O'Halloran v. Metropolitan Transportation Authority

2017 NY Slip Op 6237, 154 A.D.3d 83, 60 N.Y.S.3d 128

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: August 22, 2017
• Docket: 160953/13 3299
• Status: Published

Opinions

OPINION OF THE COURT

Acosta, P.J.

The narrow issue on appeal is whether the motion court providently permitted plaintiff to amend her complaint to include belated claims of discrimination on the basis of sexual orientation on the ground that those claims related back to the original pleading, which timely alleged, inter alia, discrimination on the basis of gender. We hold that it did, because the original pleading gave defendants notice of the occurrences plaintiff seeks to prove pursuant to her amended complaint {see CPLR 203 [f]), and defendants will not suffer undue prejudice as a result of the delay (see CPLR 3025 [b]). Therefore, we affirm.

Plaintiff, a lesbian, has been employed by the three organizational defendants — Metropolitan Transportation Authority (MTA), New York City Transit Authority (NYCTA), and MTA Bus Company (MTA Bus) — in various capacities since 1987. Beginning in November 2008, plaintiff served as Assistant Chief Facilities Officer for Business Planning and Administration for NYCTA. She reported to NYCTA’s Chief Facilities Officer, and, until 2012, received excellent annual reviews and had never been subject to disciplinary action. In 2011, NYCTA’s Chief of Staff denied plaintiff an interview for the position of Chief Facilities Officer and Vice President, although similarly situated male colleagues were granted interviews. In January 2012, defendant George Menduina was promoted to Chief Facilities Officer at NYCTA and Vice President for Facilities at MTA Bus. Plaintiff alleges that upon his promotion, Menduina and others began to subject her to discrimination.¹

Plaintiff filed the original complaint in this action on November 25, 2013, asserting causes of action for, among other things, discrimination on the basis of sex and disability and retaliation in violation of the New York State and New York City Human Rights Laws (Executive Law § 290 et seq. [the State HRL]; Administrative Code of City of NY § 8-101 et seq. [the City HRL]). After her deposition, plaintiff moved pursuant to CPLR 3025 for leave to amend her complaint to add claims that defendants also discriminated against her because of her sexual orientation.² Plaintiff conceded that the sexual orientation claims were asserted after the statute of limitations had run (see CPLR 214 [2]), but argued that the relation-back doctrine (CPLR 203 [f]) rendered them timely because those claims were “based on the same allegations as the original pleading.” She also argued that defendants would not be prejudiced by the proposed amendment, because discovery had not been completed.

Defendants opposed the motion, contending that the original complaint did not provide them with “notice of the facts underlying” plaintiff’s sexual orientation claims. Defendants noted that the original complaint did not allege that plaintiff is a lesbian or that their actions were motivated by her sexual orientation.

The motion court granted the motion, reasoning that defendants “faile[d] to overcome the heavy presumption of validity in favor of permitting the amendment” and that defendants “will not be prejudiced or surprised from the delay . . . because the facts within the complaint remain the same” (2016 NY Slip Op 31567[U], * 3). The court concluded that “[t]he amended claims are premised upon the same subject matter alleged in the original complaint” (id.). Defendants appealed.

“It is well established that leave to amend a pleading [pursuant to CPLR 3025 (b)] is freely given ‘absent prejudice or surprise resulting directly from the delay’ ” (Anoun v City of New York, 85 AD3d 694, 694 [1st Dept 2011], quoting Fahey v County of Ontario, 44 NY2d 934, 935 [1978]). “A party opposing leave to amend ‘must overcome a heavy presumption of validity in favor of [permitting amendment]’ ” (McGhee v Odell, 96 AD3d 449, 450 [1st Dept 2012], quoting Otis El. Co. v 1166 Ave. of Ams. Condominium, 166 AD2d 307 [1990]).

The relation-back doctrine, now codified in CPLR 203 (f), provides that “[a] claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions [or] occurrences ... to be proved pursuant to the amended pleading” (CPLR 203 [f]; see also Giambrone v Kings Harbor Multicare Ctr., 104 AD3d 546, 548 [1st Dept 2013] [making clear that the “salient inquiry” in deciding whether an otherwise untimely claim in an amended pleading relates back to a timely commenced action “is not whether defendant had notice of the claim, but whether, as the statute provides, the original pleading gives ‘notice of the transactions (or) occurrences ... . to be proved pursuant to the amended pleading’ ” (emphasis added)]). The doctrine is “[a]imed at liberalizing the strict, formalistic pleading requirements of the [nineteenth] century, . . . while at the same time respecting the important policies inherent in statutory repose,” and “enables a plaintiff to correct a pleading error — by adding either a new claim or a new party — after the statutory limitations period has expired” (Buran v Coupal, 87 NY2d 173, 177 [1995] [citations omitted]). It is within courts’“sound judicial discretion to identify cases that justify relaxation of limitations strictures ... to facilitate decisions on the merits if the correction will not cause undue prejudice to the plaintiff’s adversary” (id. at 178 [internal quotation marks and citation omitted]).

The Court of Appeals has recognized that a more relaxed standard applies where a plaintiff seeks to use the relation-back doctrine by adding a new claim against a defendant who is already a party to litigation as opposed to adding a new defendant (Buran, 87 NY2d at 178 [“allowing the relation back of amendments adding new defendants implicates more seriously the( ) policy concerns (underlying statutes of limitation) than simply the relation back of new causes of action since, in the latter situation, the defendant is already before the court”]); see also Duffy v Horton Mem. Hosp., 66 NY2d 473, 477 [1985] [“An amendment which merely adds a new theory of recovery or defense arising out of a transaction or occurrence already in litigation clearly does not conflict with the( ) policies” underlying statutes of limitation — i.e., repose and the conservation of judicial resources — because “(a) party is likely to have collected and preserved available evidence relating to the entire transaction or occurrence and the defendant’s sense of security has already been disturbed by the pending action”]). Thus, although the Court of Appeals has adopted a three-part test for determining whether to apply relation back to an amended pleading that adds a new defendant, no such test applies where a plaintiff simply seeks the relation back of a new claim (see Buran, 87 NY2d at 178). In other words, where, as here, a proposed amended complaint contains an untimely claim against a defendant who is already a party to the litigation, the relevant considerations are simply (1) whether the original complaint gave the defendant notice of the transactions or occurrences at issue and (2) whether there would be undue prejudice to the defendant if the amendment and relation back are permitted (see CPLR 203 [f]; 3025 [b]; see Buran, 87 NY2d at 178; Caffaro v Trayna, 35 NY2d 245, 251 [1974]).

In accordance with these principles, we hold that the motion court providently exercised its discretion when it permitted plaintiff to amend her complaint to add her otherwise untimely claims of sexual orientation discrimination. All of plaintiff’s claims are based on the same occurrences — namely the underlying employment actions taken against her — and the original complaint put defendants on notice of those occurrences. To be sure, plaintiff’s original complaint did not allege the specific facts that she is a lesbian, that defendants were aware of her sexual orientation, that defendants discriminated against her on that basis, or that another lesbian colleague was demoted for supporting her internal dispute with Men-duina. Nevertheless, the motion court correctly determined that the new claims are based on “the same subject matter alleged in the original complaint.” Defendants need not have been put on notice of every factual allegation on which the subsequent claims depend, because the original complaint put them on notice of the occurrences that underlie those claims (see Schneidman v Tollman, 279 AD2d 276, 276 [1st Dept 2001] [motion court “properly found that plaintiffs’ amended pleadings were not time-barred, since they relate back to the original complaint, merely adding additional factual detail” (internal quotation marks omitted)]).

Viewing “transactions [or] occurrences” through this broad lens for the purposes of relation back under CPLR 203 (f) is especially important in the context of anti-discrimination actions — particularly those actions brought under the City HRL — in which it is frequently difficult for plaintiffs to articulate their employers’ motivations for treating them less well than other employees (see Bennett v Health Mgt. Sys., Inc., 92 AD3d 29, 37 [1st Dept 2011] [“discrimination rarely announces itself,” and “the defendant, by definition, is in a materially better position to provide evidence as to its actual motivation than the plaintiff”], lv denied 18 NY3d 811 [2012]). Of course, it is preferable that a plaintiff set forth every factual allegation on which her claims are based, but in these circumstances plaintiff should not be faulted for not previously raising her sexual orientation as a basis for defendants’ unfavorable treatment of her.³ In this case, the occurrences underlying the new claim are defendants’ general treatment of plaintiff (e.g., denying her an opportunity to interview for advancement, giving her tighter deadlines than other employees, instituting disciplinary proceedings against her, and demoting her), all of which occurred on the same dates and in the same instances as alleged in the original complaint. That plaintiff now seeks to include another reason for those occurrences and another theory of liability cannot be fairly characterized as a failure to give notice of the occurrences she seeks to prove in her amended complaint.

Moreover, defendants will not be unduly prejudiced or surprised by allowing plaintiff to amend the complaint to add her new claims, because they have not been “hindered in the preparation of [their] case or . . . prevented from taking some measure in support of [their] position” (Jacobson v McNeil Consumer & Specialty Pharms., 68 AD3d 652, 654-655 [1st -Dept 2009] [internal quotation marks omitted]; see also Buran, 87 NY2d at 178). “Prejudice does not occur simply because a defendant is exposed to greater liability or because a defendant has to expend additional time preparing its case” {Jacobson, 68 AD3d at 654 [citation omitted]). When defendants were first confronted with plaintiffs original claims, it is likely that they conducted some kind of internal investigation into the entire series of alleged actions taken against plaintiff, to determine whether and on what grounds she was discriminated against {see Duffy, 66 NY2d at 477 [defendants are “likely to have collected and preserved available evidence relating to the entire transaction or occurrence” at the outset of the litigation]). Thus, they ought to know the discriminatory reasons for which plaintiff was treated unfavorably, if any such reasons exist. In any event, to the extent any prejudice against defendants exists, it is negligible and can be cured by further discovery {Jacobson, 68 AD3d at 654 [“(T)he need for additional discovery does not constitute prejudice sufficient to justify denial of an amendment”]).⁴

The dissent’s incorrect application of the relation-back doctrine is evident throughout its opinion. First, the dissent gives short shrift to the discretionary nature of the motion court’s ruling that the relation-back doctrine applied to plaintiff’s new claims {see Buran, 87 NY2d at 177-178). Second, the dissent mistakenly focuses its attention on whether the original complaint provided notice to defendants of plaintiff’s newly added claims instead of “whether, as the statute provides, the original pleading gives ‘notice of the transactions [or] occurrences . . . to be proved pursuant to the amended pleading’ ” {Giambrone, 104 AD3d at 548, quoting CPLR 203 [f]). Despite the dissent’s attempt to distinguish Giambrone on its facts, the rule articulated in that case (and in the relation-back statute) remains applicable here. Yet the dissent distracts from the “salient inquiry” (id.) by focusing on whether defendants had knowledge of her new claims. That view of the relation-back doctrine leads the dissent to the incorrect conclusion that plaintiffs new claims should not be considered on their merits.

The dissent observes that our sister departments permit the application of the relation-back doctrine to claims that state a new theory of recovery but that this Court has declined to do so where the new claim is based upon “a new, distinct, and independent theory of liability” (quoting Robinson v New York City Nous. Auth., 89 AD3d 497, 497 [1st Dept 2011]). However, as the dissent acknowledges, for that proposition Robinson relied on a case applying General Municipal Law § 50-e (6), which sets forth the standard for permitting new allegations in a corrected notice of claim in tort actions against municipalities, not on cases applying the relation-back doctrine codified in CPLR 203 (f). Additionally, Robinson cannot be reconciled with the Court of Appeals’ guidance that “[a]n amendment which merely adds a new theory of recovery or defense arising out of a transaction or occurrence already in litigation clearly does not conflict with the[ ] policies” underlying statutes of limitation (Duffy, 66 NY2d at 477) or this Court’s admonishment against “disregard [ing] the purpose of the relation back doctrine, which ‘enables a plaintiff to correct a pleading error — by adding either a new claim or a new party — after the statutory limitations period has expired’ ” (Giambrone, 104 AD3d at 548, quoting Buran, 87 NY2d at 177).

Furthermore, the dissent unnecessarily delves into a motion-to-dismiss analysis under CPLR 3211 (a) (7), notwithstanding the procedural posture of this case (a motion to amend the complaint) and the fact that defendants do not raise that issue on appeal. In doing so, the dissent skirts the broad City HRL protections recognized by this Court, the Court of Appeals, and the United States Court of Appeals for the Second Circuit (see e.g. Williams v New York City Hous. Auth., 61 AD3d 62 [1st Dept 2009], lv denied 13 NY3d 702 [2009]; Romanello v Intesa Sanpaolo, S.p.A., 22 NY3d 881 [2013]; Mihalik v Credit Agri-cole Cheuvreux N. Am., Inc., 715 F3d 102 [2d Cir 2013]).⁵ The dissent cites Matz v Prospect Energy Corp. (63 AD3d 619 [1st Dept 2009]), which in turn relied on Brennan v Metropolitan Opera Assn. (284 AD2d 66 [1st Dept 2001]), a pre-Williams case that was not required to consider a broad construction of the City HRL. By citing Brennan for the proposition that plaintiff must allege that she was subjected to an adverse employment action, the dissent overlooks this Court’s more recent controlling precedent, which emphasizes the greater protections afforded to plaintiffs under the City HRL. Indeed, as this Court has emphasized, the City HRL does not require that a plaintiff suffer a materially adverse employment action in order to succeed in an anti-discrimination action under the City HRL (see Williams, 61 AD3d at 70-71, quoting Administrative Code § 8-107 [7] [“(t)he retaliation or discrimination complained of . . . need not result in an ultimate action with respect to employment . . . or in a materially adverse change in the terms and conditions of employment” (internal quotation marks omitted)]). And, in any event, “employment discrimination cases are themselves generally reviewed under notice pleading standards” (Vig v New York Hairspray Co., L.P., 67 AD3d 140, 145 [1st Dept 2009]).

Furthermore, the dissent would erroneously penalize plaintiff, in part, for failing to claim discrimination on the basis of sexual orientation in the proceedings that occurred before this action was commenced. That plaintiff could have raised the issue in those prior proceedings, however, has no bearing on the question before us. The relation-back statute does not require that a plaintiff at any point prior to the original pleading give notice of the transactions or occurrences sought to be proved pursuant to an amended pleading, and we should not read such an additional requirement into the statute.

At this early stage of the litigation, it is equally possible that plaintiff suffered discrimination because of her gender or because of her sexual orientation, or both, or that she did not suffer discrimination at all. The answer lies with defendants and will be revealed through further discovery, and plaintiff will still be put to the burden of proving any discrimination after such discovery takes place. Therefore, given the absence or negligible amount of prejudice to defendants and the fact that they had notice of the occurrences on which plaintiff’s new claims of sexual orientation discrimination are based, the motion court providently exercised its discretion in granting plaintiff leave to amend her complaint to add her new, otherwise untimely claims (see Buran, 87 NY2d at 177-178).

Accordingly, the order of the Supreme Court, New York County (Manuel J. Mendez, J.), entered August 17, 2016, which granted plaintiff’s motion for leave to amend the complaint to add claims for sexual orientation discrimination under the New York State and City Human Rights Laws, should be modified, on the law and the facts and in the exercise of discretion, to allow further disclosure as necessary (including the deposition of plaintiff as indicated herein), and otherwise affirmed, with costs.

1 . For example, plaintiff alleges that Menduina denied her the opportunity to be involved in operations work, rendering her ineligible for future promotions, that Menduina made personnel changes to the unit she managed without consulting her, that Menduina assigned her tasks without giving her proper support, resources, or training and then criticized her for failing to timely complete assignments, that Menduina gave her unreasonable deadlines, which were less favorable than those given to her similarly situated male colleagues, and that, after she filed an internal complaint with NYCTA’s Office of Equal Employment Opportunity, Menduina brought disciplinary charges against her, which resulted in her demotion to a position with a substantial reduction in salary.

2 . Specifically, plaintiff supported her new claims with allegations that she is a lesbian, that Menduina was aware of that fact, and that one of her supervisors, also an out lesbian, was demoted in retaliation for submitting a letter in support of plaintiff’s prior appeal before NYCTA’s Office of Equal Employment Opportunity, which had sustained disciplinary changes brought against her by Menduina.

3 . To be sure, plaintiff could have previously raised her sexual orientation as a basis for defendants’ actions, and it is unclear why she waited until proposing an amended complaint. But we should not attempt to decipher plaintiff’s decision to raise the new claims for the first time in her proposed amended complaint, as such an analysis is unnecessary (and likely futile) insofar as the original complaint provided notice of the occurrences underlying her belated claims.

And although, as the dissent points out, the State and City HRLs list gender and sexual orientation as separate protected statuses, at least one federal circuit court has recently determined that sexual orientation discrimination is, in essence, “sex discrimination” (see Hively v Ivy Tech Community Coll, of Indiana, 853 F3d 339, 345 [7th Cir 2017]).

4 . We note that, in her brief, plaintiff states that “Defendants questioned Plaintiff regarding, and there were many references to, Plaintiff’s spouse during Plaintiff’s deposition.” Moreover, before moving to amend the complaint, plaintiff’s counsel had offered to submit plaintiff for another hour of deposition so that defendants could question her about details surrounding the alleged sexual orientation discrimination. Defendants’ counsel declined that offer in an email to plaintiff’s counsel, but requested of the motion court that they be permitted to further depose plaintiff in the event she was allowed to amend her complaint. In view of our affirmance of the grant of plaintiff’s motion, we grant defendants’ request for an opportunity to further depose plaintiff with regard to her new claims.

5 . The City Council recently amended the City HRL to add in pertinent part that “[c]ases . . . that have developed legal doctrines . . . that reflect the broad and remedial purposes of [the City HRL] include Albunio v. City of New York, 16 N.Y.3d 472 (2011), Bennett v. Health Management Systems, Inc., 92 A.D.3d 29 (1st Dep’t 2011), and the majority opinion in Williams v. New York City Housing Authority, 61 A.D.3d 62 (1st Dep’t 2009)” (Administrative Code § 8-130 [c], as amended by Local Law No. 35 [2016] of City of NY §2).