Richardson v. Board of Pension Trustees

SUPERIOR COURT
OF THE
STATE OF DELAWARE
T. HENLEY GRAVES SUSSEX COUNTY COURTHOUSE
RESIDENT JUDGE 1 THE CIRCLE, SUITE 2
GEORGETOWN, DE 19947
(302) 856-5257
November 7, 2016
Julianne E. Murray, Esquire Ann Marie Johnson, Esquire
MurrayPhillips, P.A. Department of Justice
109 N. Bedford Street Carvel State Office Building
Georgetown, Delaware 19947 820 North French Street, 6th Floor
Wilmington, Delaware 19801
Re: Richardson v. Board of Pension Trustees,
C.A. No. S16A-02-002
On Appeal from the Board of Pension Trustees: REVERSED IN PART;
AFFIRMED IN PART
Date Submitted: August 17, 2016
Date Decided: November 7, 2016
Dear Counsel:
Pending before the Court is A. Brad Richardson’s appeal from a decision of the Board of
Pension Trustees (“the Board”) that denied Mr. Richardson’s request that he be allowed to vest
under the State of Delaware’s Pension Fund after five years of credited State employment. For
the reasons discussed below, the Board’s decision is reversed in part and affirmed in part.
Procedural Background
The matter presently before the Court arose when Mr. Richardson contacted his State of
Delaware Representative, Sean Lynn, in February of 2015 to complain that the State of Delaware
(“the State”) had provided him with inaccurate information about when his State pension would
vest. Mr. Richardson averred he had relied, to his detriment, upon that erroneous information in
accepting a job with the Delaware Department of Natural Resources and Environmental Control
(“DNREC”) in fall of 2013. Via email dated March 4, 2015, Representative Lynn contacted
David Craik, the State of Delaware Pension Administrator, and asked the Office of Pensions
(“OPEN”) to address Mr. Richardson’s request that he be grand-fathered into the five-year
vesting period in effect prior to his hire date.
Mr. Craik responded to Representative Lynn and Mr. Richardson via email dated March
17, 2015, and denied Mr. Richardson’s desire to be grand-fathered into the five-year vesting
period. Mr. Richardson appealed Mr. Craik’s decision to the Board via letter dated March 31,
2015, and requested a hearing.
The Board held a hearing on the merits on December 9, 2015. The Board issued a written
Report and Recommendations, approved and adopted by the Board on January 29, 2016. The
Board concluded Mr. Richardson’s request was not ripe for consideration and, in the alternative,
Mr. Richardson was unable to prove he reasonably relied upon the State’s representations in
accepting a position with DNREC. Mr. Richardson filed a timely appeal with this Court. Briefing
is complete.1
Factual Background
Mr. Richardson testified at the Board hearing. He was employed by Tidewater in 2013
when he and his wife started to contemplate an early retirement. At that time, Mr. Richardson
received from Tidewater an annual salary of approximately $33,000. He was fifty-seven years
old. Although Mr. Richardson loved his job with Tidewater, he began to look elsewhere for
1
Although briefing was completed in May, the Court did not receive the Board’s
complete file until August 17, 2016.
2
employment because he did not have a pension in connection with his position at Tidewater.
Specifically, he began looking for a job with a pension package and a short vesting term. Mr.
Richardson told the Board he applied for employment opportunities with the State of Delaware
after researching the State’s pension benefits on-line through the OPEN website. The OPEN
website Mr. Richardson consulted contained what turned out to be inaccurate information,
specifically, that a State employee became eligible for a service pension at age sixty-two after
five years of credited State service.
Mr. Richardson testified he interviewed for two positions with the State. At each
interview, Mr. Richardson inquired about the State’s pension plan and each interviewer directed
him to the State’s website for information about State benefits.
On October 23, 2013, DNREC offered Mr. Richardson a position in the Division of
Hazardous Solid Waste with an annual salary of $44,094. Prior to accepting the offer, Mr.
Richardson double-checked the State’s OPEN website and found the same information cited
above regarding pension eligibility. Mr. Richardson accepted DNREC’s offer of employment and
began working for DNREC on November 18, 2013.
Soon after, Mr. Richardson testified he had a conversation with a friend wherein this
friend told Mr. Richardson she believed the vesting period for a State pension was ten years. Mr.
Richardson again checked OPEN’s website, which remained unchanged.
On April 29, 2014, Mr. Richardson attended a State pension workshop where he learned
from OPEN employees for the first time that he would not vest in a State pension plan until he
had completed ten years of service. Mr. Richardson emphatically testified he would not have
taken the job with DNREC if he had known he would not have vested until after ten years.
3
David Craik, Pension Administrator for the State, testified on behalf of the State. He told
the Board that the change in the vesting period was passed via House Bill 81, which took effect
on January 1, 2012. Mr. Craik testified that other pages of the OPEN website referenced House
Bill 81 and it was also referenced in the “Frequently Asked Questions” area of the website. Mr.
Craik testified OPEN fielded a number of questions about the bill because the bill had many
components. Mr. Craik further testified that the State could change the vesting period via
legislation at any point for a non-vested State employee. In fact, there have been other instances
when benefits have been decreased for non-vested employees.
Finally, Mr. Craik acknowledged the information on the web page cited by Mr.
Richardson contained inaccurate information regarding the pension vesting period through May
of 2014.
By way of written decision, the Board concluded Mr. Richardson’s request was not ripe
for consideration and, in any event, Mr. Richardson was unable to show he had reasonably relied
upon the representations made on the OPEN website in accepting a position with DNREC.
Discussion
This Court has repeatedly emphasized the limited extent of its appellate review of
administrative decisions. The Court must ensure only that the Board’s decision is supported by
substantial evidence in the record and free from legal error.2 Substantial evidence means “such
2
George v. Board of Pension Trustees, 2009 WL 406819, at *5 (Del. Super. Jan. 29,
2009); 29 Del. C. § 8308(c)(9)d. (“The Board’s final decision may be appealed to the Superior
Court within 30 days after it is mailed to the parties by the Board. The appeal shall be on the
record established at the hearing.”).
4
relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”3 The
Court’s review is limited: “It is not the appellate court’s role to weigh the evidence, determine
credibility questions or make its own factual findings, but merely to decide if the evidence is
legally adequate to support the agency’s factual findings.”4
A. Ripeness
At the outset, the Board concluded Mr. Richardson’s request was not “ripe” for
consideration. In so doing, the Board noted Mr. Richardson had not yet worked for DNREC for
five years: “Given his short period of employment with DNREC, he would not be entitled to a
pension currently even if the five year vesting period applied to him, for at least another three and
one half years.”5
Whether a matter is ripe for consideration is a question of law that this Court reviews de
novo.6
The Delaware Supreme Court has recently summarized the case law as it pertains to the
issue of ripeness:
Delaware courts decline to exercise jurisdiction over a case unless the
underlying controversy is ripe, i.e., has “matured to a point where judicial action
is appropriate.” That principle is sometimes expressed in terms of the adage that
Delaware courts do not render advisory or hypothetical opinions. The underlying
purpose of that principle is to conserve limited judicial resources and to avoid
3
Gorrell v. Division of Vocational Rehab., 1996 WL. 453356, at *2 (Del. Super. July 31,
1996).
4
McManus v. Christiana Serv. Co., 1997 WL 127953, at *1 (Del. Super. Jan. 31, 1997).
5
Report and Recommendations, adopted and approved by the Board on January 29, 2016,
at 4 (hereinafter, “Bd. Dec. at __”).
6
See Future Ford Sales, Inc. v. Public Serv. Comm’n, 654 A.2d 837, 842 (Del. 1995).
5
rendering a legally binding decision that could result in premature and possibly
unsound lawmaking.
A ripeness determination requires a common sense assessment of whether
the interests of the party seeking immediate relief outweigh the concerns of the
court “in postponing review until the question arises in some more concrete and
final form.” Generally, a dispute will be deemed ripe if “litigation sooner or later
appears to be unavoidable and where the material facts are static.” Conversely, a
dispute will be deemed not ripe where the claim is based on “uncertain and
contingent events” that may not occur, or where “future events may obviate the
need” for judicial intervention.7
Each party cites a different portion of the above language to advance his or its respective
position. The Court finds Mr. Richardson’s argument more persuasive.
Although it is true that Mr. Richardson may fail to complete five years of credited service
with the State and thus fail to vest, common sense dictates that the matter be addressed now. Mr.
Richardson does not seek a determination that he is entitled to vest at this time; he seeks a
determination from the Court that, should he continue to be employed by the State, at the
conclusion of five years of service he will be able to vest. Requiring Mr. Richardson to work for
the State for five years prior to bringing his claim would put an undue burden on Mr. Richardson
when, in fact, Mr. Richardson has identified a conflict and seeks to have it clarified before he
suffers additional harm. Moreover, the Court’s decision will clarify the law for many a state
employee who may have visited the State’s OPEN website between January of 2012 and May of
2014 for information regarding benefits for State employees. This decision will not only clarify
Mr. Richardson’s legal standing but will deter future repetitive litigation on this matter.
In sum, a common sense assessment of the facts of this case compels the Court to rule on
7
XL Speciality Ins. Co. v. WMI Liquidating Trust, 93 A.3d 1208, 1217-18 (Del. 2014)
(emphasis added) (citations omitted).
6
the controversy at this time. The Board’s opinion that Mr. Richardson’s claim was not ripe is
reversed. The matter is now ripe for decision.
B. Administrative Estoppel
Mr. Richardson argues the Board erred in finding the State is not administratively
estopped from applying the five year vesting period to him.
As established by the Delaware Supreme Court in Harmon v. State, to prevail on a
promissory estoppel claim, Mr. 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.8
As a general rule, when the State’s officers are exercising governmental functions, a
plaintiff may not complain that the State has been administratively estopped from acting.
However, an exception is made in the context of employment.9
OPEN argues Mr. Richardson is unable to meet any of the four elements of the Harmon
test.
The Board made the following findings of fact and conclusions of law as it pertains to the
merits of Mr. Richardson’s request:
[OPEN] admits that the reference to the five year vesting period had not
been changed in a timely manner to reflect the changes of HB 81. However, Mr.
Craik testified that there were other references to the change in the FAQs page and
on other pages of the website. The failure to change the five year reference was a
mistake, and not intended to mislead a new employee, seeking employment.
8
Harmon v. State, 62 A.3d 1198, 1200-01 (Del. 2013) (citation omitted).
9
Id.
7
Moreover, the Board is not persuaded that Mr. Richardson relied solely upon the
incorrect webpage in making his job change, or that he relied to his detriment,
given the nearly 30% increase in salary he earned in the DNREC job. Finally, the
Board finds that Mr. Richardson is still entitled to a state pension if he works the
requisite number of years, and the fact that Mr. Richardson must work
approximately eight more years to vest for a pension, rather than three years, is
not, in and of itself, manifestly unjust.10
The Court concludes the Board’s decision is supported by substantial evidence and free
from legal error.
In particular, the Court finds Mr. Richardson is unable to satisfy the third requirement of
the Harmon test: he cannot establish that he relied on the information on the website to his
detriment when accepting the position with DNREC. He received a large salary increase and the
right to vest - at some point - in a employee pension plan. That is to say, his acceptance of the
State’s offer put him in a significantly better financial position as he contemplated early
retirement.
The Court also notes the length of time between when Mr. Richardson learned the vesting
period was ten years - April of 2014 - and when he lodged a complaint with his State
Representative - February of 2015 - calls into doubt Mr. Richardson’s detrimental reliance on the
website’s representation of the vesting period.
The Court also finds dubious Mr. Richardson’s assertion that he is able to satisfy the
second prong of the Harmon test; that is, the State reasonably expected potential employees to
rely upon one, specific website for information containing a matter as serious as a retirement
plan. Mr. Craik testified OPEN’s website contained other areas that included correct information
regarding pension benefits. The letter from DNREC offering Mr. Richardson a position
10
Bd. Dec. at 5.
8
originated with the Human Resources Office and contained a telephone number for the same.
The letter identified Mr. Richardson’s supervisor and provided her telephone number “if you
have any questions about... the specifics of the position.”11 This letter also stated, in bold type, “A
Benefits Representative will contact you before your first day on the job to schedule an
appointment.”12 Although Mr. Richardson was not questioned about whether he spoke with a
Benefits Representative at the hearing, the Court is confident the State provided Mr. Richardson
with the ability to consult with other, human,13 resources with whom he could clarify his
eligibility for a State service pension.
Finally, Delaware law holds that State employees have contractual rights in a state
pension plan.14 However, those contractual rights do not exist until the pension is vested.15 That
is to say, the State of Delaware could change the vesting period for a State employee like Mr.
Richardson at any point until he had vested. Although this fact was not considered by the Board,
it is case-dispositive as well.
For these reasons, the Court concludes the Board’s decision that Mr. Richardson failed to
establish the elements of administrative promissory estoppel is supported by substantial evidence
11
Record on Appeal 000048.
12
Record on Appeal 000049.
13
Compare Blackwell v. Board of Pension Trustees, 1997 WL 718630, at *3 (Del. Super.
Nov. 19, 1997) (holding the State administratively estopped when the plaintiff relied upon
representations made by an employee of OPEN who “expressly” informed him that he could
continue working part-time and doing so would not prohibit him from receiving pension benefits
based upon his full-time salary).
14
Petras v. State Bd. of Pension Trustees, 464 A.2d 894, 895-96 (Del. 1983).
15
Id. at 896.
9
and free from legal error.
Conclusion
As discussed above, the Board’s decision that Mr. Richardson’s claim was not ripe for
consideration is REVERSED and its decision that Mr. Richardson is unable to prevail on his
promissory estoppel claim is AFFIRMED.
IT IS SO ORDERED.
Very truly yours,
/s/ T. Henley Graves
T. Henley Graves
oc: Prothonotary
cc: The Board of Pension Trustees
10