In the Matter of Karri Beck-Nichols, Respondent,v.Cynthia A. Bianco,, et al., Appellants.BriefN.Y.January 8, 20130 To be Argued by: MICHAEL F. PERLEY, ESQ. Estimated Time for Argument: (20 Minutes) STATE OF NEW YORK Court of Appeals In the Matter of the Application of KARRI BECK-NICHOLS, Petitioner-Respondent, For a Judgment Under Article 78 of the Civil Practice Law and Rules Commanding Respondents to Reinstate Petitioner to Her Position as a Production Control Manager in the School District of the City of Niagara Falls, New York vs. CYNTHIA A. BIANCO, as Superintendent of Schools of the City School District of the City of Niagara Falls, New York, RUSSELL PETROZZI, as President of the Niagara Falls Board of Education, NIAGARA FALLS BOARD OF EDUCATION and SCHOOL DISTRICT OF THE CITY OF NIAGARA FALLS, NEW YORK, Respondents-Appellants. Erie County Index No.: I 2009-14459. Appellate Division Docket Number: TP 11-00935. BRIEF FOR RESPONDENTS-APPELLANTS HURWITZ & FINE, P.C. Attorneys for Respondents-Appellants 1300 Liberty Building Buffalo, New York 14202 Telephone: (716) 849-8900 Facsimile: (716) 855-0874 MICHAEL F. PERLEY, ESQ. TODD C. BUSHWAY, ESQ. Of Counsel Date of Completion: April 20, 2012. BATAVIA LEGAL PRINTING, INC.— Telephone (866) 768-2100 ii TABLE OF CONTENTS TABLE OF AUTHORITIES ................................................................................... iii PRELIMINARY STATEMENT ............................................................................... 1 PROCEDURAL HISTORY ....................................................................................... 1 JURISDICTION AND TIMELINESS ...................................................................... 3 STATEMENT OF FACTS ........................................................................................ 3 ARGUMENT ............................................................................................................. 8 POINT I: Under Either the Substantial Evidence Or Arbitrary And Capricious Standard Of Review, The Board’s Decision Was Rationally Based And Should Be Upheld. ......................................... 8 A. Substantial Evidence Standard Of Review ................................. 9 B. Arbitrary and Capricious Standard Of Review ......................... 17 POINT II: The Appellate Division’s Misapplication Of The Standard Of Review Improperly Shifted The Burden Of Proof To The Respondent. ....................................................................................... 20 POINT III: The Appellate Division Exceeded Its Authority When It Usurped The Board’s Right To Weigh The Evidence. ..................... 23 CONCLUSION ........................................................................................................ 25 iii TABLE OF AUTHORITIES CASES 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176 [1978] ........................................................................................ 11 780 P.P. Assocs. v. State of N.Y. Div. of Hous. & Cmty. Renewal, 11 A.D.3d 392 (1st Dept. 2004) ...................................................................... 23 Babbin v. State Tax Com., 49 N.Y.2d 846 (1980) .................................................. 12 Babbin v. State Tax Com., 67 A.D.2d 762 (3rd Dept. 1979) .................................. 12 Bergstein v. Bd. of Educ., 34 N.Y.2d 318 (1974) ................................................... 21 Bevacqua v. Sobol, 176 A.D.2d 1 (3rd Dept. 1992) .................................................. 9 Brockport Cent. Sch. Dist. v. New York State & Local Employees' Retirement Sys., 270 A.D.2d 706 (3rd Dept. 2000) ........................................................... 18 Condell v. Jorling, 151 A.D.2d 88 (3rd Dept. 1989) ............................................... 21 Consolidated Edison Co. v. NYS Div. of Human Rights, 77 N.Y.2d 411 (1991) ...................................................................................... 11 County of Cayuga v. McHugh, 4 N.Y.2d 609 (1958) ............................................. 10 Felix v. New York City Department of Citywide Administrative Services, et al, 3 N.Y.3d 498 (2004) ........................................................................................ 22 Gray v. Tax Appeals Tribunal, 235 A.D.2d 641 (3rd Dept. 1997) ................... 12, 13 Hason v. Dep't of Health, 295 A.D.2d 818 (3rd Dept. 2002) .................................. 18 Hecht v. Monaghan, 307 N.Y.2d 461 (1954) .......................................................... 10 In re Ridge Rd. Fire Dist. v. Schiano, 16 N.Y.3d 494 (2011) ................................. 11 In re Weber v. Town of Cheektowaga, 284 N.Y. 377 (1940) .......................... 17, 18 iv Jennings v. NYS Office of Mental Health, 90 N.Y.2d 227 (1997) .................... 9, 11 Lindemann v. American Horse Shows Ass'n, 222 A.D.2d 248 (1st Dept. 1995) ............................................................. 18, 19 Marsh v. Hanley, 50 A.D.2d 687 (3rd Dept. 1975) ................................................. 23 Matter of Miller v DeBuono, 90 NY2d 783 (1997) ................................................. 11 Pell v. Bd. of Education, 34 N.Y.2d 222 (1974)................................................. 9, 17 Sheerin v. NYS Div. of Substance Abuse Servs., 844 F. Supp. 909 (N.D.N.Y 1994) ................................................................... 10 Silberfarb v. Bd. of Coop. Educ. Servs., 60 N.Y.2d 979 (1983) ............................... 9 Stork Restaurant, Inc. v. Boland, 282 N.Y. 256 (1940) .......................................... 23 Umscheid v. Simnacher, 106 A.D.2d 380 (2nd Dept. 1984) ................................... 17 STATUTES CPLR § 5602(a)(1)(i) ................................................................................................. 3 CPLR §7803 ...........................................................................................................2, 8 CPLR §7804(g) .......................................................................................................... 9 CPLR Article 78 .................................................................................. 1, 8, 10, 19, 21 OTHER AUTHORITIES New York State Administrative Procedure and Practice § 3.12 (1995) .................. 11 1 PRELIMINARY STATEMENT This matter comes to this Court following a final decision of the Appellate Division, Fourth Department, affirming the retroactive reinstatement of Respondent Karri Beck-Nichols (“Nichols”) to her position as a Production Control Manager for the Information Systems department for the Niagara Falls City School District (the “District”), together with back pay and interest, seniority, retirement credit, and costs. In making this determination, the Appellate Division employed the incorrect standard of review, improperly shifted the burden of proof to the Niagara Falls City School Board (“Board”) and usurped the Board’s authority to weight the evidence submitted to it and assess credibility. The Appellate Division’s decision must be reversed. PROCEDURAL HISTORY On December 21, 2009, Petitioner-Respondent Karri Beck-Nichols (“Respondent” or “Beck-Nichols”), filed a Petition under Article 78 of the CLPR for review of the determination of the Niagara Falls Board of Education (the “Board”) terminating Beck-Nichols for her failure to comply with the Board’s long-standing residency requirement. (R. 16). Respondents-Appellants Cynthia A. Bianco, as Superintendent of Schools of the City School District of the City of Niagara Falls, New York; Russell Petrozzi, as President of the Niagara Falls Board of Education; the Niagara Falls Board of Education; and the School District of the 2 City of Niagara Falls, New York (collectively “Appellants”) served a Verified Answer dated March 5, 2010. (R. 81). By Order and Judgment granted on July 6, 2010, the Hon. Frank A. Sedita, J.S.C. ordered the proceeding to be referred to the Appellate Division, Fourth Department pursuant to CPLR §7803. (R. 11). Nichols filed and served a Notice of Appeal on July 27, 2010, appealing from each and every part of the aforesaid Order and Judgment. The Appellate Division, Fourth Department issued a Memorandum and Order, entered on November 10, 2011, unanimously reversing the Supreme Court’s Order and holding that the Board’s termination of Nichols was arbitrary and capricious. (R. 5). The Appellate Division reasoned that “…(T)he evidence failed to establish that petitioner evinced ‘present, definite and honest purpose to give up the old and take up the new place as (her) domicile’”, and therefore the Board’s decision to terminate Nichols was arbitrary and capricious. Further, the Fourth Department held that the Supreme Court had improperly transferred the proceeding to the Appellate Division, and that the Fourth Department has “previously determined that the residency policy termination procedure at issue in this case ‘does not involve a substantial evidence issue requiring transfer to this court.’” 3 JURISDICTION AND TIMELINESS This Court has jurisdiction to review the Order of the Appellate Division because this action originated in the Supreme Court, Erie County, and because the Order appealed from finally determines the action and is not appealable as of right. See CPLR § 5602(a)(1)(i). STATEMENT OF FACTS On February 3, 1994, the Niagara Falls City School District (the “District”) adopted the following Residency Policy: RESIDENCY POLICY The Niagara Falls Board of Education requires that employees hired or promoted after the effective date of this policy, be residents of the City of Niagara Falls and maintain their residency during their term of employment. Effective Date: March 1, 1994 (R. 61). Following the adoption of the policy, the District adopted residency regulations which define “residency” as follows: Residency shall mean, for the purpose of this policy, an individual’s actual principal domicile at which he or she maintains usual personal and household effects. (R. 62). Additionally, the regulations provided a procedure for making determinations with regard to potential violations of the Residency Policy. That procedure, as set forth in the regulations, is as follows: 4 E. Violation of Residency Requirement Any Niagara Falls Board of Education employee alleged to be in violation of this policy shall be given written notice of the alleged violation by the Human Resources Office. The employee will have seven (7) calendar days in which to respond in writing. If after investigation the Board of Education continues to believe the employee is in violation of the residency policy, the Superintendent of Schools shall institute the necessary proceedings to terminate the individual’s employment status with the school district. (R. 57-58). Nichols had been employed by the District since July, 1994. In September of 2001, Nichols affirmed her principal domicile to be 9133 Champlain Avenue, Niagara Falls, New York 14304. (R. 108, 110). On June 7, 2004, the District requested Nichols attend a meeting in the Human Resource Office in an effort to obtain additional information/documentation regarding her affirmation that she resided in the City of Niagara Falls. (R. 116). On June 23, 2004, the District conducted an affirmation meeting with Nichols, along with her personal counsel, during which time Nichols identified her primary domicile as 9133 Champlain Avenue, Niagara Falls, New York. (R. 118). Nichols stated she lived at the Champlain Avenue residence with her parents and her nephew over whom she has guardianship. She further stated that her children attend the Lewiston- Porter School District, and that her and her husband’s belongings were located at the Champlain residence and other places. (R. 118). 5 On December 17, 2008, the District conducted a Westlaw address search of many of its employees, including Nichols, to confirm compliance with the Residency Policy. (R. 202). The Westlaw search revealed that Nichols’ current address was 470 Aberdeen Road, Lewiston, New York. (R. 203). The discovery of this information prompted the Board to conduct further investigation. During the course of this investigation, the District obtained a copy of an application for STAR relief executed by Nichols and her husband. (R. 118, 189- 190). This application for STAR benefits was signed by both Nichols and her husband. The STAR application certified that the 470 Aberdeen Road address was their primary address. (R. 118, 189-190). On February 10, 2009, a second Residency Affirmation meeting was requested by the School District. (R. 116). On March 25, 2009, the District conducted the second residency affirmation meeting with Nichols and her personal counsel. At this meeting, Nichols stated she had moved back to 8931 Joliet Avenue, Niagara Falls, New York since the last affirmation meeting. (R. 118- 120). Subsequent to the second meeting with Nichols, the District engaged Probe Services to conduct surveillance. (R. 41-51). The surveillance confirmed that out of six occasions on which surveillance was taken, Nichols was observed staying overnight at the Joliet address only two times, March 6, 2009 and May 11, 6 2009. (R. 41-51). Probe believed Nichols knew of the surveillance as she would drive evasively and at high rates of speed. Nichols eventually confirmed Probe’s suspicions that she was aware of and attempting to evade the surveillance. (R. 41- 51). Specifically, the Probe report provided to the District found: At the onset of our investigation, the subject was residing at 471 Aberdeen Road in Lewiston, NY. Ms. Nichols was found at that location on multiple occasions during the early morning hours and followed to that location after work on two occasions. She remained there until the evening hours. Ms. Nichols traveled to the residence at 8931 Joliet Avenue in Niagara Falls during two shifts of surveillance which were conducted from her work place. Each day she subsequently returned to her Aberdeen Road residence where she remained until the evening hours. During our final shift of surveillance, Ms. Nichols traveled to her Lewiston residence where she remained until the late evening hours and then traveled to her Joliet Avenue residence where she remained until the early morning hours. During the course of our investigation, Ms. Nichols appeared to be very suspicious of our surveillance. On the final two shifts she was found at the Joliet Avenue address. (R. 42.) Even prior to Probe’s determination that she was aware of the surveillance, Nichols was only observed twice making short stops at the Joliet address. (R. 41-51). Importantly, Nichols later confirmed she knew of the surveillance. (R. 230). This 7 evidence directly contradicted Nichols’ prior representations that the Joliet address was her primary residence. The results of the Probe investigation, as well as the additional documents provided by Nichols, were reviewed by the Board on July 28, 2009. (R. 206-226). Based on the evidence presented to it, the Board determined that Nichols did not in fact reside at the Joliet Avenue address or any other property within the City of Niagara Falls, and therefore she was in violation of the District’s Residency Policy. (R. 227). The Board directed the District to initiate the process of terminating Nichols. A formal letter affording Nichols seven days to respond to the Board’s initial determination was sent to Nichols on July 30, 2009. (R. 227). In response, Nichols forwarded correspondence dated August 4, 2009 to the District in an attempt to persuade the District to reconsider without providing any additional documentation. (R. 228). This resulted in an additional meeting held on August 18, 2009. (R. 229-230). At that meeting, Nichols had an opportunity to be heard by administrative officials of the District. (R. 230). During this meeting, Nichols admitted to knowing she was the subject of surveillance. (R. 230). On September 24, 2009, Nichols was terminated by the Board (R. 232), along with nineteen other employees who were also found to be in violation of the Policy. 8 ARGUMENT POINT I: Under Either the Substantial Evidence Or Arbitrary And Capricious Standard Of Review, The Board’s Decision Was Rationally Based And Should Be Upheld. CPLR §7803 sets forth the standard of review that is applicable in an Article 78 proceeding commenced to review a decision made by an administrative body. The court’s review is limited to (1) questions of law, (2) whether the administrative body acted in excess of its jurisdiction, (3) whether the determination was made in violation of lawful process, and (4) whether the determination made after a quasi-judicial hearing was supported by substantial evidence. See, CPLR §7803. The trial court below found that CPLR §7803(4) required transfer of Nichol’s petition to the Appellate Division and made no findings as to whether the Board’s decision was rational. Nichols then sought the Fourth Department’s review of the trial court’s decision. Specifically, Nichols asserted that this matter did not involve a substantial evidence issue, and that the Board’s decision was arbitrary and capricious because it did not establish Nichols had changed her domicile with clear and convincing evidence. The two standards of review under CPLR §7803 are whether this matter involves an issue of substantial evidence, and whether the Appellate Division, under the arbitrary and capricious standard of 9 review, properly found that the Board’s decision was improper. Substantial evidence is the standard when an evidentiary hearing has occurred. Arbitrary and capricious is the standard when no such hearing has taken place. There are numerous decisions in this State which discuss the court’s application of both the substantial evidence and arbitrary and capricious standards of review. A review of that case law reveals that rationality is the underlying basis for each standard. See, Jennings v. NYS Office of Mental Health, 90 N.Y.2d 227 (1997); Pell v. Bd. of Education, 34 N.Y.2d 222 (1974). Applying either standard in this case, the Board’s decision to terminate Nichols was justified and the Appellate Division ruled improperly in overturning the Board’s determination. A. Substantial Evidence Standard Of Review When a court is asked to review an administrative agency’s decision arising out of a hearing directed by law, the appropriate standard of review is whether the decision was supported by substantial evidence. Silberfarb v. Bd. of Coop. Educ. Servs., 60 N.Y.2d 979, 981 (1983); Jennings v. N.Y. State Office of Mental Health, 90 N.Y.2d 227, 239 (1997). The review should be conducted by the Appellate Division pursuant to CPLR §7804(g). A hearing is directed by law when the hearing is “required either by constitutional due process or by statute and accompanying regulations.” Bevacqua v. Sobol, 176 A.D.2d 1, 3 (3rd Dept. 1992) (internal citations omitted). 10 A permanently appointed public employee such as Nichols has a protected property interest in retaining her employment. Sheerin v. NYS Div. of Substance Abuse Servs., 844 F. Supp. 909, 919 (N.D.N.Y 1994). When an individual’s due process rights are affected by the administrative decision, a quasi- judicial hearing is necessary. See, County of Cayuga v. McHugh, 4 N.Y.2d 609 (1958). The hearing is quasi-judicial when the hearing is evidentiary in nature; the individual is apprised of the claims against him or her; and he or she are provided the opportunity to rebut the evidence presented. Hecht v. Monaghan, 307 N.Y.2d 461, 470 (1954). In this matter, Nichols was entitled to and afforded a quasi-judicial hearing because her employment. Nichols was provided notice, in writing, of the allegation that she was not in compliance with the Residency Policy. (R. 28). Thereafter, Nichols exercised her right to have counsel represent her during this process and at the hearing. Nichols submitted documentation to the Board to rebut the evidence presented against her, and while represented by counsel, testified to her alleged compliance with the Residency Policy. Because this process involved a quasi-judicial hearing, the proper standard of review in the Article 78 proceeding is whether the Board’s decision was supported by substantial evidence. 11 Recently, this Court explained what is necessary to meet the substantial evidence standard in the case In re Ridge Rd. Fire Dist. v. Schiano, 16 N.Y.3d 494 (2011). In that decision, this Court defined substantial evidence as: Such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact, and "is less than a preponderance of the evidence, overwhelming evidence or evidence beyond a reasonable doubt" (300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 180-181 [1978]). The standard "demands only that 'a given inference is reasonable and plausible, not necessarily the most probable' "(Matter of Miller v DeBuono, 90 NY2d 783, 793 [1997] quoting Borchers and Markell, New York State Administrative Procedure and Practice § 3.12, at 51 [1995]). Id. at 499. It is not necessary to find that the decision reached by the administrative body is the only rational conclusion, and the existence of another rational conclusion does not “warrant annulment of the agency's conclusion.” Jennings v. NYS Office of Mental Health, 90 N.Y.2d 227, 239 (1997). “Although a contrary decision may be reasonable and also sustainable, a reviewing court may not substitute its judgment for that of the [administrative body] if [it] is supported by substantial evidence.” Consolidated Edison Co. v. NYS Div. of Human Rights, 77 N.Y.2d 411, 417 (1991). In other words, the reviewing court may not substitute its own judgment for that of the administrative body. 12 In Babbin v. State Tax Com., this Court affirmed the judgment of the Appellate Division affirming the State Tax Commission’s decision, holding “[a]lthough the proof in the record would also have supported a contrary conclusion, it cannot be said that there is not substantial evidence to sustain the determination.” Babbin v. State Tax Com., 49 N.Y.2d 846, 847-8 (1980). The Tax Commission had found that the petitioner had maintained a domicile New York in 1973. Babbin v. State Tax Com., 67 A.D.2d 762, 768 (3rd Dept. 1979). The petitioner was born and raised in New York and employed by an international company. Id. at 762. During his career, the petitioner worked in several foreign divisions, returning to New York each time. Id. In 1973, the petitioner moved with his family to the Netherlands and sold his home in New York. Petitioner claimed he changed his domicile to the Netherlands in 1973 and the issue before the Tax Commission was whether all of the petitioner’s income was taxable as a New York domiciliary for the year 1973. Id. The Third Department concluded that because the Commission’s determination was rationally supported by the evidence, it had to be affirmed. Id. Likewise, in Gray v. Tax Appeals Tribunal, the appellate court once again upheld the administrative decision even though the facts could have been found to be substantial evidence for the opposite conclusion. Gray v. Tax Appeals Tribunal, 235 A.D.2d 641 (3rd Dept. 1997). At issue in this case was the date upon which the 13 petitioners became domiciles of Florida rather than New York. Id. The petitioners were longtime residents of New York owning property in New York until 1989, and they were the controlling shareholders of a manufacturing business until September of 1987. Id. at 641-42. The petitioners leased property in Florida from 1985 until October 1988 and purchased a lot there with plans to build a home in 1986. Id. at 642. In 1985, the petitioners executed a declaration of domicile and citizenship in Florida and were issued Florida driver's licenses in November. Id. They registered to vote in Florida in 1986. Id. Upon review of the evidence submitted, the administrative body determined that the petitioners remained a New York domicile until September 1987, when they sold their business. Id. The court acknowledged “that the facts establishing petitioners' firm ties to the Florida area could have provided substantial evidence for a contrary determination by respondents, we are not at liberty to substitute our judgment for an agency's reasonable determination because one could reasonably reach a different conclusion on the basis of the evidence presented.” Id. at 643-44. For that reason, the Third Department affirmed the decision made by the administrative body. While conflicting evidence was presented to the Board in this case, the Board’s decision was rational in light of the evidence presented and thus supported by substantial evidence. Before presenting the evidence to the Board, 14 the School District undertook a thorough investigation into the status of Nichols’ domicile, conducted an interview with Nichols wherein she was represented by counsel and able to provide documentation in her defense, and presented the findings to the Board. The Board was also provided documentation from Nichols which was reviewed as well. On June 23, 2004, the District held a meeting wherein Nichols was represented by Counsel and a record of the proceeding was taken. (R. 113). At this meeting, Nichols stated that she lived with her parents and nephew, whom she had custody over, at her parent’s residence in Niagara Falls. (R. 113). She further testified that the Niagara Falls property she and her husband owned was rented to others, that she and her husband owned a home in Lewiston and her own children attended school in Lewiston. (R. 113). On February 10, 2009, the District sent a letter to Nichols informing her that the District believed she was in violation of the Residency policy and requested her participation in an interview during which she was entitled to be represented by counsel. (R. 28). A second residency affirmation meeting occurred on March 25, 2009 during which she was again represented by counsel. (R. 118). At the meeting the District’s attorney reviewed the documentation that had been previously submitted which included the deed to the Lewiston property, mortgage information, documentation demonstrating Nichols’ children were enrolled in 15 Lewiston schools, STAR exemption application indicating the Lewiston address was her primary residence and information regarding the Niagara Falls property which listed the Lewiston address for property taxes. (R.118). The STAR exemption form signed in 2001 by both Nichols and her husband stated: I (we) certify that all of the above information is correct and that the property listed above is owned by and is my (our) primary residence. I (we) understand it is my (our) obligation to notify the assessor if I (we) relocate to another primary residence and to provide any documentation of eligibility that is requested. (R. 189). The District, in an effort to obtain credible evidence regarding Nichols’ domicile, hired Probe Services to conduct surveillance of Nichols. Probe found that Nichols owned two pieces of property - one in Niagara Falls and one in Lewiston, which was purchased in 2001. (R. 41, 43). Notably, Probe found Nichols to be suspicious of their surveillance, a fact she eventually confirmed. (R. 41, 230). Probe’s national database search revealed the Lewiston address as her residence. (R. 42). On February 20, 2009, Probe observed Nichols at her Lewiston home at 8:00 in the morning. (R. 45). On February 24, 2009 and March 2, 2009, Probe observed Nichols leaving work, making a brief stop at her Niagara Falls residence and another Niagara Falls residence. Following these stops she drove back to her Lewiston residence, driving both at a high rate of speed and evasively. (R. 45, 47). On March 6, 2009, it appears that Nichols spent the night at the Niagara Falls home for the first time during the surveillance. (R. 48). On 16 the afternoon of May 11, 2009, Nichols was again observed leaving the school and proceeding to her Lewiston address. (R. 50). She then left the Lewiston address at 11:40 pm and drove evasively to the Niagara Falls address where she observed the surveillance. (R. 50). Prior to Nichols becoming suspicious of the surveillance, she resided at the Lewiston residence, making only the occasional stop at her supposed Niagara Falls residence. It was only once she became aware of the surveillance, did Nichols actually remain overnight at the Niagara Falls residence. The surveillance revealed a pattern of evidence that indicated Nichols maintained a domicile at the single family home in Lewiston where her family resided. Nichols provided a variety of documents showing the Niagara Falls address, including her driver’s license and voter’s registration card. However, the total evidence submitted to the Board contradicted her documentary evidence and assertions she lived in Niagara Falls. As reviewed above, the administrative agency’s determination must be upheld as long as it is rational, even when the facts could arguably support an opposite conclusion. Various databases showed Nichol’s residence to be in Lewiston, her family lived in Lewiston and her children attended Lewiston schools, she stayed overnight in Niagara Falls only after she became aware of the surveillance, and she swore in her STAR exemption that her primary residence was the Lewiston property. This evidence provides a rational 17 basis for the Board to determine Nichols had changed her domicile to Lewiston. Furthermore, questions of credibility are left to the trier of fact. Umscheid v. Simnacher, 106 A.D.2d 380, 382 (2nd Dept. 1984). B. Arbitrary and Capricious Standard of Review In making its determination in this case, the Appellate Division improperly substituted its own judgment for that of the Board. The proper and sole consideration for the Court should have been whether the Board’s determination was arbitrary and capricious. In the landmark case of Pell v. Board of Education, this Court clarified the standard of review in an Article 78 proceeding. 34 N.Y.2d 222, (1974). Generally, “[t]he courts cannot interfere unless there is no rational basis for the exercise of discretion or the action complained of is arbitrary and capricious.” Id. at 230. As further explained, the “arbitrary and capricious test chiefly relates to whether a particular action should have been taken or is justified and whether the administrative action is without foundation in fact." Id. (internal citations omitted). In In re Weber v. Town of Cheektowaga, this Court made clear that “the determination upon the facts is for the Town Board, and such determination will not be set aside by the courts unless it is unsupported by proof sufficient to satisfy a reasonable man, of all the facts necessary to be proved in 18 order to authorize the determination.” In re Weber v. Town of Cheektowaga, 284 N.Y. 377, 380 (1940). Furthermore, the existence of conflicting evidence does not automatically render an agency’s determination irrational or arbitrary and capricious. See generally, Hason v. Dep't of Health, 295 A.D.2d 818, 822 (3rd Dept. 2002); Brockport Cent. Sch. Dist. v. New York State & Local Employees' Retirement Sys., 270 A.D.2d 706, 708 (3rd Dept. 2000). In cases of conflicting evidence, “it is not [the reviewing court’s] function to weigh conflicting evidence or to substitute its judgment even where the record may support an opposite result.” Id. The reviewing court’s role is not that of fact finder but instead to determine whether the agency’s decision was rational in light of the evidence submitted and the agency’s entitlement to weigh the evidence submitted. See, Lindemann v. American Horse Shows Ass'n, 222 A.D.2d 248 (1st Dept. 1995). The reviewing agency is entitled to rely upon its own findings and investigation. See, Brockport Cent. Sch. Dist. v. New York State & Local Employees' Retirement Sys., 270 A.D.2d 706, 708 (3rd Dept. 2000). The First Department applied the aforementioned principles in an Article 78 proceeding in the case of Lindemann v. American Horse Shows Ass'n, 222 A.D.2d 248 (1st Dept. 1995). Lindemann was indicted for conspiracy to collect insurance money by arranging for the murder of his race horse. Id. at 249. 19 The American Horse Show Association’s Hearing Committee conducted a hearing wherein it determined that Lindemann had violated the association’s rules and found that his suspension was mandated. Id. A second hearing was held and involved the presentation of extensive evidence in the form of affidavits and testimony. Id. at 249. Again, the Hearing Committed suspended Lindemann. Id. The Supreme Court, upon review, found that the respondent’s determination was arbitrary and capricious, and the decision was appealed. Id. The First Department limited its review to whether the Supreme Court applied the correct standard of review explaining that “[i]t is axiomatic that the court may not weigh the evidence, choose between conflicting proof, or substitute its assessment of the evidence or the credibility of the witnesses for that of the Administrative Law Judge or hearing panel.” Id. The court found that the Supreme Court violated these tenets and substituted its own judgment for that of the administrative agency. Id. The court held that “[t]he inferences drawn by defendant Association from that evidence were rational and not arbitrary. The court was not warranted, therefore, in choosing among conflicting inferences and substituting its assessment of the evidence for that of the Association.” Id. The Board in this case, after reviewing both the District’s investigation and the documentary evidence submitted by Nichols, weighed the evidence and determined that the District had demonstrated that Nichols had 20 violated the District’s Residency Policy. Without question, the Board had the authority to weigh the evidence presented to it in making its determination. While, Nichols provided documentary evidence in an attempt to prove she had retained a Niagara Falls domicile, there was persuasive and substantial evidence submitted by the District that Nichols had established her domicile in Lewiston with her family. A review of the evidence presented to the Board shows that a reasonable person could conclude that Nichols was domiciled in Lewiston, New York rather than Niagara Falls, New York as required under the Residency Policy. POINT II: The Appellate Division’s Misapplication Of The Standard Of Review Improperly Shifted The Burden Of Proof To The Respondent. As discussed at length above, the Board’s determination must be upheld if it is rationally based. In this matter, the Appellate Division not only erred in applying the standard of review, it also improperly shifted the burden of proof to the Respondent/Appellants by finding that “…that the evidence failed to establish that Petitioner evinced ‘a present, definite and honest purpose to give up the old and take up the new place as (her) domicile’.” (R. 7). In an Article 78 proceeding, the petitioner has the “burden to show that the underlying material upon which the [administrative agency] relied for its decision failed to supply a rational basis for its determination.” Condell v. Jorling, 21 151 A.D.2d 88, 92 (3rd Dept. 1989). For example, in a case reviewing a school board’s denial of tenure to a teacher, this Court found that the Appellate Division “improperly shifted the burden of proof from the petitioner to the board” when it remanded the case to the trial court and required the school board “to produce legal and competent evidence to establish that tenure was not denied for impermissible reasons.” Bergstein v. Bd. of Educ., 34 N.Y.2d 318, 323 (1974). The Fourth Department, in finding in favor of Nichols, held that District had not proven that Nichols had changed her domicile, placing the burden of proof on the respondent. As explained above, the burden in an Article 78 appeal is on the petitioner to demonstrate the board’s decision was irrational. In this case, the Appellate Division found that the evidence presented by the Board did not effectively demonstrate Nichols changed her domicile from that of Niagara Falls to Lewiston, New York. In so holding, the, the Appellate Division found that the Board has not presented clear and convincing evidence that Nichols intended to change her domicile rather than determining whether Nichols has demonstrated the Board’s decision was irrational. Not only was the incorrect standard of review applied, the Appellate Division also improperly placed the burden of proof on the Board rather than Nichols. That the burden of proof was always upon Nichols is demonstrated by this Court’s holding in Felix v. New York City Department of Citywide Administrative 22 Services, et al, 3 N.Y.3d 498 (2004). In Felix, the Court held that the party claiming compliance with the Residency Policy had the burden of establishing that he/she resides in the municipality. In Felix the Court stated: “The issue before this Court is whether a person employed by the municipality of New York City, with permanent, Civil Service status can be determined to have forfeited his employment after failing to establish his city residency following notice of and opportunity to contest the claim of non-residency. We conclude that failure to establish residency is a violation of the city’s residency requirement which results in forfeiture of employment ...” Felix v. New York City Department of Citywide Administrative Services, et al at 501 (emphasis added). In both cases the employee was hired permanently appointed to a competitive class position under the Civil Service Law. Likewise the plaintiff in Felix, Nichols acknowledged the existence of the Residency Policy, which required her to maintain a residency in the City of Niagara Falls, New York while she was employed by the Niagara Falls Board of Education. In fact, Nichols confirmed under oath her residency in the City of Niagara Falls, New York. (R. 101). This Court, in Felix, placed the burden of proof of establishing residency squarely upon the person whose compliance of a residency policy is questioned. In this case, Nichols bore that burden and her failure to meet that burden resulted in 23 her termination. The Appellate Division erred when it shifted that burden of proof to the Board. As such, its decision should be reversed. POINT III The Appellate Division Exceeded Its Authority When It Usurped The Board’s Right To Weigh The Evidence. “In a review of administrative determinations, appellate courts do not review the facts de novo and arrive at an independent determination.” Marsh v. Hanley, 50 A.D.2d 687 (3rd Dept. 1975). It is well-established that issues of credibility and veracity of the witnesses is best left to the trier of fact and may not be determined by the Appellate Division upon review. 780 P.P. Assocs. v. State of N.Y. Div. of Hous. & Cmty. Renewal, 11 A.D.3d 392 (1st Dept. 2004). Similarly, the trier of fact is also responsible for weighing the evidence submitted, and the “courts may not weigh the evidence or reject the choice made by the Board where the evidence is conflicting and room for choice exists.” Stork Restaurant, Inc. v. Boland, 282 N.Y. 256, 267 (1940). The Appellate Division’s review of the evidence de novo usurped the Board of its due process right to weigh the evidence and make credibility determinations. As set forth above, the trier of fact is responsible for weighing the evidence making credibility determinations. When the Appellate Division reviewed the documentary evidence submitted by Nichols and relied upon such, it 24 made a determination which was outside the scope of the Appellate Division’s review powers. In this case, Nichols claimed the documentation she submitted showed her intent to continue her domicile in Niagara Falls, New York, and not change it to Lewiston, New York, where she owned property and where her husband and children resided. The Board was entitled to determine whether such documentation was obtained in good faith, or if it was obtained for the purposes of misleading the Board and circumventing the District’s Residency Policy. The motive for her securing the documentation as well as the weight to be given to the documentation was for the trier of fact—the Board—not the Appellate Division. By depriving the Board of the opportunity to weigh the credibility and veracity of the Beck-Nichols, the Appellate Division exceeded the scope of its authority and denied the Board its due process rights. 25 CONCLUSION For the reasons set forth above, it is respectfully submitted that the Court should uphold the determination of the Board of Education of the Niagara Falls City School District to terminate Karri Beck-Nichols for her failure to comply with the District’s Residency Policy and reverse the determination of the Appellate Division. DATED: April 20, 2012 Buffalo, New York ________________________________ Michael F. Perley, Esq. HURWITZ & FINE, P.C. 1300 Liberty Building Buffalo, New York 14202 Telephone: (716) 849-8900