Opinion
23-P-1147
10-07-2024
STEPHEN O'MALLEY & another [1] v. CONTRIBUTORY RETIREMENT APPEAL BOARD & another. [2]
Praven Shenoy for the plaintiffs. Gregory F. Galvin for retirement board of Brockton. Andrew Batchelor, Assistant Attorney General, for Contributory Retirement Appeal Board.
Heard: June 6, 2024.
Civil action commenced in the Superior Court Department on February 5, 2020. The case was heard by Paul D. Wilson, J., on a motion for judgment on the pleadings.
Praven Shenoy for the plaintiffs.
Gregory F. Galvin for retirement board of Brockton. Andrew Batchelor, Assistant Attorney General, for Contributory Retirement Appeal Board.
Present: Blake, Neyman, & Sacks, JJ.
NEYMAN, J.
We consider whether traffic duty pay for work performed by the plaintiffs, Stephen O'Malley and Thomas Lambert, must be included in the calculation of the plaintiffs' retirement allowances. This determination hinges on whether traffic duty pay constitutes "regular compensation" within the meaning of G. L. c. 32, § 1. We conclude that the plaintiffs' traffic duty pay does not qualify as "regular compensation" under the statute. Accordingly, we affirm the judgment.
Background.
Stephen O'Malley commenced employment with the Brockton school department as a school police officer on February 6, 1985, and in 1990 began working as a school crossing guard in addition to his school police officer duties. Thomas Lambert commenced employment with the Brockton school department as a school custodian on March 11, 2002, and in 2008 began working as a school crossing guard in addition to his school custodian duties. Both O'Malley's and Lambert's traffic duty pay "[was] calculated at time and a half, the same rate for overtime pay." O'Malley and Lambert worked irregular hours as school crossing guards, and neither of their employment contracts required that they perform traffic duty.
In 2009 and 2010, O'Malley and Lambert, respectively, suffered injuries at work and applied for accidental disability retirement based on those work-related injuries. Their "accidental disability pension[s] [were] computed according to [ ] G. L. c. 32, § 7 (2) (a) (ii)." The Public Employee Retirement Administration Commission (PERAC) calculated O'Malley's and Lambert's retirement allowances "based on the amount that the [retirement] [b]oard [of Brockton] had reported as 'regular compensation,' and excluded traffic duty payments." PERAC made this calculation pursuant to regulations implemented in June 2010, which provided updated guidance as to what constitutes "regular compensation" under G. L. c. 32. See 840 Code Mass. Regs. § 15.03 (2010).
PERAC's June 17, 2010 memorandum concerning the regulations read, in relevant part: "In determining whether payments on or after July 1, 2009 are 'regular compensation' for purposes of Chapter 32, Retirement Boards must consider the criteria contained in 840 [Code Mass. Regs. §] 15.03(3) (b) ."
O'Malley and Lambert filed appeals with the retirement board of Brockton (board), requesting that it include traffic duty pay as part of the plaintiffs' regular compensation in the calculation of their retirement benefits. After the board denied the plaintiffs' appeals, O'Malley and Lambert appealed to the Contributory Retirement Appeal Board (CRAB), which assigned their cases to the Division of Administrative Law Appeals (DALA). Following a hearing at which both O'Malley and Lambert testified, and documentary evidence was admitted into the administrative record, DALA issued a decision upholding the board's exclusion of traffic duty pay from the calculation of the plaintiffs' retirement benefits. O'Malley and Lambert appealed DALA's decision to CRAB. CRAB adopted DALA's findings, ruled that the "traffic duty payments were irregular payments paid on an hourly basis and are akin to overtime payments," and affirmed DALA's decision. O'Malley and Lambert then brought the present action in the Superior Court pursuant to G. L. c. 30A, § 14, for review of the CRAB decision. Following a hearing, a Superior Court judge denied the plaintiffs' motion for judgment on the pleadings and ordered the entry of judgment in favor of the defendants, CRAB and the board. Judgment for the defendants entered, and O'Malley and Lambert filed a timely notice of appeal.
Discussion.
1. Standard of review.
It is well established that judicial review of an agency decision pursuant to G. L. c. 30A is "narrow and deferential." Buchanan v. Contributory Retirement Appeal Bd., 65 Mass.App.Ct. 244, 246 (2005). Plaintiffs have the "heavy burden" of demonstrating that the agency's decision is invalid. Massachusetts Ass'n of Minority Law Enforcement Officers v. Abban, 434 Mass. 256, 263-264 (2001) . On appeal, CRAB's decision must stand unless it is unsupported by substantial evidence or based on an error of law. See G. L. c. 3 0A, § 14 (7); Murphy v. Contributory Retirement Appeal Bd., 463 Mass. 333, 344 (2012). "It is not our province to determine whether the CRAB decision is based on the weight of the evidence, nor may we substitute our judgment for that of CRAB" (quotations and citation omitted). Murphy, supra. We give due weight to the agency's experience and specialized knowledge, as well to the discretionary authority conferred upon it. See G. L. c. 30A, § 14 (7); Murphy, supra at 344-345. Indeed, "[i]n the notoriously difficult, sometimes tortuous field of retirement rights and calculations, there is particular reason for giving deference to the agency's expertness." Evans v. Contributory Retirement Appeal Bd., 46 Mass.App.Ct. 229, 233 (1999). "However, in deferring to the administrative body, we do not abdicate our judicial responsibility." Water Dep't of Fairhaven v. Department of Envtl. Protection, 455 Mass. 740, 744 (2010) .
2. Regular compensation.
The plaintiffs argue that they had reasonable expectations that their traffic duty pay constituted regular compensation because prior to the 2010 PERAC regulations, the board had included traffic duty pay when calculating regular compensation for other employees, and retirement contributions had been deducted from plaintiffs' traffic duty pay and forwarded to the board.
As stated in the DALA decision, the board has been holding the plaintiffs' "retirement deductions pending the outcome of the appeals." At oral argument, the defendants confirmed that those deductions will be returned to the plaintiffs if this appeal is decided in the defendants' favor.
We begin our analysis by looking to the plain language of the statute. See Plymouth Retirement Bd. v. Contributory Retirement Appeal Bd., 483 Mass. 600, 604 (2019). "Regular compensation" is defined, in relevant part, as "compensation received exclusively as wages by an employee for services performed in the course of employment for his employer." G. L. c. 32, § 1. "Wages" are "the base salary or other base compensation of an employee paid to that employee for employment by an employer; provided, however, that 'wages' shall not include . . . [inter alia,] overtime, commissions, [or] bonuses other than cost-of-living bonuses." G. L. c. 32, § 1. "As we have held, the 'straightforward and unambiguous' language of § 1 indicates that 'regular compensation' is 'ordinary, recurrent, or repeated payments not inflated by any "extraordinary ad hoc" amounts such as bonuses or overtime pay.'" Public Employee Retirement Admin. Comm'n v. Contributory Retirement Appeal Bd., 478 Mass. 832, 835 (2018), quoting Pelonzi v. Retirement Bd. of Beverly, 451 Mass. 475, 479 (2008) . "Where the statutory meaning is unambiguous we are constrained to follow it . . . ." Providence & Worcester R.R. Co. v. Energy Facilities Siting Bd., 453 Mass. 135, 142 (2009).
As found in the DALA decision, which was adopted by CRAB and supported by the administrative record, the plaintiffs could work traffic duty whenever they chose to do so, traffic duty was not a part of their contractual duties, their hours varied, and compensation for traffic duty was irregular and akin to overtime pay. In addition, the plaintiffs were paid their overtime rate for traffic duty. In view of these findings, we agree that the traffic duty payments lack the "ordinary" nature required for an employee's regular compensation under G. L. c. 32, § 1. Indeed, our precedent supports this conclusion. See Hallett v. Contributory Retirement Appeal Bd., 431 Mass. 66, 70 (2000) ("In G. L. c. 32, § 1, the definition of '[r]egular compensation' excludes bonus, overtime, or severance pay. . . . Hourly compensation paid on an irregular basis is more akin to overtime payments than to annual salary"). See also Public Employee Retirement Admin. Comm'n, 478 Mass. at 835.
The plaintiffs maintain that Hallett, 431 Mass. at 70, is inapposite because it concerns "regular compensation" provisions in G. L. c. 32, § 1, that are applicable only to schoolteachers. We disagree. In Hallett, supra, the court analyzed the statutory definition of "regular compensation," and the legislative intent behind G. L. c. 32:
"[T]he statutory intent is clearly to exempt irregular payments of compensation from the retirement base. (In G. L. c. 32, § 1, the definition of '[r]egular compensation' excludes bonus, overtime, or severance pay.) Hourly compensation paid on an irregular basis is more akin to overtime payments than to annual salary."Moreover, the Supreme Judicial Court has relied on the reasoning in Hallett in defining "regular compensation" in disability retirement cases involving employees other than teachers. See Public Employee Retirement Admin. Comm'n, 478 Mass. at 835 (citing Hallett, in case involving public works employee, for broad proposition that "the statutory intent [behind the definition of 'regular compensation'] is clearly to exempt irregular payments of compensation from the retirement base"); Rotondi v. Contributory Retirement Appeal Bd., 463 Mass. 644, 652 (2012) (same, in case involving town moderator).
Nonetheless, citing Colo v. Contributory Retirement Appeal Bd., 37 Mass.App.Ct. 185, 188 (1994), the plaintiffs insist that "the reasonable expectations of a retiree control [], even if PERAC's interpretation of G. L. c. 32 resulted in denying benefits." Otherwise stated, the plaintiffs contend that the board's practice of including traffic duty pay when calculating regular compensation created a reasonable expectation on which they both relied. They contend that that expectation obviates the need to determine whether traffic duty pay is regular compensation. This argument fails for various reasons.
First, for the reasons stated above, the plaintiffs' argument is inconsistent with the language of G. L. c. 32. Second, as the plaintiffs acknowledged at oral argument, their claims are not predicated on equitable or estoppel principles.
Indeed, such an argument would be unavailing, as equitable concerns may not trump a statutory rule. See Plymouth Retirement Bd., 483 Mass. at 604, quoting Joslyn v. Chang, 445 Mass. 344, 352 (2005) ("[T]he duty of the court [is] to adhere to the very terms of the statute, and not, upon imaginary equitable considerations, to escape from the positive declarations of the text"). Third, Colo is distinguishable from the present case. That case involved the application of a 1964 change in the retirement law itself to the plaintiff who commenced work as a "call fire fighter" in 1957. Colo, 37 Mass.App.Ct. at 185-186, 190. In 1964, the Legislature amended G. L. c. 32, § 4 (2) (b), which had the effect of "limit[ing] the authority of a retirement board in determining how much creditable service to grant call fire fighters, among others." Colo, supra at 186-187. When the plaintiff retired after more than thirty-two years of service, CRAB determined that "he should be denied creditable service for the period after the effective date of the [amendment to the] statute in 1964." Id. at 186. The court reversed a Superior Court judgment affirming the CRAB decision because, on the particular facts of that case, the plaintiff had a reasonable expectation under the statute as it existed at the time he began his service (and for seven years thereafter) "that his service as a call fire fighter would continue to count as creditable service as long as deductions were being taken from his salary and until his employment terminated." Id. at 191. Critical to that outcome, the court grounded its opinion in a statutory right held by the plaintiff that the Legislature changed during the course of the plaintiff's service. See Id. at 188-189 ("retirement plans for public employees have been treated in Massachusetts ... as irrevocable contractual commitments rather than mere gratuities, and where a retirement plan has generated material expectations on the part of employees, they should be respected and not be subject to significant legislative modification" [emphasis added; quotation and citation omitted]).
In the present case, by contrast, the plaintiffs never held a statutory right to having their traffic duty payments count as "regular compensation." Unlike the call firefighter in Colo whose expectation was based on statutory authority, the plaintiffs here base their expectation solely on the board's erroneous practice of deducting retirement contributions from the plaintiffs' traffic duty pay. Although there may be a degree of facial appeal to the equitable nature of the plaintiffs' claim, expectations grounded in an administrative board's error are not the same as expectations grounded in a statutory right. See Plymouth Retirement Bd., 483 Mass. at 604. Put simply, the board's incorrect view that traffic duty payments constituted "regular compensation" is not a tenable basis to ignore the language and meaning of "regular compensation" under G. L. c. 32. See Smith v. Commissioner of Transitional Assistance, 431 Mass. 638, 646 (2000) ("An agency regulation that is contrary to the plain language of the statute and its underlying purpose may be rejected by the courts").
3. Substantial evidence.
The plaintiffs also contend that certain findings in the DALA decision, adopted by CRAB, were not supported by substantial evidence and thus we should set aside the decision and remand for further proceedings. The argument is unpersuasive.
"In order to be supported by substantial evidence, an agency conclusion need not be based upon the clear weight of the evidence ... or even a preponderance of the evidence, but rather only upon reasonable evidence, . . . i.e., such evidence as a reasonable mind might accept as adequate to support a conclusion, after taking into consideration opposing evidence in the record" (quotations omitted). Lisbon v Contributory Retirement Appeal Bd., 41 Mass.App.Ct. 246, 257 (1996), quoting G. L. c. 30A, § 1 (6).
Here, the plaintiffs contest DALA's findings that their traffic duty payments were irregular, paid on an hourly basis, and akin to overtime payments. As discussed supra, ample evidence in the administrative record supports the findings that the plaintiffs were paid hourly for their traffic duty work; their hours were inconsistent and differed at all relevant times; and they were paid an overtime rate for the work. As explained in the DALA decision, "the amounts [of the payments made to the plaintiffs] differed based on how many hours the [plaintiffs] worked, they were not regular, ordinary, and normal. The traffic payments were not stipendiary, but changed according to the [plaintiffs'] choice." Where the record supports these determinations, we conclude that the DALA decision was supported by substantial evidence, and judgment properly entered for the defendants.
The plaintiffs' contention that DALA reviewed the incorrect timeframe when considering their traffic duty hours is unavailing. As the plaintiffs acknowledged, regardless of the timeframe considered, the evidence before DALA showed that (a) the plaintiffs' traffic duty hours were inconsistent and varied, and (b) they could choose when to work or not work traffic duty at all relevant times.
Judgment affirmed.