachers' Retirement Sys. 237 AD2d 703, 705 [1997]). Although the recordcontains no contract between petitioner and PLTW, Inc., the evidence reveals that petitioner'swork involved promoting and facilitating participation in PLTW among school districtsstatewide to the benefit of PLTW, Inc., and the cost of petitioner's BOCES salary and benefitsand the overhead for her BOCES office were reimbursed to BOCES by that private entity. Inview of respondent's statutory obligation to preserve its integrity, it was appropriate—inascertaining whether petitioner is properly credited with service—to look beyond thelabels placed on the transaction by the parties and examine its substance (see Matter of Holbert v New York StateTeachers' Retirement Sys., 43 AD3d 530, 532 [2007]; Matter of Van Haneghan v New York StateTeachers' Retirement Sys., 6 AD3d 1019, 1021 [2004]). Accordingly, a rational basissupports respondent's determination that petitioner's service was rendered to PLTW, Inc., whichis not an "employer" for purposes of participating in respondent (see Education Law§ 501 [3]). The determination is therefore not arbitrary and capricious, notwithstanding thefact that evidence may have supported a contrary conclusion (see Matter of Cooper v New York State Teachers' Retirement Sys., 19AD3d 724, 726 [2005]); Matter of Moraghan v New York State Teachers' RetirementSys., 237 AD2d at 705).
In light of the foregoing, we need not reach respondent's contention that the work performedby petitioner did not constitute "teaching service" creditable in respondent.
Spain, J.P., Rose, Malone Jr. and Garry, JJ., concur. Ordered that the judgment is reversed,on the law, without costs, and petition dismissed.