                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: October 30, 2014                   518305
________________________________

In the Matter of EDWARD
   WARTKO,
                    Appellant,
      v                                     MEMORANDUM AND ORDER

NEW YORK STATE TEACHERS'
   RETIREMENT SYSTEM et al.,
                    Respondents.
________________________________


Calendar Date:   September 4, 2014

Before:   Peters, P.J., Stein, Garry, Lynch and Devine, JJ.

                             __________


      Richard E. Cassagrande, New York State United Teachers,
Latham (Megan M. Mercy of counsel), for appellant.

      Eric T. Schneiderman, Attorney General, Albany (William E.
Storrs of counsel), for respondents.

                             __________


Devine, J.

      Appeal from a judgment of the Supreme Court (Ceresia Jr.,
J.), entered March 29, 2013 in Albany County, which dismissed
petitioner's application, in a proceeding pursuant to CPLR
article 78, to review a determination of respondent New York
State Teachers' Retirement System excluding certain payments in
its calculation of the amount of petitioner's final average
salary.

      Petitioner, a former   teacher in the Buffalo City School
District, applied for, but   was denied, a coaching position for
the 2004-2005 school year,   resulting in the filing of a grievance
by petitioner's union, the   Buffalo Teachers' Federation, upon
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which a settlement was reached in 2006. The $9,500 settlement
award was included in the calculation of petitioner's final
average salary for retirement purposes by respondent New York
State Teachers' Retirement System (hereinafter respondent). When
petitioner was not appointed to a coaching position for the 2005-
2006 and 2006-2007 school years, BTF again grieved the decisions
on petitioner's behalf. In 2011, in order to settle the dispute,
a memorandum of understanding (hereinafter MOU) was executed in
which petitioner was awarded $11,220, which amount constituted
the stipends that petitioner would have been given had he been
appointed to a coaching position for both school years.1
Pursuant to petitioner's request that respondent recalculate his
three-year final average salary to include the 2011 settlement
payment, respondent determined that, as such payment was not part
of petitioner's regular compensation, it would not be included in
the final computation of petitioner's retirement benefit.
Petitioner commenced this proceeding seeking, among other things,
to annul respondent's determination. Supreme Court dismissed the
petition and this appeal ensued.

      We affirm. Petitioner argues that respondent was in error
when it refused to include the $11,220 settlement award as part
of his final average salary and, further, that such decision was
arbitrary and capricious in light of respondent's previous
inclusion of the 2006 settlement payment in its computation of
his final average salary. As is relevant here, a person's final
average salary is based on his or her highest average annual
regular salary that was earned over any three consecutive years
of service prior to retirement (see Retirement and Social
Security Law § 443 [a]; Education Law § 501 [11] [b]), but shall
exclude, among other things, "payments which are not part of the
salary base" (21 NYCRR 5003.1 [a]; see Matter of Evans v New York
State Teachers' Retirement Sys., 98 AD3d 1221, 1222 [2012];
Matter of Maillard v New York State Teachers' Retirement Sys., 57


    1
        Although the MOU states that the $11,220 settlement
amount constitutes the stipends of $5,605 that petitioner would
have been paid for holding a coaching position during each of the
two school years for which he applied, the annual stipend amounts
actually total $11,210.
                              -3-                518305

AD3d 1299, 1300 [2008], lv denied 12 NY3d 705 [2009]).
Respondent's decision to distinguish the two settlement payments
was rationally based. Specifically, respondent properly
construed the 2006 stipulation to reflect an acknowledgment by
the school district that it had violated an existing collective
bargaining agreement when it denied petitioner's coaching
application on the ground that he was unqualified and gave the
positions to teachers with less seniority, only to later confirm
that petitioner was indeed eligible to assume the coaching
positions. Conversely, the MOU settling petitioner's subsequent
grievances did not concede, in any manner, that the denial of
petitioner's coaching applications for the 2005-2006 and 2006-
2007 school years had resulted in any contractual violations and
it, in fact, reiterated the school district's assertion that
petitioner "was unqualified for the coaching position at issue."
That the school district opted to pay petitioner in exchange for
a complete settlement of his claims against it does not create a
basis to find that petitioner was eligible for the coaching
appointments and, therefore, that the MOU settlement payment
constituted compensation that he would have earned, thereby
requiring respondent to include such payment in its calculation
of his final average salary (see Matter of Andrews v New York
State Teachers' Retirement Sys., 80 AD3d 939, 941 [2011]; Matter
of Moraghan v New York State Teachers' Retirement Sys., 237 AD2d
703, 704-705 [1997]). As respondent's determination, which was
rendered without a hearing, was rational and not arbitrary and
capricious, it shall remain undisturbed (see Matter of Evans v
New York State Teachers' Retirement Sys., 98 AD3d at 1222; Matter
of Jensen-Dooling v New York State Teachers' Retirement Sys., 68
AD3d 1264, 1266 [2009], lv denied 14 NY3d 705 [2010]).

     Peters, P.J., Stein, Garry and Lynch, JJ., concur.
                        -4-                  518305

ORDERED that the judgment is affirmed, without costs.




                       ENTER:




                       Robert D. Mayberger
                       Clerk of the Court
