Burke v. Medford Contributory Retirement System

12 Mass. L. Rptr. 514
CourtMassachusetts Superior Court
DecidedOctober 2, 2000
DocketNo. 000800
StatusPublished

This text of 12 Mass. L. Rptr. 514 (Burke v. Medford Contributory Retirement System) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burke v. Medford Contributory Retirement System, 12 Mass. L. Rptr. 514 (Mass. Ct. App. 2000).

Opinion

Fahey, J.

Plaintiff, Daniel J. Burke, brings this action against Defendants, Medford Contributory Retirement System (“Medford”) and the Public Employee Retirement Administration Commission (“PERAC”). This action arose after PERAC directed Medford to recover plaintiffs excess earnings from him pursuant to the authority vested in PERAC by G.L.c. 32, §21(4). In his complaint, plaintiff asserts that when constitutional issues, statutory construction issues, and a question of the authority of an agency are raised, plaintiff may bring an action in the Superior Court without first exhausting his administrative remedies. Specifically, plaintiff argues that because PERAC lacked legal authority to direct Medford to reverse its decision pursuant to G.L.c. 32, plaintiff is entitled to remain in Superior Court at this early stage. Defendant moved to dismiss this case and while that was pending, both sides filed motions for summary judgment, which now need not be decided. After hearing and for the reasons set forth below, defendant’s motion to dismiss is ALLOWED.

BACKGROUND

Plaintiff worked as a police officer for the Town of Medford from April 1970 until October 1986. Compl. ¶4. While on the police force, plaintiff developed a heart condition. As a result of the condition, plaintiff received disability retirement under G.L.c. 32, §6, and G.L.c. 32, §94. Compl. ¶5.

General Laws c. 32 sets out a comprehensive scheme for the administration of public employees’ retirement and pension benefits. Pursuant to G.L.c. 32, §91 A, individuals who receive disability retirement benefits must file an annual statement with PERAC certifying the full amount of income that they have received over the past year. General Laws c. 32, §91A also provides that if an individual’s earnings in conjunction with their retirement benefits are more than $5,000 over what they would have earned in regular compensation had they not retired, the individual must refund the portion of his retirement allowance that is equal to such excess.

In April of 1998, plaintiff submitted a statement to PERAC pursuant to G.L.c. 32, §91 A, certifying his 1997 earnings from earned income. Compl. ¶8, 9. In November 1998, both Medford and PERAC separately thereafter informed plaintiff that he had earnings in excess of the amount permitted by G.L.c. 32, §91A, [515]*515and that he would therefore be required to reimburse Medford for the excess amount. Compl. ¶ 11, 12. On December 30, 1998, on plaintiffs appeal of the determinations of PERAC and Medford, Medford held a hearing on whether the money in question constituted earned income within the meaning of G.L.c. 32, §91 A. Compl. ¶13, 14. After the hearing, Medford sent a letter on May 4, 1999 to plaintiff, informing him that his 1997 excess earnings in the amount of $88,212.52 did not constitute earned income. Compl.¶ 18.

On May 11, 1999, PERAC requested from Medford a detailed explanation of its decision. Compl. ¶20, 21. There were additional communications between Med-ford and PERAC of which plaintiff did not know. On September 2, 1999, plaintiff was notified that PERAC had completed its review of his 1998 Statement of Earned Income and that PERAC had determined that he had excess earned income in 1998 and was therefore required to make a refund to Medford for that year. Compl. ¶24. In a letter dated September 7, 1999, PERAC informed Medford that plaintiffs excess earnings did constitute earned income within the meaning of G.L.c. 32, §91A, and that Medford was therefore directed pursuant to G.L.c. 32, §21(4), to recover the excess earnings from plaintiff. Plaintiff was not provided with a copy of this 9/7/99 letter from PERAC, only of the 9/2/99 letter. Compl. ¶25.

On September 21, 1999, Medford sent plaintiff a letter indicating that he had “earnings in excess of the amount allowed by the retirement law" in 1998 and that, as a result, he was required to refund $35,183.04 to Medford. Compl. ¶26. Plaintiffs counsel requested in a letter to Medford dated September 28, 1999, a hearing on the alleged excess income in 1998. Compl. ¶27.

On September 30, 1999, Medford informed plaintiff that it would withhold his retirement allowance until his 1997 additional earnings were recovered. Compl. ¶28. On January 26, 2000, Medford held a hearing1 in which it reiterated that it would withhold plaintiffs pension until such time as it had recovered an amount equal to plaintiffs excess earned income. Compl. ¶33. Plaintiff has never sought review of that decision with the Contributory Retirement Appeal Board (“CRAB”).

DISCUSSION

Since PERAC’s motion to dismiss raises a jurisdictional issue, the court must address that issue prior to considering the merits of the case. Plaintiff brings this complaint asserting that when constitutional issues are raised, plaintiff may bring an action in the Superior Court without first exhausting his administrative remedies. Pl.’s Mem. Sup. Opp’n Mot. Dismiss at 2; Pl.’s Mot. Summ. J. at 2. Specifically, plaintiff argues that PERAC lacked legal authority to reverse Medford’s decision pursuant to G.L.c. 32. Pl.’s Mem. Sup. Opp’n Mot. Dismiss at 1; Pl.’s Mot. Summ. J. at 2.

Under G.L.c. 231A, §3, the SJC has imposed a general requirement that a plaintiff seeking declaratory relief of an adjudicatory decision must first have exhausted all administrative remedies available. See St. Luke's Hospital v. Labor Relations Comm'n, 320 Mass. 467, 469 (1946). The rationale for the imposed doctrine of exhaustion of administrative remedies in the context of declaratory judgment actions is to permit the agency to complete its assessment of the evidence and its fact finding, including the exercise of its technical and professional expertise.2 See id. at 469.

However, case law holds that there are specific instances when a person may seek judicial review of an agency decision without first exhausting administrative remedies. See id. at 470. Exhaustion of administrative remedies is inapplicable where the administrative agency “is dealing with a matter clearly beyond the scope of its authority,” or when the administrative agency is created by or is acting under an unconstitutional statute. Id. at 470. In East Chop Tennis Club v. Massachusetts Comm’n Against Discrimination, 364 Mass. 444, 451-52 (1973), the SJC held that these exceptions apply only where the agency clearly lacks jurisdiction as a matter of law from the face of the complaint and answer.

Plaintiff claims that his appeal to the Superior Court at this stage is correct because PERAC is acting, plaintiff claims, under a statute that violates this plaintiffs right to due process. Plaintiff is correct that, if in fact that was the case, then plaintiff could, indeed, have recourse at this early stage to the Superior Court. The issue raised by plaintiff is whether, at the stage of PERAC’s review, plaintiff is entitled to due process, notice and a hearing.

The constitutional challenge to the statute, G.L.c. 32, §21(4), as applied to Burke, is the legality of PERAC’s direction to Medford dated 9/7/99 which states in pertinent part:

The decision of the Medford Retirement Board in this matter is incorrect as a matter of law. The earnings of Mr. Burke from Medford Enterprises, Inc. (d.b.a. United Vending) are earned income to Mr. Burke within the provisions of G.L.c. 32, §91 A.
As such, pursuant to the authority vested in the Commission by G.L.c.

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Bluebook (online)
12 Mass. L. Rptr. 514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burke-v-medford-contributory-retirement-system-masssuperct-2000.