               SUPREME COURT OF THE STATE OF NEW YORK
                  Appellate Division, Fourth Judicial Department

241
CA 11-01225
PRESENT: SCUDDER, P.J., SMITH, FAHEY, CARNI, AND SCONIERS, JJ.


IN THE MATTER OF THE ARBITRATION BETWEEN
BOARD OF EDUCATION OF DUNDEE CENTRAL SCHOOL
DISTRICT, PETITIONER-RESPONDENT,

                    AND                                   MEMORANDUM AND ORDER

DOUGLAS COLEMAN, RESPONDENT-APPELLANT.
(APPEAL NO. 1.)


RICHARD E. CASAGRANDE, LATHAM (PAUL D. CLAYTON OF COUNSEL), FOR
RESPONDENT-APPELLANT.

FERRARA, FIORENZA, LARRISON, BARRETT & REITZ, P.C., EAST SYRACUSE
(ERIC J. WILSON OF COUNSEL), FOR PETITIONER-RESPONDENT.

O’HARA, O’CONNELL & CIOTOLI, FAYETTEVILLE (STEPHEN CIOTOLI OF
COUNSEL), FOR NEW YORK STATE ASSOCIATION OF MANAGEMENT ADVOCATES FOR
SCHOOL LABOR AFFAIRS, AMICUS CURIAE.

TIMOTHY G. KREMER, EXECUTIVE DIRECTOR, LATHAM (JAY WORONA OF COUNSEL),
FOR NEW YORK STATE SCHOOL BOARDS ASSOCIATION, INC., AMICUS CURIAE.


     Appeal from a judgment of the Supreme Court, Yates County (W.
Patrick Falvey, A.J.), dated October 1, 2010. The judgment granted in
part the petition to vacate portions of the Hearing Officer’s award.

     It is hereby ORDERED that the judgment so appealed from is
affirmed without costs.

     Memorandum: Pursuant to Education Law § 3020-a, petitioner filed
two disciplinary charges with 16 specifications against respondent, a
tenured Social Studies teacher employed by petitioner. Respondent
moved to dismiss six specifications on the ground that the conduct
encompassed by those specifications had been the subject of counseling
memoranda placed in respondent’s personnel file. The memoranda warned
respondent “of the serious consequences of any future incident[s] . .
. .” It is undisputed that the specific conduct addressed in the
memoranda did not recur before the disciplinary charges were filed.
The Hearing Officer granted respondent’s motion, concluding that “it
would be both improper and unfair under the just cause protocol to
permit and entertain formal charges, identical in nature to those at
issue in the foregoing counseling memoranda, [because], by all
accounts, the matters have not repeated.” We note that two of the
dismissed specifications concerned respondent’s drawing of a cartoon
of two “aliens” on the test of a student with a disability and writing
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                                                         CA 11-01225

the names of the student and her special education teacher next to the
“aliens.” Respondent was also accused of writing sexually
inappropriate terms on a final exam in which he asked the students to
define various vocabulary terms.

     During the hearing, two specifications were withdrawn, and the
Hearing Officer sustained six of the remaining specifications related
to four incidents in which respondent threatened to kill a student;
physically demonstrated a torture technique on a female student lying
on respondent’s desk; gave inappropriate and, in some instances,
derogatory nicknames to students, despite previous warnings to refrain
from such conduct; and ignored fair and consistent grading practices
while exhibiting favoritism in grading practices. The Hearing Officer
imposed a penalty of a six-month suspension without pay “but with
continued medical insurance benefits.”

     Petitioner commenced this proceeding pursuant to Education Law §
3020-a (5) and CPLR 7511 challenging the penalty, the continuation of
health benefits and the dismissal of the six specifications.
Petitioner contended, inter alia, that the penalty of a six-month
suspension was “excessively lenient”; that the Hearing Officer
exceeded his authority under Education Law § 3020-a in ordering
petitioner to continue to pay for respondent’s health insurance during
the period of suspension; and that the Hearing Officer’s decision to
dismiss the six specifications was irrational.

     In appeal No. 1, respondent appeals from a judgment granting the
petition in part (Matter of Board of Educ. of the Dundee Cent. School
Dist. v Coleman, 29 Misc 3d 1204[A], 2010 NY Slip Op 51684[U], *4-*5).
Supreme Court concluded, inter alia, that the Hearing Officer erred in
dismissing the six specifications and lacked statutory authority to
direct petitioner to pay for respondent’s health insurance during the
period of suspension (id. at *3-*4). The court therefore ordered
respondent to reimburse petitioner for any such costs that had been
previously paid by petitioner and remitted the matter for further
consideration on the reinstated six specifications (id. at *4-*5).
Inasmuch as the court was remitting the matter with respect to those
specifications, it determined that it would be premature to address
the issue of the appropriate penalty (id. at *4).

     Upon remittal, the Hearing Officer sustained, in whole or in
part, three of the six specifications, but he reimposed the same
penalty, finding that respondent had previously been disciplined for
the conduct at issue in those specifications through the counseling
memoranda. Thus, the Hearing Officer concluded that “[i]t would be
inherently unfair and totally contrary to the just cause protocol to
issue further discipline to the [r]espondent for actions that were
never repeated” (emphasis added).

     Petitioner commenced a second proceeding pursuant to Education
Law § 3020-a and CPLR 7511 to vacate the Hearing Officer’s decision to
the extent that the Hearing Officer determined that the penalty of a
six-month suspension was appropriate and failed to comply with the
prior judgment. Petitioner contended, inter alia, that the penalty
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                                                         CA 11-01225

imposed was “excessively lenient” and that the refusal to impose any
additional penalty was irrational. In appeal No. 2, respondent
appeals from a judgment granting the petition and determining that the
Hearing Officer’s decision regarding the penalty lacked a rational
basis “due to his improper reliance on the premise that [petitioner]
had to prove [respondent] repeated the misconduct that gave rise to
the counseling memoranda before [the Hearing Officer] would consider
[petitioner’s] request for a penalty” (Board of Educ. of the Dundee
Cent. School Dist. v Coleman, 32 Misc 3d 334, 340). The court vacated
the penalty and remitted the matter to a different hearing officer
regarding only the issue of the penalty (id.).

     We affirm the judgment in each appeal.

     Education Law § 3020-a (5) permits judicial review of a hearing
officer’s decision, expressly providing that “[t]he court’s review
shall be limited to the grounds set forth in” CPLR 7511. Pursuant to
CPLR 7511 (b), an award may be vacated only upon very limited grounds,
one of which is that the arbitrator or person making the award
“exceeded his [or her] power or so imperfectly executed it that a
final and definite award upon the subject matter submitted was not
made” (CPLR 7511 [b] [1] [iii]). The Court of Appeals has concluded
that “[a]n arbitration award may not be vacated unless it violates a
strong public policy, is irrational, or clearly exceeds a specifically
enumerated limitation on the arbitrator’s power” (Matter of Board of
Educ. of Arlington Cent. School Dist. v Arlington Teachers Assn., 78
NY2d 33, 37; see Matter of Mohawk Val. Community Coll. [Mohawk Val.
Community Coll. Professional Assn.], 28 AD3d 1140, 1141). “Where, as
here, parties are subject to compulsory arbitration, the award must
satisfy an additional layer of judicial scrutiny-it ‘must have
evidentiary support and cannot be arbitrary and capricious’ ” (City
School Dist. of the City of N.Y. v McGraham, 17 NY3d 917, 919, quoting
Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89
NY2d 214, 223; see Lackow v Department of Educ. [or “Board”] of City
of N.Y., 51 AD3d 563, 567-568).

     In appeal No. 1, we conclude that the Hearing Officer’s decision
to grant the motion of respondent to dismiss six of the specifications
was arbitrary and capricious. It is well settled that counseling
memoranda such as those placed in respondent’s personnel file are not
considered disciplinary actions (see Holt v Board of Educ. of Webutuck
Cent. School Dist., 52 NY2d 625, 631-632). Rather, such memoranda
“amount to nothing more than administrative evaluations which the
supervisory personnel of the school district have the right and the
duty to make as an adjunct to their responsibility to supervise the
faculty of the schools” (id. at 631). In Holt, the Court of Appeals
specifically stated that such memoranda may “be used to support a
formal charge of misconduct within three years of the occurrence which
the evaluation addresses” (id. at 634 n 2; see Matter of Heslop v
Board of Educ., Newfield Cent. School Dist., 191 AD2d 875, 877; see
also Matter of Lory v County of Washington, 77 AD3d 1265, 1266). As
even the dissent recognizes, Holt and its progeny establish that
counseling memoranda do not constitute professional discipline. Under
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                                                         CA 11-01225

the clear language of Holt, Lory and Heslop, conduct addressed in a
nondisciplinary counseling memorandum may be used to support formal
disciplinary charges at a later date not to exceed three years. Thus,
the court properly determined that it was irrational, arbitrary and
capricious for the Hearing Officer to dismiss the six specifications
on the sole ground that the conduct encompassed by those
specifications had been addressed in counseling memoranda.

     We further conclude in appeal No. 1 that the court properly
determined that the Hearing Officer exceeded his statutory authority
in directing petitioner to pay for respondent’s health insurance
benefits during the period of suspension. “In recommending a penalty
under [section] 3020-a of the Education Law, a hearing [officer] is
limited to one of the penalties set forth in that section, i.e., ‘a
reprimand, a fine, suspension for a fixed time without pay or
dismissal’ ” (33 Ed Dept Rep [Decision No. 13201]; see Matter of
Adrian v Board of Educ. of E. Ramapo Cent. School Dist., 60 AD2d 840,
840; 33 Ed Dept Rep [Decision No. 13137]; 33 Ed Dept Rep [Decision No.
13135]). Inasmuch as a contribution toward an employee’s health
insurance is a form of compensation (see Matter of Police Assn. of
City of Mount Vernon v New York State Pub. Empl. Relations Bd., 126
AD2d 824, 825; Matter of Town of Haverstraw v Newman, 75 AD2d 874,
874-875), the Hearing Officer improperly imposed what amounted to “a
penalty of suspension at reduced pay” (33 Ed Dept Rep [Decision No.
13201]). We therefore conclude that the court properly reinstated the
six specifications and ordered respondent to reimburse petitioner for
any payments that it made toward respondent’s health insurance
benefits during the suspension period.

     In appeal No. 2, we conclude that the court properly determined
that the Hearing Officer’s decision on remittal to impose the same
penalty was arbitrary and capricious inasmuch as the Hearing Officer
based his decision on an erroneous interpretation of the law. The
Hearing Officer refused to impose any additional penalty after
sustaining some of the remitted six specifications based on his
continuing belief that the counseling memoranda constituted a form of
discipline. Inasmuch as it is well established that counseling
memoranda are not disciplinary measures under Education Law § 3020-a
(see Holt, 52 NY2d at 632-634; Matter of Ferguson v Traficanti, 295
AD2d 786, 788), the Hearing Officer’s conclusion that respondent had
previously been disciplined for the conduct encompassed by those
specifications is arbitrary and capricious. We therefore conclude
that the court properly vacated the penalty imposed by the Hearing
Officer and remitted the matter to a different hearing officer for
imposition of a penalty.

     All concur except SCONIERS, J., who dissents in part and votes to
modify in accordance with the following Memorandum: I respectfully
dissent in part in appeal No. 1 because I conclude that, with the
exception of vacating the directive requiring petitioner to pay for
respondent’s health insurance during the period of suspension, Supreme
Court exceeded its limited scope of review in vacating the Hearing
Officer’s decision and award with respect to the teacher disciplinary
charges that petitioner brought pursuant to Education Law § 3020-a
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                                                         CA 11-01225

(Matter of Board of Educ. of the Dundee Cent. School Dist. v Coleman,
29 Misc 3d 1204[A], 2010 NY Slip Op 51684[U]). As the majority
correctly notes, “[a]n arbitration award may not be vacated unless it
violates a strong public policy, is irrational, or clearly exceeds a
specifically enumerated limitation on the arbitrator’s power” (Matter
of Board of Educ. of Arlington Cent. School Dist. v Arlington Teachers
Assn., 78 NY2d 33, 37; see Matter of Mohawk Val. Community Coll.
[Mohawk Val. Community Coll. Professional Assn.], 28 AD3d 1140, 1141-
1142). Moreover, as the Court of Appeals has made clear, these are
“three narrow grounds” (Matter of United Fedn. of Teachers, Local 2,
AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1
NY3d 72, 79; see Matter of New York City Tr. Auth. v Transport Workers
Union of Am., Local 100, 14 NY3d 119, 123). In addition, in cases
such as this, in which the parties have engaged in compulsory
arbitration, “the award must satisfy an additional layer of judicial
scrutiny-it ‘must have evidentiary support and cannot be arbitrary and
capricious’ ” (City School Dist. of the City of N.Y. v McGraham, 17
NY3d 917, 919, quoting Matter of Motor Veh. Acc. Indem. Corp. v Aetna
Cas. & Sur. Co., 89 NY2d 214, 223). Ordinarily, arbitrators are “not
bound by principles of substantive law or by rules of evidence”
(Matter of Town of Webb Union Free School Dist. [Atlantic Energy
Servs., Inc.], 81 AD3d 1454, 1454 [internal quotation marks omitted];
see Matter of Silverman [Benmore Coats], 61 NY2d 299, 308; Matter of
Mays-Carr [State Farm Ins. Co.], 43 AD3d 1439, 1440).

     Contrary to the decision of the majority, Holt v Board of Educ.
of Webutuck Cent. School Dist. (52 NY2d 625) does not support its
conclusion that the Hearing Officer’s dismissal of those disciplinary
charges on which the counseling memoranda had been issued was
arbitrary and capricious. Rather, in a footnote, the Court merely
noted that “critical evaluations can only be used to support a formal
charge of misconduct within three years of the occurrence” addressed
by the evaluation, citing Education Law § 3020-a (1), and that,
“[t]hereafter, such evaluations can only be used to show that the
teacher was given notice of the school district’s dissatisfaction with
his [or her] performance” (id. at 634 n 2 [emphasis added]). Holt
simply held that counseling memoranda did not constitute professional
discipline. Holt neither authorized a school district to bring formal
disciplinary charges based on occurrences that had been the subject of
counseling memoranda nor limited a hearing officer’s authority to
dismiss such disciplinary charges.

     Moreover, the two remaining cases upon which the majority relies,
i.e., Matter of Heslop v Board of Educ., Newfield Cent. School Dist.
(191 AD2d 875, 877) and Matter of Lory v County of Washington (77 AD3d
1265, 1266), do not support the majority’s position. Indeed, given
the limits on our scope of review in proceedings such as this,
upholding the Hearing Officer’s dismissal of disciplinary charges
herein would be wholly consistent with Heslop and Lory. While those
cases both confirmed the determinations of hearing officers upholding
disciplinary charges based on occurrences that had been the subject of
counseling memoranda, nothing in those cases suggests or implies that
the hearing officers were without authority to reach the contrary
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                                                         CA 11-01225

result.

     Given the lack of express legal precedent or strong public policy
affording school districts the unfettered right and authority to bring
disciplinary charges based on occurrences that had been the subject of
counseling memoranda, it cannot be said that the Hearing Officer’s
dismissal of those charges against respondent was arbitrary and
capricious, irrational or against public policy. Moreover, the
counseling memoranda issued to respondent gave no indication that
future charges based on those underlying incidents could be brought
unless the same conduct was repeated. Indeed, the fact that the same
conduct was not repeated provides a further basis for determining that
the Hearing Officer’s dismissal of the six disciplinary charges
concerning conduct addressed in prior counseling memoranda was not
arbitrary and capricious or irrational.

     I agree with the majority in appeal No. 1, however, that the
court properly determined that the Hearing Officer exceeded his
statutory authority under Education Law § 3020-a in ordering
petitioner to pay the cost of respondent’s health insurance during the
period in which respondent was suspended and thus properly ordered
respondent to reimburse petitioner for any such payments. If the
majority agreed with my view of appeal No. 1, we would necessarily
have to dismiss as moot the appeal from the judgment in appeal No. 2.
However, in light of the majority’s determination in appeal No. 1, I
am compelled to address the issues presented in appeal No. 2.
Underlying appeal No. 2 is the decision and award of the Hearing
Officer on remittal, finding respondent guilty on some of the
reinstated disciplinary charges but determining that a greater penalty
than was first imposed was not warranted (Board of Educ. of the Dundee
Cent. School Dist. v Coleman, 32 Misc 3d 334). Given the lack of any
strong public policy or principle of law compelling him to impose an
enhanced penalty, it cannot be said that the Hearing Officer’s refusal
to impose a more severe sanction upon remittal was arbitrary and
capricious or irrational. Simply because the Hearing Officer’s
rationale for reaching that result was faulty does not render the
award irrational, and thus vacating the penalty and remitting the
matter a second time, and to a different hearing officer, on the issue
of the penalty to be imposed on respondent was beyond the court’s
scope of review in this CPLR article 75 proceeding.




Entered:   June 15, 2012                        Frances E. Cafarell
                                                Clerk of the Court
