Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner

187 So. 3d 404, 2016 La. LEXIS 103
CourtSupreme Court of Louisiana
DecidedJanuary 27, 2016
Docket2015-C -1175
StatusPublished
Cited by19 cases

This text of 187 So. 3d 404 (Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner, 187 So. 3d 404, 2016 La. LEXIS 103 (La. 2016).

Opinions

[406]*406CRICHTON, J.

|!This case arises-‘from a dispute between the City of Kenner (“Kenner”) and Kenner’s firefighters concerning the computation' of retirement benefits under La. R.S. 11:233 and 11:2252. The dispute centers around four types of compensation— educational incentive pay, seniority incentive pay, holiday pay, and acting pay — and the. res nova question presented to the Court is whether these types of compensation should be considered “earnable compensation” for purposes of calculating the firefighters’ pension contributions. ■ For the reasons set forth below, we affirm the court of appeal holding that no genuine issues of material fact remain as to whether each of the four types of pay constitutes “earnable compensation” under the requirements of the statutes.

BACKGROUND

In 1999, the Kenner merged its municipal retirement system for firefighters with the statewide Firefighters’ Retirement System (“FRS”). Under the pre-1999 municipal retirement system, Kenner calculated firefighters’ pension' contributions based on base pay and supplemental pay, but did not include in the calculation educational incentive pay, seniority incentive pay, holiday pay, and acting pay. After the systems merged, Kenner made no changes in its method of calculating pension contributions.

|Jn May 2010, Michael Dunn, on his own behalf and on behalf of the class of all similarly situated employees of the Fire Department, City of Kenner and of the members of the Kenner Fire Fighters Association Local 1427 (“Firefighters”), filed a lawsuit in the' 24th Judicial District Court, Parish of Jefferson, against Ken-ner, seeking retroactive adjustment to, and forward correction of, Kenner’s pension contributions.1 The Firefighters later [407]*407amended the petition to remove the class allegations, adding individual firefighters and alleging that Local 1427 was suing on behalf of its members. The Firefighters alleged that certain types of pay — educational incentive pay, seniority incentive pay, holiday pay, and acting pay — -should be included in the definition of “earnable compensation” for the purpose of calculating pension contributions pursuant to La. R.S. 11;233.2 In July 2010, Kenner began remitting pension contributions -on holiday and acting pay, but did not make retroactive adjustments to holiday pay and acting pay or begin remitting pension contributions on either educational incentive pay or seniority incentive pay.3

Kenner filed a motion for summary judgment in October 2013, arguing that these four types of compensation were, not “earned” during a “regular tour of | ¡¡duty,” and were instead either bonuses or other types of irregular, nonrecurring, or deferred payments. The Firefighters then filed a cross-ipotion for. summary judgment on the same issues, claiming Kenner was liable for failing to pay pension contributions on the four types of pay.

On December 17, .2013, after a hearing on both motions, the trial court granted Kenner’s motion for summary judgment and denied the Firefighters’ cross-motion for summary judgment. The trial court found that educational incentive pay, seniority incentive pay, holiday pay, and acting pay “are not included as earnable compensation pursuant to La. R.S. 11:233,” and therefore should not be considered in calculating the- Firefighters’ pension contributions. The trial 'court stated that it chose to, interpret the statute in a “strict fashion,” noting that “[i]f the statute doesn’t say it, okay, I’m not inclined to include it, regardless of how any public entity may feel about voluntarily contributing anything to any pension.”

The Court of Appeal, Fifth Circuit, heard the Firefighters’-. appeal before a three-judge panel. Before rendering a decision, the court of appeal, en banc, requested and heard additional argument and subsequently reversed the trial court. Dunn v. City of Kenner, 14-113 (La.App. 5 Cir. 5/14/15), 170 So.3d 1065. The court of appeal noted that none of the four types of compensation at issue in the case are expressly included or excluded as earnable compensation in the -language of La. R.S. 11:233, and therefore found the statute to be “inherently ambiguous.” The court of appeal then undertook a two-step analysis under the catch-all provision of La. R.S. ll;233(B)(2)(g), which excludes from the definition of earnable compensation “any [408]*408other type of irregular or nonrecurring payment.” First, the court of appeal analyzed whether each type of compensation is “earned,” and second, the court of appeal analyzed whether each type of compensation was “irregular or nonrecurring.” Under this analysis, the court of appeal found that each of the four types of compensation is earned and regular or recurring. The |4court of appeal reversed both the trial court’s grant of Kenner’s motion for summary judgment and the trial court’s denial of the Firefighters’ motion for summary judgment. The court of appeal expressly found no genuine issues of material fact as to whether the four payment types must be included as “earnable compensation,” found the Firefighters were entitled to judgment as a matter of law, and rendered summary judgment in favor of the Firefighters.4

We granted the writ to determine whether each of the four types of payment at issue constitutes “earnable compensation” for purposes of pension contributions. Dunn v. City of Kenner, 15-1175 (La.10/2/15), 178 So.3d 576.

APPLICABLE LAW

Courts of this state have routinely recognized the remunerative nature of retirement contributions, which represent “an increasingly important part of an employee’s compensation for his services.” See Fishbein v. State ex rel. L.S.U. Health Sciences Center, 04-2482 (La.4/12/05), 898 So.2d 1260 (quoting Andrepont v. Lake Charles Harbor & Terminal Dist., 602 So.2d 704, 708 (La.1992)). We have described retirement contributions as “an inducement to employees to remain in the service of the company to enjoy the benefits the plan promised.” T.L. James & Co. v. Montgomery, 332 So.2d 834, 841 (La.1975). An employer’s contribution to retirement is “not a purely gratuitous act, but it is in the nature of additional remuneration to the employee who meets the conditions of the plan.” Id. See also Born v. City of Slidell, 15-0136 (La.10/14/15), 180 So.Sd 1227, 2015 WL 5972534 (“[W]hen an employer promises a benefit to employees, arid employees accept that offer, or benefit, by their actions in meeting the conditions, the result is not a mere gratuity

| ^Article X, section 29(E) of the Louisiana Constitution recognizes the importance of the state retirement systems, providing that “[t]he actuarial soundness of state and statewide retirement systems shall be attained and maintained and the legislature shall establish, by law, for each state or statewide retirement system, the particular method of actuarial valuation to be employed for purposes of this Section.” In the year following the adoption of La. Const. Art. X, § 29(E), the legislature enacted Title 11 of the Louisiana Revised Statutes. Title 11 was enacted “to consolidate public retirement law in order to effectively eomply with the mandate of Article X, § 29(E) of the Constitution of Louisiana to maintain public retirement systems on a sound actuarial basis.” La. R.S. 11:2. See, e.g., City of New Orleans v. La. Assessors’ Retirement and Relief Fund,

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Bluebook (online)
187 So. 3d 404, 2016 La. LEXIS 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michael-dunn-and-the-class-of-similarly-situated-persons-kenner-fire-la-2016.