Romano v. Retirement Board of the Employees' Retirement System

767 A.2d 35, 26 Employee Benefits Cas. (BNA) 1304, 2001 R.I. LEXIS 48, 2001 WL 166418
CourtSupreme Court of Rhode Island
DecidedFebruary 19, 2001
Docket99-394-M.P.
StatusPublished
Cited by38 cases

This text of 767 A.2d 35 (Romano v. Retirement Board of the Employees' Retirement System) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Romano v. Retirement Board of the Employees' Retirement System, 767 A.2d 35, 26 Employee Benefits Cas. (BNA) 1304, 2001 R.I. LEXIS 48, 2001 WL 166418 (R.I. 2001).

Opinions

OPINION

FLANDERS, Justice.

Did a retired state employee’s detrimental reliance on advice given to him by agents of the State Retirement Board (board) — advice that was contrary to state law — estop the board from suspending the retiree’s pension when it discovered he was also working full-time for a municipality? Because the alleged representations relied upon were ultra vires and in conflict with state law, we answer this question in the negative. Therefore, we affirm that portion of the trial justice’s ruling holding that the doctrine of equitable estoppel did not preclude the board from suspending future retirement payments to the plaintiff, Paul E. Romano (Romano). We quash, however, the trial justice’s sua sponte order of restitution (requiring Romano to reimburse the state for pension benefits he received but which he was not entitled to under state law) because there was insufficient evidence to determine, as a matter of law, whether it was equitable in these circumstances to require restitution.

Facts and Travel

Romano worked as an engineer for the Rhode Island Department of Transportation (DOT) for twenty-five years. As a state employee, he was a member of the state’s Retirement System (system). In 1989, the Governor announced an early retirement incentive package for state employees that significantly enhanced retirement benefits for those who chose to participate. In addition to other incentives, the package offered participants an additional 10 percent service credit and a more favorable salary basis upon which retirement benefits would be calculated (under the package, retirement benefits would be based upon the participant’s previous twelve-month salary, rather than the three-year salary average generally used). See P.L.1989, ch. 126, art. 43, § 1.

At the time of the Governor’s announcement, the then-administrator of the Town of Bristol (town), Halsey Herreshoff (Her-reshoff), approached Romano and offered him a position as the town’s director of public works. Contemplating this offer, but concerned about its potential impact on his retirement benefits, Romano spoke to a retirement counselor from the system. She told him that, although she knew of no restrictions, if he “wanted to stay out of trouble” he should “go to the retirement board.” Thereafter, acting on Romano’s behalf, Herreshoff allegedly contacted then-executive director of the system, Donald Hickey (Hickey), to confirm what the retirement counselor had told Romano. On July 25, 1989, Hickey sent a letter to Herreshoff and, without referring specifically to Romano or to Romano’s particular situation, he stated his general understanding of the board’s policy “concerning people working for a municipality after retirement from State service without penalty.” He wrote, “[s]ince the municipal system is a different system and only administered by us, there is no prohibition against a state retiree working for and belonging to a municip.;,; system.” He gave no further details or advice concerning the statutory restrictions and conditions governing such reemployment but offered “[i]f further clarification is needed please let me know.”

Romano claims to have understood this letter as one that specifically addressed his case. As a result, he interpreted it to mean that he could simultaneously collect his state retirement pension and receive his full-time salary from the town. Almost immediately after receipt of Hickey’s letter on July 25, 1989, and without making any further inquiries into potential limitations [37]*37and/or conditions that might restrict his reemployment, Romano retired from DOT. Shortly thereafter he accepted the full-time position as the town’s director of public works and he began to receive both his municipal salary as a full-time employee of the town and his state retirement pension.1

According to the system, Romano’s “double dipping” went unnoticed until 1996 when it was uncovered by an internal audit. Upon discovery of the error, the Retirement System informed Romano by letter, dated January 2, 1996, that because his municipal employment had exceeded the annual limit of seventy-five full days or 150 half days (the statutory limit imposed by G.L.1956 § 36-10-36), he would be ineligible to receive pension benefits, effective January 31, 1996. In a letter to Romano, dated January 18, 1996, the executive director of the system, Joann E. Flaminio (Flaminio), issued an administrative decision requiring Romano to “either comply with the 75 working-day limitation (or 150 half-day limitation) enunciated in § 36-10-36 or risk suspension of your pension benefits once the 75 day limit is exceeded.” She also ordered him to “cease employment with the Town of Bristol as of April 17, 1996, of this year in order to continue to receive your current monthly pension payment.”

Romano appealed Flaminio’s administrative decision and the matter was assigned for a determination to an administrative hearing officer from the system. The system agreed to continue paying Romano his monthly pension pending a decision of the hearing officer. On November 18, 1996, however, the hearing officer affirmed Flaminio’s decision, finding that, pursuant to § 36-10-36, Romano’s full-time employment with the municipality disqualified him from receiving state pension benefits.

In an administrative appeal before the board on December 18, 1996, Romano argued that he had detrimentally relied upon the representations made by the retirement councilor and Hickey and that therefore he should be granted an equitable remedy. The board upheld the hearing officer’s decision, concluding that “where there is a clear statutory mandate, [the board] must comply with [it], and * * * no government official can in fact waive that mandate.” The board notified Romano of its decision by letter, dated December 20, 1996, and informed him that his pension benefits would be suspended effective December 31,1996.

Romano appealed the board’s decision to the Superior Court. On April 15, 1997, at Romano’s request, that court issued a temporary restraining order enjoining- the board from suspending Romano’s monthly retirement benefits pending the outcome of his administrative appeal. The order noted that “[s]hould the Plaintiffs action be unsuccessful, the plaintiff may be obligated to reimburse the State of Rhode Island.”

On June 29, 1999, the Superior Court upheld the board’s decision and vacated the temporary restraining order, thereby allowing the system to suspend future retirement payments to Romano. In addition, the Superior Court ordered sua sponte that Romano “reimburse the State of Rhode Island for any benefits paid him to which he was not entitled.”

I

Suspension of Future Pension Payments

Neither the facts of this case nor the applicable law barred the board from [38]*38suspending the payment of future pension benefits to Romano after it discovered in 1996 that he had been serving as a full-time municipal employee while he was also receiving pension benefits from the state.2 Therefore, we affirm that portion of the Superior Court’s judgment in this case, squarely on the grounds that the doctrine of equitable estoppel should not be applied against a governmental entity like the board when, as here, the alleged representations or conduct relied upon were ultra vires or in conflict with applicable law. See State v. Rhode Island Alliance of Social Services Employees, Local 580, SEIU, 747 A.2d 465, 469 (R.I.2000)

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Bluebook (online)
767 A.2d 35, 26 Employee Benefits Cas. (BNA) 1304, 2001 R.I. LEXIS 48, 2001 WL 166418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/romano-v-retirement-board-of-the-employees-retirement-system-ri-2001.