DeMoss v. Silver Lake

[Cite as DeMoss v. Silver Lake, 2019-Ohio-3165.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
GARY W. DEMOSS, et al. C.A. No. 28559
Appellants
v. APPEAL FROM JUDGMENT
ENTERED IN THE
VILLAGE OF SILVER LAKE COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellee CASE No. CV 2012-09-5141
DECISION AND JOURNAL ENTRY
Dated: August 7, 2019
HENSAL, Presiding Judge.
{¶1} Gary Demoss, Carl Harrison, and Mark Kennemuth appeal a judgment of the
Summit County Court of Common Pleas that entered judgment for the Village of Silver Lake on
their declaratory judgment action. For the following reasons, this Court affirms.
I.
{¶2} The facts of this case are not in dispute. In 1972, the Village enacted an
ordinance to provide health care and life insurance benefits to its employees. The ordinance also
provided that the Village would continue to provide those benefits to retired employees, as long
as they had worked for the Village for at least 15 years at the time of their retirement. In the
years that followed, Mr. Demoss, Mr. Harrison, and Mr. Kennemuth (collectively “the
Employees”) each began working for the Village. By the end of 1994, they had each completed
15 years of service.
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{¶3} In 1995, the Village repealed the employee benefits ordinance and replaced it
with a new one. The new ordinance provided that employees of the Village would be provided
with health care and life insurance but did not contain a provision regarding retired employees.
{¶4} As the Employees began to retire, they filed a complaint for declaratory judgment
in common pleas court, asking it to declare that the Village had to provide them with health care
and life insurance following their retirement because they had satisfied the requirements for
vesting under the 1972 ordinance. The case was assigned to a magistrate, who determined that
the Employees did not have any vested rights under the 1972 ordinance and that the 1995
ordinance had eliminated any benefits to employees who retired after its passage. The
Employees objected to the magistrate’s decision. Although the trial court sustained some of their
objections, it concluded that the magistrate had correctly denied the Employees’ requested
declaratory judgment because the 1995 ordinance cancelled any life or health insurance benefits
to be paid to retirees under the 1972 ordinance.
{¶5} The Employees appealed the trial court’s judgment. Upon review, this Court
determined that the trial court had failed to analyze the Employees’ argument that the 1995
ordinance violated the Ohio Constitution’s retroactivity clause. It also determined that the trial
court’s judgment contained inconsistencies. On remand, the trial court determined that the 1995
ordinance did not apply retroactively and did not infringe on any of the Employees’ vested
rights. In particular, it concluded that the Employees could not have any vested rights under the
1972 ordinance until they both worked for the Village for 15 years and retired. It, therefore,
declared that the Village does not have to pay the Employees’ health care and life insurance
premiums following their retirement. The Employees have appealed, assigning two errors.
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II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED AS A MATTER OF LAW IN HOLDING THAT
PLAINTIFFS DID NOT HOLD A VESTED RIGHT TO THE REQUESTED
HEALTH CARE BENEFITS BECAUSE THEY HAD NOT RETIRED WHILE
THE 1972 ORDINANCE WAS IN EFFECT.
{¶6} The Employees argue that the trial court incorrectly concluded that the 1972
ordinance had two requirements for their rights to trigger. They argue that, under the language
of the 1972 ordinance, their rights vested as soon as they completed 15 years of service. They
argue that, like other pension systems, the fact that they were not entitled to receive their
retirement benefits until they actually retired does not mean that they did not acquire vested
rights earlier. “This Court applies a de novo standard of review to an appeal from a trial court’s
interpretation and application of an ordinance.” Meeker v. Akron Health Dept., 9th Dist. Summit
No. 24539, 2009-Ohio-3560, ¶ 11; see also Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-
3208, ¶ 13 (providing that an appellate court reviews questions of law in a declaratory judgment
action de novo).
{¶7} The 1972 ordinance provided “[t]hat section 139.05 Medical Coverage and
Insurance, is hereby amended and enacted to read as follows[:]”
A. All permanent regular employees shall be provided with hospitalization,
surgical, major medical and life insurance coverage in such form and
under such terms as Council may periodically determine after establishing
specifications therefor and after legal advertising and taking bids.
B. Such coverage as is herein established or may be hereafter modified by
Council shall also be continued for those employees retiring hereafter
under PERS or Police Pension who have completed at least fifteen (15)
years of service to the Village, or any retiree presently covered under the
group hospitalization and medical insurance of the Village.
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According to the Employees, the “retiring hereafter” language indicates that the Village knew
that the health care coverage would be used by retirees in the future and set a certain length of
employment to establish eligibility for that benefit. They also note that the ordinance did not
have any language regarding when retirement must take place. They argue that the ordinance put
any employee who worked 15 years on the same footing as those who had already retired. They
also note that the retirement benefit was simply a continuation of a benefit Village employees
received through the term of their employment. The Employees further argue that they relied on
the Village’s promise to provide them benefits when they retired.
{¶8} Initially, public retirement benefits were viewed purely as a gratuity that did not
grant vested rights and that could be modified or repealed by future legislatures. State ex rel.
Drage v. Jones, 37 Ohio App. 413, 415 (9th Dist.1930). In 1954, however, the Ohio Supreme
Court held that a pensioner acquired a vested right to the installment of a pension when the
installment became due. State ex rel. Hanrahan v. Zupnik, 161 Ohio St. 43 (1954), paragraph
one of the syllabus. Shortly thereafter, it held that the General Assembly could not deny or
restrict a disability retirement allowance that had already vested. State ex rel. McLean v.
Retirement Bd., Public Emps. Retirement Fund, 161 Ohio St. 327, 330-331 (1954). In McLean,
the Ohio Supreme Court held that an employee’s right to a disability retirement allowance is
“governed by the statutes in force when such member becomes eligible for and is granted such
retirement * * *.” Id. at paragraph one of the syllabus. Thus, the General Assembly could not
pass legislation in 1947 to restrict compensation that the employee had begun receiving in 1945.
Id. at 330.
{¶9} The Village’s 1972 ordinance provided that the benefits provided under
subsection A. would be “continued for those employees retiring hereafter[.]” Giving that
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language its most natural reading, we conclude that “retiring” is one of the eligibility
preconditions under subsection B. In this case, none of the Employees “retir[ed]” while the 1972
ordinance was in effect. We, therefore, conclude that the trial court correctly concluded that they
did not acquire a vested right to post-retirement health care and life insurance benefits under the
1972 ordinance. The Employees’ first assignment of error is overruled.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED AS A MATTER OF LAW IN FAILING TO
ONCE AGAIN CONDUCT THE PROPER ANALYSIS WITH REGARD TO
RETROACTIVE APPLICATION OF THE 1995 ORDINANCE.
{¶10} In their second assignment of error, the Employees argue that the trial court failed
to follow all of this Court’s remand instructions. Specifically, they argue that the trial court
failed to complete both steps of the Ohio Supreme Court’s retroactivity test. In the Employees’
reply brief, however, they concede that the issue has been made moot by the Village’s
concession that it did not intend for the 1995 ordinance to act retroactively. Upon review of the
record, we note that the reason the trial court did not conduct the second step of the analysis is
because it determined that the Village did not intend the 1995 ordinance to be retroactive.
Accordingly, we agree that this issue is moot. The Employees’ second assignment of error is
overruled.
III.
{¶11} The Employees’ assignments of error are overruled. The judgment of the Summit
County Court of Common Pleas is affirmed.
Judgment affirmed.
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There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellants.
JENNIFER HENSAL
FOR THE COURT
SCHAFER, J.
RICE, J.
CONCUR.
(Rice, J., of the Eleventh District Court of Appeals, sitting by assignment.)
APPEARANCES:
LARRY SHENISE, Attorney at Law, for Appellants.
JOHN T. MCLANDRICH, FRANK H. SCIALDONE, and TAMMI Z. HANNON, Attorneys at
Law, for Appellee.