Opinion
1683CV1191B
06-20-2018
PLYMOUTH RETIREMENT BOARD v. CONTRIBUTORY RETIREMENT APPEAL BOARD et al.
MEMORANDUM AND ORDER OF JUDGMENT ON CROSS MOTIONS FOR JUDGMENT ON THE PLEADINGS
Michael D. Ricciuti, Justice of the Superior Court
The plaintiff, the Plymouth Retirement Board ("PRB"), brought this action seeking judicial review of a decision of one of the defendants, the Contributory Retirement Appeal Board ("CRAB"), which requires PRB to collect money from one of its members, a police officer by the name of Antonio Gomes ("Gomes")-money that PRB had refunded to Gomes a decade earlier as the result of direction given by defendant Public Employee Retirement Administration Commission ("PERAC") and based on PERAC’s then-view of the law, the diametric opposite of CRAB’s current view.
PRB moves for judgment on the pleadings, asserting that CRAB’s reading of the applicable statute, G.L.c. 32, § 4(2)(b) and (c), is erroneous as a matter of law, and asks this Court to vacate CRAB’s decision and remand the matter back to CRAB. In response, CRAB and PERAC (collectively, "CRAB") oppose and cross move for judgment on the pleadings, seeking an affirmation of CRAB’s statutory interpretation and order.
As detailed below, the Court concludes that CRAB’s current reading of the law is in error. Accordingly, PRB’s motion for judgment on the pleadings is ALLOWED, and CRAB’s motion is DENIED. This matter is REMANDED to CRAB for further proceedings consistent with this decision.
BACKGROUND
The relevant facts are not disputed. This Court adopts the findings of fact from the Division of Administrative Law Appeals ("DALA") with CRAB’s minor corrections.
The DALA finding of fact incorrectly depicts the end date of Officer Gomes’ employment in the relevant position at the Plymouth Police Department. This error was corrected in CRAB’s finding of fact and is not disputed by Plaintiff.
Between June 21, 1987 and June 27, 1991, Gomes worked as a permanent-intermittent police officer for the Town of Plymouth. Because he worked as a permanent-intermittent or temporary full-time police officer throughout that period, Gomes was not eligible for membership in the Plymouth Retirement System. On July 31, 1992, Gomes was appointed as a permanent officer of the Plymouth Police Department, and subsequently granted membership into the Plymouth Retirement System on October 4, 1992.
In both 1994 and 1998, Gomes was informed that he could purchase and receive credit for up to five years of prior permanent-intermittent service pursuant to G.L.c. 32, § 4(2)(b). In 1998, Gomes decided to purchase such credit through payroll-deductions over a two-year period, and did so for a payment in excess of $5,000.
In 2003, following an audit of PRB, PERAC notified PRB that it should not have required members, like Gomes, who had served as permanent-intermittent police officers to remit contributions to PRB to receive credit for service. PRB thereafter refunded Gomes the contributions he had made to receive that credit.
On June 21, 2013, CRAB issued a decision in MacAloney v. Worcester Regional Retirement System, CR-11-19 (June 21, 2013), which PRB contends reversed decades of PERAC practice, in which CRAB found that § 4(2)(b) required MacAloney, an on-call firefighter, to remit contributions to his retirement system in order to receive credit for prior service. Following this ruling, PERAC issued a series of three memoranda instructing retirement boards on implementing MacAloney. As a result, PRB notified Gomes that he would be required to return the funds that he had previously paid and which had been refunded to him in order to receive credit for his past service.
Gomes filed a timely appeal with DALA, which on February 5, 2016, ruled that under MacAloney, Gomes was required to remit contributions, with interest, pursuant to § 4(2)(b). Gomes appealed to CRAB, which reaffirmed its reasoning in MacAloney as applied to Gomes’ service as a permanent-intermittent police officer and required that Gomes remit payment in order to receive retirement credit for that service. Under the order, PRB is required to collect the payments and interest from Gomes.
PRB brought this action pursuant to G.L.c. 30A, § 14. Gomes has not appealed CRAB’s decision.
DISCUSSION
A. PRB has Standing
CRAB argues that PRB lacks standing to appeal because it is not "aggrieved" by its decision because it works to PRB’s pecuniary interest and because PRB cannot press Gomes’ arguments.
CRAB failed to raise its standing argument under Rule 12, as directed under Standing Order 1-96(3)(a), and thus likely waived it. See id. ("Any party failing to serve such a motion within the prescribed time limit, or within any court-ordered extension, shall be deemed to have waived any such motion (unless relating to jurisdiction) and the case shall proceed solely on the basis of the record"). Even if not waived, the Court rejects CRAB’s overly-narrow view of standing, and concludes that PRB has standing.
To maintain an action under G.L.c. 30A, § 14, a party must be aggrieved in a "legal sense" and show that "substantial rights" have been "prejudiced." Board of Health of Sturbridge v. Board of Health of Southbridge, 461 Mass. 548, 557 (2012). CRAB argues that because its ruling requiring PRB to collect contributions from Gomes will add to PRB’s coffers, PRB cannot have standing as an aggrieved party because its pecuniary interests have not been harmed, citing in support Group Insurance Commission v. Labor Relations Commission, 381 Mass. 199, 204 (1980). CRAB’s argument assumes that if an action is in a party’s pecuniary interest, that party cannot maintain standing on any other basis. This assumption is wrong, and is not supported by Group Insurance Commission. That case identifies several alternative bases to support standing; in addition to "pecuniary injury," a party may be aggrieved and therefore have standing if it has suffered a "sufficient indirect injury to accord it aggrieved status" or has been "ordered to do, or refrain from doing, anything." Id. In this case, PRB is a party and, as the result of CRAB’s decision, is required to take an action regarding Gomes-to collect money from him, including interest. Thus, even assuming that CRAB is correct that collecting contributions from Gomes would add to PRB’s finances in the near-term, that fact does not foreclose PRB from pursuing claims arising from the actions now required of it. Were this not the case, an opponent of a public entity could eliminate judicial review sought by that public entity by identifying a short-term monetary benefit to that entity, regardless of duties imposed upon it or other harms suffered by it. Such a narrow approach to standing would improperly (and alarmingly) limit access to justice. Especially in this context, a public agency is entitled to its day in court when it claims an effect on a public or official duty, regardless of its pecuniary interest. Cf. American Can Co. of Massachusetts v. Milk Control Bd., 313 Mass. 156, 161 (1943) (in probate cases, an appealing party must have "some pecuniary interest, some personal right, or some public or official duty resting upon him, affected by the decree") (citations omitted).
In Group Insurance Commission, the Group Insurance Commission was an intervenor, and not party.
Because PRB is duty-bound to administer the retirement system for the Town of Plymouth and that duty is affected (and in its view, negatively affected) by CRAB’s ruling on Gomes’ claim, PRB is an "aggrieved" party and has standing to seek judicial review under G.L.c. 30A, § 14.
B. CRAB’s Interpretation of § 4(2)(b) is in Error
Both parties agree that § 4(2)(b) governs Gomes’ claim, at least in part, but come to differing conclusions arising from the absence of language in § 4(2)(b) requiring Gomes to pay into PRB to receive credit for his service as a permanent-intermittent police officer for the Town of Plymouth. PRB argues that the lack of any payment requirement in § 4(2)(b) means what it says-that the Legislature intended none. CRAB contends that § 4(2)(b) must be read in conjunction with § 4(2)(c), which includes a payment requirement.
At the outset, neither side addresses whether it is appropriate under these facts for Gomes to be charged at all when the PERAC determined a decade earlier that he should be refunded his contributions. The Court has strong reservations about the propriety of CRAB’s requiring PRB to assess Gomes for monies that a state entity (and party here) ordered returned to Gomes. This seems manifestly unfair. The state actors responsible for overseeing PRB decided a decade ago that Gomes was entitled to the return of his money, and no reason appears from this record to support their reversing their own decision-and charging Gomes interest on the allegedly overdue payments to boot. The Court need not decide this issue, however, as it finds in favor of PRB under the statute.
The law appears to empower PRB to forego any such payments from Gomes and avoid this result. Under G.L.c. 32, § 20(5)(c)(2), when an error is made in computing a benefit and, as a result, a member receives from the system more or less that to which he or she would have been entitled, a retirement board must correct the record or the error. However, under § 20(5)(c)(3), upon request of a member, the board may waive repayment or recovery of such amounts provided that the error persisted for a period in excess of one year, the error was not the result of erroneous information provided by the member, and the member had no knowledge of the error or reason to believe that the benefit amount was wrong. See Bristol County Retirement Bd. v. Contributory Retirement Appeal Bd., 65 Mass.App.Ct. 443 (2006) (despite CRAB’s ruling that a claimant did not have to repay county retirement board for excess funds received, CRAB did not have authority to make that decision; the power to waive repayment or recovery of such amounts rests in county board, "the administrative agency that actually operates the system affected, that is most likely to be familiar with relevant conditions and circumstances, and whose system will absorb the impact of a decision not to recoup").
PRB contends that CRAB’s interpretation of § 4(2)(b) to require repayment is erroneous as a matter of law and may be set aside by this Court pursuant to G.L.c. 30A, § 14(7). PRB argues that § 4(2)(b) explicitly addresses providing permanent-intermittent police officers like Gomes with credit for past service, and includes no language requiring payment for that credit. PRB further asserts that § 4(2)(c), on which CRAB relies, does not apply, as that section makes no mention of permanent-intermittent police officers at all. PRB thus claims that the Legislature intended such prior service to be credited at no cost to Gomes. PRB further contends that CRAB’s decision in Gomes’ case is irreconcilable with its decision in Grimes v. Malden Retirement Bd., CR-15-5 (Nov. 18, 2016), issued on the same day as the decision in this case. In Grimes, CRAB held that another former permanent-intermittent police officer, who was available on a call list but never actually worked at that time, could receive prior creditable service but, unlike Gomes, would receive that credit without making any contributions to his retirement system. Because CRAB relied on the same statutory language in both decisions, PRB argues that the inconsistency between the results in Gomes and Grimes creates an "irreconcilable disparity between similarly situated employees."
CRAB argues that the lack of language concerning payment for prior service credit in § 4(2)(b) is not determinative or, in its view, even surprising, because, it claims, the only purpose of that section is to fix and determine the amount of creditable service to which an individual is entitled. It contends that in order to properly comply with the Legislature’s intent, § 4(2)(b) must be read in conjunction with § 4(2)(c), which requires makeup payments in an amount equal to what would have been withheld from that employee’s income, plus buyback interest, over the period of time for which prior creditable service is sought. In addition, CRAB contends that Gomes is not irreconcilable with Grimes. Grimes was available on the call list but never actually worked during the period of service he was attempting to obtain credit for and therefore had no wages from which a contribution could be extracted. In contrast, Gomes performed work and was paid, and had wages from which a contribution could be made. Even though the net result of Gomes and Grimes is to reward an employee who did not work over one who did, CRAB says that is what the law requires, and any unfairness is for the Legislature to correct.
In deciding this dispute, the Court gives due weight to the experience, technical competence, and specialized knowledge of CRAB, as well as the discretionary authority conferred upon it. G.L.c. 30A, § 14(7); Bulger v. Contributory Ret. Appeal Bd., 447 Mass. 651, 657 (2006). "We recognize that CRAB has been charged with a principal role in interpreting G.L.c. 32, the governing statute. We accept the facts found by CRAB when there is substantial evidence to support them, and also accept the reasonable inferences CRAB draws from the facts." Lawrence Ret. Bd. v. Contributory Ret. Appeal Bd., 87 Mass.App.Ct. 1124 (2015) (citations, internal punctuation omitted). However, "where a question of law is involved, [the Court] act[s] de novo." Id., citing Bristol County Ret. Bd., 65 Mass.App.Ct. at 451; see also Rotondi v. Contributory Ret. Appeal Bd., 463 Mass. 644, 648 (2012). While the administrative agency’s interpretation of a statute within its charge is granted substantial deference in the court’s de novo analysis, the applicable principle is one of deference, not abdication, and the court may overrule an agency’s interpretation when it is contrary to the plain language of the statute and its underlying purpose. Leopoldstadt, Inc. v. Commissioner of Div. of Health Care Finance and Policy, 436 Mass. 80, 91 (2002), citing Protective Life Ins. Co. v. Sullivan, 425 Mass. 615, 618 (1997).
Despite the deference due to CRAB, the plain language of the statute does not support CRAB’s conclusion that Gomes must repay the contributions to PRB. CRAB’s contention that the "only" purpose for § 4(2)(b) is to set out "how to calculate the creditable service" of certain employees, and that "the absence of explicit language ... regarding payment for the purchase of such prior service does not create the inference that prior service may be credited without payment" is flawed. Section § 4(2)(b) does not solely set out "how to calculate creditable service"; with respect to permanent-intermittent police officers, § 4(2)(b) affirmatively instructs boards to credit them for service. In relevant part, it states:
The board, subject to rules and regulations promulgated by the commission, shall fix and determine how much service in any calendar year is equivalent to a year of service. In all cases involving part-time, provisional, temporary, temporary provisional, seasonal or intermittent employment or service of any employee in any governmental unit ... the board, under appropriate rules and regulations which shall be subject to the approval of the actuary, shall fix and determine the amount of creditable prior service, if any ... provided, further, that the board shall credit as full-time service not to exceed a maximum of five years that period of time during which a reserve or permanent-intermittent police officer ... was on his respective list and was eligible for assignment to duty subsequent to his appointment.(emphasis added). Thus, while it is true that § 4(2)(b) directs a board like PRB to "fix and determine how much service in any calendar year is equivalent to a year of service" for "part-time, provisional, temporary, temporary provisional, seasonal or intermittent employment or service" employees, it directs that permanent-intermittent police officers receive such credit where two requirements are met-that the employee (1) was on the respective list and (2) was eligible for assignment to duty. No other precondition exists in the statute, including a requirement for payment. See Grimes, CR-15-5 (CRAB Nov. 18, 2016) at 4-5 ("the Legislature [in § 4(2)(b) ] provided for creditable service for merely being on a list and eligible for assignment"). CRAB’s suggestion that the lack of a payment requirement in § 4(2)(b) "does not create an inference that prior service may be credited without payment" is flatly inconsistent with the statute and with the case CRAB cites in contrast with its position, Lawrence Retirement Board. In Lawrence, the Appeals Court was faced with a similar interpretative task-determining whether, under G.L.c. 32, § 4(1)(b), prior service to be credited required monetary contributions to the retirement system. 87 Mass.App.Ct. 1124 (2015). That section states:
Periods of service in any governmental unit prior to the date a system becomes operative therein rendered by any employee who becomes a member when such system first becomes operative in such governmental unit, or who becomes a member as otherwise provided for in paragraph (6)(f) of section three, shall, subject to the provisions and limitations of sections one to twenty-eight inclusive, be counted as creditable prior service; provided, that in no event shall any such person be credited with more than one year of creditable service for all such prior service rendered during any one calendar year.
Focusing solely on § 4(1)(b), the Appeals Court recognized that it was not one of the thirty-two sections and subsections within the statute which explicitly required payment for creditable service and concluded that the lack of any such language within § 4(1)(b) meant that monetary contributions were not required to receive creditable service under it. Id. "Where the Legislature has employed specific language [requiring payment in certain sections], but not in another, the language should not be implied where it is not present." Id., quoting Beeler v. Downey, 387 Mass. 609, 616 (1982), citing First Nat’l Bank v. Judge Baker Guidance Center, 13 Mass.App.Ct. 144, 153 (1982). Similarly here, § 4(2)(b) allows credit for Gomes’ prior service without requiring payment. This is so whether or not the permanent-intermittent police officer was assigned any duties; so long as the police officer was "on his respective list and was eligible for assignment of duty," the credit is earned, much as it was in Lawrence.
Under this straight-forward reading, there is no need to refer to § 4(2)(c) because the direction contained in § 4(2)(b) as to the credit due to permanent-intermittent police officers is complete-they are to be credited with up to five years of full-time service when they have been on the respective list and available for work, whether or not they performed any service, the result reached a decade ago with respect to Gomes when his contributions were returned to him. Accordingly, CRAB’s argument that permanent-intermittent police officers are a subcategory of "part-time, provisional, temporary, temporary provisional, seasonal or intermittent employment or service" addressed in both § 4(2)(b) and (c), and that the two sections must be read together, is unpersuasive. Indeed, while § 4(2)(c) states that boards "may allow credit, upon whatever proportionate basis it shall determine" for previous "part-time, provisional, temporary, temporary provisional, seasonal or intermittent employment or service" and require make-up payments to receive that credit, id. (emphasis added), § 4(2)(b) does not give the board this choice when it comes to permanent-intermittent police officers; for them, § 4(2)(b) directs the board to award up to five years credit without requiring payment. The Legislature made no mention of permanent-intermittent police officers in § 4(2)(c) as among the types of employment categories for which make-up payments were required because it had already dealt with the issue in § 4(2)(b), the only section of the two which specifically addresses permanent-intermittent police officers. Section 4(2)(b) alone controls in this case. See Wing v. Comm’r of Prob., 473 Mass. 368, 373-74 (2015) ("where statutes deal with the same subject, the more specific statute controls the more general one, so long as the Legislature did not draft the more general statute to provide comprehensive coverage of the subject area") (citations omitted).
In relevant part, § 4(2)(c) states:
In the case of any employee of any governmental unit who is a member of the retirement system pertaining thereto, the board may allow credit, upon whatever proportionate basis it shall determine under appropriate rules and regulations which shall be subject to the approval of the actuary, for any previous period of part-time, provisional, temporary, temporary provisional, seasonal or intermittent employment or service rendered by him after such a retirement system becomes operative ... provided, that after becoming a member or being reinstated as such, and before the date any retirement allowance becomes effective for him, he pays into the annuity savings fund of the system in one sum, or in installments, upon such terms and conditions as the board may prescribe, make-up payments of an amount equal to that which would have been withheld as regular deductions from his regular compensation had he been eligible for membership and been a member of such system during such previous period, together with buyback interest.
CRAB’s further argument-that "it would make no sense to include an explicit requirement concerning payment for credit [in § 4(2)(b) ], since the provision applies equally to current employees who have already paid for their service via payroll deductions"-is in error because it ignores the words of the statute and approach the Legislature chose.
Therefore, CRAB’s reading of § 4(2)(b) to insert a make-up payment requirement into that section which does not exist, and its contention that § 4(2)(b) must be read harmoniously with § 4(2)(c) to get there, is undercut by the words the Legislature used in the two sections, one of which addresses permanent-intermittent police officers and says nothing about make-up payments (§ 4(2)(b)) and one of which does not mention them at all and does require make-up payments (§ 4(2)(c)). The Court concludes that the Legislature intended that credit for prior service by permanent-intermittent police officers is to be governed solely by § 4(2)(b) which does not require make-up payments, and that it did not intend for § 4(2)(c) to apply to permanent-intermittent police officers.
ORDER
For the foregoing reasons, the motion for judgment on the pleadings brought by plaintiff Plymouth Retirement Board is ALLOWED and the motion for judgment on the pleadings brought by defendants Contributory Retirement Appeal Board and Public Employee Retirement Administration Commission is DENIED. This matter is REMANDED to CRAB for further proceedings consistent with this decision.
PRB also disputes the scope of PERAC’s authority over it. As the Court resolves this matter based on its reading of the relevant statute, it need not reach this issue.