Lynch v City of New York

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Lynch v City of New York 2012 NY Slip Op 33199(U) January 20, 2012 Supreme Court, New York County Docket Number: 650822/2010 Judge: Carol R. Edmead Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. INDEX NO. 650822/2010 /' [*FILED: NEW YORK COUNTY CLERK 01/20/2012 1] NYSCEF DOC. NO. 59 COURT OF THE STATE OFNYSCEF: 01/20/2012 RECEIVED NEW YORK SUPREME NEW YORK COUNTY PRESENT: __HON. CAROL EDMEAD PART Justice Index Number: 650822/2010 LYNCH, PATRICK INDEX NO. _ _ _ _--;:;-_ vs. MonON DATE CITY OF NEW YORK SEQUENCE NUMBER: 004 ARTICLE 78 /6. I g.,20 1/ MonON SEQ. NO. _ _ __ The following papers, numbered 1 to _ _ , were read on this motion tailor _ _ _ _ _ _ _ _ _ _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits Answering Affidavits - Exhibits Exhibits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s). _ _ _ _ __ I No(s). _ _ _ _ __ I No(s). _ _ _ _ __ Upon the foregoing papers, it is ordered that this motion is w U ~ Motion sequences 002, 003 and 004 are decided in accordance with the annexed Memorandum Decision. It is hereby ~ ORDERED that defendants' motion to dismiss the action is granted to the extent that the second, third, fourth, and fifth causes of action are dismissed, and the complaint is severed and dismissed as to defendants the New York City Police Pension Fund and the New York City Fire Department Pension Fund; and it is further ORDERED that the Clerk is directed to enter judgment accordingly; and it is further ADJUDGED and DECLARED that defendant City of New York has violated and continues to violate Retirement and Social Security Law § 480 (b) (i) and (ii) by failing to contribute to members of the New York City Police Pension Fund and the New York City Fire Department Pension Fund who are in Tier III of the City's pension system the amounts required by § 480 (b) (ii), to wit, amounts "equal to the rate of such contributions assumed by such employer for the payroll period preceding [January 1, 1976]"; and it is further ORDERED that counsel for plaintiffs shall serve a copy of this order with notice of entry within twenty (20) days of entry on counsel for defendants; and it is further ORDERED that the rest of this proceeding .., :::> c w 0:: 0:: w u.. W 0:: ~Ci) ...Jz :::> 0 u.. III 3; (!) ti W ~ 0:: W Z ~~ - 9 w...J ~~ ~ w !5 ::;; 0:: 01= ~ Dated: DMEAD 1, CHECK ONE: ,................... ,.. ,........ " ................................... 0 NON.FINALDISPOSITION CASE DISPOSED 2. CHECK AS APPROPRIATE: ........................... MOTION IS: 0 GRANTED 3. CHECK IF APPROPRIATE: ................................................ 0 SETTLE ORDER DDO NOT POST 0 DENIED o GRANTED IN PART 0 o SUBMIT ORDER OTHER o FIDUCIARY APPOINTMENT o REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: lAS PART 35 -----------------------------------------X PATRICK LYNCH as President of the PATROLMEN'S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of the Aggrieved Police Members, and the PATROLMEN'S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC., ROY T. RICHTER, as PRESIDENT of the CAPTAINS' ENDOWMENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of the Aggrieved Police Surgeon and its future adversely affected members, and ALEXANDER HAGEN, as President of the UNIFORMED FIRE MEMBERS ASSOCIATION, on behalf 'of the Aggrieved Medical Member, and its future adversely affected Members, Plaintiffs, Index No. 650822/10 -againstThe CITY OF NEW YORK, the NEW YORK CITY POLICE PENSION FUND, and THE NEW YORK CITY FIRE DEPARTMENT PENSION FUND, Defendants. -----------------------------------------X CAROL EDMEAD, J.S.C. By order, dated April I, 2011, Justice Kornreich, before whom this action was pending, converted it to an Article 78 proceeding and sent it for reassignment outside the Commercial Motion sequence nos. disposition. 002, 003, Division. and 004 are now consolidated for In motion sequence no. 002, petitioner Patrick Lynch moves for summary judgment. In motion sequence no. 003, defendants move to dismiss the action. In motion sequence no. 004, petitioner Roy T. Richter moves for partial summary judgment as to liability. By letter dated September IS, 2011, petitioner Alexander Hagan joined in the motions for summary judgment. Petitioners seek declaratory and monetary relief for [* 3] defendants' failure to contribute to the sums that New York City (City) police officers and fire fighters, who are in Tier III of the City's pension program, are statutorily required to pay toward their retirement benefits. The following five causes of action: three (1) complaints allege the the City's failure to make such contributions violates the Retirement and Social Security Law (RSSL) § 480 (b) (i) and (ii); (2) the failure to make contributions without authorization from the board of trustees of defendants New York City Police Pension Fund and New York City Fire Department Pension Fund violates the Administrative Code of City of New York §§ 13-216 (b) and 13 316 (b); (3) the failure to make contributions violates a June 6, 2000 agreement between the City and the Municipal Labor Committee (MLC) , of which both the Patrolmen's Benevolent Association of the City of New York and the Uniformed Fire Officers Association are members; (4) the failure to make contributions violates Labor Law § 193; and (5) the City and defendant pension funds have converted the amounts that the City was required to contribute. Labor Law § 193 bars employers from making any deductions from the wages of employees, other than such deductions as are statutorily permitted. The principal question that this action raises is whether a statute that provides for the City to make contributions to offset, in part, the sums that police officers and fire required to pay toward their retirement benefits, fighters are and that was enacted at a time when all City police officers and fire fighters were members of Tier I or Tier II of the City pension system, is 2 [* 4] also applicable to those officers and fire fighters who are now members of Tier III. RSSL § 480 (b), which was first enacted in 1974, provides: (i) Any program under which an employer in a public retirement system funded by the state or one of its political subdivisions assumes all or p~rt of the contribution which would otherwise be made by its employees toward retirement, which expires or terminates during nineteen hundred seventy-four, is hereby extended ... , except that commencing with the payroll period the first day of which is nearest to January first nineteen hundred seventy-six, the rate of such contribution assumed by an employer in any of the public retirement systems funded and maintained by a city, shall be onehalf the rate of such contribution assumed by such employer for the immediately preceding payroll period ... Commencing in 1963 and continuing until the enactment of RSSL § 480, the Mayor of the City of New York, by executive order, provided that the contributions that each member of the City police force and fire department was required to make toward his or her retirement benefits would be reduced by a certain percentage of the member's compensation, thus providing such employees with increased take-horne-pay (ITHP). See Admin Code §§ 13-226, 13-326. Although Tier III of the City pension system was created in 1976 (see Admin Code § 13-500; L 1976 ch 890), and, in general, all City employees who were hired thereafter were placed in Tier III, newly hired police officers and fire fighters continued to be placed in Tier II until June 30, 2009, after which newly hired officers and fire fighters were placed in Tier III. Thus, when RSSL § 480 was first enacted, all New York City police officers and fire fighters were either in Tier I, or Tier II, of their respective pension systems. Defendants have not extended the benefits provided for in RSSL 3 § [* 5] 480 (b) to police officers and fire fighters who are in Tier III. Defendants employees argue in Tier that RSSL because, III, 480 § (b) is by its terms, inapplicable that to subsection extended programs that expired or terminated in 1974, and those programs were and fighters who were sections of applicable the in solely Tiers I to and Administrative programs that expired in 1974, police However, II. Code, officers which the provided fire relevant for the do not refer to pension tiers. Rather, they make the benefits that they provide available to each "member." Admin Code §§ 13-226, 13-326. "Member" is defined as, respectively, a member of the police pension fund (Admin Code §§ 13-214, 13-215) and a member of the fire department pension fund (Admin Code §§ 13-313 (4), 13-314). Indisputably, the Administrative Code provisions were written to include future, as well as then-employed officers and fire fighters, and needless to say, police officers and fire fighters, who are in Tier III, are members of their respective pension funds. To be sure, the programs that expired in 1974 did not affect any Tier III police officers or fire fighters, because there were no such officers or fire fighters prior to July 1, 2009, and indeed, there was no reason to think, in 1974, that a new pension tier would be created. However, at the time that RSSL 480 (b) was amended, in 2009, to § make the provisions of that statute applicable to City employees joining the retirement system on or after January 1, 2010 (L 2009, ch. 504, approved Dec. 10, 2009), there had been police officers and fire fighters who had been in Tier III of their respective 4 [* 6] pension funds for more than five months, because on June 3, 2009, Governor Paterson had vetoed a bill (S. 1409) that would have extended placement in Tier II for uniformed members of the police department who became members on or after July 1, 2009 but prior to July 1, 2011. "[TJhe Legislature is presumed to be aware of the law in existence at the time of an enactment." v South Colonie Ind. Cent. School Dist., Matter of Amorosi 9 NY3d 367, 373 (2007), quoting B&F Bldg. Corp. v Liebig, 76 NY2d 689, general principle enactment of is all the more Chapter 504 followed applicable Governor 693 (1990). here, That where Paterson's veto the by approximately six months, and where Chapter 504 retained the RSSL § 480 requirement that the City contribute a portion of the sums that police officers and fire fighters pay toward their retirement benefits, although the major thrust of the Chapter was to reduce the City's and the State's pension costs by, among other things, increasing the vesting period for pensions from five years to 10. See L 2009, ch. 504, Part A, § 1202. Defendants also argue that the ITHP program is inconsistent with the statutory provisions governing Tier III, because members of Tier III are required to contribute 3% of their salary per year for 25 years toward their pension benefits, while the ITHP program would reduce their contributions to zero. The parties' joint statement of facts states that the sums that members of Tiers I and II are required to contribute toward their pensions are based upon age at entry and actuarial calculations and that, pursuant to the actuarial table that the City uses, 5 the contribution rate for [* 7] police officers and fire fighters hired prior to July 1, 2009 varies from 8.65% for an individual hired at age 16 to 4.30% for an individual hired at age 43. Pursuant to RSSL § 480 (b) (ii), the City currently assumes 5% of each such member's contribution rate. Accordingly, an officer or fire fighter with a contribution rate above 5% contributes the percentage of his or her salary by which his or her contribution rate exceeds 5%, and a member with a contribution rate of 5%, or less, contributes nothing. While the actuarial table is not applicable to members in Tier III, because Tier III members are statutorily required to contribute a set 3% of salary toward their retirement, there is no inconsistency in those members paying nothing, just as Tier 1 and Tier II members whose contribution 5% rates are or less of their salaries also pay nothing, although they are required to pay at the rate set by the actuary of the City. See Admin Code §§ 13-221 (1) and (2). The provisions requiring the City to offset all, or a portion of the sums that officers and fire fighters are statutorily required to contribute to their pensions are independent of thOse statutory requirements. The second cause of action alleges that, by failing to vote to require the City to fund the 3% contribution rate that Tier III members defendant are required pension to funds pay have toward violated their those pension benefits, sections of the Administrative Code that require their boards to vote on any act that they take. However, while the boards of defendant pension funds are statutorily required to "establish rules and regulations 6 [* 8] for the administration and transaction of the business of [the funds] and for the control and disposition thereof" (Admin Code 13-216 [a], whether, 13-316 or to [a]), what they extent, have no their authority members or to the §§ determine City is responsible for contributing to them. The MLC agreement, entered into by the City and MCL on June 6, 2000, provided that MLC would support the City actuary's recommendations for various actuarial assumptions and methods and that the savings expected to be realized thereby would be used to fund certain legislation. pension improvements Statement of Facts through ~~ improvements was the amendment of RSSL (b) § 24, jointly 25. One supported of those 480 (b) to add subsection (ii), which raised the ITHP rate from 2.5% to the pre-1976 rate of 5%. Plaintiffs' contention is that by failing to extend the ITHP benefit to officers and fire fighters in Tier III the City breached the agreement. While, indeed, as plaintiffs argue, the courts will not adopt an interpretation of a contract that would "'render insubstantial or even illusory the benefits ... for which [one party] bargained,' " (Federa ted Retail Holdings, Weatherly 39th St., LLC, 77 AD3d 573, 574 (1st Dept 2010) omitted), the MLC Inc. v (citation it was hardly in the contemplation of either party to agreement that, nine years later, newly hired police officers and fire fighters would no longer be placed in Tier II of their respective pension systems. Accordingly, the court is dismissing the third cause of action. The City's sole argument for dismissing the four and fifth 7 [* 9] causes of action is that the City is not required to contribute ITHP funds to petitioners' Tier III members. to the contrary. The court has found However, neither the fourth nor the fifth cause of action has independent vitality. Both rest entirely upon the allegations of the first cause of action. Accordingly, the court is dismissing these claims. Inasmuch as the court has determined that RSSL § 480 (b) is applicable to police officers and fire fighters who are in Tier III, the court will grant plaintiff movants partial summary judgment on their first cause of action. Accordingly, it is hereby ORDERED that defendants' motion granted to the extent that the second, to dismiss third, the fourth, action is and fifth causes of action are dismissed, and the complaint is severed and dismissed as to defendants the New York City Police Pension Fund and the New York City Fire Department Pension Fund; and it is further ORDERED that the Clerk is directed to enter judgment accordingly; and it is further ADJUDGED and DECLARED that defendant City of New York has violated and continues to violate Retirement and Social Security Law § 480 (b) (i) and (ii) by failing to contribute to members of the New York City Police Pension Fund and the New York City Fire Department Pension Fund who are in Tier III of the City's pension system the amounts required by § 480 (b) (ii), to wit, amounts "equal to the rate of such contributions assumed by such employer 8 [* 10] for the payroll period preceding [January 1, 1976]"; and it is further ORDERED that counsel for plaintiffs shall serve a copy of this order with notice of entry withi~ twenty (20) days of entry on counsel for defendants; and it is further ORDERED that the rest of this proceeding shall continue. Dated: January 20, 2012 Carol Robinso Edmead, J.S.C. 'HON.CAROLEDMEAD l 9

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