William Lang v. Sterling Heights Employees Retirement System

CourtMichigan Court of Appeals
DecidedJune 10, 2021
Docket352497
StatusUnpublished

This text of William Lang v. Sterling Heights Employees Retirement System (William Lang v. Sterling Heights Employees Retirement System) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
William Lang v. Sterling Heights Employees Retirement System, (Mich. Ct. App. 2021).

Opinion

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

WILLIAM LANG, UNPUBLISHED June 10, 2021 Plaintiff-Appellee,

v No. 352497 Macomb Circuit Court STERLING HEIGHTS EMPLOYEES LC No. 2018-004202-NZ RETIREMENT SYSTEM and BOARD OF TRUSTEES OF THE STERLING HEIGHTS EMPLOYEES RETIREMENT SYSTEM,

Defendants-Appellants,

and

WALTER HESSELL, JACQUELINE NOONAN, and CITY OF UTICA,

Defendants.

Before: K. F. KELLY, P.J., and SHAPIRO and SWARTZLE, JJ.

PER CURIAM.

Defendants Sterling Heights Employees Retirement System and its Board of Trustees (collectively referred to as “SHRS”) appeal as of right the trial court’s order denying their motion for summary disposition and granting plaintiff’s motion for partial summary disposition of his claims requesting calculation of the dollar value of plaintiff’s prior service credit, and ordering SHRS to transfer that amount to the Michigan Employees Retirement System. Finding no errors warranting reversal, we affirm.

I. BASIC FACTS AND PROCEDURAL HISTORY

Plaintiff formerly worked for Sterling Heights and, by June 2004, he had earned approximately 18 years of service credit in SHRS. In 2004, before accepting a new position with the city of Utica, plaintiff investigated whether he could transfer his accrued service credit to

-1- Utica’s retirement system, which is through the Municipal Employees Retirement System of Michigan (“MERS”). After plaintiff began working for Utica, he attempted to arrange the service credit transfer once Utica adopted the Reciprocal Retirement Act (RRA), MCL 38.1101 et seq. Sterling Heights agreed to transfer plaintiff’s service credit for retirement through the RRA, but it would only approve the payment of $124,288 for his accrued service. That amount was later increased to $155,000. Plaintiff claimed he should have received $340,421 as financial consideration for his accrued retirement benefits under the RRA’s method for calculating service credit transfers. In 2007, SHRS adopted Resolution 07-01, by which it implemented its own method for calculating transfers of service credit under the RRA using SHRS’s own actuary and an interest rate assumption adopted by SHRS.

At the time SHRS approved the transfer of $124,288 for plaintiff’s accrued service, MERS had calculated that plaintiff needed $321,723 to fund his years of service with Sterling Heights in order to transfer his retirement to MERS. Although SHRS increased the transfer amount to $155,000, Utica declined to approve plaintiff’s transfer of his service credit to MERS under the RRA because Utica would be responsible for paying the unfunded amount for plaintiff’s years of service with Sterling Heights, as calculated by MERS. Plaintiff filed this action, primarily to compel SHRS to follow the requirements of the RRA for calculating the transfer of service credit.

SHRS moved for summary disposition under MCR 2.116(C)(10), arguing that there was no genuine issue of material fact that plaintiff was not entitled to a transfer under the RRA because it was Utica, not Sterling Heights, that refused to approve the transfer of his years of service. SHRS also alleged that plaintiff failed to demonstrate entitlement to financial consideration under the RRA because both municipalities did not agree to a transfer of service credit. SHRS further asserted that it was entitled to summary disposition on the basis of governmental immunity and quasi-judicial immunity.

Plaintiff filed his own motion for summary disposition, contending that he was entitled to summary disposition under MCR 2.116(C)(10) on his claims for a declaratory judgment (Count I) and mandamus (Count VII). Plaintiff submitted that SHRS had a clear legal duty under the RRA and Sterling Heights’ own retirement ordinance to transfer the MERS dollar value of plaintiff’s prior service, using the Pension Benefit Guarantee Corporation’s (“PBGC”) method for calculating transfers under the RRA, MCL 38.1106(3). He requested that the trial court issue a writ of mandamus directing SHRS to immediately transfer to MERS $473,265, which was the present- day value of his prior service credit computed using the PBGC method.

The trial court rejected SHRS’s arguments and granted plaintiff’s motion for partial summary disposition, finding no genuine issue of material fact that SHRS failed to follow the requirements of the RRA. The court further noted that plaintiff’s right to compensation for his contributions to the retirement system were protected by Const 1963, art 9, § 24. The court issued a declaratory judgment holding that SHRS failed to follow MCL 38.1106(3) when calculating the amount to be paid for plaintiff’s years of service, and ordered SHRS to immediately transfer $473,265 to MERS.

II. SCOPE OF REVIEW

-2- Initially, SHRS alleges that the trial court failed to apply the correct standard of review by failing to give proper deference to SHRS’s decisions regarding plaintiff’s request for a transfer of his service credit, and instead improperly substituting its judgment for that of SHRS. We disagree.

In Caprathe v Mich Judges Retirement Bd, 275 Mich App 315, 319-320; 738 NW2d 272 (2007), this Court explained that pension boards, like SHRS, are administrative agencies, whose decisions are entitled to deference when supported by competent, material and substantial evidence on the whole record. However, decisions by a pension board are also subject to review to determine if they are authorized by law. Id. As explained in Section II, the parties’ dispute in this case concerned SHRS’s application and interpretation of the RRA, which involved questions of law. The trial court could permissibly review SHRS’s decisions to determine whether SHRS properly followed the RRA, and the court was not required to defer to SHRS’s decisions to the extent that they were contrary to law. SHRS has not shown that the trial court exceeded the permissible scope of review.

III. THE RRA

SHRS contends that the trial court erred in its application of the RRA because a credit transfer is discretionary, an agreement was not reached by SHRS and Utica regarding the service credit transfer and its cost, and SHRS was not required to use the PBGC assumptions when calculating the actuarial value. We disagree.

A trial court’s ruling on a motion for summary disposition is reviewed de novo. Bennett v Russell, 322 Mich App 638, 642; 913 NW2d 364 (2018). Summary disposition is appropriate pursuant to MCR 2.116(C)(10) where there is “no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law.” MCR 2.116(C)(10). When reviewing a motion for summary disposition challenged under MCR 2.116(C)(10), the court considers the affidavits, pleadings, depositions, admissions, and other admissible documentary evidence then filed in the action or submitted by the parties. MCR 2.116(G)(4), (G)(5); Puetz v Spectrum Health Hosps, 324 Mich App 51, 68; 919 NW2d 439 (2018).

MCL 38.1103(1) provides that “[a]ny municipal unit, which covers its employees under a retirement system or systems, by a majority vote of its governing body may elect to adopt the provisions of this act for its employees covered under such retirement system or systems.” The word “may” generally addresses permissive action, entrusting a choice to a party’s discretion. In re Complaint of Mich Cable Telecom Ass’n, 241 Mich App 344, 361; 615 NW2d 255 (2000). Thus, it is discretionary with each municipality whether to adopt the RRA. See Caprathe, 275 Mich App at 321-323. The terms of the RRA supplement any retirement provisions adopted by a municipality. See MCL 38.1103(4).

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Bluebook (online)
William Lang v. Sterling Heights Employees Retirement System, Counsel Stack Legal Research, https://law.counselstack.com/opinion/william-lang-v-sterling-heights-employees-retirement-system-michctapp-2021.