Tipaldo v. Lynn
| Decision Date | 22 October 2015 |
| Docket Number | No. 143,143 |
| Citation | 26 N.Y.3d 204,42 N.E.3d 670,2015 N.Y. Slip Op. 07698,21 N.Y.S.3d 173 |
| Parties | John TIPALDO, Respondent, v. Christopher LYNN, as Commissioner of the Department of Transportation for the City of New York, et al., Appellants. |
| Court | New York Court of Appeals Court of Appeals |
Zachary W. Carter, Corporation Counsel, New York City (Marta Ross, Richard Dearing and Larry A. Sonnenshein of counsel), for appellants.
Pollack, Pollack, Isaac & DeCicco, LLP, New York City (Lewis Rosenberg and Brian J. Isaac of counsel), and Ginarte O'Dwyer Gonzalez Gallardo & Winograd, LLP, for respondent.
In this whistleblower action, we are faced with two issues: First, whether plaintiff John Tipaldo made a good faith effort to comply with the reporting requirements of Civil Service Law § 75–b (2)(b) ; and second, whether prejudgment interest is available under Civil Service Law § 75–b and Labor Law § 740(5) .
For the reasons that follow, we hold that plaintiff made a good faith effort to comply with the statute, and that prejudgment interest is available in actions of this kind.
Plaintiff was employed by New York City's Department of Transportation (DOT) and served as the DOT's Acting Assistant Commissioner for Planning and Engineering. He was apparently promised that at some point that position would become permanent and be accompanied by a significant pay increase. While he held that position plaintiff supervised the Queensborough Bridge Project which involved procuring a variety of street signs, including “don't honk” signs to advise motorists of possible fines. Plaintiff discovered an alleged scheme by his superiors, defendants Christopher Lynn, then-Commissioner of the DOT, and Richard Malchow, then-First Deputy Commissioner of the DOT, to award a signage contract to Lynn's acquaintance in violation of the City's public bidding rules. The day after placing an order for the signs from Lynn's acquaintance on November 6, 1996, a meeting was held informing DOT employees, including Tipaldo, that the signs had been purchased. According to plaintiff, he and other employees questioned the legality of the process and the DOT employees whose signatures were required to authorize the purchase refused to sign the authorization. The following day, November 8, Lynn and Malchow then solicited bids from the public. Following the delivery and installment of the signs, the DOT received several lower bids compared to the $6,000 paid to Lynn's acquaintance. Defendants thereafter allegedly created a backdated memorandum stating that the need for the signs was “urgent” and that the order must be placed immediately, rather than go through the bidding process.
Plaintiff informed his immediate supervisors about defendants' alleged misconduct. One or two business days later, plaintiff reported defendants' alleged actions to the Office of the Inspector General for the DOT and requested an investigation. Plaintiff claims that shortly after filing his report with the Inspector General, Lynn and Malchow retaliated against him by excluding him from meetings, removing him from supervising and managing several projects, and publicly making negative comments about him. Eventually, plaintiff was removed from his position and demoted.
Plaintiff then commenced this action in 1997 pursuant to Civil Service Law § 75–b. He alleged that he was retaliated
against for reporting improper governmental activity and sought a permanent injunction, reinstatement, all lost compensation, punitive damages, attorney's fees, and costs. Defendants moved for summary judgment dismissing the complaint, arguing that plaintiff failed to comply with Civil Service Law § 75–b by not reporting the allegedly wrongful actions to the appointing authority (which under these facts were defendants) before contacting the Inspector General's office. Plaintiff cross-moved for summary judgment on liability.*
Supreme Court granted defendants' motion for summary judgment, denied plaintiff's cross motion, and dismissed the complaint (2006 N.Y. Slip Op. 30746[U], 2006 WL 8213627 [2006] ). The court agreed with defendants that plaintiff failed to state a cause of action by not reporting the defendants' alleged misconduct to an appointing authority. On appeal, the Appellate Division reversed, and granted plaintiff's motion for summary judgment, stating, “[t]here is no dispute that retaliatory actions were taken against plaintiff, and although a cause of action pursuant to the subject statute requires plaintiff to have first reported the alleged violation to the internal [DOT] ‘appointing authority,’ here, that was defendants” (48 A.D.3d 361, 361–362, 851 N.Y.S.2d 564 [1st Dept.2008] [citation omitted] ). The Court determined that “plaintiff's good faith efforts in the manner and timing of his reporting, first informally to his immediate supervisors, and then soon thereafter to the [DOI], satisfactorily met the requirements of Civil Service Law § 75–b (2) ” (id. at 362, 851 N.Y.S.2d 564 ).
Thereafter, a bench trial on damages was conducted. Plaintiff's expert Dr. Anne Bynoe testified, concluding that if plaintiff had not been demoted, he would have been permanently appointed to Assistant Commissioner for Planning, receiving a $25,000 raise, amounting to an $81,000 salary at the time of demotion. Using the salary information of two comparators (DOT managers that Dr. Bynoe determined were similarly situated to plaintiff in experience and job responsibilities),
Dr. Bynoe concluded that over the 10 years since plaintiff's demotion, plaintiff lost approximately $388,243 in earnings, or $662,721 with 9% statutory interest. Defendants did not present any evidence to refute Dr. Bynoe's conclusions.
Supreme Court then directed judgment to be entered in favor of plaintiff. However, the court denied plaintiff's claim for interest, stating that “neither C[ivil] S[ervice] L[aw] § 75–b nor Labor Law § 740 makes any provision for interest.” The court directed that defendants pay plaintiff $175,000, rather than the amount computed by Dr. Bynoe.
The Appellate Division modified the judgment and, as so modified, affirmed (76 A.D.3d 477, 907 N.Y.S.2d 177 [1st Dept.2010] ). The Court determined that Supreme Court failed to explain how it calculated the award and did not address plaintiff's requests for consequential damages or reinstatement to an equivalent position. The Court determined that the only expert opinion before it was plaintiff's, and it saw no reason to disturb Dr. Bynoe's conclusions on the back pay owed to plaintiff based upon the raise he was to receive with the anticipated promotion. The Court determined that Labor Law § 740(5) allows whistleblower plaintiffs who sue under Civil Service Law § 75–b to seek prejudgment interest, because the purpose of Civil Service Law § 75–b is to “remediat[e] adverse employment actions which, if allowed, would undermine an important public policy, that is, encouraging public employees to expose fraud, waste and other squandering of the public fisc” (id. at 482, 907 N.Y.S.2d 177 ). Additionally, the Court ordered defendants to reinstate plaintiff to the same or equivalent position he held before the retaliatory personnel action.
Supreme Court then entered a judgment awarding plaintiff $388,243 in back pay, $274,478 in interest, $152,521.81 in attorney's fees, and $985 in costs. The judgment also directed defendants to promote plaintiff to an Assistant Commissioner position, with a salary of $157,000, effective August 24, 2010. This Court granted defendants' motion for leave to appeal from the judgment, bringing up for review the prior non-final 2008 and 2010 Appellate Division orders. We now affirm.
The first issue is whether plaintiff complied with Civil Service Law § 75–b, the state whistleblower statute.
Civil Service Law § 75–b (2)(a)(ii) provides that adverse employment action may not be taken against a public employee
based upon his or her disclosure of information “which the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action.” “Improper governmental action” is defined as:
“any action by a public employer or employee, or an agent of such employer or employee, which is undertaken in the performance of such agent's official duties, whether or not such action is within the scope of his employment, and which is in violation of any federal, state or local law, rule or regulation” (Civil Service Law § 75–b [2 ][a] ).
Prior to reporting what may be “improper governmental action,” an employee is to make “a good faith effort to provide the appointing authority or his or her designee the information to be disclosed and shall provide the appointing authority or designee a reasonable time to take appropriate action unless there is imminent and serious danger to public health or safety” (Civil Service Law § 75–b [2 ][b] ). An “appointing authority” is the “officer, commission or body having the power of appointment to subordinate positions” (Civil Service Law § 2[9] ). Based upon the legislative history, the purpose of the reporting requirement was to allow the employer the opportunity to cease the violations by providing internal notice prior to disclosing misconduct to an outside agency (see Budget Report, Bill Jacket, L. 1984, ch. 660 at 7). Following the report of a complaint to the appointing authority, pursuant to a New York City mayoral executive order, it is the authority's obligation to report the alleged improper governmental action to the Department of Investigation (see N.Y. City Executive Order No. 16 of 1978 § 4[d] ). The executive order also requires an employee to immediately report misconduct or face disciplinary action, including possible termination.
Because plaintiff's appointing authorities were Lynn and Malchow, he understandably did not report their alleged misconduct to them. The scheme in which Lynn and Malchow purportedly engaged was quite deliberate. After entering into a contract...
To continue reading
Request your trial