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Baker v. Regan

68 N.Y.2d 335 Court N.Y. Decision date 1986-11-18 English

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In the Matter of Edward A. Baker, Appellant, v Edward V. Regan, as State Comptroller and Administrator of the New York State Employees’ Retirement System, Respondent. In the Matter of William J. Dempsey, Appellant, v Edward V. Regan, as State Comptroller and Administrator of the New York State Employees’ Retirement System, Respondent. In the Matter of William C. Brennan, Appellant, v Edward V. Regan, as State Comptroller, et al., Respondents. In the Matter of Charles P. Garvey, Appellant, v Edward V. Regan, as State Comptroller, et al., Respondents. In the Matter of Thomas V. LaFauci, Appellant, v Edward V. Regan, as State Comptroller, et al., Respondents. In the Matter of Orest V. Maresca, Appellant, v Edward V. Regan, as State Comptroller, et al., Respondents.
Argued October 8, 1986;
decided November 18, 1986
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POINTS OF COUNSEL
John J. Clyne for appellant in the first above-entitled, proceeding.
I. The Laws of 1984 (ch 117), effective May 15, 1984, is unconstitutional insofar as it purports to affect the retirement benefits of petitioner-appellant. (Birnbaum v New York State Teachers Retirement Sys., 5 NY2d 1 ; Public Employees Fedn. v Cuomo, 62 NY2d 450 ; Kleinfeldt v New York City Employees’ Retirement Sys., 36 NY2d 95 ; Kranker v Levitt, 30 NY2d 574 ; Matter of Weber v Levitt, 34 NY2d 797 ; Matter of Rosenthal v New York State Employees’ Retirement Sys., 89 Misc 2d 616 .) II. The "elective public office” exception contained in Civil Service Law § 150 prior to the 1984 amendment applied to petitioner. (Sega v State of New York, 60 NY2d 183 ; Riegert Apts. Corp. v Planning Bd., 57 NY2d 206 ; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1 ; Matter of Erie County Agric. Socy. v Cluchey, 40 NY2d 194 ; Matter of Barton v Lavine, 38 NY2d 785 ; Zappone v Home Ins. Co., 55 NY2d 131 ; Uniformed Firefighters Assn. v Beekman, 52 NY2d 463 .)
Joseph P. Famighetti for appellant in the second above-entitled proceeding.
I. Civil Service Law § 150, prior to the
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1984 amendment (L 1984, ch 117), granted petitioner-appellant the right to early retirement. (Matter of Powhatan Democratic Club v Curran, 206 Misc 960 ; Matter of Del Giorno v Police Dept., 33 AD2d 665 , 26 NY2d 620 ; Jaffe Plumbing & Heating Co. v Brooklyn Union Gas Co., 51 Misc 2d 1083 ; Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 62 NY2d 539 .) II. The Laws of 1984 (ch 117) is unconstitutional as applied to petitioner-appellant as it violates NY Constitution, article V, § 7 and US Constitution, article I, § 10 by impairing and diminishing petitioner-appellant’s retirement benefits. (Kleinfeldt v New York City Employees’ Retirement Sys., 38 NY2d 95 ; Birnbaum v New York State Teachers Retirement Sys., 5 NY2d 1 ; Public Employees Fedn. v Cuomo, 62 NY2d 450 ; Roddy v Valentine, 268 NY 228 ; United States Trust Co. v New Jersey, 431 US 1 ; Winston v City of New York, 759 F2d 242 .) III. The action of respondent in suspending the payment of retirement benefits to petitioner-appellant was unconstitutional under the Fourteenth Amendment of the United States Constitution in that that action deprived petitioner-appellant of "property” without due process of law and also deprived him of the equal protection of the law. (Board of Regents v Roth, 408 US 564 ; Perry v Sindermann, 408 US 593 ; Winston v City of New York, 759 F2d 242 ; Basciano v Herkimer, 605 F2d 605 ; Soni v Board of Trustees, 513 F2d 347 ; Vail v Board of Educ., 706 F2d 1435 ; McLaurin v Fischer, 768 F2d 98 ; Reed v Reed, 404 US 71 ; Zeigler v Jackson, 638 F2d 776 ; International Assn. of Firefighters v City of Sylacauga, 436 F Supp 482 .) IV. The principle of estoppel must be applied to bar the new interpretation of section 150 made by respondent after petitioner-appellant relied to his detriment on the contrary interpretation made directly to him by respondent in the past. (Bender v New York City Health & Hosps. Corp., 38 NY2d 662 .)
Joseph O. Giaimo for appellants in the third, fourth, fifth and sixth above-entitled proceedings.
I. The Legislature intended to amend section 150 to restrict its application to the same public office, not to explain the intention of previous Legislatures. (People v Fonseca, 36 NY2d 133 ; Sega v State of New York, 60 NY2d 183 ; Matter of Peterson v Daystrom Corp., 17 NY2d 32 ; Helvering v City Bank Co., 296 US 85 ; Blum v Bacon, 457 US 132 .) II. Respondents are estopped to deny appellants’ pension benefits. (Quaglia v Incorporated Vil. of Munsey Park, 54 AD2d 434 , 44 NY2d 772 ; Matter of 1555
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Boston Rd. Corp. v Finance Administrator of City of N. Y., 61 AD2d 187 ; Eden v Board of Trustees, 49 AD2d 277 ; Boylan v Morrow Co., 96 AD2d 983 ; Matter of Van Alstyne v David Q., 92 AD2d 971 .) III. Section 150, as amended, violates the pension clause of the New York State Constitution. (Roddy v Valentine, 268 NY 228 ; Birnbaum v New York State Teachers Retirement Sys., 5 NY2d 1 ; Public Employees Fedn. v Cuomo, 62 NY2d 450 ; Matter of Rosenthal v New York State Employees’ Retirement Sys., 89 Misc 2d 616 .) IV. Section 150, as amended, violates the impairment of contracts provision of the United States Constitution. (Allied Structural Steel Co. v Spannaus, 438 US 234 .) V. The section 150 amendment violates the equal protection clause. (Matter of Abrams v Bronstein, 33 NY2d 488 .) VI. The section 150 amendment violates the due process clauses of the Federal and State Constitutions. (Board of Educ. v Miles, 15 NY2d 364 ; Periconi v State of New York, 91 Misc 2d 823 .) VIL Appellant Maresca is entitled to receive his retirement allowance pursuant to Retirement and Social Security Law § 212.
Robert Abrams, Attorney-General (Frank K. Walsh, O. Peter Sherwood and Peter H. Schiff of counsel), for respondents in the first, second, third, fourth, fifth and sixth above-entitled proceedings.
I. The court below correctly held that the "elective public office” exception contained in Civil Service Law § 150 does not apply to an incumbent who wins reelection and, therefore, petitioners were not entitled to receive retirement benefits in addition to salary despite their "retirement” prior to the assumption of their new terms of office. (Zappone v Home Ins. Co., 55 NY2d 131 ; Matter of Radich v Council of City of Lackawanna, 93 AD2d 559 , 61 NY2d 652 ; Kurcsics v Merchants Mut. Life Ins. Co., 49 NY2d 451 ; Matter of Astman v Kelly, 2 NY2d 567 ; Matter of Allstate Ins. Co. v Libow, 106 AD2d 110 , 65 NY2d 807 ; State of New York v Garlick Parkside Mem. Chapels, 55 Misc 2d 797 , 30 AD2d 143 , 23 NY2d 754 ; Matter of Chatlos v McGoldrick, 302 NY 380 ; Matter of Russo v Valentine, 294 NY 338 .) II. The issue of whether the "elective public office” exception contained in Civil Service Law § 150 applies to an incumbent who wins reelection is properly before this court. (Cook v City of Binghamton, 48 NY2d 323 ; Hotel Dorset Co. v Trust for Cultural Resources, 46 NY2d 358 ; Montgomery v Daniels, 38 NY2d 41 ; Matter of Malpica-Orsini, 36 NY2d 568 ; People v Pagnotta, 25 NY2d 333 ; Matter of Van Berkel v Power, 16 NY2d 37 ; New York State
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Coalition for Criminal Justice v Coughlin, 103 AD2d 40 , 64 NY2d 660 ; American Sugar Refining Co. v Waterfront Commn. of N. Y. Harbor, 55 NY2d 11 ; Persky v Bank of Am. Natl. Assn., 261 NY 212 ; People ex rel. Roides v Smith, 67 NY2d 899 .) III. Chapter 117 does not deny petitioners equal protection of the law or due process of law. (Trump v Chu, 65 NY2d 20 ; Maresca v Cuomo, 64 NY2d 242 ; Brown v New York State Teachers’ Retirement Sys., 107 AD2d 103 , 66 NY2d 601 ; O’Connor v Levitt, 51 AD2d 1090 ; Board of Regents v Roth, 408 US 564 ; Matter of Economico v Village of Pelham, 50 NY2d 120 .)

OPINION OF THE COURT

Appellants are sitting Judges of the Unified Court System who, following their respective reelections in November of various years since 1977 but prior to commencing their new terms of office in January of the following year, applied to the New York State Retirement System for retirement benefits and thereafter retired on or before the date of the commencement of their new term of office. After the commencement of their respective new terms of office, each appellant received both retirement benefits and the salary for their judicial offices simultaneously until the Comptroller suspended the payment of retirement benefits following enactment by the Legislature of chapter 117 of the Laws of 1984.

Appellants then successfully instituted these article 78 proceedings challenging the determinations of the Comptroller. The Appellate Division, with two Justices dissenting, reversed the Special Term judgments and appellants have appealed to this court as of right (CPLR 5601 [a]).

All parties agree that the 1984 amendment to Civil Service Law § 150 (L 1984, ch 117) prospectively prohibits incumbents who have won reelection to the same office from receiving salary payments and retirement benefits simultaneously where they have retired subsequent to reelection but prior to assuming their new term of office. Likewise, all parties agree that the 1984 amendment cannot be applied retroactively (see, Public Employees Fedn. v Cuomo, 62 NY2d 450 ; Birnbaum v New York State Teachers Retirement Sys., 5 NY2d 1 ) and that if the relevant statutes in effect at the time that the appellants retired (all of the appellants retired prior to the effective date of the 1984 amendment to Civil Service Law § 150) authorized an incumbent to win reelection, retire, and upon

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assumption of his new term of office receive both salary payments and retirement benefits, then the subsequent suspension of the retirement benefits would violate NY Constitution, article V, § 7.[1]

Our Legislature has for over a half century evinced a strong public policy in favor of the suspension of retirement benefits of a person who after retiring accepts an office in the civil service of the State (see, Civil Service Law § 32, added by L 1932, ch 78, repealed by L 1958, ch 790; Civil Service Law § 71-a, added by L 1921, ch 207, repealed by L 1947, ch 841; Civil Service Law § 150, added by L 1958, ch 790; Retirement and Social Security Law § 101, added by L 1955, ch 687). Although exceptions have been made to this general proscription, it is clear that such exceptions were enacted for limited purposes and were not meant to abrogate or dilute the longstanding and overriding State policy to prohibit the receipt of retirement benefits and salary at the same time which could constitute an abuse of the public fisc.

We must reject appellants’ argument that they fall within the exception provided in Civil Service Law § 150 for an "elective public office” (see, Retirement and Social Security Law § 101 [d] [3]). As initially interpreted (see, 1947 Opns Atty Gen 138; 1936 Opns Atty Gen 178; 1935 Opns Atty Gen 145; 1935 Opns Atty Gen 144) and subsequently codified (see, L 1955, ch 687, adding Retirement and Social Security Law § 101), this exception was limited to local elective public officers, who it was feared, would be discouraged from seeking local elective offices, which traditionally were low-paying, if their retirement benefits thereby would be suspended (see, 1947 Opns Atty Gen 138, 139; 1955 NY Legis Ann, at 84, 86). Moreover, the expansion of this exception in 1975 by the amendment of Retirement and Social Security Law § 101 (d) (3) to include both State and local elective officers was intended to do no more than "provide that retired police and firemen that are elected to state elective public office are exempt from the requirement that retirement pensions or annuities be suspended during the period of renewed service” (Memoranda of Assemblyman Stephen R. Greco, 1975 NY Legis Ann, at 75). To extend this limited exception beyond its

* NY Constitution, article V, § 7 states: "After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.”

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intended application would, in these circumstances, be illogical, and would effectively defeat the intent and purpose of the Legislature in enacting the broader statutory scheme and would contravene the established public policy of this State. Accordingly, we conclude that appellants had no statutory or contractual entitlement to receive their retirement benefits while simultaneously receiving salary payments for their judicial offices and that the suspension of those benefits by the Comptroller did not contravene NY Constitution, article V, §7.

We have considered appellants’ other Federal and State constitutional arguments as well as their contention that estoppel is available against the State under these circumstances and conclude that these arguments are without merit.

We would note that inasmuch as appellant Maresca, who reached the age of 70 on May 27, 1984, claims that Retirement and Social Security Law § 212 exempts him from the suspension of his retirement allowance and respondents having not disputed the applicability of this statute to him, the order of the Appellate Division should be reversed and the petition of appellant Maresca granted. Based on the foregoing, however, the remaining orders of the Appellate Division should be affirmed, with costs.

Judges Meyer, Simons, Kaye, Alexander, Titone and Hancock, Jr., concur in Per Curiam opinion; Chief Judge Wachtler taking no part.

In Matter of Baker v Regan, Matter of Dempsey v Regan, Matter of Brennan v Regan, Matter of Garvey v Regan, and Matter of LaFauci v Regan: Order affirmed, with costs.

In Matter of Maresca v Regan: Order reversed, with costs, and petition granted.

Cases cited

Statutes and regulations cited