Bannan v. City of Saginaw

• Decision Date: 06 January 1983
• Docket Number: Docket Nos. 57322,57323,57324 and 57325
• Citation: 328 N.W.2d 35,120 Mich.App. 307
• Parties: James H. BANNAN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant. Gerald W. GIFFIN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant. George J. KAUFMAN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant. Raymond J. HALE, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 35

328 N.W.2d 35

120 Mich.App. 307

James H. BANNAN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant.

Gerald W. GIFFIN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant.

George J. KAUFMAN, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant.

Raymond J. HALE, Plaintiff-Appellee, v. CITY OF SAGINAW, a municipal corporation, Defendant-Appellant.

Docket Nos. 57322, 57323, 57324 and 57325.

Court of Appeals of Michigan.

Submitted July 15, 1982.

Decided Oct. 7, 1982.

Rehearing Denied Nov. 22, 1982.

Released for Publication Jan. 6, 1983.

van Benschoten, Hurlburt & van Benschoten, P.C. by Lawrence A. Hurlburt, Saginaw, for plaintiffs-appellees.

Braun, Kendrick Finkbeiner, Schafer & Murphy by Bruce L. Dalrymple, Saginaw, for defendant-appellant.

Before ALLEN, P.J. and CYNAR and MARTIN, ^* JJ.

PER CURIAM.

Defendant, City of Saginaw, appeals as of right the trial court's four judgments entered April 7, 1981, ordering the city to reimburse all four plaintiffs, with interest, the sums the city deducted from their disability retirement pensions. The judgments further enjoined defendant from deducting the amount of each plaintiff's future workers' compensation benefits from their pension benefits. The principal issue on appeal is the applicability of Sec. 129 of the City of Saginaw's Ordinance D, which mandates the offset of worker's compensation benefits from all retirement benefits.

Plaintiffs are former City of Saginaw fire fighters who retired due to disabilities. Plaintiff Bannan was a Saginaw fire fighter for 24 years until February 28, 1967. The Bureau of Worker's Disability Compensation awarded Bannan weekly benefits of $69, or $3,588 annually, from that date. When Bannan became 55 years old, the city began paying him a duty disability pension pursuant to defendant's Ordinance D. Bannan was entitled to an annual duty disability pension of $3,479. However, pursuant to an offset provision in Ordinance D, defendant withheld and continues to withhold all of Bannan's pension benefits.

Plaintiff Giffin stopped working as a fire fighter on October 25, 1973, after approximately 24 years. On October 29, 1973, defendant voluntarily commenced paying Giffin workers' compensation benefits pursuant to the Worker's Disability Compensation Act of 1969 (WDCA), M.C.L. Sec. 418.101 et seq.; M.S.A. Sec. 17.237(101) et seq., in the amount of $98 per week or $5,096 annually. On November 1, 1973, Giffin retired. He was then entitled to an annual disability pension of $6,041.62. On October 31, 1974, Giffin turned 55. The defendant did deduct and continues to deduct Giffin's $5,096 workers' compensation benefits from his pension benefits.

Prior to that date, Giffin twice filed for a duty disability retirement. Instead, defendant's Board of Trustees of the Saginaw Policemen's and Firemen's Retirement System (Board) found Giffin eligible for a nonduty disability pension on November 1, 1973, based upon its medical director's report which indicated Giffin suffered from several chronic illnesses but did not indicate the illnesses were work related. On November 26, 1974, Giffin asked the Board to reconsider his application for duty disability benefits. On December 11, 1974, defendant sent Giffin a letter noticing a meeting of the Board on December 17, 1974. At that meeting, the Board noted Giffin's request and said:

"The Board reviewed the history of various reports that were considered at the time Mr. Giffin originally applied for pension benefits. It was their considered opinion that based upon the evidence at that time, that the decision to grant Mr. Giffin non-duty disability benefits was correct. It was moved by Mr. Potthoff, supported by Mr. Muellerweiss, and adopted unanimously, that the communication from Gerald W. Giffin be received and filed."

Plaintiff Raymond Hale also discontinued working for defendant after almost 25 years on March 8, 1974. The following day, defendant voluntarily commenced paying Hale workers' disability benefits pursuant to the WDCA in the amount of $106 per week or $5,512 annually. On September 14, 1974, defendant's Board granted Hale's application for a duty disability pension in the amount of $8,035.30 annually. Defendant's Board deducted and continues to deduct $5,512 from Hale's duty disability pension annually.

Plaintiff Kaufman discontinued working as a Saginaw fire fighter on September 20, 1973, after 35 years of service. On November 21, 1974, the City voluntarily commenced paying Kaufman workers' compensation in the amount of $104 weekly or $5,408 annually. On June 6, 1973, Kaufman applied for a duty disability pension but defendant's Board denied the same. Instead, Kaufman became eligible on his last day of work to a regular retirement pension of $10,408.84. Kaufman turned 55 years old in 1971. The defendant's Board deducted and continues to deduct the $5,408 annual workers' compensation benefits from Kaufman's pension benefits.

The plaintiffs filed their suits against the city of various dates in 1978, seeking reimbursement of the amounts deducted from their pensions and a court order enjoining the defendant from further deducting the amounts of their workers' compensation benefits from their disability pensions. Moreover, plaintiffs Giffin and Kaufman each sought a writ of mandamus ordering the defendant's Board to find him eligible for a duty disability pension as opposed to a nonduty disability pension or a regular pension.

Defendant's Ordinance D, Saginaw Administrative Code, Chapter 5, which contains the provisions governing the city's Policemen and Firemen Retirement System, requires the offset of workers' compensation benefits from all retirement benefits:

"Any workmen's compensation which may be paid or payable to a member, retirant or beneficiary on account of his city employment shall be offset against any pensions payable to such member, retirant or beneficiary. In case the present value of the workmen's compensation is less than the pension reserves for the pensions payable under this ordinance, the present value of such workmen's compensation shall be deducted from such pension reserves and such pensions as may be provided by the pension reserves so reduced shall be payable under the provisions of this article." Sec. 129.

Section 102.1(h) of that ordinance defines retirant as, "any member who retires with a pension payable by the retirement system". Section 102.1(u) also defines voluntary retirement age:

" 'Voluntary retirement age' means age 55 years for the firemen and age 52 years for the policemen: Provided, that in the case of an original member, voluntary retirement age means age 55 years for firemen and age 52 years for policemen or the age at which he acquires 25 years of credited service, whichever occurs first."

All Saginaw fire fighters must contribute to the pension/retirement system:

"Section 131. Members Deposit Fund.

"131.1 The members deposit fund is hereby created. It shall be the fund in which shall be accumulated, at regular interest, the contributions made by members to the retirement system, and from which shall be made refunds and transfers of accumulated contributions, as provided in this article.

"131.2 The contributions of a member to the retirement system to February 1, 1965, shall be 5 percent of his compensation. From and after January 31, 1965, to November 1, 1968, the contributions of a member shall be 6 percent of his compensation. From and after October 31, 1968, the contributions of a fireman member shall be 7 percent of his compensation."

Saginaw fire fighters do not contribute to the federal city's mandatory pension program. The city also contributes to the retirement fund annually based on a fluctuating annual actuarial evaluation of the system's means of support.

Sections 121-122 of Ordinance D provide for nonduty disability pensions or retirements. Such disabilities are not work related. Section 122 provides:

"Section 122. Non-duty Disability Pension.

"122.1 A member who retires on account of disability, as provided in Section 121 hereof, shall receive a disability pension computed according to subsections 118.1 and 118.3. If the said member retires prior to his attainment of age 55 years his credited service shall be increased for the exclusive purpose only of computing his disability pension, by the number of years, and fraction of a year, not to exceed 10 years, in the period from the date of his disability retirement to the date he would attain age 55 years. His said disability pension shall be subject to Sections 128 and 129. Upon his retirement he shall have the right to elect, in lieu of a straight life disability pension, to receive his disability pension under an option provided for in Section 120." (Emphasis added.).

Sections 123-124 of Ordinance D provide for duty disability pensions. Such disabilities are work related. Section 123 provides in part:

"If the medical committee certifies to the board, by majority opinion, that such member is physically or mentally totally incapacitated for duty as a policeman or fireman in the employ of the city, and the board finds the disability to have occurred as the natural and proximate result of causes arising out of and in the course of employment with the city, such member shall be retired by the board upon written application filed with the board by said member or his department head. Upon his retirement he shall be entitled to a pension provided in Section 124." (Emphasis added.)

Section 124 provides in part:

"Section 124. Duty Disability Pension.

"124.1 A member, who retires at or after his attainment of age 55 years on account of disability, as provided in Section 123, shall receive a disability pension computed according to Section 118. Upon his retirement he shall have the right to elect, in lieu of his straight life disability pension, to receive...