C.S.D. No. 2 of Town of Coeymans v. New York State Teachers Retirement System

• Decision Date: 03 May 1965
• Parties: C. S. D. NO. 2 OF TOWNS OF COEYMANS ET AL., ALBANY COUNTY, Town of New Baltimore, Greene County, et al., Petitioners, v. NEW YORK STATE TEACHERS RETIREMENT SYSTEM, New York State Teachers Retirement Board, C. B. Murray, Martin A. Helfer, Muriel H. Weber, Lester B. Foreman, Arthur Levitt, Frank Wells McCabe, Harold A. Moe and Howard B. Tuggey, Respondents.
• Court: New York Supreme Court

Page 585

259 N.Y.S.2d 585

46 Misc.2d 225

C. S. D. NO. 2 OF TOWNS OF COEYMANS ET AL., ALBANY COUNTY Town of New Baltimore, Greene County, et al., Petitioners, v. NEW YORK STATE TEACHERS RETIREMENT SYSTEM, New York State Teachers Retirement Board, C. B. Murray, Martin A. Helfer Muriel H. Weber, Lester B. Foreman, Arthur Levitt, Frank Wells McCabe, Harold A. Moe and Howard B. Tuggey, Respondents.

Supreme Court, Special Term, Albany County.

May 3, 1965.

Watters & Donovan, New York City, for petitioners (John P. Walsh, New York City, of counsel).

Bruce Bromley, New York City, for respondents.

LOUIS G. BRUHN, Justice.

This is a proceeding which was instituted on July 20, 1964 pursuant to article 78 CPLR by 105 of the 807 school districts (Employers) against the New York State Teachers Retirement System (System), the New York State Teachers Retirement Board (Board), the individual members of the Board and C. B. Murray, the Executive Secretary of the System.

The petition, as amended on January 29, 1965, is allegedly brought on behalf of the petitioners and all other Employers similarly situated and claims that the respondents in assessing 'contributions' against them have acted in violation of the statute governing such contributions. (§ 517 of the Education Law.)

The petitioners' claims are set forth in the amended petition in five separate causes of action.

In the first cause of action they claim that the Board, at its April 1962 meeting, assessed a 'deficiency contribution' for the school year 1962-63 although they knew, or should have known, that the deficiency balance was nearing liquidation and that the rate fixed was such that enough was collected to create an over collection which they seek to have refunded.

In the second cause of action they claim that the Board, at its April 1963 meeting, assessed a further 'deficiency contribution' at the same rate for the school year 1963-64 illegally since the deficiency balance had not only been completely liquidated but in fact overpaid during the school year 1962-63. They claim further that the Board reaffirmed this action following requests for reconsideration at its March 19, 1964 meeting by a divided vote of 4 to 2.

In the third and fourth causes of action they claim that, since 1958, the Board has been assessing a 'special deficiency contribution' in violation of § 517(2)(c).

In the third cause of action they seek to have the respondents required to abide by the statute and refund the excess contributions to them.

In the fourth cause of action they seek to have the overassessment of the 'special deficiency contribution' eliminated and corrected for the future.

In the fifth cause of action they claim that at its March 1964 meeting the Board illegally assessed a 'normal contribution' by including components unauthorized by § 517(2)(b).

In addition to denials the respondents have pleaded the statute of limitations as well as laches as defenses to this proceeding and for that reason it might be well to examine those questions first.

CPLR 217, provides, in part:

'* * *, a proceeding against a body or officer must be commenced within four months after the determination to be reviewed becomes final and binding upon the petitioner or the person whom he represents in law or in fact, or after the respondent's refusal, upon the demand of the petitioner or the person whom he represents, to perform its duty; * * *.' (Italics supplied.)

Apparently, recognizing the dilemma presented to them because of this section, the petitioners are now claiming not only that the respondents have made determinations which were affected by an 'error of law' and which were 'arbitrary and capricious' but, in addition, are claiming they 'failed to perform a duty enjoined upon [them] by law.' (CPLR 7803(1) and (3).)

Viewing the relief sought as a review of a determination it would appear that, since there is no machinery designed for a hearing and review before the respondents, their determinations became final and binding at the particular meeting at which the determinations were made.

Under those circumstances, the statute of limitations would be a bar to all causes of action.

On the contrary, if they urge that the relief they seek is more appropriately one involving a failure to perform a duty enjoined by law then the proceeding becomes one in the nature of mandamus and there seems little doubt that the law requires that type of proceeding, except for laches, to be commenced within four months of a refusal upon demand. (Matter of O'Connell v. Kern, 287 N.Y. 297, 301, 39 N.E.2d 246, 248; Matter of Williams v. Morton, 297 N.Y. 328, 334, 79 N.E.2d 428, 430; Matter of Gimprich v. Bd. of Educ. of City of N. Y., 306 N.Y. 401, 405, 118 N.E.2d 578, 579.)

It is equally true that, in that type of proceeding, a petitioner cannot delay in making the required demand in order to postpone indefinitely the time within which to institute such a proceeding. (Matter of Amsterdam City Hosp. v. Hoffman, 278 App.Div. 292, 104 N.Y.S.2d 348; Matter of Kleinman v. Kaplan, 20 A.D.2d 594(5), 245 N.Y.S.2d 268.)

Incidentally, in the Kleinman case, supra, the court used this very significant language:

'In Matter of Cash v. Bates, 301 N.Y. 258, 93 N.E.2d 835, where the civil service appointments were held invalid, the argument that the petition must be dismissed for 'untimeliness' was rejected in view of the continuing failure of respondent to obey the constitutional directions in respect of civil service appointments. But this treatment of 'untimeliness' cannot reasonably be read to mean that under all circumstances a petitioner has a right to bring mandamus to challenge civil service appointments whenever he wishes with no possibility that he may be barred by his own laches. The court, with Cash cited to it as a precedent, expressly rejected such a possibility in Austin v. Board of Higher Education of City of New York, 5 N.y.2d 430, 442, 186 N.Y.S.2d 1, 10, 158 N.E.2d 681, 687-688. This was not a civil service case, but the principle laid down is applicable to the general problem of undue delay constituting laches. An aggrieved party may not 'extend indefinitely' the period during which he is required to take action 'by delaying making his demand'.' (Italics supplied.)

In the case of Matter of Devens v. Gokey, 12 A.D.2d 135, 136, 137, 209 N.Y.S.2d 94, 96, 97, affd. 10 N.Y.2D 898, 223 N.Y.S.2d 515, 179 N.E.2d 516, the court stated:

'It is the settled law that the demand must be made within a reasonable time after the right to make the demand occurs or * * * where the petitioner has been misled the respondent's conduct, within a reasonable time after he becomes aware of the facts which give rise to his right of relief.' (Italics supplied.)

At page 137, 209 N.Y.S.2d at page 97, the court further stated:

'The term does not refer to the equitable doctrine of laches. If there is an unexcused delay in making the demand, the four months' statute of limitations will be deemed to have begun to run at the time the demand should have been made. * * * The problem in these proceedings is one of the statute of limitations and not one of the equitable doctrine of laches and it is immaterial whether or not the delay caused any prejudice to the respondent.

'Even though we treat a four months' period as a measure of permissible delay in the making of the demand ([Matter of] Amsterdam City Hospital v. Hoffman, supra, 278 App.Div. at page 297, 104 N.Y.S.2d at page 353), it would give an aggrieved person four months to make a demand and four months thereafter to bring the proceeding.' (Italics supplied.)

To properly apply these accepted principles it becomes necessary first to establish the date when the right to relief or, in other words, the date when the right to make a demand, arose.

This determination would seem relatively simple since the petitioners concede that the earliest date on which it can be said there was any demand for corrective action by any petitioner was at the April 24, 1964 meeting.

Since the fifth cause of action was not asserted until the service of an amended petition, it might be well to realize there is authority which holds that in a mandamus proceeding the petition itself may be construed as a demand and the answer as a refusal. (De Lack v. Greene, 170 Misc. 309, 312, 11 N.Y.S.2d 149, 152; Matter of Moskowitz v. La Guardia, 183 Misc. 33, 40, 48 N.Y.S.2d 174, 180, affd. 268 App.Div. 918, 51 N.Y.S.2d 758, affd. 294 N.Y. 830, 62 N.E.2d 388.)

Therefore, whether we regard the petition or the amended petition as the date of the demand and the answer as the refusal and if we take April 24, 1964 as the date of the demand applicable to the first four causes of action we must conclude that the statute of limitations would not be a defense were the proceeding regarded as one in mandamus.

However, to say that the statute of limitations is no defense is not to say that the same holds true necessarily regarding laches as a defense. (Matter of Singer v. Schechter, 17 A.D.2D 204, 206, 233 N.Y.S.2d 483, 485.)

Even though the proceeding itself may have been commenced within the statutory four month limitation period the question still remains as to whether the demand which was made was made within four months 'after the right to make the demand occurred.'

There appears to be nothing in this record to justify any inference that the petitioners were mislead by any conduct of the respondents so, consequently, no need arises for the application of the alternate rule that the demand, when there has been misleading conduct, must be made within four months after beoming 'aware of the facts which give rise to his right to relief.'

Bearing in mind that, concededly, April 24, 1964 was the earliest date any demand for corrective action was made regarding the first four causes of action, the defense of laches unquestionably is a bar since the right to make the demand affecting in first cause of action...