[*1]
Matter of Troeller v New York City Dept. of Educ.
2014 NY Slip Op 51352(U) [44 Misc 3d 1226(A)]
Decided on September 2, 2014
Supreme Court, New York County
Hunter Jr., J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on September 2, 2014
Supreme Court, New York County


In the Matter of the Application of Robert J. Troeller, as President of Local 891, International Union of Operating Engineers, and as a Resident Taxpayer of the City of New York,, Petitioner, Decision and Judgment For a Judgment Pursuant to C.P.L.R. Article 78,

against

The New York City Department of Education, and Dennis M. Walcott, as Chancellor of the New York City Department of Education, Respondents, and Temco Service Industries, Inc., An Additional Party.




113097/2011



Petitioner:



James M. Murphy, Esq.



Spivak Lipton Watanabe



1700 Broadway - 21st Floor



New York, NY 10019



(212) 765-2100



Respondents:



Andrew Gelfand, Esq., Of Counsel



Corporation Counsel of the City of New York



100 Church Street



New York, NY 10007



(212) 788-1150


Alexander W. Hunter Jr., J.

The application by petitioner for a judgment pursuant to C.P.L.R. Article 78, declaring the extension of the 2011 service contract between respondent New York City Department of Education ("DOE") and additional party Temco Services, Inc. ("Temco") without satisfying competitive bidding statutes as violative of General Municipal Law § 103 and Education Law § 2556(10) is denied.



Procedurally, this petition for an order declaring that respondents failed to satisfy competitive bidding requirements was denied and respondents' cross-motion to dismiss the petition for lack of standing was granted by this Court (In re Troeller v. The New York City Dept. of Educ., 2012 NY Slip Op. 31058[U] [Sup Ct, New York County 2012, Hunter, J.]). On appeal, the Appellate Division, First Department, reversed the denial (Troeller v. New York City Dept. of Educ., 107 AD3d 507 [1st Dept. 2013]) holding that the petitioner union had associational standing to bring the Article 78 petition and finding respondents' contentions relating to mootness and justiciability unavailing.



In June 2003, the DOE issued a request for proposals (RFP) for Facilities Management Services and on November 12, 2004 awarded the contract (the "Contract") to Control Building Services, Inc. ("CBS"). In May 2007, CBS assigned the Contract to Temco with the DOE's consent. The Contract was set to expire in November 2011, but was extended for one year and expired in November 2012. The Contract was for facilities management services to be performed at schools located in Regions 3 and 8 in Queens and Brooklyn, respectively. A full recitation of the facts is set forth in In re Troeller, 2012 NY Slip Op. 31058(U).



As a threshold issue, an Article 78 proceeding against a public body "must be commenced within four months after the determination to be reviewed becomes final and binding upon the petitioner. An administrative determination becomes final and binding when the petitioner seeking review has been aggrieved by it." Matter of Yarborough v. Franco, 95 NY2d 342, 346 (2000) (internal quotation marks omitted); see also CPLR 217(1). "In order to determine what event triggered the running of the [s]tatute of [l]imitations, we must first ascertain what administrative decision petitioner is actually seeking to review and then find the point when that decision became final and binding and thus had an impact upon petitioner." Monteiro v. Town of Colonie, 158 AD2d 246, 249 (3rd Dept. 1990). Petitioner seeks review of respondents' August 2011 decision to assign additional schools to Temco and amend staffing levels at a number of those schools. The petition is timely as petitioner union members were not aggrieved by respondents' decision until August 2011. The instant petition was filed on October 28, 2011, within the four month statute of limitations period. This court finds respondents' claims of res judicata and estopple are without merit as this issue has not been litigated in any other proceeding.



A claim for Article 78 relief essentially rests upon whether the challenged determination "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion ." CPLR 7803(3). The standard for deciding a claim that a governmental action was arbitrary or capricious is whether there is a rational basis for the challenged action. See Matter of Pell v. Bd. of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222 (1974).



It is a well settled rule that judicial review of an administrative determination is limited to the grounds invoked by the agency. Scherbyn v. Wayne-Finger Lakes Bd. of Co-op. Educ. Services, 77 NY2d 753, 758 (1991) (internal citations omitted). Moreover, a "fundamental [*2]tenet of CPLR article 78 review[,]" is that "[j]udicial review of administrative determinations is confined to the facts and record adduced before the agency.' " Matter of Featherstone v. Franco, 95 NY2d 550, 554 (2000) (citing Yarbough at 347).



Petitioner's instant application centers around the so-called "Pilot Program 2," a system of schools facilities management that petitioner asserts was separate and distinct from the Contract. Also at the center of this dispute are the following provisions contained in the Contract and cited by respondents as its basis for extending the Contract:



"Article 3(B): [t]he Board may: (i) add to Attachment A school buildings or facilities located within Regions 3 and 8 (Queens and Brooklyn, respectively). Such buildings and facilities are listed in Attachment C; and (ii) assign to the contractor additional school buildings and facilities that are under the Board's temporary custodial care.





Article 1(B)(32): [t]he Board reserves the right to amend staffing patterns as it deems appropriate, provided that such amended staffing patterns do not exceed the staffing levels set forth in Attachment A."



(Respondents' Answer, Exhibit D).



The issue before this court is whether there was a rational basis for the DOE's decision to assign additional schools to Temco in August 2011 and replace on-site building managers, without following the competitive bidding process, or whether it was an arbitrary decision, taken without regard to the facts.



"A court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction, nor may it construe the language in such a way as would distort the contract's apparent meaning. The words and phrases used in an agreement must be given their plain meaning so as to define the rights of the parties."



Bottitta v. Bottitta, 194 AD2d 510, 513 (2nd Dept. 1993) (citations omitted).



Petitioner is urging the court to interpret the Contract as covering only schools with on-site building managers and those either explicitly listed in the Contract or under temporary custodial care, within regions 3 and 8. Such a reading would require the court to warp the plain meaning of the words contained within the four corners of the Contract. This court cannot say that respondents' decision to assign additional schools was arbitrary and capricious because a plain reading of Article 3(B) of the Contract supports respondents' reasoned actions. Likewise, looking at Contract Article (1)(B)(32), it provides clear support for the DOE's claim that the Contract reserved their right to amend staff levels.



Petitioner's reliance on Tufaro Tr. Co., Inc. v. Bd. of Ed. of City of New York, 79 AD2d 376 (2nd Dept. 1981) is misplaced. In that case, the Board of Education of the City of New York faced a shortfall in the number of vehicles available to fill a requirements contract. However, instead of turning to the next lowest bidder on the project, the Board looked to an [*3]inapplicable contract provision which outlined the procedure to be followed if the total number of required vehicles increased, and awarded that part of the contract to the 30th lowest bidder. The Appellate Division, Second Department held that "a solution should have been found, not by resort to a strained interpretation of an inapplicable contract provision, but through adherence to the principles of competitive bidding." Id. at 380. In the instant case, however, respondents correctly applied Article 3(B) of the Contract, which unequivocally allowed for the assignment of additional schools under temporary custodial care to Temco. Indeed, only a strained interpretation of the Contract's terms would support petitioner's argument.



Respondents properly exercised its discretion in deciding to extend the Contract with Temco. It was not arbitrary, capricious or irrational because Article 3(B) of the Contract clearly reserved its right to undertake that action. Pursuant to Article 1(B)(32) of the Contract, respondents also retained the right to determine appropriate staffing levels at sites assigned to Temco. Therefore respondents' decision to assign additional schools to Temco, outside of Regions 3 and 8 and without an on-site building manager, did not form the basis of a new contract subject to competitive bidding statutes General Municipal Law § 103 and Education Law § 2556(10).



"A party whose interests may be inequitably affected by a judgment must be made a party to the action. This rule applies to CPLR article 78 proceedings." Ayres v. New York State Com'r of Taxation & Fin., 252 AD2d 808, 810 (3rd Dept. 1998) (citations omitted). As such, additional party Temco's third affirmative defense to be dismissed from this petition is denied.



Accordingly, it is hereby,



ADJUDGED that petitioner's application for a judgment pursuant to C.P.L.R. Article 78 declaring the extension of the 2011 contract between respondents and additional party Temco as violative of competitive bidding statutes General Municipal Law § 103 and Education Law § 2556(10) is denied.



Dated: September 2, 2014

ENTER:

____________________________

J.S.C.