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Maturo v. State Employees Retirement Commission

Supreme Court of Connecticut

July 11, 2017

JOSEPH MATURO, JR.
v.
STATE EMPLOYEES RETIREMENT COMMISSION

          Argued March 30, 2017.

         Appeal from the decision of the defendant determining that the plaintiff was ineligible to receive certain pension benefits, brought to the Superior Court in the judicial district of New Britain and tried to the court, Schuman, J.; judgment dismissing the appeal, from which the plaintiff appealed. Affirmed.

          Lawrence C. Sgrignari, for the appellant (plaintiff).

          Michael J. Rose, with whom was Cindy M. Cieslak, for the appellee (defendant).

          Rogers, C. J., and Palmer, Eveleigh, McDonald, Espinosa and Robinson, Js. [*]

         Syllabus

         Pursuant to statute (§ 7-438 [b]), if a member of the municipal employees' retirement system who is retired and has begun to collect a pension, again accepts employment from the same municipality from which he was retired, he shall be eligible to participate, and shall be entitled to credit, in the municipal employees retirement system for the period of such municipal employment, provided such member shall not receive his retirement allowance while so employed, except under certain specified circumstances.

         The plaintiff appealed from the judgment of the trial court upholding the declaratory ruling of the defendant retirement commission and dismissing his administrative appeal. The plaintiff retired from his position as a firefighter with the town of East Haven in 1991 and was awarded a disability pension through his membership in the municipal employees retirement system, which is governed by the Municipal Employees' Retirement Act (§ 7-425 et seq.). From 1997 to 2007, the plaintiff served as the elected mayor of East Haven, a full-time, salaried position that the town had not designated for participation in the retirement system. During his tenure as mayor, the plaintiff continued to receive his disability pension, as it was the policy of the commission at that time that a member could continue to collect a pension while reemployed by a participating municipality, provided the member was reemployed in a nonparticipating position. In 2010, the retirement services division of the Office of the State Comptroller, which jointly administers the retirement system with the commission, informed the plaintiff that the commission's prior interpretation of the act was erroneous, and that, pursuant to § 7-438 (b), he no longer would be eligible to collect a disability retirement benefit if he were to be employed in any paid position with the town. When the plaintiff was again elected to the position of mayor of East Haven in 2011, the retirement services division suspended the plaintiff's pension. The plaintiff then appealed to the commission, which issued a declaratory ruling denying reinstatement of the plaintiff's pension. On appeal to the trial court, the plaintiff claimed, inter alia, that the decision of the commission was inconsistent with the statute (§ 7-432) that authorizes disability pensions because there had been no determination by a medical examining board that he was no longer disabled before his pension was suspended, and further claimed that he had relied to his detriment on the agencies' prior interpretation of the act. The trial court affirmed the commission's decision and rendered judgment dismissing the appeal, from which the plaintiff appealed. Held:

         1. The trial court properly dismissed the plaintiff's appeal from the decision of the commission, the plain language of § 7-438 (b) having barred the plaintiff from continuing to collect a disability pension while serving as the mayor of East Haven: the plaintiff's claim that the act could be interpreted to exclude elective officers as employees, and that, as mayor, he was not an employee of the town as that term is used in § 7-438 (b), was unavailing, as that interpretation would deprive elective officers who are members of the retirement system from many of the rights and benefits that other members enjoy, and, in the absence of any apparent rationale for such a scheme or a clear statement of legislative intent, this court declined to adopt the interpretation urged by the plaintiff, which would achieve a bizarre outcome.

         2. The plaintiff could not prevail on his claim that § 7-438 (b), when read as a whole and in light of the underlying policy rationales, evidenced a legislative intent to preclude a member of the retirement system from receiving a retirement pension only while reemployed in a participating position, and that, because he returned to work in a nonparticipating position, he was entitled to continue collecting his disability pension; notwithstanding the provision in § 7-438 (b) that a member ‘‘shall be eligible to participate, and shall be entitled to credit, '' in the retirement system, a member of the retirement system, such as the plaintiff, who is reemployed in a nonparticipating position is not eligible to participate in the retirement system while so employed, and § 7-438 (b) reasonably may be understood to embody a legislative judgment that a participating municipality should not have to contribute additional funds to a member's retirement pension while at the same time paying the member's salary.

         3. There was no merit to the plaintiff's claim that the commission and the trial court improperly interpreted § 7-438 (b) in isolation and did not consider its relationship to § 7-432 (g), which precludes the medical examining board from reconsidering eligibility for a disability pension unless additional facts concerning the member's condition are disclosed: subsection (g) was not added to § 7-432 until 2013, approximately two years after the retirement services division suspended the plaintiff's pension, and § 7-432 previously did not reference the medical examining board but, instead, delegated broad authority to the commission to determine a member's ongoing eligibility for a disability pension.

         4. This court was not persuaded by the plaintiff's claim that the commission was bound by, or should have adhered to, its prior interpretation of § 7-438 (b) that permitted elective officials to retain their pensions while reemployed by participating municipalities in light of the fact that the legislature effectively acquiesced in that prior interpretation when it failed to amend the act, and the fact that the attorney general issued a nonbinding opinion letter counseling the commission not to deviate from its prior interpretation in the absence of further legislative direction: the evidence for legislative acquiescence in the commission's prior interpretation of the act was inconclusive and did not compel this court to depart from the plain meaning of the statutory text, and the legislature's failure to address the commission's revised interpretation when the legislature amended § 7-438 in 2011 tended to demonstrate acquiescence in the revised interpretation; moreover, the plaintiff's claim that the attorney general's opinion that the legislature had acquiesced in the commission's prior interpretation and that the revised interpretation might upset retirees' settled expectations was unconvincing, as an administrative agency, such as the commission, that discovers that it has been applying an erroneous interpretation of a statute is obliged, after giving fair notice to affected persons, to conform its policy to the correct interpretation, particularly in light of the provision (§ 7-439h) in the act that requires the commission to correct any erroneous overpayment of benefits.

          OPINION

          ESPINOSA, J.

         The plaintiff, Joseph Maturo, Jr., appeals from the judgment of the trial court upholding the declaratory ruling of the defendant, the State Employees Retirement Commission, and dismissing his administrative appeal. The plaintiff retired in 1991 from his position as a firefighter with the town of East Haven and was awarded a disability pension through his membership in the municipal employees retirement system (retirement system). He subsequently was elected to the position of mayor of East Haven in 1997, and served in that capacity until 2007, when he lost his reelection bid. During that time, the commission and the retirement services division of the Office of the State Comptroller (collectively, the agencies), which jointly administer the retirement system, [1] interpreted the Municipal Employees' Retirement Act (act), General Statutes § 7-425 et seq., to provide that a retired member, who is reemployed by a municipality that participates in the retirement system, may continue to receive a retirement pension if he or she is reemployed in a position, such as the mayor of East Haven, that the municipality has not designated for participation in the system (nonparticipating position). In 2009, however, the agencies concluded that they had misconstrued the act in this regard and that a retiree cannot continue to collect a pension while reemployed in any full-time position with a participating municipality. Accordingly, when the plaintiff was again elected mayor in 2011, the retirement services division suspended[2] his pension, a decision that both the commission and the trial court, Schuman, J., subsequently affirmed. On appeal, the plaintiff's primary contention is that the agencies improperly construed the reemployment and disability pension provisions of the act, [3] and that he is not barred from receiving a disability pension while serving as the mayor of East Haven. The plaintiff also challenges the trial court's conclusions that he did not rely to his detriment on the agencies' previous interpretation of the act and that the commission did not violate his rights to equal protection and due process of law. Finding no error, we affirm.

         I

         FACTS AND PROCEDURAL HISTORY

         The following facts and procedural history, as found by the commission and supplemented by the undisputed evidence of record, are relevant to our disposition of the plaintiff's appeal. The plaintiff served as a firefighter for the town of East Haven from 1973 to 1991, during which time he participated as a member of the retirement system. In September, 1991, the town separated the plaintiff from service on the basis of a ‘‘service-connected'' disability. In a January, 1992 letter, the commission approved his application for early retirement, but informed him that his retirement payments would be suspended if he again accepted employment with the town. In 1993, after the medical examining board confirmed the plaintiff's disability, the commission approved his ‘‘service-connected disability retirement, '' retroactive to October, 1991. A March, 1993 letter from the commission again advised the plaintiff as to the retirement system's reemployment rules, stating that ‘‘[his] eligibility for a disability retirement [pension] is contingent on [his] being permanently and totally disabled from performing any gainful employment in the service of [his] former employer [and that he] may not accept reemployment with that municipality.''

         In 1997, the plaintiff was elected to the office of mayor of the town of East Haven. At all times relevant to this case, although the town participated in the retirement system, it did not designate the office of mayor as a participating position. The plaintiff served as mayor from 1997 until 2007, when he lost a reelection bid. During that time, in spite of the warnings contained in the January, 1992 and March, 1993 letters, it was the policy of the agencies that a member could continue to collect a pension while reemployed by a participating municipality, so long as the member was reemployed in a nonparticipating position. Accordingly, during his initial ten years as mayor, the plaintiff received a salary from the town and also continued to collect his disability retirement pension.

         In June, 2010, in response to information that the plaintiff was again considering running for elective office, Helen M. Kemp, the assistant director and counsel of the retirement services division, wrote to advise him that the commission's prior interpretation of the act was erroneous and that in the future he would not be eligible to collect a disability retirement benefit while employed in any paid position for the town. In a follow-up letter, Mark E. Ojakian, the deputy state comptroller and acting director of the retirement services division, explained that, in 2009, the retirement services division had adopted and begun informing members of this revised interpretation of the act. Despite these warnings, in November, 2011, the plaintiff again campaigned and won the election for the position of mayor of East Haven.

         Shortly thereafter, the plaintiff received a letter from Kimberly McAdam, a retirement system supervisor, informing him that he was no longer considered to be disabled under the act because ‘‘[t]he fact that [he is] performing the duties of [mayor] indicates that [he is] neither permanently nor totally disabled from engaging in gainful employment in the service of the municipality.'' The letter notified the plaintiff that his pension would be ‘‘stopped'' as of November 19, 2011. In that same time period, the commission sent letters to all disability retirees informing them that they could not collect a disability retirement pension while working for the same municipality from which they had retired, even in a nonparticipating position.

         The retirement services division subsequently declined the plaintiff's request to reconsider its decision. The plaintiff then appealed to the commission, which, following what the trial court characterized as ‘‘a long and somewhat complicated administrative review process, '' ultimately issued a declaratory ruling denying reinstatement of the plaintiff's retirement pension.

         The plaintiff then appealed to the Superior Court. While proceedings in that court were pending, the General Assembly considered-for the second time in three years-legislation that would have expressly allowed the plaintiff and similarly situated members of the retirement system to continue to collect retirement pensions while reemployed by a participating municipality in a nonparticipating position. See Public Acts 2015, No. 15-188 (P.A. 15-188); Public Acts 2013, No. 13-219 (P.A. 13-219). The legislature unanimously passed each bill but Governor Dannel P. Malloy vetoed each one, and the legislature did not attempt to override the vetoes. See 2 Conn. Public and Special Acts 1478 (2015); 2a Conn. Public and Special Acts 2230 (2013).

         The plaintiff made four primary claims before the trial court. First, he argued that the decision of the commission upholding the suspension of his disability pension while he is employed as the mayor of East Haven was inconsistent with various provisions of the act. Specifically, he argued that (1) General Statutes § 7-432, which authorizes disability pensions, does not allow the retirement services division to suspend a member's pension unless the commission's medical examining board first finds that the member is no longer disabled pursuant to § 7-432 (g), and (2) the provision on which the retirement services division relied in suspending his pension, General Statutes § 7-438 (b), which prohibits members of the retirement system from receiving a retirement pension while reemployed by a participating municipality, does not apply to former members who return to work in nonparticipating positions.

         In its memorandum of decision, the trial court found the first argument to be without merit because, although the retirement services division initially had informed the plaintiff that his disability pension was being terminated because his reemployment with East Haven was prima facie proof that he no longer was disabled, the commission itself did not rely on the premise that the plaintiff no longer was disabled. Rather, the commission determined that § 7-438 (b) applies to both disability and ordinary retirements and bars members from collecting either type of pension while reemployed by a participating municipality. The trial court found the plaintiff's second statutory argument to be so incomprehensible as to be effectively abandoned. Nevertheless, the court did attempt to parse and evaluate the argument, which, it concluded, lacked any support in the text of the relevant statutes.[4]

         Second, the plaintiff claimed that it was improper for the agencies, after years of construing the act to allow the plaintiff and others similarly situated to retain their retirement pension when returning to work in a nonparticipating position, to adopt a new, contrary interpretation of the law. He specifically argued that (1) he had reasonably relied to his detriment on the agencies' pre-2009 interpretation of the act and on a September 30, 2011 letter in which the retirement services division director, Brenda Halpin, advised him to take no action with respect to his current employment status until the retirement services division completed an administrative review of the issue, and (2) the commission should have abided by the advice of Attorney General George C. Jepsen, who counseledinaNovember2, 2012 opinion letter (Jepsen opinion) that the commission not deviate from its pre-2009 interpretation of the act in the absence of further legislative direction.

         In rejecting the plaintiff's detrimental reliance claim, the trial court noted that the law disfavors claims of estoppel against government entities, which ‘‘may be invoked: (1) only with great caution; (2) only when the action in question has been induced by an agent having authority in such matters; and (3) only when special circumstances make it highly inequitable or oppressive not to estop the agency.'' (Internal quotation marks omitted.) Chotkowski v. State, 240 Conn. 246, 268-69, 690 A.2d 368 (1997). In the present case, the court determined that that standard was not satisfied because the retirement services division had notified the plaintiff that its prior interpretation of the act was erroneous and that, henceforth, he would not be permitted to receive a disability benefit while employed in any paid position with the town. In addition to concluding that the plaintiff's ongoing reliance on the retirement services division's past interpretation of the act was unreasonable, the court concluded that the plaintiff had failed to demonstrate that his reliance thereon had caused him any detriment. Rather, the court found that the plaintiff's erroneous receipt of a retirement pension during his previous ten year tenure as mayor had been a ‘‘windfall.'' The court further noted that the Jepsen opinion constituted nonbinding authority and that the opinion was unpersuasive insofar as it did not purport to analyze the statutes at issue or identify any defects in the commission's revised interpretation of the act. As a general matter, the court rejected as untenable the principle that a government agency must continue to adhere to an erroneous interpretation of a statute even when, having discovered its error, it provides fair notice to affected persons that it will change its policy in light of the revised interpretation.

         Third, the plaintiff claimed that the commission treated him differently from other, similarly situated persons and thereby denied him equal protection of the law, as guaranteed by the federal and state constitutions. At trial, the plaintiff was unable to identify any other members who had been permitted to retain their retirement pensions after returning to work for participating municipalities.[5] Still, the plaintiff, a Republican, alleged that he had been singled out on the basis of his political affiliation insofar as the agencies (1) sent him an unsolicited letter in 2010, warning him that if he were again elected mayor, his pension would be suspended, (2) closely monitored the results of the East Haven mayoral election, (3) gave a Democrat, the registrar of voters for the town of East Haven, the express choice either to resign from his employment or to have his pension suspended, whereas the plaintiff's pension was simply suspended a few days after he was sworn into office, and (4) initially permitted another Democratic municipal retiree to retain her pension while reemployed, before ultimately reversing that decision. The plaintiff also introduced testimony by a Republican state senator suggesting that legislative efforts to amend § 7-438 (b) in 2013, to allow persons in the plaintiff's position to retain their pensions while reemployed had been delayed by certain legislators, presumably Democrats, who did not want to help the plaintiff.

         The trial court found that the plaintiff also had abandoned this claim by inadequate briefing, insofar as he had failed to allege that any selective treatment was based on impermissible considerations or membership in a protected class. In the alternative, the court rejected the equal protection claim on the merits, finding that the commission had informed all disability pension recipients that they could not collect their pensions while working for the same municipality for which they had previously worked, even in a nonparticipating position. The court further concluded that the aforementioned factual allegations did not constitute selective treatment vis-a-vis other, similarly situated persons.

         Fourth, the plaintiff claimed that the commission's decision to provide him with an informal rather than a formal hearing violated both the governing statutes and his right to procedural due process. The trial court, in rejecting this claim, determined that the relevant procedural statutes did not require the commission to hold a formal hearing and that the requirements of due process had been satisfied.

         Consistent with these determinations, the trial court affirmed the commission's decision and dismissed the plaintiff's appeal. The plaintiff appealed from the judgment of the trial court to the Appellate Court, raising claims substantially similar to those he raised before the trial court, and we ...


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