Lazarus v. City of Detroit

Michael J. Kelly, J.

Defendant City of Detroit appeals from a circuit court order granting summary disposition in favor of plaintiff Gary Lazarus. Plaintiff sued defendant to obtain benefits under defendant’s retirement plan and for compensation for unused sick leave days. Plaintiff moved for summary disposition under MCR 2.116(0(10), which the court granted, finding that plaintiff was entitled to the relief requested. We affirm.

Gary Lazarus had been employed by the city’s water and sewerage department for twenty-eight years at the time he applied for a service retirement in August of 1986. The board of trustees of the city’s retirement system in September of 1986 approved Lazarus’ application for a “service retirement” effective in October of 1986. Correspondence from the board of trustees to Lazarus and the water and sewerage department referred only to a service retirement, and never mentioned that he would not receive the full benefits of a service retirement. A summary of the board meeting approving Lazarus’ retirement listed his name under a list of service retirements, but with an asterisk denoting a vested pension.

As a service retiree, Lazarus would be entitled to payment for fifty percent of his accumulated, unused sick leave, which came to $18,298.80, plus hospitalization and medical insurance benefits. When he did not receive payment for his unused sick leave, plaintiff sued defendant for breach of contract to recover this amount. Plaintiff later amended his complaint to request all insurance benefits due him as a service retiree.

Plaintiff moved for summary disposition under MCR 2.116(0(10). In support of his motion, plaintiff presented documents from the board of trustees of the retirement system indicating approval of his service retirement. Plaintiff also claimed that he was entitled to compensation for unused sick leave pursuant to a provision in his collective bargaining agreement. In response to plaintiff’s motion, defendant argued that plaintiff was not a service retiree entitled to sick leave payout and health insurance benefits, but instead that he had received a "vested pension” under the city’s charter. Defendant did not address whether plaintiff was entitled to sick leave payout under his collective bargaining agreement. The court granted plaintiff’s motion, finding that no genuine issue of material fact existed and that plaintiff was a service retiree under the city’s retirement system and entitled to all insurance and other benefits of a service retiree. The court ordered judgment for plaintiff in the amount of $18,298.80, plus interest. Defendant now appeals the circuit court’s order as of right.

On appeal, the city argues that Mr. Lazarus was not a "service retirant” under the city charter, and that the circuit court erred in so holding. We find no error.

Summary disposition under MCR 2.116(0(10) tests the factual support for a claim and is appropriate only if the court is satisfied that it is impossible for the nonmoving party’s claim to be supported at trial because of a factual deficiency which cannot be overcome. Boyle v Odette, 168 Mich App 737, 742-743; 425 NW2d 472 (1988).

Here the dispute was not of a factual nature, but instead centered on the proper interpretation of the city charter. The general rules of statutory construction are applicable to the interpretation of the city charter. Brady v Detroit, 353 Mich 243, 248; 91 NW2d 257 (1958). The primary goal of interpretation of the charter is to give effect to the intent of the drafters. Browder v International Fidelity Ins Co, 413 Mich 603, 611; 321 NW2d 668 (1982). Provisions pertaining to a given subject matter must be construed together and harmonized if possible. Brady, p 248. Where the drafters used certain and unambiguous language, the plain meaning of the written provisions must be followed. Browder, p 611. Undefined terms must be given their common and ordinary meaning. Swift v Kent Co, 171 Mich App 390, 393; 429 NW2d 605 (1988). Pension laws, being remedial in nature, should be liberally construed in favor of the persons intended to be benefitted by them. O’Connell v Dearborn Police & Fire Pension Bd, 334 Mich 208, 214-215; 54 NW2d 301 (1952).

Defendant claims that its charter provides for two separate types of retirement — service and vested. Retirement provisions are contained within title IX, chapter 6 of the Detroit Charter. Plaintiff retired pursuant to title IX, chapter 6, article VI, part A, § 1.4. Defendant argues that by retiring under § 1.4, plaintiff received only a "vested” pension, rather than a service retirement. The city claims that service retirements are set forth only under § 1.1 of article VI, part A, and that the provisions of § 1.4 do not provide for a service retirement. Another panel of this Court, in Clexton v Detroit, 179 Mich App 209, 214; 445 NW2d 201 (1989), addressed this identical issue and evidently agreed with the city, stating:

A person who resigns from city employment under the "40 and 8” provision has a deferred vested interest in receiving a retirement allowance "notwithstanding his membership [in the retirement system] has terminated.” Detroit Charter, tit IV, ch 6, art IV, part A, § 1.4.

We cannot agree with Clexton. We find the city’s argument and the Court’s finding in Clexton unsupported by the language of the charter. The charter provisions do not refer to or define a "vested” pension or retirement or distinguish between a service and vested retirement.

Article VI, part A is entitled "Service Retirement.” Four different methods of retirement are listed under this heading, under §§ 1.1, 1.2, 1.3 and 1.4. There is no language contained in any of these sections indicating whether they grant a full service retirement or merely a vested pension, nor is there any additional language distinguishing § 1.1 as the exclusive method for obtaining a service retirement. The provision under which plaintiff Lazarus retired, part A, § 1.4, provides:

Retirement allowance for certain persons leaving city employment after eight years service.

Should any member who (1) has attained age forty years, and (2) has eight or more years of credited service, leave the employ of the city prior to the date he would have first become eligible to retire as provided in this part A, for any reason except his discharge, retirement or death, he shall be entitled to a retirement allowance computed according to section 2 of this article, as said section was in force as of the date of his employment with the city last terminated; provided, that he does not withdraw his accumulated contributions from the Annuity Savings Fund prior to the effective date of his retirement allowance.

His retirement allowance shall only begin the first day of the calendar month next following the month in which his application for same is filed with the board of trustees, on or after the date he would have been eligible to retire had he continued in city employment. Unless otherwise provided in this Chapter, such person shall not receive service credit for the period of his absence from city employment nor shall he or his beneficiary be entitled to any other benefit afforded in this Chapter except the benefits afforded in Part A, Section 2 of Part D of this Article VI, notwithstanding his membership has terminated. [Emphasis added.]

Section 1.4 specifically provides that a person leaving the city’s employment under its provisions shall be entitled to a retirement allowance under § 2. Article VI, part A, § 2 is entitled "Service retirement allowance.” This is the same retirement allowance as provided for retirees under §§ 1.1, 1.2 and 1.3 of part A. The only difference between retirement based upon the different sections of part A would be the amount of service retirement allowance received under part A, § 2, which is determined by years of service rather than the method of retirement.

Our review of the charter’s provisions indicates that Mr. Lazarus is a service retiree under the terms of title IX, chapter 6 of the charter. Article III of chapter 6 provides the definitions of key phrases used within the provisions of Chapter 6. Section 1.23 of article III provides:

"Retirant” means a member who retires with a retirement allowance or pension paid by the retirement system.

Section 1.18 of article III provides:

"Retirement” means a member’s withdrawal from the employ of the city with a retirement allowance or pension paid by the retirement system.

Section 1.3 of article III provides:

"Member” means any person who is included in the membership of the retirement system.

Under the provisions of article IV, § 1(a), all persons who are employees of the city are included in the membership of the retirement system. Thus, because plaintiff was an employee of the city prior to his retirement, he was included in the membership of the retirement system, and was a member under § 1.3 of article III. Because plaintiff was a member who withdrew from the employ of the city with a retirement allowance, his withdrawal from employment was therefore "retirement” under article III, § 1.18. Plaintiff retired with a retirement allowance paid by the retirement system and so was a "retirant” as defined by § 1.23. Plaintiff fits the definition of a retirant under the charter, retired under a provision entitled service retirement, and received a service retirement allowance as his pension. As there are no provisions in the charter to the contrary, plaintiff is obviously a service retirant under the meaning of the charter.

Defendant also argues that plaintiff cannot be a service retirant as he lost his membership in the city’s retirement system. Defendant points out that under article IV, § 2, when a member leaves employment with the city he ceases to be a member of the retirement system. The panel in Clexton, supra, p 214, used similar reasoning, concluding:

Construing § 1.23 in conjunction with § 1.4, we understand the plain meaning of these sections to be that plaintiff lost his membership in the retirement system upon his resignation from city employment, although he did retain the right to a retirement allowance once he reached retirement age. Accordingly, plaintiff cannot be said to have been a "member who retires.” We find therefore that plaintiff does not fall within the definition of "retirant” and is not entitled to an accumulated unused sick leave payout.

There is no support for the city’s argument or the finding in Clexton. Article IV, § 2 provides: Cessation of membership; re-employment by city.

Except as otherwise provided in this chapter, should any member leave the employ of the city, for any reason except his retirement or death, he shall thereupon cease to be a member and his credited service at that time shall be forfeited by him. In the event he is re-employed by the city, he shall again become a member of the retirement system. Should his said re-employment occur within a period of six years from and after the date his city employment last terminated, his credited service last forfeited by him shall be restored to his credit. Should he become a retirant or die, he shall thereupon cease to be a member. [Emphasis added.]

As previously noted, plaintiff’s termination of employment was a "retirement” as defined by article III, § 1.18. Thus, even if we accept the city’s reasoning, plaintiff did not lose his membership status by leaving his employment with the city as his leave was a retirement. Additionally, the last sentence of § 2 indicates that employees who become retirants also lose their membership in the retirement system. Following defendant’s logic, all employees who retire and become retirants would then lose their membership in the retirement system and therefore be ineligible for any benefits due them as service retirants. This result is contradictory, absurd, and obviously incorrect.

We think Clexton was wrongly decided. Clexton allegedly relies upon the language of article VI, part A, § 1.4 and article III, § 1.23 to find that the plaintiff therein was not a "member who retires” or a "retirant.” Our review of the plain language of these provisions belies such a conclusion. As previously noted, § 1.4 provides that plaintiff is entitled to a retirement allowance according to § 2 of part A — a service retirement allowance. Plaintiff was a member who retired with a retirement allowance paid by the retirement system, and so was a retirant under the plain language of § 1.23.

The circuit court properly interpreted the city charter to find Gary Lazarus a service retiree entitled to payment for sick leave and health insurance benefits. We disagree with Judge Reilly’s dissent on this issue principally because her interpretation tends to fill gaps left in the city’s enabling legislation and resolutions which could easily have been filled expressly by the city. Defendant’s contentions to the contrary were unsupported by the evidence or by the provisions of the city charter. Summary disposition for plaintiff was proper.

Affirmed.

H. E. Deming, J., concurred.