Bowen v. Annapolis

• Decision Date: 14 December 2007
• Docket Number: No. 34, Sept. Term, 2007.,34, Sept. Term, 2007.
• Citation: 937 A.2d 242,402 Md. 587
• Parties: Edgar A. BOWEN, Jr., et al. v. CITY OF ANNAPOLIS.
• Court: Court of Special Appeals of Maryland

937 A.2d 242

402 Md. 587

Edgar A. BOWEN, Jr., et al. v. CITY OF ANNAPOLIS.

No. 34, Sept. Term, 2007.

Court of Appeals of Maryland.

December 14, 2007.

Robert E. Deso (David W. Buckley, Deso & Buckley, P.C., Washington, DC), on brief, for petitioners.

Eric Paltell (Thomas A. Bowden, Kollman & Saucier, P.A., Timonium; Shaem C. Spencer, Annapolis), on brief, for respondent.

Argued before BELL, C.J., RAKER, HARRELL, BATTAGLIA, GREENE, ALAN M. WILNER (Retired, Specially Assigned) and DALE R. CATHELL (Retired, Specially Assigned), JJ.

GREENE, J.

This is principally a case of statutory interpretation involving our construction of Section 3.36.150A1 of the Code of the City of Annapolis ("City Code").¹ Fifty-nine retired police officers and firefighters for the City of Annapolis ("Petitioners") challenge the City's interpretation of Section 3.36.150A1 which would deny them increased pension benefits in tandem with raises given to their active duty counterparts. Each Petitioner had filed a separate claim with the City's Director of Human Resources requesting a pension increase after the City modified the pay scale for active duty city employees.² When the Director denied their individual claims on the same basis, Petitioners and other retired employees collectively appealed to the City's Civil Service Board.³ Preliminarily, the Board decided it would not consider sixty-one of the sixty-two claims, finding the retired employees' collective appeal improper under Federal Rules of Civil Procedure, Rule 23.⁴ The Board then denied the only claim pending before it — that of Edgar A. Bowen, Jr. ("Bowen") — on its merits.

Thereafter, dissatisfied with the decisions of the Director of Human Resources and the Civil Service Board, Bowen and fifty-eight other retired employees filed a complaint for declaratory and injunctive relief and judgment in the Circuit Court for Anne Arundel County. Specifically, Petitioners requested that the Circuit Court make the following declaration, pursuant to Maryland Code (1973, 2006 Repl. Vol.), § 3-403 of the Courts and Judicial Proceedings Article:

a. That pursuant to the "equalization provision" of the Code of the City of Annapolis § 3.36.150A1, plaintiffs are entitled to an increase in their pension payments equal to the percentage of pay scale increase received by active members of the same rank and years of service pursuant to the pay plans adopted by the City of Annapolis effective July 1, 1995 and July 1, 2001 to implement the recommendations of the Yarger Study and the Hendricks Study;

b. That plaintiffs are entitled to an adjustment in their pensions retroactive to July 1, 1995 and July 1, 2001, the dates that pay scales were increased for active members pursuant to Resolution R-26-95 and R-12-01 implementing the recommendations of the Yarger Study and the Hendricks Study.

In addition, Petitioners sought a judgment "increasing their pensions both prospectively and retroactively pursuant to the `equalization provision' of the City of Annapolis Code § 3.36.150A1 by a percentage increase equal to the pay scale increase received by active members of the Police and Fire Department pursuant to Resolution R-26-95 and R-12-01 implementing the recommendations of the Yarger Study and the Hendricks Study, [and] for interest on the retroactive payments."

The Circuit Court heard the matter and reversed the Board's decision. The City noted a timely appeal to the Court of Special Appeals. In a reported opinion, the intermediate appellate court held that the so-called "equalization provision" contained in Section 3.36.150A1 applied only to cost-of-living adjustments made in the active duty employees' pay scale. City of Annapolis v. Bowen, 173 Md.App. 522, 537, 920 A.2d 54, 63 (2007).

On June 13, 2007, we granted Petitioners' request for a writ of certiorari, Bowen v. Annapolis, 399 Md. 595, 925 A.2d 634 (2007), to review the following three questions:

1. Did the Court of Special Appeals err as a matter of law by denying [Petitioners]' motion to dismiss the City's appeal, on the grounds that the Circuit Court's review of the stipulated record of the Civil Service Board's decision was an action in the nature of mandamus?

2. Did the Court of Special Appeals and the Civil Service Board err as a matter of law by ruling that each [Petitioner] was not entitled to have his pension increased by the same percentage as the pay scale increases granted to active members of the Annapolis Police and Fire Departments who had the same rank and years of service as each [Petitioner], pursuant to Code § 3.36.150A1?

3. Did the Civil Service Board err as a matter of law when it summarily dismissed 61 of 62 grievance appeals of [Petitioners]?

We answer questions two and three in the affirmative and question one in the negative; therefore, we shall affirm in part and reverse in part the judgment of the Court of Special Appeals.

BACKGROUND

I. Retirement System

Like other cities across Maryland, the City of Annapolis maintains a retirement system for its police officers and fire fighters. The retirement system is codified at Section 3.36 of the City Code. Of pertinent interest to this appeal is Section 3.36.150A, entitled "Cost-of-Living Adjustments," which discusses, in part, the adjustment of retirement pension benefits for retired employees. It reads in pertinent part:

The retirement pension benefits of any member, and the annuity benefits of any eligible survivor of a deceased member, shall be adjusted according to the following:

A. For (1) any member hired prior to August 1, 1972, (2) any member hired on or after August 1, 1972 and prior to August 1, 1979 who does not elect to be covered by Section 3.36.020(A)(11)(c)(ii) (pertaining to normal service retirement after twenty-five years of active service), and (3) the eligible survivors of a deceased member falling into category (1) or (2), the pension benefits for service retirement or disability retirement being paid to the member, or the annuity benefits being paid to eligible survivor(s) of such a deceased member, shall be adjusted according to the following:

1. Each retired member's pension shall be increased by the same percentage as any increase in the pay scale for members of the same rank and years of service who are on active duty. If no increase in the pay scale for members of the same rank and years of service who are on active duty is provided in the annual budget, then the member's pension shall be increased, effective July 1st of that year, by such cost of living adjustment as the City Council, in its discretion, shall provide by resolution. If the member had elected to be covered under the normal service retirement benefit formula described in Section 3.36.040(A)(2), the annual adjustment to the member's retirement benefit shall not exceed four percent of the amount of the annuity the member was receiving immediately before the date the adjustment is made.

(Emphasis added.)

II. Changes in the City's Pay Scale Structure

The City also retains a pay scale structure similar to many other governmental jurisdictions. The pay scale is divided into a hierarchy of grades and, within each grade, a hierarchy of steps.

In 1993, the City hired Yarger and Associates, Inc. to review salaries and job classifications within the City's civil service structure and provide recommendations on a reclassification that would "make the City's pay level reasonably comparable to the appropriate labor market pay levels." The firm provided the City with a report (the "Yarger Study") that recommended that the City increase its current pay level by ten percent or two grades. In 1995, the City Council adopted the recommendations set forth in the Yarger Study. Annapolis, Md., Resolution No. R-26-95 (May 22, 1995). As a result of this adoption, all active employees, including active duty police officers and fire fighters moved up two pay grades, but back two steps within the pay scale structure. This change left all active employees earning relatively the same salary as they were earning prior to the change.⁵ The adoption of the Yarger Study, according to the City, resulted in employees receiving increased opportunities for "additional in-grade increases, through the merit system." Under this plan, an active duty employee could receive an increase in pay equal to approximately five percent on his or her anniversary date of employment with the City if he/she achieved a "satisfactory rating" on a review from his or her superior(s). In addition, the City Council granted active City employees a two percent cost-of-living adjustment ("COLA") or increase in their salaries. The City also granted retired employees, including Petitioners, a two percent COLA increase in their pension benefits.

Thereafter, in 2001, the City hired Hendricks and Associates, Inc., to conduct a subsequent review of the City's job classifications and pay scale structure. The firm issued a report ("the Hendricks Study") recommending an entirely new classification system. The Hendricks Study proposed compressing the then-current pay scale from forty grades to twenty grades and compressing the number of steps within each grade from eleven to ten. The study also proposed increasing the increment between in-grade steps from 5 percent to 5.36 percent. In addition, the Hendricks Study proposed the reassignment of all City positions to grades based upon job evaluations to be completed. The City Council adopted the proposed plan on June 11, 2001, to be effective on July 1, 2001. Annapolis, Md., Resolution No. R-12-01 (June 11, 2001). As a result of the adoption, "[e]mployees were placed in whatever step within a newly assigned grade [that] would bring them closest to, but not less than, 102% of their current salaries." Employees were still eligible to receive merit-based salary increases on the "anniversary date" of their employment with the City. In addition to the significant pay scale structure change...