JHO Vacates Own Report For Exceeding Her Mandate

On August 13, 2014, the Second Department issued a decision in GMS Batching, Inc. v. TADCO Construction Corp., 2014 NY Slip Op. 05773, largely affirming a 2012 judgment of Justice Kitzes of the Queens County Commercial Division.

The factual basis of the action was a run-of-the-mill contract dispute, but the procedural history is of some interest:

The action was initially referred to a judicial hearing officer . . . to hear and report. After taking testimony on July 30, 2010, the referee issued a decision [recommending that the action should be dismissed]. However, the JHO thereafter noted that the order of reference directed her to hear and report, and not to hear and determine, and that she had inadvertently issued a decision determining the merits of the plaintiff’s claims in the absence of the plaintiff’s consent to do so. Thus, on September 30, 2010, the referee issued a brief report vacating her prior decision, and summarizing the parties’ contentions, without making any findings of fact or recommendations.

The Supreme Court then directed a new trial due to the JHO’s failure to “make any findings or come to any conclusions,” and after a bench trial Justice Kitzes granted judgment to the plaintiff.

The Appellate Division affirmed (except on one individual-capacity claim), reasoning that the Supreme Court has the discretion to reject or accept a referee’s findings, with or without a new trial, and that in light of the limited JHO’s report, its decision to order a new trial was not an abuse of discretion. The Appellate Divisions also noted that, in a non-jury trial, “this Court’s power is as broad as the trial court’s power, and this Court may render the judgment it finds warranted by the facts, taking into account in a close case that the trial judge had the advantage of seeing the witnesses.”

So it appears that the procedural confusion surrounding “hear and report,” as opposed to “hear and determine,” essentially mooted the entire proceeding before the JHO, requiring a second trial before the Supreme Court and delaying resolution of the case—which was filed in 2006—for several years. Practitioners should be on their guard to clarify the scope of a JHO’s mandate before such expense or delay is incurred.