ALBANY – An appeals court has upheld New York state’s decision to deny renewing a license held for 28 years by a non-attorney to represent claimants before the Workers’ Compensation Board.

A 4-1 panel of the Appellate Division, Third Department, said the board acted rationally when it denied Donna Silverman’s application to continue representing petitioners. The board based its decision on Silverman’s lack of familiarity with an important 2010 board decision and her failure to disclose her business relationship with her attorney-husband.

“Upon our review of the record in its entirety, we are…satisfied that the Board’s decision to deny renewal of petitioner’s license had a rational basis and was not arbitrary and capricious,” Justice Leslie Stein (See Profile) wrote for the majority in Matter of Silverman v. New York State Workers’ Compensation Board, 514576.

Silverman acted as a non-lawyer representative to claimants under Workers’ Compensation Law §24-a, which was established in 1983 to give claimants an alternative to representation by lawyers when bringing claims against employers.

Under 12 NYCRR 302-1.2, a non-attorney representative must display a “competent knowledge of the law and regulations…and the necessary qualifications to render service to his or her client.” Non-attorney representatives must pay a $100-a-year registration fee and be recertified by the board every three years.

When Silverman went through the recertification process in 2011, a panel of examiners recommended denial of her application. She was subsequently rejected by the full Workers’ Compensation Board.

As part of the renewal process, it was revealed that Silverman failed to disclose her working relationship with her husband, Irwin Silverman, a Spring Valley attorney. The court noted that under 12 NYCRR 302-2.3, representatives are bound to disclose any business relationships that the board rules could deem to be partnerships.

“Not only did petitioner and [Irwin] Silverman share office space, skill and knowledge and cover for each other at hearings on behalf of their respective clients, [Irwin] Silverman also represented most of petitioner’s clients before the full Board without remuneration,” Stein wrote.

The board has fairly wide latitude to set its own criteria for what constitutes a business arrangement or partnership involving non-attorney representatives, the appellate court noted.

“In determining whether a partnership exists, no one factor is controlling, and the Board could properly consider the overall relationship between petitioner and [Irwin] Silverman ‘in terms of their express or implied intent to exercise joint control and management of the business and to share its profits and losses,’” Stein wrote, quoting Sterling v. Sterling, 21 AD3d 663 (2005).

The court concluded that between 1983 and 1998, Donna Silverman worked for her husband in a Workers’ Comp-oriented practice.

The panel also noted that in 1998, Donna identified herself as a self-employed, licensed representative of claimants during one year in which her husband had been suspended by the Appellate Division, Second Department [see Matter of Silverman, 238 AD2d 89 (1998)]. The charges against Irwin Silverman largely concerned his failure to file written statements with the Office of Court Administration outlining the terms of his retainer agreements with personal injury clients.

The panel also said it was not unreasonable for the board to give considerable weight to the fact that Donna Silverman was “not familiar with the implications” of the board’s 2009 ruling in Matter of American Axle, 80303659. That ruling set down guidelines for claimants when demonstrating their attachment to the labor market for purposes of obtaining Workers’ Comp benefits.

“In the Board’s view, petitioner’s responses to such inquiry demonstrated that she was not familiar with the implications of that case, despite the fact that it had been cited in at least three adverse determinations issued to petitioner’s clients prior to her oral review,” Stein wrote.

The dissenter, Justice Bernard Malone Jr. (See Profile), said it was not “rational” for the board to deny Donna Silverman a license based on the board’s dissatisfaction with her answers about American Axle. He called the board’s questions to her about the case “unartfully-phrased” and “ambiguous.”

Malone said he also found “arbitrary and capricious” the board’s conclusions about Donna Silverman’s relationship with her husband. The board’s definition of “partnership,” Malone added, is vague and subject to the individual interpretation of board members.

“Something more substantial than an ‘I know it when I see it’ analysis should be used before petitioner is deprived of the license that she held and extensively practiced under for decades,” Malone wrote.

Presiding Justice Karen Peters (See Profile) and Justices Robert Rose (See Profile) and John Egan Jr. (See Profile) joined in the majority.

Michael Zhu of Manhattan represented Donna Silverman.

Assistant Attorney General Paul Groenwegen argued for the Workers’ Compensation Board.

@|Joel Stashenko can be reached at jstashenko@alm.com.