A-1 First Class-Viking Moving & Stor., Inc. v New York City Off. of Administrative Trials & Hearrings Contract Dispute Resolution Bd.

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A-1 First Class-Viking Moving & Stor., Inc. v New York City Off. of Administrative Trials & Hearrings Contract Dispute Resolution Bd. 2012 NY Slip Op 31463(U) May 30, 2012 Supreme Court, New York County Docket Number: 101893/2012 Judge: Joan B. Lobis Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 61412012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: 3QAN BmkQB!8 I PART Judco Index Number : 101883/2012 A-I FIRST CUSS-VIKING MOVING 6 INDEX NO. vs. NYC OFFICE OF ADMINSTRATIVE SEQUENCE NUMBER : 001 ARTICLE 78 The following papors, numbond 1 to &, Notlce of MoUonlOrdor to Show Caum Aniwerlng Amdivlb - Exhlbltm MOTION SEQ NO. w e n read on thli motlo&for ,* d P e Mw -AMdnvltm - Exhlblb Roplylng Affldrvlb d 4 0 'S h l INo@). 1316 IN O W l?-----2 I IWN. Upon the fongolng papers, It is ordered that thii motlon k r' I : ..................................................................... DISPOSED 0 NON-FINALOlSWSlTlON 0DENIED 3 GRANTED IN PART [JOTHER 2. CHECK AS APPROPRIATE: ........................... MOTION IS: 0GRANTED 0SUBMIT ORDER 3. CHECK IF APPROPRIATE: ................................................ 08ETfLE ORDER 0DO NOT POST 0FIDUCIARY APPOINTMENT 0REFERENCE 1. CHECK ONE: [* 2] UNFILED JUDGMENT T b judgment has not been entered by the County Clerk h QndI I O h Of Mlrycarmot be served based h e m . To entry, counsel o authorired represenlatie must r SUPREME COURT OF THE STATE OF NEW hl a t Judgmens cbk f~ (Room Desk l41B). NEW YORK COUNTY: IAS PART 6 .................................................................... X A-1 FIRST CLASS-VIKING MOVING & STORAGE, INC., Petitioner, Index No. 101893/12 Decision, Order, and Judgment -againstNEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS CONTRACT DISPUTE RESOLUTION BOARD, CITY OF NEW YORK and NYC HUMAN RESOURCE ADMINISTRATION, Petitioner brings this proceeding under Article 78 of the C.P.L.R., seeking an order annulling, reversing, and setting aside the decision of respondent New York City Office of Administrative Trials and Hearings Contract Dispute Resolution Board ( CDRB ), dated October 29, 201 1 ( the CDRB Decision ), on the grounds that the CDRB Decision is not warranted by the facts; is illegal, unjust, void, arbitrary and capricious; is unauthorized and violative of the laws of the state of New York; is not based on substantial evidence; and is an abuse of discretion. Respondents City of New York and New York City Human Resources Administratioflepartment of Social Services s M a NYC Human Resources Administration ( HRA ) answer and assert affirmative defenses. A-1 First Class-Viking Moving & Storage, Inc. ( A-1 ) is a moving industry rl, employer. On or about June 15, 2009, A-1 entered into a contract with HRA to provide moving , services (the Contract ). Under the terms of the Contract, the wages are governed by the prevailing [* 3] wage schedule issued by the New York City Comptroller (the Comptroller ). On July 1,2010, the Comptroller issued changes to the prevailing wage schedule for moving industry employers. Most notably, petitioner states that the new prevailing wage schedule required that casual employees, who had been earning $12 to $13 per hour under the previous wage schedule, be afforded benefits and increased wages of $30.40 to $38.90 per hour. Roughly 90% ofA- 1 s employees are categorized as casual employees. In light of the new prevailing wage schedule, A- 1 requested an increase in its billable rates by letter dated July 7,20 10, addressed to Fern Vasile, Assistant Deputy Commissioner of HRA. By letter dated August 11, 2010, Ms. Vasile responded that HRA, along with the Office of Legal Affairs and the New York City Law Department, had reviewed A- 1 s request, and that, collectively, they made certain wage adjustments and increases in accordance with the new prevailing wage schedule, but had rejected some of A-1 s requests. The August 11,2010 letter was also copied to five other individuals, including Edward LeMelle, Deputy General Counsel of HRA. On September 3, 2010, Lawrence Laby, a principal of A-1, met with Mr. LeMelle. According to A- 1, it requested the meeting in order to fully explain its position. By letter dated September 10, 20 10, Mr. LeMelle reiterated HRA s position in light of the new prevailing wage For the purposes of this motion, the new prevailing wage schedule refers to the prevailing wage schedule that was effective July 1, 2010. A-1 requested increases as follows: Industry A Driver: $42.88; Industry A Assistant: $47.86; Industry B Driver: $37.89; Industry B Assistant: $61.15. HRA adjusted the rates as follows: Industry A Driver: $42.88; Industry A Assistant: $47.86; Industry B Driver: $37.01; Industry B Assistant: $42.59. -2- [* 4] schedule and re-emphasized A-1 s obligations under the Contract. On October 8, 2010, A-1 submitted a Notice of Dispute to Robert Doar, Commissioner of HRA. On December 7, 2010, Commissioner Doar issued a decision that the Notice of Dispute was time barred under 9 R.C.N.Y. 5 4-09(d)(l). On June 17,201I , A-1 submitted apetition to CDRB, and on October 29, 201 1, CDRB issued the CDRB Decision, adopting HRA s position that A-1 s petition was time barred. A- 1 now brings this petition challenging the CDRB Decision. Primarily, petitioner argues that CDRB incorrectly found that the 30-day statute of limitations under 9 R.C.N.Y. 5 4-09(d)(l) began to run from the date of Ms. Vasile s letter on August 11, 2010. Petitioner contends that Ms. Vasile s August 11,2010 letter was not a determination as intended by the statute because it lacked a reasoned explanation, failed to analyze a bona fide dispute between the parties from which petitioner could seek relief, and did not acknowledge the complexity of the implications of the new prevailing wage schedule. Further, petitioner sets forth that CDRB arbitrarily and capriciously called into question the authenticity of an HRA organizational chart offered by A- 1 in support of its claim that Ms. Vasile, as Assistant Deputy Commissioner, lacked actual or apparent authority to render a determination on behalf of HRA and that HRA s top ranking officials were unaware of the August 11, 2010 letter. Petitioner argues that Mr. LeMelle s September 10,2010 letter actually triggered the running ofthe 30-day statute of limitations because, as Deputy General Counsel, Mr. LeMelle was authorized to render a decision on behalf of HRA, and because that letter resulted from a meeting during which A- 1 communicated the complexity of the issues it was experiencing as a result of the new prevailing wage schedule. It further contends that [* 5] the September 10, 20 10 letter contained a reasoned explanation, rendering it a determination as intended by the statute. Petitioner also states that CDRB committed an error of law by determining that the reasoned explanation requirement set forth in 9 R.C.N.Y. 4 4-09(b) is inapplicable to decisions rendered prior to the submission of a Notice of Dispute. Furthermore, petitioner argues that should the court find that Ms. Vasile s August 1 1,2010 letter was a determination triggering the 30-day statute of limitations, its claim should nevertheless be permitted because the claim is meritorious and the delay was minimal. In their response papers, the City of New York and HRA (collectively as the Answering Respondents ) argue that the CDRB Decision, denying A- 1 s claim as time barred, was rational and was not affected by an error of law. The Answering Respondents state that CDRB acted rationally in finding that Ms. Vasile s August 1 1 2010 letter was a final determination triggering the 30-day statute of limitations, and that neither the September 3,2010 meeting nor the September 10, 2010 letter by Mr. LeMelle tolled A-1 s time to file its Notice of Dispute with the Agency Head. They state that CDRB rationally found that A-1 failed to establish that Ms. Vasile lacked authorization to render a decision on behalf of HRA, that CDRB also rationally found that Ms. and Vasile s August 1 1,2010 letter placed A- 1 on notice of the rates that HRA would pay in light of the new prevailing wage schedule. The Answering Respondents additionally argue that CDRB rationally interpreted that the reasoned explanation requirement in 9 R.C.N.Y. 4 4-09(b) only applies to the Agency Head s decision and the CDRB s decision, and that this requirement is inapplicable to determinations made prior to the filing of the Notice of Dispute. -4- [* 6] Furthermore, the Answering Respondents set forth that respondent CDRB is not a proper or necessary party to this proceeding, and request that the proceeding be dismissed against CDRBa3 They cite C.P.L.R. 4 7804(i) in support of their request, which authorizes a judicial officer to elect not to appear in an Article 78 proceeding unless ordered by the Court to do so upon a party s application. They further argue that although CDRB is an administrative body and not a judicial one, and that although section 7804(i) does not strictly apply to it, CDRB should nonetheless be dismissed because the same principles are at issue here. This court s review of the CDRB Decision is limited to whether the decision was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion. C.P.L.R. S, 7803(3); 9 R.C.N.Y. 6 4-09(g)(6). An agency determination is arbitrary and capricious if it is without rational basis. Ln re Pel1 v. Bd. of Educ., 34 N.Y.2d 222, 23 1 (1974). Where a rational basis exists for the agency action, the court may not substitute its judgment for that of the agency. In re Tockwotten Assocs., LLC. v. N.Y. State Div. of Hous. and Community Renewal, 7 A.D.3d 453,454 (1st Dep t 2004). Moreover, an agency s interpretation of a statute that it is charged with administering is entitled to deference if it is not irrational or unreasonable. Smith v. Donovan, 61 A.D.3d 505,508 (1st Dep t) (citations omitted), -lv. denied, 13 N.Y.3d 712 (2009). See also Peckham v. Calogero, 12 N.Y.3d 424,43 1 (2009). CDRB submits its own verified answer, stating that it is administered by the New York City Office of Administrative Trials and Hearings, and that it determines disputes between suppliers and agencies of the City of New York pursuant to an alternative dispute resolution clause contained in the City s construction and service contracts, and pursuant to 9 R.C.N.Y. 9 4-09. CDRB further states that it takes no position in this litigation adverse to either party, and refers the court to its decision. -5- [* 7] Under 9 N.Y.C.R. 5 4-09(d)( l), a vendor shall present its dispute in writing( Notict of Dispute ) to the Agency Head within the time specified by the contract or, if no time is specified, within thirty days of receiving written notice of the determination or action that is the subject of the dispute. This language is also replicated under Article 14, Section 4(a) of the Contract. The parties do not dispute that the 30-day statute of limitations applies. The essence of the parties dispute rests on the date which triggered the running of the statute of limitations. While petitioner contends that the statute of limitations did not start running until September 10,2010, the date of Mr. LeMelle s letter, the Answering Respondents argue that Ms. Vasile s letter dated August 1 1,20 10 tnggered the statute. For the following reasons, the court finds that the August 11, 2010 letter was HRA s final determination, thus triggering the statute of limitation and rendering A- 1 s Notice of Dispute, dated October 8,2010, time barred. The court finds unpersuasive petitioner s argument that Ms. Vasile lacked apparent or actual authority to render a decision on behalf of HRA. Petitioner contends that Ms. Vasile s title ofAssistant Deputy Coinmissioner is not listed among the top twenty seven (27) positions on HRA s website. The Answering Respondents correctlypoints out that petitioner s argument is contradictory to the The Escalation Clause of Section 12 of the Contract, which provides that [i]n the event that the applicable New York State Labor Law establishing the prevailing wage for services performed under this Contract is increased during the term of this Contract, Contractor may request a contract modification to address such payroll modifications and related contract expenditures. Any requests for such change should be submitted in writing to the Contract Manager and the Assistant Deputy Commissioner for Contract Services, along with any official notification and documentation supporting the modification request. -6- [* 8] Petitioner specifically addressed its request to Ms. Vasile. Not only does the Escalation Clause allow Ms. Vasile to make determinations, but petitioner requested that she make such a determination. Additionally, Ms. Vasile s August 1 1,2010 letter stated that the request was reviewed by the Office of Legal Affairs and the New York City Law Department, and was copied to five individuals, including Mr. LeMelle. Accordingly, HRA was informed of A-1 s request and was aware that Ms. Vasile was rendering a decision on behalf of HRA. Moreover, CDRB did not arbitrarily question A-1 s evidence in support of A-1 s proposition that Ms. Vasile lacked authority, because it is permitted to weigh evidence, and question the credibility of such evidence, in rendering its decision. The court also finds unpersuasive petitioner s argument that the August 11, 2010 letter was not the predicate to the Notice of Dispute because it was not a final rejection of A-1 s request. The August 1 1,2010 letter placed petitioner on notice that a dispute had arisen by setting forth the rates that HRA would pay in light of the new prevailing wage schedule and that the decision was intended to be final. Absent some clear indication that an agency has misled a petitioner into foregoing the right to commence a timely proceeding, a mere inquiry or even a request for reconsideration outside the formal administrative review process will not render a prior determination nonfinal. In re Cauldwest Realty Cow. v. City of N.Y., 160 A.D.2d 489,491 (1st Dep t 1990) (internal citations omitted) (citations omitted). The court further finds unpersuasive petitioner s argument that CDRB erroneously found that the reasoned explanation provision in 9 R.C.N.Y. -7- 5 4-09(b) was inapplicable to [* 9] decisions rendered prior to the filing of a Notice of Dispute. Petitioner argues that, in contrast to the August 11, 2010 letter, the September 10, 2010 letter did give an explanation as required by 9 R.C.N.Y.-§4-09(b), because the latter referenced and analyzed the applicable changes in the wage schedule and addressed the relevant contract provision. The statute states that i [all1 determinations required by this section shall be clearly stated, with a reasoned explanation for the determination based on the information and evidence presented to the party making the determination. Failure to make such determination within the time required by this section shall be deemed a nonidetermination without prejudice that will allow application tot he next level. 9 R.C.N.Y. 4 4-09(b). But, this provision comes into operati4n only after aNotice of Dispute is filed and applies to determinations made pursuant to the statute, such as that of Commissioner D a or or !I the CDRB. The only requirement set forth by section 4-09 that is applicable to a determination that is the subject the dispute, such as the August 1 1,20 10 letter, is that it must be written, Moreover, the CDRB is given deference to its interpretation of the statute governing its area of expertise. See Y In re. Peckham v.C , 12 N.Y.3d 424,431 (2009). d I The CDRB Decision, finding that petitioner s Notice of Dispute is time barred, was not arbitrary, capricious, nor affected by fraud or error of law. The court need not consider the parties remaining requests. Accordingly, it is hereby i .I ORDERED and ADJUDGED that the petition is denied and the proceeding is ,I II dismissed. Dated: May 39 2012 UNFILED JUDGMENT T i judgment has not been entered by the County C rk hs and notice of entry cannot be served based hereon.- o &lain entry, coullsel o authorized repmentatwe must r appear in person at the Judgment Clerk s Desk (Room 1418). rrf .. I

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