City of Miami v. Carter

• Decision Date: 23 July 1958
• Citation: 105 So.2d 5
• Parties: The CITY OF MIAMI, a Florida municipal corporation, Appellant, v. G. H. CARTER et al., Appellees.
• Court: Florida Supreme Court

Page 5

105 So.2d 5

The CITY OF MIAMI, a Florida municipal corporation, Appellant, v. G. H. CARTER et al., Appellees.

Supreme Court of Florida.

July 23, 1958.

Rehearing Denied Oct. 1, 1958.

George S. Okell, Sr., and Robert M. Haverfield, Miami, for appellant.

Cypen, Salmon & Cypen, Miami Beach, and Ben Shepard, Miami, for appellees.

O'CONNELL, Justice.

The City of Miami, appellant, hereinafter referred to as the City, was defendant in an action brought by the plaintiffs, employees of the Miami Fire Department, hereinafter referred to as the firemen. The complaint sought an accounting of funds received by the City, during the period extending from December 6, 1939 to June 5, 1952, from the proceeds of a one (1%) per cent tax on gross receipts of all premiums collected on fire and tornado insurance policies covering property within the City's municipal limits, pursuant to an ordinance of the City enacted under the authority of Chap. 19112, Laws of Fla.1939.

The complaint alleged that in 1939 the legislature enacted Chapter 19112, supra, which is now and is hereinafter referred to as Chapter 175, Florida Statutes, F.S.A.; said chapter provided for the creation of a 'Municipal firemen's pension fund' in the State Treasury and authorized certain cities, including Miami, to assess and impose on insurers insuring against loss by fire or tornado a tax amounting to 1% of the gross amount of receipts of premiums on such policies covering property within their corporate limits; said chapter required insurers to pay said tax to the State Treasurer who was required to pay such into a special 'Municipal firemen's pension fund' and annually pay over to each city the net amount to which such city was entitled; said chapter provided that the sums thus received by a city were to be paid into a firemen's relief and pension fund or into its pension fund for firemen and policemen, where such latter fund existed; the Supreme Court, in Jackson v. McGrath, 1945, 155 Fla. 565, 20 So.2d 907, held that funds so received must be held and administered for the sole use and benefit of firemen members and their dependents; the City of Miami passed its Ordinance No. 2231 on December 6, 1939 assessing and imposing the 1% tax as provided; the City had continuously since that date received said tax, said funds being paid over to it in trust for its firemen; prior to December 6, 1939 there existed in the City a pension system known as 'the Pension and/or Retirement Fund for members of the Police and Fire Departments of the City of Miami'; on December 6, 1939, by Ordinance No. 2230 the City created 'The Miami City Employees' Retirement System'; the former pension fund. 'The Pension and/or Retirement Fund for Members of the Police and Fire Departments', ceased to exist upon the creation of the new retirement system and its assets were transferred to the new fund; the City had failed and refused to hold and administer, for the sole use and benefit of firemen members and their dependents, funds received by it under the provisions of Chapter 175 during the years 1940 through 1952, but, on the contrary, had paid all such funds into 'The Miami City Employees' Retirement System' and in so doing deprived the plaintiffs of their property without due process of law; and that in a suit brought by certain firemen against the City the trial court had rendered its judgment adjudicating the disposition of all such monies received by the City since June 5, 1952, such judgment being affirmed by the Supreme Court in a per curiam decision without opinion, State ex rel. Sharpe v. City of Miami, Fla.1955, 77 So.2d 806.

The complaint concluded with a prayer that an accounting be taken of the monies received commencing on the 6th day of December, 1939 and ending on the 4th day of June, 1952. Plaintiffs prayed that the City be decreed to pay the amount determined, together with interest thereon, into the 'Miami City Employees' Retirement System', there to be held in a special fund and administered for the sole benefit of firemen members and their dependents, such benefits to be in addition to the benefits already provided for them under said retirement system.

The City's motion to dismiss was denied and it then answered. In the answer the City alleged that the pleader's interpretations of Jackson v. McGrath, supra, were mere conclusions of the pleader and denied that the subject funds had been paid over to the City in trust for its firemen; the liabilities of the old pension and/or retirement fund for members of the police and fire departments of the City exceeded its assets and said liabilities were assumed by the new retirement system; the firemen had received special benefits not received by general employees participating in the City's retirement system; the present retirement system replaced the old, defunct system of firemen and policemen; the method by which the tax monies were administered was approved by the Supreme Court in Voorhees v. City of Miami, 1940, 145 Fla. 402, 199 So. 313; since passage of Ordinance No. 2230 in 1939 and through 1951 the amount received by the retirement system from the 1% tax was $434,946 and the City had paid for the benefit of firemen that amount plus $1,119,075; the benefits the firemen had received and accepted under the retirement system included the 1% tax, said tax being an integral part of the firemen's benefits; and that the case referred to, State ex rel. Sharpe v. City of Miami, supra, was a class suit including the class that the firemen represent, and the issues raised in that case were identical to issues raised herein.

The City's answer stated that the firemen were not diligent in pursuing their remedies and were estopped from securing the relief sought. The City prayed that the complaint be dismissed.

The City's motion for summary judgment was denied and at the conclusion of the testimony the chancellor entered his decree for the firemen. The chancellor decreed that under the provisions of Chapter 19112, Laws of Florida, Acts of 1939, as interpreted by this Court in Jackson v. McGrath, supra, it was the duty of the City to pay the tax money into a separate fund within the Miami City Employees' Retirement System, there to be held and administered for the sole use and benefit of firemen members and their dependents. He found that the City had used said sums to reduce the contribution to the retirement system which it was required to make and that, contrary to the City's contention, the firemen had never received any benefits over and above what they were entitled to receive under the retirement system created by Ordinance No. 2230. The chancellor specifically recited that the preponderance of the evidence showed that the firemen were not guilty of laches. He also rejected the contention that the matters at issue were res judicata, stating that his examination of the Voorhees and Sharpe cases convinced him the issues involved in the instant suit were not determined therein. He ordered the City to pay over the total proceeds from the tax, which he found to be $436,920.68, in lieu of the figure alleged in the City's answer, into a special fund within the Miami City Employees' Retirement System, there to be held and administered for the sole use and benefit of the firemen members who were members at any time during the period from December 6, 1939 to June 5, 1952, and their dependents. He decreed that the firemen were to receive the benefits of said special fund in addition to the benefits already provided for firemen members and their dependents under the retirement system. He also decreed that 'no interest is allowed (on the $436,920.68) as the City of Miami honestly felt that they were handling the funds properly.'

From this final decree the City appeals and the firemen file as a cross-assignment of error the chancellor's refusal to award interest.

The City raises four points on appeal. First, it contends that it has properly used the funds in question for the use and benefit of firemen and their dependents; second, it says that the decisions in the cases of Voorhees v. City of Miami, supra, and State ex rel. Sharpe v. City of Miami, supra, are res judicata on the issues of the instant case; third, that the plaintiffs were guilty of laches; and fourth, that the provisions of Sec. 175.25, F.S.A. provide that the municipalities shall be independent of each other in the enforcement and interpretation of the provision of Chapter 175, F.S.A. and therefore the decision of Jackson v. McGrath, supra, is not binding on the City of Miami.

We will consider the first and fourth points together.

While it is true that the Jackson v. McGrath case involved the City of Miami Beach and not the City of Miami, nevertheless, it is clear that the same basic question was involved in that case as in this, i. e. whether a city can use the proceeds of the tax authorized under Chapter 175, F.S.A. for the benefit of all the members of the city relief or pension fund, or must the funds be used exclusively for the benefit of firemen members and their dependents.

In the Jackson case (155 Fla. 565, 20 So.2d 909), the trial court held that such monies should be paid into the 'General Employee Pension, Annuity and Retirement Fund of the City of Miami Beach' and used for the benefit of all the members thereof.

In reversing that holding this Court expressly interpreted and construed the terms of Chapter 175, F.S.A., saying, in 20 So.2d at page 909 et seq:

'It appears to us from a study of the applicable statutes that the monies received from the state comptroller may be lawfully placed and kept in the General Employee Pension, Annuity and Retirement Fund of the City of Miami Beach, but that they must be there held and administered for the sole use and benefit of firemen members and their dependents and not for all employees in the service of the city.

'* * * Nowhere in the controlling statute is it provided, or even remotely...