Part of Whistleblower Suit Survives Late Notice of Claim

Part of Whistleblower Suit Survives Late Notice of Claim

An appellate panel has reinstated part of a whistleblower claim with a first-time holding that such an action, to the extent that it seeks to vindicate a public right, trumps the usual notice of claim requirements.

The Appellate Division, First Department, said Thursday that a whistleblower action seeking both equitable and monetary relief is severable, meaning that a plaintiff who filed a late claim can move forward with a case seeking reinstatement.

Rose v. New York City Health and Hospitals Corp., 102533/12, is rooted in incidents at the Harlem Hospital, where the plaintiff, William Rose, served as administrative manager of the engineering department.

Records show that in 2011, temporary air conditioning “chillers” were placed in the hospital while new units were being installed. Rose contends that even though the new chillers were not working properly, officials were pressuring the contractor to remove the temporary equipment. In an email to the hospital’s top officials, Rose expressed concern about violations of state and federal health standards.

The day after sending the email, according to court papers, Rose was summoned to the office of the hospital’s executive director and berated for being an “idiot” for sending the note. Two weeks later, Rose received a negative job evaluation and a termination letter.

Rose responded with a whistleblower action seeking back pay, reinstatement and costs, but concededly failed to serve the notice of claim required under General Municipal Law §50-e (1)(a). Manhattan Supreme Court Justice Geoffrey Wright dismissed the case for that reason.

On appeal, the key issue was whether Rose’s entire claim—both the portion seeking money damages and the part seeking the equitable remedy of reinstatement—was barred by his admitted failure to serve a timely notice of claim. Rose argued that the law requires a notice of claim only to warn a governmental unit of potential financial liability.

Unanimously, the First Department held that the equitable claim is severable in a whistleblower case and that a notice a claim is not required on that portion.

“This would ameliorate the perceived harshness of dismissing whistleblower cases because notices of claim were not filed,” Justice Paul Feinman (See Profile) wrote for the 5-0 court. “It would also, and perhaps more importantly, support the underlying purpose of the whistleblower law, which is to reduce risks to the public health and safety by permitting employees to report uncorrected violations or wrongful governmental action by an employer.”

Feinman said the whistleblower law, “while certainly protecting the individual employee who reveals the wrongdoing, also serves an important public function.”

The First Department last addressed the whistleblower notice of claim issue four years ago in Yan Ping Xu v. New York City Department of Health, 77 AD3d 50 (2010). In Xu, a plaintiff argued that a retaliatory firing suit is parallel to an employment discrimination claim under the Human Rights Law, for which no notice of claim is necessary.

Xu relied on Mills v. County of Monroe, 59 NY2d 307 (1983), where the Court of Appeals held that a claim under the Human Rights Law must be preceded by a notice of claim unless the plaintiff is seeking to vindicate a public right. The Xu court found that the claim, since it sought only private remedies, did not fall under the Mills exception.

Feinman, bemoaning “the dearth of whistleblower cases addressing the severance question,” observed that in a separate line of cases the First Department has held that a claimant seeking only equitable remedies is not bound to submit a notice of claim (see Kahn v. New York City Department of Education, 79 AD3d 521, 2010). He also noted that the Appellate Division, Second Department, “has taken a more narrow approach in recent years,” citing Ruocco v. Doyle, 38 AD2d 132 (1972).

But the court said “the discussions if not the holdings” in various cases “seem to establish a rule that when a case is brought against a municipality or governmental agency and sounds in equity, no notice of claim is required unless the notice requirement specifically includes equitable claims.”

“Where a whistleblower claim seeks both equity and monetary damages, but no notice of claim was filed, there is no reason not to treat the claim as we have sometimes treated claims brought against a municipality seeking significant amounts of money damages in addition to resolving the complained-of conditions, that is to say, the equitable portion of the claim can be severed from the claims for monetary damages, and the latter dismissed,” Feinman wrote.

Joining the decision were justices Rolando Acosta (See Profile), Dianne Renwick (See Profile), Karla Moskowitz (See Profile) and Helen Freedman (See Profile).

The appeal was argued by Arnold Joseph and Arnold DiJoseph III of Manhattan for Rose and assistant corporation counsels Janet Zaleon and Kristin Helmers for the Health and Hospitals Corp.

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