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Lawyer Loses Retirement Benefits

Court OKs Retroactive Review of Lawyer's Employment Relationship:




Principles of fairness did not bar the state comptroller from reviewing a retired lawyer's relationship with two public entities and retroactively determining that the lawyer had not been an employee of one of his putative employers and so he owed overpayments and arrears on the retirement benefits he had been collecting, a New York appellate court ruled.


Case: Matter of Mowry v. DiNapoli, No. 516295, 11/21/2013, published.


Facts: John Mowry worked as an attorney for the Mexico Central School District from 1974 until he retired in 2002. He also served as the attorney for the Village of Mexico during roughly that same time frame and maintained a private practice.


In 2010, eight years after his retirement, Mowry received a letter from the New York State and Local Retirement System informing him that it had reviewed his relationship with both the school district and the Village, and it had determined that Mowry had been incorrectly reported as an employee, rather than as an independent contractor. Accordingly, the letter stated that Mowry's salary and credited service were being removed from his records and, as a result, his annual benefit amount had been reduced and he was responsible for more than $162,000 in overpayments and arrears.


Procedural History: Mowry objected, but the hearing officer determined that he had not been an employee of the school district or the Village. State Comptroller Thomas P. DiNapoli adopted the hearing officer's decision.


Analysis: The Appellate Division's 3rd Department explained that when professional services are involved, the absence of direct control by a putative employer is not dispositive of the existence of an employer-employee relationship. Rather, such an employment relationship may be evidenced by demonstrating the putative employer's control of important aspects of the services performed.


The court said the comptroller's determination that Mowry had not been an employee of the school district was not supported by substantial evidence.


Although both the school board president and the assistant superintendent testified that the school district had chosen to retain Mowry as an independent contractor, the court noted that the school district had no written contract with him.


Additionally, the board and the assistant superintendent directed Mowry as to what work needed to be completed and when services were to be performed, and the assistant superintendent and board reviewed Mowry's work for its sufficiency.


While Mowry did not have set hours, the assistant superintendent testified that Mowry was available on an as-needed basis and, even if Mowry did not perform work for the school district during a pay period, he would receive a paycheck for that period nonetheless.

Both the testimony and documentary evidence also indicated that Mowry was a salaried employee paid every two weeks by paycheck, from which income taxes, Social Security, Medicare and health insurance premiums were deducted, and Mowry received a W-2 form annually.


The court concluded, however, that substantial evidence supported the Comptroller's determination that Mowry was not an employee of the Village, including the fact that Mowry admitted that he served in the capacity of Village Attorney as an independent contractor.


The court went on to say that the doctrine of laches did not bar the Comptroller from reviewing Mowry's relationship with the Village long after he had retired. The doctrine represents the idea that a legal right or claim should not be enforced or allowed out of principles of fairness if the person asserting the right or claim has unreasonably delayed in acting.


Since the Comptroller was statutorily required to correct errors in the retirement benefit records and adjust payments accordingly to ensure the integrity of the public retirement system, the court said the doctrine of laches couldn't bar the Comptroller from performing his duty.


Disposition: Annulled in part and affirmed as amended.


To read the decision, click here.



Source: WorkCompCentral

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