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FINLEY v. GIACOBBE

April 12, 1994

JOANNE E. FINLEY, M.D., Plaintiff,
v.
GEORGE T. GIACOBBE, Individually and as Commissioner, Department of Hospitals, Rockland County, New York, JOHN T. GRANT, Individually and as Rockland County Executive, ROCKLAND COUNTY DEPARTMENT OF HOSPITALS, SUMMIT PARK HOSPITAL/ROCKLAND COUNTY INFIRMARY, and COUNTY OF ROCKLAND, Defendants.



The opinion of the court was delivered by: GERARD L. GOETTEL

 GOETTEL, D.J.

 This case involves the alleged illegal firing of plaintiff Dr. Joanne E. Finley. Plaintiff was employed as Director of Medical Services for defendant Rockland County Department of Hospitals ("the Department of Hospitals") and Chief Medical Officer of defendant Summit Park Hospital/Rockland County Infirmary from December 3, 1991 through May 1992. Both Summit Park Hospital ("SPH") and Rockland County Infirmary ("RCI") are health care institutions operated by Rockland County which are covered by Article 28 of the New York Public Health Law. During her tenure as Chief Medical Officer, plaintiff attempted to admit patients with AIDS in need of long-term hospital care. As a result, she asserts that her employment was terminated. *fn1"

 FACTS

 Plaintiff originally brought this action under federal and state anti-discrimination laws. She also alleged a state law contract claim and a § 1983 claim for violation of her civil rights. On July 19, 1993, we issued an opinion which dismissed plaintiff's fourth cause of action under N.Y. State Human Rights Law, N.Y. Executive Law §§ 292(2) and 292(9), but denied defendants' motion to dismiss plaintiff's other claims. Finley v. Giacobbe, 827 F. Supp. 215 (S.D.N.Y. 1993). Because the facts of this case were laid out in some depth in that decision we need not repeat them here.

 Presently before the court are cross motions for partial summary judgment and plaintiff's motion to amend her complaint to add an additional defendant. In addition, since the return date of this motion, both plaintiff and defendants have made motions to supplement the record, pursuant to F. R. Civ. P. 56(e).

 ANALYSIS

 A. Cross-Motions for Summary Judgment

 1. Failure to Bring an Article 78 Proceeding

 Defendants first argue that they are entitled to summary judgment as to plaintiff's fifth and sixth causes of action because plaintiff's exclusive remedy is an article 78 proceeding in state court. Plaintiff's fifth cause of action is a contract claim alleging that state law and regulations and the medical staff by-laws are implied terms in her employment contract and that defendants' violation of the law, regulations and by-laws constitute a breach. Plaintiff's sixth cause of action alleges that defendants George T. Giacobbe, Commissioner of Hospitals for Rockland County, and John T. Grant, Rockland County Executive, tortiously interfered with her employment contract by firing her when they did not have the power to do so. Plaintiff argues that an article 78 proceeding is proper where one seeks administrative review of agency determinations or where one seeks to compel the performance of a duty by a board or officer. However, article 78 proceedings do not provide monetary relief aside from incidental damages. Thus, plaintiff argues that an article 78 proceeding would be improper where the primary relief sought is money damages.

 a. The article 78 requirement

 The main case that defendants rely upon is Austin v. Board of Higher Educ. of the City of New York, 5 N.Y.2d 430, 186 N.Y.S.2d 1, 158 N.E.2d 681 (1959). In Austin, six former employees of the Board of Higher Education for the City of New York brought suit to recover back pay alleging that their termination had violated their due process rights. Id. at 438. *fn2" The Court of Appeals found no merit in the argument that plaintiffs were not required to proceed through an article 78 proceeding because their dismissals were the result of the automatic operation of the City Charter rather than the exercise of Board discretion. 186 N.Y.S.2d at 11. The Court of Appeals based its holding on the policy behind the short statute of limitations applied to article 78 proceedings. It wrote,

 
manifestly, the validity of a dismissal of a public employee should be determined expeditiously and before the possible accumulation of substantial sums for back pay. Unless reinstatement by means of an article 78 proceeding is a prerequisite to a claim for payment of salary the dismissed employee, without rendering any service, may defer action until expiration of the six-year Statute of Limitations is imminent.

 Id. at 441. See Friedman v. State, 24 N.Y.2d 528, 537, n.2, 301 N.Y.S.2d 484, 249 N.E.2d 369 (1979) (distinguishing its facts from Austin because the claimant argued he had never properly been removed and so was not required to first establish a right to reinstatement through an article 78 proceeding).

 New York courts have consistently interpreted Austin as holding that an article 78 proceeding is a necessary prerequisite to a successful action for lost salary. See Johnson v. Director, Downstate Med. Ctr., 52 A.D.2d 357, 384 N.Y.S.2d 189, 193 (2d Dep't 1976), aff'd, 41 N.Y.2d 1061, 396 N.Y.S.2d 172, 364 N.E.2d 837 (1977) (noting the purpose of the requirement is to "relegate a dismissed employee to the prompt remedy of an article 78 proceeding"); Abramson v. Board of Educ. of the City of New York, 120 A.D.2d 474, 502 N.Y.S.2d 30, 31 (2d Dep't 1986) (holding "a discharged public employee cannot recover back pay unless he proves his right to the position from which he was discharged in a proceeding pursuant to CPLR article 78"); State Div. of Human Rights v. N.Y. State Dep't of Correctional Svcs., 90 A.D.2d 51, 456 N.Y.S.2d 63 (2d Dep't 1982) (holding unless a right to possession of an office or position is established by mandamus, "other adjudication or stipulation, recovery of back pay is barred.")

 Despite the clear language in Austin, plaintiff argues that article 78 proceedings are not the proper vehicle for contract actions. Automated Ticket Systems, Ltd. v. Quinn, 70 A.D.2d 726, 416 N.Y.S.2d 864 (3d Dep't 1979). While this is true as a general proposition, we believe contract claims asserting breach of an employment contract are distinguishable. *fn3" See Faillace v. Port Auth. of N.Y. & N.J., 130 A.D.2d 34, 517 N.Y.S.2d 941, 947 (1st Dep't 1987) (holding that the "appropriate vehicle for plaintiff to assert his [breach of employment contract claim] is a CPLR Article 78 proceeding and not an action at law."), appeal denied, 70 N.Y.2d 613 (1987); Clancy v. State of N.Y., 126 Misc. 2d 292, 481 N.Y.S.2d 943, 945 (Ct.Cl. 1984) (holding "a breach of contract action for lost wages may not be maintained since claimant has not obtained reinstatement to her former position via an Article 78 proceeding, a condition precedent to such an action against a public employer"); Lachica v. State of N.Y., 139 Misc. 2d 772, 528 N.Y.S.2d 963, 965 (Ct.Cl. 1988) (holding that a doctor could not maintain her breach of contract claim based upon her right to continue in a residency program because the decision not to approve her entry into the third year of a residency program was a professional discretionary action "a decision which the Court should not review in the context of an action for damages" and that the claimant should have first sought review in an article 78 proceeding). Thus, we conclude that New York law requires that breach of employment contract claims be brought by article 78 proceedings. In addition, we note, although plaintiff asserts that she is primarily seeking damages, her prayer for relief seeks either money damages or reinstatement which further supports our conclusion that an article 78 proceeding is the proper forum for her claim.

 Forino v. City of Troy, 42 A.D.2d 647, 345 N.Y.S.2d 148 (3d Dep't 1973) and Leisner v. Bahou, 97 A.D.2d 860, 469 N.Y.S.2d 255 (3rd Dep't 1983), appeal dismissed in part, 61 N.Y.2d 985 (1984), and appeal dismissed in part and denied in part, 62 N.Y.2d 940 (1984) are distinguishable from the facts here. Forino involved a suit for the salary differential owed to plaintiff as a result of overtime work already performed. Thus, there was no need for the court to decide whether plaintiff had been properly terminated. Indeed, the Forino court wrote, "an article 78 proceeding is not the exclusive remedy for the recovery of unpaid back salary which is otherwise due and owing." Forino, 345 N.Y.S.2d at 150. The Leisner court simply held that a claim for money damages could not be maintained against as government employee sued in his individual capacity. Leisner, 469 N.Y.S.2d at 258.

 b. Applicable statute of limitations

 Article 78 proceedings have a four month statute of limitations. N.Y. C.P.L.R. § 217. Plaintiff sent a letter of resignation on May 18, 1992, effective May 22, and this suit was filed on March 10, 1993. *fn4" However, plaintiff argues that we should not grant summary judgment as to her fifth and sixth claims even if we find that the claims should have been brought in an article 78 proceeding because N.Y. C.P.L.R. § 103 empowers a New York court that otherwise has jurisdiction over the parties to convert a civil proceeding brought in the improper form to one in the proper form rather than dismissing the claim. *fn5" In re Cromwell Towers Redevelopment Co. v. City of Yonkers, 41 N.Y.2d 1, 390 N.Y.S.2d 822, 359 N.E.2d 333 (1976). She also cites Chase v. Boisvert, 78 Misc. 2d 1061, 359 N.Y.S.2d 400, 404-05 (1974) claiming it establishes that when a plaintiff brings a contract claim in an article 78 proceeding, New York courts apply the contract statute of limitations.

 Chase involved a suit brought by the administrator of Health Service for the City of New York against the Commissioner of Social Services of Ontario County seeking reimbursement for healthcare services. The Chase court held that the obligation to make payment was a continuing obligation which was not subject to the four-month limitation period. Id. at 404. It went on to state that the proceeding was "in reality bottomed upon breach of a written agreement," so that the four month statute of limitation should not apply. Id. However, the court noted that the action could have properly been brought either as an article 78 proceeding or an action at law. Id. at 403.

 We think that plaintiff's claim alleging breach of her employment contract is distinguishable from Chase. Unlike Chase, where the plaintiff exercised a choice between proceedings and the court was concerned that the plaintiff's choice not impact upon the length of the applicable statute of limitations, Finley had no choice. New York case law has clearly established that a public employee seeking damages for his or her termination must first bring an article 78 proceeding to establish the wrongfulness of the termination. Further, the very purpose for requiring the article 78 proceeding ...


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