Retirement Board of the Employees' Retirement System of Rhode Island v. Azar

721 A.2d 872, 1998 R.I. LEXIS 330, 1998 WL 918234
Supreme Court of Rhode Island·Decided December 11, 1998·No. No. 97-351-Appeal·Published·Cited by 10 cases

Opinion

OPINION

FLANDERS, Justice.

We review here a Superior Court judgment carving up the pension of a corrupt, former municipal employee. Attempting to redress the financial wounds inflicted by this employee’s venality, the trial justice allocated the employee’s pension among the retired employee, his dependent brother, certain of his other relatives, and his former municipal employer. For the reasons explained below, (1) we reverse and vacate certain portions of the judgment that have been challenged on appeal: namely, (a) the use of the employee’s revoked pension benefits to repay his relatives’ loans to him, and (b) the eventual reinstatement of the employee’s pension; and (2) we affirm the remainder of the judgment.

Facts and Travel

After he retired from his job as Public Works Director for the City of Cranston (city) and began to collect his pension, defendant, Raymond J. Azar (defendant or Azar), was convicted of racketeering for accepting bribes and other favors in exchange for allowing contractors to overcharge the city on various construction projects. For over six years while he was serving as the city’s Public Works Director, defendant engaged in a pattern of criminal conduct that sorely abused the public trust reposed in him. Upon learning of Azar’s treachery and seeking to revoke his pension, the Retirement Board (board) of the Employees’ Retirement System of the State of Rhode Island (retirement system) filed a Superior Court lawsuit against him under the Public Employee Pension Revocation and Reduction Act (PE-PRRA), G.L.1956 chapter 10.1 of title 36.

The board appeals from the judgment that entered as a result of this lawsuit, and defendant has filed a cross appeal challenging the constitutionality of any reduction of his pension benefits. A Superior Court justice ordered the retirement system to pay monthly pension benefits to defendant in trust and [875] then ordered him, as trustee, to use the pension funds: (1) to pay $1500 per month for the living expenses of Dennis Azar, defendant’s mentally disabled and dependent brother; (2) to reimburse the city for the remaining financial losses defendant had caused it to sustain (earlier, defendant had made a partial restitutionary payment to the city); and (S) to repay monies loaned to defendant by his brothers, sisters, and nephew (relatives) to enable him to make the earlier, partial restitutionary payment to the city for a portion of the losses he had caused it to suffer. Upon defendant’s repayment of the debts he owed to the city and his relatives via the monthly pension benefits that were to be paid to him in the future, the court ordered that the retirement system reinstate the monthly pension payments for defendant’s own use, subject only to his ongoing responsibility to devote the first $1500 of such payments to care for his dependent brother. We proceed now to address the issues raised by the parties’ appeals.

I.

Mandatory vs. Discretionary Pension Revocation or Reduction

The board argues on appeal that PEPRRA categorically prohibits retired public employees/officials from receiving any part of their public pensions if any portion of their service was dishonorable. Because of PEPRRA’s express provisions giving the trial justice discretion to permit a pension reduction for dishonorable service rather than mandating a complete revocation, we disagree with this aspect of the board’s argument. Nevertheless, we hold that, given the substantial benefits defendant already has derived from the pension payments he has received to date, and the substantial benefits he will derive from the city’s settlement of its restitution claims against him (in exchange for receiving $210,000 of Azar’s future pension monies), the trial justice abused his discretion under PEPRRA by providing for the eventual reinstatement of defendant’s public pension.1

PEPRRA sets forth a multi-factored analysis for the trial justice to use in deciding whether to revoke or reduce the pension benefits of a public employee/official who has been convicted of a job-related crime. After indicating that honorable service is presumed and required before it will allow payment of retirement benefits, PEPRRA requires the trial justice to analyze whether the pension to which the “(ii) * * * public [employee/official] is otherwise entitled should be revoked or diminished and, if so; (iii)[i]n what amount or by what 'proportion such revocation or reduction should be ordered.” Section 36 — 10.1—3(c)(l)(ii), (iii). (Emphases added.) Read together, these two provisions indicate a legislative intention for the trial justice to make a discretionary determination whether to reduce or revoke, in whole or in part, the pension that the public employee/official would otherwise be entitled to receive but for having been convicted of a crime relating to his or her public office. The role of the trial justice is not, as the board would urge, to attempt a total recomputation of what pension, if any, the public employee/official is otherwise entitled to receive. That remains the function of the retirement system.2 Nor does the statute necessarily require the trial justice to subtract those years of dishonorable service from the employee/offieial’s overall years of public employment because they were proven to be dishonorable. Although PEPRRA might permit the trial justice to alter the methodology used to calculate the pension that a public employee is otherwise entitled to collect, he or she is not required by law to do so. Rather, any pension reduction or [876] revocation should be made in accordance with PEPRRA’s provisions — that is, a revocation or diminution of this “otherwise entitled” pension benefit by whatever “amount or * * * proportion,” if any, that the Superior Court shall determine after weighing the requirement of honorable service, the severity of the crime, the amount of monetary loss caused by the employee’s misconduct, the degree of public trust reposed in the employee, and such other factors as the court believes justice requires it to consider. Section 36 — 10.1—3(e)(l)(ii), (in), (2).

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Retirement Board of the Employees' Retirement System of Rhode Island v. Azar, 721 A.2d 872, 1998 R.I. LEXIS 330, 1998 WL 918234 (R.I. 1998).

721 A.2d 872 (Retirement Board of the Employees' Retirement System of Rhode Island v. Azar) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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