Opinion
PC-2017-1767
05-05-2020
ROBERT PERFETTO v. EMPLOYEES' RETIREMENT SYSTEM OF RHODE ISLAND
For Plaintiff: Lauren E. Jones, Esq. For Defendant: Michael P. Robinson, Esq.; John H. McCann, Esq.
For Plaintiff: Lauren E. Jones, Esq.
For Defendant: Michael P. Robinson, Esq.; John H. McCann, Esq.
DECISION
K. RODGERS, J.
Before this Court is Robert Perfetto's (Appellant or Perfetto) appeal from a decision of the Employees' Retirement System of Rhode Island (Appellee or ERSRI) denying Appellant's request to have a lump sum of back-pay that he received in 2010 included as compensation for the purpose of determining his monthly retirement benefits upon his retirement from state service in 2013. The ERSRI found that the lump-sum payment was back-pay for the 2008-2009 academic year, and therefore, it was not "earned and paid for the performance of duties" during the statutorily defined three-year period used to calculate Appellant's retirement benefits, resulting in a lower monthly pension benefit than Appellant expected.
Jurisdiction is pursuant to G.L. 1956 §§ 42-35-15, et seq. For the reasons that follow, the ERSRI's decision is affirmed.
I
Facts and Travel
Perfetto began working for the State of Rhode Island in 1987, spending most of his career as a teacher at the Davies Career and Technical School. In 2007, Appellant was laid off from his State employment. Believing that he was exempt from being laid off, Appellant brought suit against the State. See Robert Perfetto v. Rhode Island Department of Administration, et al., C. A. No. PC-2009-2428. While that suit was pending, Appellant returned to work for the State on July 27, 2009, at the Rhode Island Training School (Training School) as an Administrator, later becoming an Assistant Principal. Appellant and the State settled that civil action in 2010 pursuant to a Consent Order dated June 23, 2010 (the 2010 Consent Order), which provided as follows:
"[Perfetto] shall receive back pay in the amount of $55,775. This sum is based on the total annual salary that [Perfetto] had received at the William M. Davies, Jr. Career-Technical High School ("Davies") during the 2007-08 school year, plus additional sums that would have been paid to him during the 2008-09 school year, plus his out-of-pocket medical expenses for the 2008-09 school year, minus sums and benefits [Perfetto] had received in payment during the 2008[-]09 school year[.]" See Admin. R. 00135.
Thereafter, Appellant received the $55,775 as a lump sum and paid taxes on it that same year.
There is no evidence before this Court of when in 2010 the lump-sum payment was issued by the State and/or received by Appellant. It is, however, undisputed that Appellant paid taxes thereon in calendar year 2010.
Appellant continued in his employment at the Training School until he began to consider retiring in 2013. Appellant met with ERSRI's Retirement Benefit Analyst, John Midgely (Midgely), on April 2, 2013. At that meeting, Appellant provided Midgely with a copy of the 2010 Consent Order. Midgely accessed the State's payroll records in order to provide Appellant an estimate of his monthly retirement benefits based on a calculation of Appellant's three-year average compensation if Appellant retired on August 1, 2013. At that time, the State's payroll records reflected that the $55,775 lump-sum back-payment was credited to Appellant's 2010 wages. The wages used to calculate Appellant's estimated retirement benefit derived from part of 2010, all of calendar years 2011 and 2012, and part of 2013, as set forth in an "Estimate of Benefits" form prepared by Midgely. Admin. R. 00115. The second page of that "Estimate of Benefits" form calculated Appellant's monthly retirement benefit to be $6617.05. Admin. R. 00116. Midgely prepared, signed and dated an "Application for Retirement" form, which Appellant would need if he decided to retire, along with an "Option Selection Form" which Midgely also prepared and provided to Appellant on April 2, 2013. Admin. R. 00113-00114, 00117; see also Admin. R. 00127-00129. The "Option Selection Form" specified a "Service Retirement Allowance" of $79,404.60, Admin. R. 00117, which calculates out to be the same monthly benefit of $6617.05.
As a State employee, Appellant's retirement benefits are determined by statute. See G.L. 1956 § 36-8-1(5)(a) ("'Average compensation' for members eligible to retire as of September 30, 2009 shall mean the average of the highest three (3) consecutive years of compensation, within the total service when the average compensation was the highest."); § 36-8-1(8) ('"Compensation' . . . shall mean salary or wages earned and paid for the performance of duties for covered employment including regular longevity or incentive plans approved by the board . . . .").
The "Estimate of Benefits" form was neither signed nor dated by Midgely. Inexplicably, the "Estimate of Benefits" form includes a "Generation Date" of December 13, 2013. Admin. R. 00115. Notwithstanding, there is no dispute that Midgely prepared and provided the two page "Estimate of Benefits" form to Appellant on April 2, 2013.
Appellant elected to retire on August 1, 2013. On July 9, 2013, Appellant completed and submitted to the ERSRI the "Application for Retirement" form and "Option Selection Form" which Midgely had provided to him at the April meeting. It is undisputed that the consecutive three-year period in which Appellant's compensation was the highest was the three years (or seventy-eight bi-weekly pay periods) immediately preceding his August 1, 2013 retirement; namely, from August 1, 2010 until July 31, 2013. See Admin. R., at 002, 0051, 00119.
One month after he retired, Appellant received his first monthly retirement benefits check for $5580.52, which was $1036.53 less than Midgely's original estimation. Appellant inquired with the ERSRI about the reduced monthly payments. In a letter dated October 2, 2013, Midgely explained the discrepancy as follows:
"[T]he reason it was higher on the estimate was because of the $55,000 [sic] retroactive payment that was posted to your account by State payroll under 2010, when it should have been posted under 2009, since that's the year the payment was meant for, according to documentation in your file. I did notice this when I calculated your actual benefit, and was required to make the adjustment; I did not realize that the amount was included in your estimate." Admin. R. 002.
Appellant petitioned the ERSRI to reinstate the original retirement benefits amount that Midgely calculated and included in his "Estimate of Benefits" and "Option Selection Form" that was included as part of the "Application for Retirement" form prepared by Midgely. On June 20, 2014, the ERSRI's Executive Director, Frank Karpinski, denied Appellant's petition. Appellant then requested that his petition be reviewed by an ERSRI Retirement Board hearing officer (Hearing Officer) in accordance with Section 3 of ERSRI's Regulation 4, Rules of Practice and Procedure for Contested Hearings. A hearing was held on September 26, 2014, at which Appellant and the ERSRI's Executive Director testified before the ERSRI Hearing Officer. The Hearing Officer upheld the ERSRI's Executive Director's denial of Appellant's petition, finding that Appellant was entitled to receive only $5580.52 in monthly retirement benefits payments, the lower amount which excluded the retroactive payment from the 2010 Consent Order in the monthly benefit calculation.
In addition to petitioning the ERSRI, in 2013 Appellant filed a civil action seeking compensation for the decrease in his retirement benefits amount. See Robert Perfetto v. ERSRI, C. A. No. PC-2013-5811. That action was dismissed without prejudice after hearing on June 10, 2014, and before Appellant received a response from the ERSRI to his petition, in order to allow Appellant to exhaust all administrative remedies. In dismissing that case, the parties also agreed that "ERSRI shall not refuse to provide Plaintiff access to any such available procedures based upon any claimed failure to request administrative review in a timely fashion[.]" Admin. R. 0025.
The ERSRI's rules and regulations have since been reissued and renumbered.
Appellant then appealed the Hearing Officer's decision to the ERSRI's full Retirement Board. A letter was sent to Appellant on March 22, 2017 informing him that the ERSRI's Retirement Board voted to accept the Hearing Officer's decision. Having exhausted all administrative remedies, Appellant timely appealed the ERSRI's decision to this Court on April 19, 2017.
II Standard of Review
Section 42-35-15(g) of the Administrative Procedures Act (APA) establishes this Court's appellate jurisdiction to review final decisions issued by state administrative agencies. See McAninch v. State of Rhode Island Department of Labor & Training, 64 A.3d 84, 87 (R.I. 2013). Pursuant to § 42-35-15(g),
"[t]he court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
"(1) In violation of constitutional or statutory provisions;
"(2) In excess of the statutory authority of the agency;
"(3) Made upon unlawful procedure;
"(4) Affected by other error of law;
"(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
"(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Section 42-35-15(g).
In reviewing an administrative agency's decision, "[q]uestions of law determined by the administrative agency are not binding upon [the court] and may be freely reviewed to determine the relevant law and its applicability to the facts presented in the record." State, Department of Environmental Management v. State Labor Relations Board, 799 A.2d 274, 277 (R.I. 2002) (citing Carmody v. Rhode Island Conflict of Interest Commission, 509 A.2d 453, 458 (R.I. 1986)). Notwithstanding this Court's authority to afford great deference to an administrative agency's factual findings, '"questions of law-including statutory interpretation-are reviewed de novo.'" McAninch, 64 A.3d at 86 (quoting Heritage Healthcare Services v. Marques, 14 A.3d 932, 936 (R.I. 2011)). This Court can vacate an administrative decision based on errors of law. Rhode Island Temps, Inc. v. Department of Labor & Training, Board of Review, 749 A.2d 1121, 1125 (R.I. 2000) (quoting Environmental. Scientific Corp. v. Durfee, 621 A.2d 200, 208 (R.I. 1993)).
III
Analysis
The issue before this Court is whether the Retirement Board erred by accepting the Hearing Officer's finding that Appellant's three-year average compensation from 2010-2013 does not include the $55,775 of back-pay that Appellant received in 2010 for the purpose of determining Appellant's actual retirement benefits. Specifically, this Court must determine whether Appellant is entitled to receive monthly retirement benefit payments of $6617.05, as Midgely indicated in his original calculation from the April 2, 2013 meeting, or $5580.52 per month as calculated without the lump-sum back-pay included in the three-year average.
Appellant contends that the ERSRI's findings and conclusions contain errors of law and are clearly erroneous in view of the reliable, probative, and substantial evidence of the whole record. See § 42-35-15(g). Appellant asserts that the ERSRI misinterpreted § 36-8-1(8)-which defines "compensation" and that Midgely used to determine Appellant's retirement benefits-by finding that the 2010 retroactive payment was not "earned and paid" in the same year. Appellant also argues that equitable estoppel applies because the State's payroll applied the $55,775 payment toward 2010, and therefore, any error in Midgely's original calculation was not ultra vires. Finally, Appellant maintains that the ERSRI's unilateral reduction of his monthly retirement benefits, two months after he retired, was unconscionable and a violation of his constitutional right to due process.
Appellant also claimed that he should have been reinstated to the position that he held prior to retirement due to his reliance on Midgely's calculation in deciding to retire in August 2013. However, Appellant is now more than seventy years old, he no longer lives in this State, and he concedes that this claim is moot.
The ERSRI responds that this Court should affirm the March 22, 2017 decision as § 36-8-1(8) does not require the inclusion of the $55,775 payment as compensation because it was not earned for the performance of duties in 2010. Moreover, the ERSRI argues that equitable estoppel does not apply because Midgely's inclusion of the payment in his April 2, 2013 calculation does indeed constitute an ultra vires action, and that Appellant was not deprived of his constitutional right to due process.
A
Statutory Interpretation
Section 36-8-1, et seq. governs the administration of the State's retirement system. See §§ 36-8-1, et seq. The General Assembly established that "[t]he general administration and the responsibility for the proper operation of the retirement system and for making effective the provisions of chapters 8-10 of this title are [] vested in a retirement board." Section 36-8-3. The Retirement Board maintains the broad authority to promulgate rules and regulations for the administration and transaction of the retirement system's business and is responsible for "providing retirement allowances for employees of the state of Rhode Island . . . ." Section 36-8-2.
When a State employee becomes eligible for retirement, the employee's retirement benefits are determined by a statutorily defined "average compensation" calculation. See § 36-10- 9(1)(c)(iv) (establishing the requirements that members of the state retirement system must meet to become eligible for retirement allowances); see also § 36-10-10 (instituting the amount of retirement allowances a retirement system member is entitled to receive when that member is eligible pursuant to § 36-10-9). Section 36-8-1(5)(a) defines "'[a]verage compensation' for members eligible to retire as of September 30, 2009" as "the average of the highest three (3) consecutive years of compensation, within the total service when the average compensation was the highest." Subsection (8) of that statute further defines "[c]ompensation" as "salary or wages earned and paid for the performance of duties for covered employment, including regular longevity or incentive plans approved by the board . . . ." Section 36-8-1(8) (emphasis added).
It is undisputed that Appellant is within the class of retirement system members eligible for retirement as of September 30, 2009.
It is well settled that "an administrative agency[] is bound by the acts of the General Assembly that empower it." Clarke v. Morsilli, 714 A.2d 597, 600 (R.I. 1998). "In the course of performing its discrete functions," an administrative agency "is called upon both to interpret certain acts of the Legislature and to promulgate applicable regulations not inconsistent with its delegated authority." Id. (citing Lerner v. Gill, 463 A.2d 1352, 1358 (R.I. 1983)). However, the judiciary acts as the '"final arbiter of the validity or interpretation of statutory law' as well as of any agency regulations promulgated to administer that law." Id. (quoting DeAngelis v. Rhode Island Ethics Commission, 656 A.2d 967, 970 (R.I. 1995)).
Furthermore, '"when the language of a statute is clear and unambiguous, [a] [c]ourt must interpret the statute literally and must give the words of the statute their plain and ordinary meanings."' Iselin v. Retirement Board of Employees' Retirement System of Rhode Island, 943 A.2d 1045, 1049 (R.I. 2008) (quoting Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1226 (R.I. 1996)); see also Town of Cumberland v. Cumberland Town Employees Union, 183 A.3d 1114, 1118 (R.I. 2018) (quoting Grasso v. Raimondo, 117 A.3d 482, 489 (R.I. 2018)) (noting that '"when a statutory section is clear and unambiguous, [the court] appl[ies] the plain and ordinary meaning of the statute and [the court] need not delve into any further statutory interpretation'"). Alternatively, the Court must "examine [an ambiguous] statute in its entirety [and determine] 'the intent and purpose of the Legislature.'" State v. Peterson, 722 A.2d 259, 264 (R.I. 1998) (quoting In re Advisory to the Governor, 688 A.2d 1246, 1248 (R.I. 1996)). In doing so, the Court must "'give deference to an agency's interpretation of an ambiguous statute that it has been charged with administering and enforcing, provided that the agency's construction is neither clearly erroneous nor unauthorized.'" Town of Burrillville v. Pascoag Apartment Associates, LLC, 950 A.2d 435, 445 (R.I. 2008) (quoting Rossi v. Employees' Retirement System of Rhode Island, 895 A.2d 106, 113 (R.I. 2006)); see also In re Proposed Town of New Shoreham Project, 25 A.3d 482, 505-06 (R.I. 2011). The Court applies this level of deference "even when the agency's interpretation is not the only permissible interpretation that could be applied." Auto Body Association of Rhode Island v. State Department of Business Regulation, 996 A.2d 91, 97 (R.I. 2010).
The Retirement Board accepted the Hearing Officer's decision, which explained: "The [ERSRI] has interpreted the definition of compensation set forth in [§] 36-8-1(8) as requiring salary or wages to be both earned and paid in a particular year, in order to be included for purposes of calculating final average compensation, in accordance with [] [§] 36-8-1(5)(a)." Admin. R. 00216 (Hearing Officer's Decision at 5, January 6, 2017). The ERSRI's interpretation of § 36-8-1(8) is entitled to great weight, even if it is susceptible to more than one interpretation. See Auto Body Association of Rhode Island, 996 A.2d at 97; Pascoag Apartment Associates, LLC, 950 A.2d at 445-46. This Court must "presume that the General Assembly 'intended each word or provision of a statute to express a significant meaning, '" and '"will give effect to every word, clause, or sentence, whenever possible."' In re Estate of Manchester, 66 A.3d 426, 430 (R.I. 2013) (quoting Swain v. Estate of Tyre ex rel. Reilly, 57 A.3d 283, 288 (R.I. 2012)).
The ERSRI's interpretation of § 36-8-1(8) properly gives effect to the clear and unambiguous language of the statute. See Iselin, 943 A.2d at 1049; see also In re Estate of Manchester, 66 A.3d at 430. The language of the statute clearly details that the average compensation is calculated based on salary or wages that must be earned for the performance of duties and paid during the seventy-eight consecutive months that constitute the three-year average. Section 36-8-1(8) (emphasis added). See also Earle v. Zoning Board of Review of City of Warwick, 96 R.I. 321, 324, 191 A.2d 161, 163 (1963) (quoting Pedro v. Muratore, 83 R.I. 123, 127, 113 A.2d 731, 733) ("The words 'or' and 'and' are not the equivalent of each other and should not be considered as interchangeable unless reasonably necessary in order to give effect to the intention of the enacting body.") To read the provision as including salary that was paid in 2010 but not earned in 2010 requires a substitution of the word "and" with "or", in contravention of the clear language used by the General Assembly. See id. Such an interpretation is neither warranted nor permitted under our rules of statutory construction.
Pursuant to § 36-8-1(5)(a), Appellant is entitled to an amount based on "the average of the highest three (3) consecutive years of compensation, within the total service when the average compensation was the highest." Employing the ERSRI's interpretation of § 36-8-1(8), the average compensation calculation includes Appellant's salary or wages earned and paid out for the performance of duties within Appellant's three highest paid consecutive years of employment. It is undisputed that Appellant's earnings were the highest in the three consecutive years immediately preceding his August 1, 2013 retirement, and specifically in the seventy-eight consecutive pay periods between August 1, 2010 and July 31, 2013. The record is also clear that the $55,775 payment was back-pay for the time Appellant was laid off during 2008-2009 and therefore was earned prior to August 1, 2010. See Admin. R. at 00135.
While it is possible that the lump-sum payment was paid out by the State or received by Appellant within the three-year period between August 1, 2010 and July 31, 2013, the decision below correctly determined that in no event was the $55,775 lump-sum payment "earned" during the designated period that the Retirement Board was required to consider.
If the lump-sum payment was issued and/or received by Appellant prior to August 1, 2010, then unquestionably it could not have been paid nor earned during the three-year period between August 1, 2010 and July 31, 2013. In any event, and without the need to remand this matter for evidence of the date of the $55,775 payment, this Court still concludes, as the Retirement Board did, that the lump-sum payment was not earned between August 1, 2010 and July 31, 2013, and therefore cannot be used to calculate Appellant's monthly pension benefit.
Accordingly, this Court finds that the ERSRI's interpretation of §§ 36-8-1(5)(a) and 36-8-1(8) and its application of these provisions to the instant case were neither clearly erroneous nor unauthorized. See Pascoag Apartment Associates, LLC, 950 A.2d at 445 (quoting Rossi, 895 A.2d at 113). The $55,775 payment Appellant received in 2010 is not considered compensation for the purposes of calculating Appellant's average compensation as it was back-pay from 2008-2009, rather than compensation earned and paid for the performance of duties between August 1, 2010 and July 31, 2013.
B
Equitable Estoppel
Appellant next contends that equitable estoppel dictates that he is entitled to the higher monthly retirement benefit. The doctrine of equitable estoppel applies "against public agencies to prevent injustice and fraud where the agency or officers thereof, acting within their authority, made representations to cause the party seeking to invoke the doctrine either to act or refrain from acting in a particular manner to his [or her] detriment." Romano v. Retirement Board of Employees' Retirement System of Rhode Island, 767 A.2d 35, 39 (R.I. 2001) (internal quotation omitted). Equitable estoppel applies when there is "an affirmative representation or equivalent conduct on the part of the person against whom the estoppel is claimed which is directed to another for the purpose of inducing the other to act or fail to act in reliance thereon; and secondly, that such representation or conduct in fact did induce the other to act or fail to act to his injury." El Marocco Club, Inc. v. Richardson, 746 A.2d 1228, 1233 (R.I. 2000) (internal quotation omitted). The Rhode Island Supreme Court has held that "[u]nder the doctrine of equitable estoppel, a party may be precluded from enforcing an otherwise legally enforceable right because of previous actions of that party." Retirement Board of the Employees' Retirement System of Rhode Island v. DiPrete, 845 A.2d 270, 284 (R.I. 2004).
However, our Supreme Court has also indicated that the doctrine of equitable estoppel is "extraordinary relief, which will not be applied unless the equities clearly [are] balanced in favor of the part[y] seeking relief." Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890 A.2d 58, 67 (R.I. 2005) (internal quotation omitted). In the context of cases involving governmental action, Rhode Island courts "will not entertain an estoppel claim when a governmental employee's actions clearly are ultra vires." Waterman v. Caprio, 983 A.2d 841, 846 (R.I. 2009); see Romano, 767 A.2d at 39-40; see also Technology Investors v. Town of Westerly, 689 A.2d 1060, 1062 (R.I. 1997) (finding that equitable estoppel did not apply when a municipality enacted an ordinance that clearly contradicted state law).
In Romano, a retired state employee sought advice from the ERSRI regarding whether post-retirement municipal employment would impact his retirement benefits. Romano, 767 A.2d at 36. The then-executive director of the ERSRI indicated that there was no prohibition against a state retiree working for a municipal system. Id. In reliance on that advice, Romano accepted the position, but was later informed that he was no longer eligible to receive his pension benefits due to his municipal employment. Id. at 37. In that case, the Court held that the ERSRI's then-executive director "lacked any authority to bind the state to provide retirement benefits to Romano beyond those allowed by state law" by giving advice regarding post-retirement municipal employment that contradicted state law. Id. at 40 (citing Providence Teachers Union v. Providence School Board, 689 A.2d 388, 391 (R.I. 1997)). The Court found that giving such advice constituted ultra vires actions and reasoned that "the renegade legal interpretations of a high-ranking state official can[not] override a state law that plainly provides otherwise. Id. (citing State v. Rhode Island Alliance of Social Services Employees, Local 580, SEIU, 747 A.2d 465, 470 (R.I. 2000)).
More recently, in Waterman, 983 A.2d 841, the Supreme Court again considered the ultra vires action of a state employee. In that case, the plaintiff was employed by the state as a correctional officer when he was injured on the job. Id. at 843. During settlement negotiations, the assistant executive director of the ERSRI erroneously informed the plaintiff that a workers' compensation settlement would not be offset against the amount of the plaintiff's disability retirement payment as the retirement statute's offset provision would not apply. Id. After taking the assistant executive director's advice and settling his workers' compensation claim, the plaintiff learned that his retirement payments would not commence until the amount of the settled claim was offset against his benefits. Id. The Supreme Court determined that the assistant executive director of the ERSRI lacked "either actual or implied authority to waive, modify, or ignore applicable state law that conflicted with his statements" regarding the offset provision of the retirement statute. Id. at 847. The Court relied on its reasoning in Romano to determine that an equitable estoppel claim fails when "[t]he statements made by the retirement system employees were not within their authority to make because they contradicted state law." Id. (citing Romano, 767 A.2d at 38).
In the instant matter, equitable estoppel does not apply because the inclusion of the $55,775 payment as compensation that Appellant received in 2010 conflicts with the statutory definition of compensation set forth in § 36-8-1(8). See Waterman, 983 A.2d at 847; see also Pascoag Apartment Associates, LLC, 950 A.2d at 445 (quoting Rossi, 895 A.2d at 113). As previously discussed, Appellant is entitled to retirement benefits based on his average compensation, including the salary and wages that he earned and for which he was paid for the performance of duties in the seventy-eight consecutive pay periods leading up to his August 1, 2013 retirement. See § 36-8-1(8). Midgely's initial calculation of Appellant's retirement benefits included the $55,775 lump-sum payment that was erroneously credited as part of Appellant's 2010 wages, notwithstanding that Midgely had a copy of the Consent Order which clearly revealed that the payment was for back-pay from the 2008-2009 academic year. Admin. R. 00135. Upon realizing that the lump-sum payment should not have been included in Appellant's retirement benefit calculation, Midgely corrected the calculation when he calculated the actual-rather than the estimated-retirement benefit. In his October 2, 2013 correspondence with Appellant, Midgely explained two mistakes having been made: (1) "the $55,000 [sic] retroactive payment that was posted to [Appellant's] account by State payroll under 2010, when it should have been posted under 2009, since that's the year the payment was meant for", and (2) "[Midgely] did not realize that the amount was included in [Appellant's] estimate." Admin. R. 002. After noticing the errors, Midgely stated that he was "required to make the adjustment." Id.
The correction that Midgely made to the calculation of Appellant's retirement benefit is evidence that the earlier estimate had been calculated in a manner that was ultra vires and in violation of state law. First, the fact that the lump-sum payment was erroneously credited to 2010 rather than 2009, wherein the sums were to compensate for the 2008-2009 school year, is contrary to the terms of § 36-8-1(8) and the Consent Order. The lump-sum payment was earned for the school year 2008-2009 and could not have been credited as compensation in 2010. Second, and for the same reason, the estimated retirement benefit for the period August 1, 2010 through July 31, 2013, could not include the lump-sum payment that was earned prior to that three-year period. Both the unidentified individual who erroneously credited the lump-sum payment to Appellant's 2010 salary and Midgely lacked the authority to waive, modify or ignore the terms of § 36-8-1(8) or the Consent Order. Accordingly, the doctrine of equitable estoppel does not apply and the ERSRI cannot be bound to such ultra vires acts by its agents. See Waterman, 983 A.2d at 847; Romano, 767 A.2d at 39-40.
Appellant's suggestion that the initial mistake in how the State characterized the lump-sum payment should absolve Midgely for having acted beyond his authority, see Appellant's Mem. at 9-10, 12, is equally unavailing. To allow one ultra vires act to be compounded by another ultra vires act would do nothing more than exacerbate an unlawful act that conflicts with state law. Thus, this Court rejects Appellant's argument that Midgely acted within his authority by virtue of relying upon the State's then-payroll record that included the lump-sum payment as part of Appellant's 2010 wages.
For all these reasons, Appellant is not entitled to relief based on a claim of equitable estoppel.
In finding that the acts of ERSRI agents were ultra vires, this Court need not address the two-pronged test for equitable estoppel claims. See El Marocco Club, Inc., 746 A.2d at 1233 (explaining that equitable estoppel applies when there is "an affirmative representation or equivalent conduct" that is (1) "directed to another for the purpose of inducing the other to act or fail to act in reliance thereon," and (2) "that such representation or conduct in fact did induce the other to act or fail to act to his injury"). However, this Court pauses to note that it would be unreasonable to conclude that Appellant's decision to retire on August 1, 2013, was not, at least in part, based on his reliance on Midgely's initial retirement benefits estimate from April 2, 2013. This reliance, however, cannot overcome the ultra vires action of Midgely, which dictates that the doctrine of equitable estoppel shall not apply.
C
Due Process Violation
With respect to Appellant's constitutional due process argument, the Rhode Island Supreme Court has adopted the United States Supreme Court's definition of a property right, which "indicates that a state statute can confer a property interest on government employees, thereby entitling those employees to the due-process and just-compensation protections that are found in both the state and federal constitutions." Wilkinson v. State Crime Laboratory Commission, 788 A.2d 1129, 1139 (R.I. 2002); see Perry v. Sindermann, 408 U.S. 593, 601 (1972). As a result, the Court has explicitly held that when provided for by statute, state-government employees are entitled to "due-process and just-compensation protections against any attempted elimination or alteration of their property rights." Wilkinson, 788 A.2d at 1139-40.
However, Appellant's claim that the ERSRI deprived him of his constitutionally protected property interest in his retirement benefits is without merit. The "Estimate of Benefits" provided to Appellant by Midgely at the April 2, 2013 meeting did not establish a constitutionally protected property interest in the original monthly amount, as such interests are conferred by statute and cannot be altered by a state employee's estimated calculation of a statutorily defined amount. See Wilkinson, 788 A.2d at 1139. Rather, Appellant maintains a protected property interest in the amount of retirement benefits that is conferred by statute. Id. The ERSRI did not deprive Appellant of a protected property interest when it issued Appellant a lower monthly benefit payment of $5580.52, because that is the proper monthly benefit amount based on Appellant's average compensation from the seventy-eight consecutive pay periods preceding his retirement. See § 36-8-1(8).
Accordingly, this Court finds that Appellant was not deprived of any constitutional due-process protections as the ERSRI did not alter or eliminate the retirement benefits that Appellant is entitled to receive. Wilkinson, 788 A.2d at 1139-40.
Due to this Court's finding that Appellant is entitled to monthly benefit payments of only $5580.52, which is the amount that Appellant has received since his retirement, it is unnecessary to address Appellant's pre-judgment interest argument. The Court notes, however, that the issue was properly preserved on appeal.
IV
Conclusion
After review of the record, this Court finds that the ERSRI's decision was not in violation of constitutional or statutory provisions, affected by error of law, or clearly erroneous. The substantial rights of Appellant have not been prejudiced. Accordingly, this Court affirms the ERSRI's full Retirement Board's denial of Appellant's request to have the $55,775 payment included as compensation for the purpose of calculating his actual retirement benefits.
Counsel for Appellee shall submit an appropriate judgment for entry.