Richardson v. Board of Pension Trustees

IN TI-[E SUPREME COURT OF THE STATE OF DELAWARE
A. BRAD RICHARDSON,
Defendant Below,
Appellant,
No. 574, 2016
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§ Court BeloW_Superior Court
v. § of the State of Delaware
§ C.A. Sl6A-02-002
BOARD OF PENSION TRUSTEES, §
Plaintiff BeloW,
Appellee.
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Submitted: August 23, 2017
Decided: August 29, 2017
Before VALIHURA, SEITZ, and TRAYNOR, Justices.
0 R D E R
This 29th day of August, 2017, upon consideration of the parties’ briefs and
the record on appeal, it appears to the Court that:
(l) The appellant, A. Brad Richardson, filed this appeal from a Superior
Court decision upholding the Board of Pension Trustee’s (the “Board’s”) denial of
his request that the vesting period for his State pension be shortened from ten to five
years. Richardson claims that, in reliance upon statements on the Office of Pensions
(“OPen”) Website that State employees are eligible for a service pension at age 62 if
at that time they have five years of credited service, he resigned from a position in
the private sector and accepted a job With the Delaware Department of Natural
Resources and Environmental Control (“DNREC”). After accepting the DNREC
1
position in late 2013, Richardson learned that the information on the OPen Website
Was incorrect and that the vesting period had been changed to ten years as of January
2012. lt is undisputed that, at the time of Richardson’s hiring, the erroneous vesting
information remained on the OPen Website, but there Was also evidence that the
correct information appeared at other locations on the Website.
(2) Richardson contends that the Board, by virtue of the clear statement on
the OPen Website and his reliance thereon, is estopped from applying the five-year
vesting period to him. The Board rejected this argument, concluding that Richardson
did not rely solely on the Website and that his purported reliance Was not detrimental
The Superior Court held that the Board’s conclusions Were supported by substantial
evidence in the record and free from legal error and therefore affirmed the Board’s
denial of Richardson’ request. We agree With the Superior Court and affirm.
(3) Effective January l, 2012, the General Assembly revised the State
Employees’ Pension Plan to increase the pension Vesting period of employees hired
after January 1, 2012 from five to ten years.l Unfortunately, the State neglected to
update various pages appearing on its pension and new-employee Websites.
(4) In late 2013, Richardson, then 57 years old and an employee of
Tidewater Utilities, began the search for a new job that might make it easier for him
to retire at age 62. He hoped to find a job that had a pension package With a “fairly
l29 Del. C. §5523.
short” vesting period, “like five years.”2 As part of this search, he reviewed the State
of Delaware website and learned_or so he thought_that the State Employees’
Pension Plan allowed for vesting at age 62 after five years of credited service. He
then interviewed for two State positions and Was offered a spot as an environmental
scientist with DNREC at an annual salary of $44,094, a 33% increase over his
$33,000 annual Tidewater salary. Not surprisingly, Richardson accepted the
DNREC offer. He testified, however, that “the single most important criterion”
supporting his decision to leave Tidewater and join DNREC was not the substantial
salary increase but “the promise of a pension with a short vesting period-five
years.”3
(5) Richardson’s belief that the relevant Vesting period was five years was
not whimsical. Before he interviewed with DNREC, he consulted the OPen Website
Where he read that the vesting period was five years. He testified that, at the end of
each of his two interviews, he asked about the State’s pension benefits and on both
occasions was referred to the State’s website which he then “double-check[ed].”4
Again, he saw that the vesting period was five years. After accepting the DNREC
position and being directed to the “online new employee orientation course,”
2 App. to Opening Br. at A24-25.
3 Id.; see also ia'. at A69.
4 Id. atA24-25.
Richardson once again encountered the erroneous statement that he would be
eligible for his pension upon reaching age 62 with five years of credited service.
(6) Shortly after Richardson started at DNREC in late November of 2013,
he first learned during a conversation With a friend Whose husband was a state
employee that he might be mistaken in believing that the State’s pension vesting
period was five years. The friend told Richardson that she thought there was a ten-
year vesting requirement Rather than ask a human-resources representative at
DNREC to clarify the issue, Richardson once again Went to the State of Delaware
website and saw that the vesting period was five years. He printed the page and put
it in his “file.”
(7) In April of 2014, Richardson attended an OPen pension workshop. He
testified that, “even though [he] knew [he] wasn’t eligible [for a pension] for another
four and a half years, [he] was curious to hear what they had to say so [he] went.”5
During the workshop, he learned that his friend was right and that what he had seen
on the State website was wrong; in fact, his eligibility for a pension was subject to a
ten-year vesting requirement This prompted him to contact his immediate
supervisor and a DNREC human resources supervisor to whom he showed
screenshots of the Website pages he claimed to have relied upon, and announced his
expectation that the State would “honor the promise under which he accepted [the
5 Id. at A29-30.
DNREC] job.”6 A few months later he enlisted the assistance of his State
representative and, when that was unavailing, sought relief from the State Pension
Administrator. Specifically, he asked the Administrator “to apply a five year vesting
period for pension eligibility to him.”7 When the Administrator denied his request,
Richardson appealed to the Board, arguing that the State Was administratively
estopped from applying the five-year vesting period. The Board rejected this
contention, principally because “[it Was] not persuaded that Mr. Richardson relied
solely upon the incorrect Webpage, or that he relied to his detriment, given the nearly
30% increase in salary he earned in the DNREC job.” The Superior Court affirmed
(8) On appeal from a Superior Court decision affirming a decision of an
administrative agency, our function “is, in effect a replication of that performed by
the Superior Court.”8 Absent an abuse of discretion, the agency’s decision must be
affirmed.9 Our review is limited to a determination of whether the agency’s decision
was supported by substantial evidence on the record before the agency and free from
legal error.10 Substantial evidence has been defined to mean “such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion. Substantial
evidence is more than a scintilla and less than a preponderance.”11
6 Id. at A33.
7 Id. at A4.
8 Fuz‘ure Ford Sales, Inc. v. Pub. Serv. Comm ’n, 654 A.2d 837, 842 (Del. 1995).
9 Stoltz Mgmt. Co. v. Consumer Ajj”az`rs Bd., 616 A.2d 1205, 1208 (Del. 1992).
1°Ia'. See also 29 Del. C. § 10142(d).
“ Olney v. Cooch, 425 A.2d 610, 614 (Del. 1981) (intemal quotation marks omitted).
5
(9) Although Richardson now contends that the Board and the Superior
Court committed “legal error” by “disregarding the uncontroverted evidence . . .
which demonstrates that Richardson has established a valid administrative estoppel
”12
claim, in reality he is challenging the Board’s finding that the purported proof of
the factual underpinnings of his claim was unpersuasive
(10) To prevail on his administrative estoppel claim, Richardson must
establish that:
(i) a promise was made; (ii) it was the reasonable
expectation of the promisor to induce action or
forbearance on the part of the promisee; (iii) the promisee
reasonably relied on the promise and took action to his
detriment; and (iv) such promise is binding because
injustice can be avoided only by enforcement of the
promise.13
(l l) The Board found that Richardson supplied unpersuasive proof of three
of the four elements listed above. More particularly, the Board found that:
(i) It was not the reasonable expectation of the State to
induce action on Richardson’s part because “[t]he failure
to change the five-year reference Was a mistake, and not
intended to mislead a new employee.”14 The Board also
cited the inclusion of the correct information on other
website pages as undermining Richardson’s proof of this
factor.15
12 Opening Br. at 15.
13 Harmon v. State, 62 A.3d 1198, 1200-01 (Del. 2013) (citation omitted).
14 App. to Opening Br. at A8.
15 Id
(ii) Richardson did not rely solely upon the incorrect
vesting information in making his decision to leave
Tidewater and join DNREC and that any reliance was not
detrimental “given the nearly 30% increase he earned in
the DNREC job.”16
(iii) The difference in the vesting periods is not so
substantial as to render the failure to enforce the purported
promise manifestly unjust.17
(12) There is more than adequate evidence_or the lack thereof where proof
is required_to support the Board’s conclusion that Richardson did not rely to his
detriment on the incorrect Vesting period information.
(13) As the Board and the Superior Court aptly noted, Richardson’s
acceptance of the DNREC position and its attendant 33% salary increase improved
his financial position significantly without regard to his eligibility for a State
pension. But his eligibility for a pension_a benefit that he did not have With
Tidewater_was also a beneficial aspect of his decision. The Board’s conclusion
that Richardson did not rely solely on the incorrect vesting information when he
changed jobs and that, in any event, the change was not detrimental was supported
by the record.
(14) The reasonableness of Richardson’s purported reliance is also suspect.
As the Superior Court noted, under Delaware law, a State employee does not have
16 Id
17 Id_
contractual rights in the State pension plan until the pension is vested.18 Therefore,
even if Richardson’s pension benefits were subject to a five-year vesting period at
the time he was hired, the State could change the length of that period at any time
prior to his vesting. Moreover, it should have been_and probably was-clear to
Richardson that the amount of his pension benefit after only five years of State
employment was insignificant relative to the salary increase he would enjoy over
that five-year period. Stated differently, it would be unreasonable from a financial
point of view for Richardson to have rejected the 33% salary increase had he known
that his pension benefits would Vest in ten (not five) years. This rather obvious
financial fact undermines the credibility of Richardson’s testimony and provides
adequate support for the Board’s finding of the absence of reasonable and
detrimental reliance.19
(15) Finally, Richardson’s implication that, because his testimony that he
relied exclusively and detrimentally upon the incorrect vesting information posted
on the State’s website was uncontroverted, the Board was legally bound to accept it
is misguided. “[T]he trier of fact . . . is at liberty within the bounds of reason to
reject entirely the uncontradicted testimony of a witness which does not convince
18 Pelras v. St. Ba'. of Pension Trustees, 464 A.2d 894, 895-96 (Del. 1983).
19 Because of this determination, we need not address the reasonable-expectation and avoidance-
of-injustice prongs of the estoppel analysis
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the trier of its merit.”20 For the reasons previously stated, the Board’s rejection of
Richardson’s testimony relating to reliance Was not an abuse of discretion and was
well Within the bounds of reason.
NOW, THEREFORE, IT IS HEREBY ORDERED that the Superior Court’s
order is AFFIRMED.
BY THE COURT:
/s/ Gary F. T raynor
Justice
20 Rhoades, Inc. v. Unitea'Az'rlines, Inc., 340 F.2d 482, 486 (3d Cir. 1965) (citing Wooley v. Great
Atlantic & Pacifz`c Tea Co., 281 F.2d 78 (3d Cir. 1960)).
9