Faust v. Metropolitan Government

Decision Date03 May 2006
Citation206 S.W.3d 475
PartiesWayne FAUST, et al. v. METROPOLITAN GOVERNMENT OF NASHVILLE and Davidson County, et al.
CourtTennessee Court of Appeals

Karl F. Dean, Director of Law, James L. Charles, Michael B. Bligh; Matthew J. Sweeney, April Y. Berman, Nashville, Tennessee, for the appellants, The Metropolitan Government of Nashville and Davidson County and the Metropolitan Employee Benefit Board.

George E. Barrett, James Bryan Lewis, Gerald E. Martin; David Komisar, Nashville, Tennessee, for the appellees, Wayne Faust, Robert Clark, and Nashville Police Civil Association, Inc.

C. Dewey Branstetter, Mark A. Mayhew, Nashville, Tennessee, for the appellee intervenor-plaintiffs, Owen Frame, et al.


WILLIAM B. CAIN, J. delivered the opinion of the court, in which WILLIAM C. KOCH, JR., P.J., M.S., joined. PATRICIA J. COTTRELL, J. did not participate.

This case involves eligibility for enhanced retirement benefits of certain employees of a local government. In 1996, civilian employees of the police department sued alleging that an administrative interpretation of eligibility requirements that allowed civilian employees of the fire department into the enhanced benefits plan available only to "firemen" and "policemen" deprived the police department civilian employees of their rights to equal protection. Over the almost-eight-year course of this litigation in the trial court, a number of orders were entered that are challenged in this appeal. The practical result of these orders is that a large number of individuals who were civilian employees of the two departments at specified times, which times differed for the two departments, were included in an enhanced benefit plan for which they were clearly not eligible by the terms of the ordinances establishing the plan. For the reasons set out below, we reverse the decision of the trial court.

Like most governmental entities, the Metropolitan Government of Nashville and Davidson County ("the Metropolitan Government" or "Metro") provides within its overall pension plan a special plan for employees with public safety duties. That plan provides enhanced benefits, such as a higher accrual rate and eligibility for retirement at an earlier age. These enhanced benefits are justified as incentives for initial and continued employment in the often hazardous conditions faced by such employees, as well as the physical demands and stress-related consequences of these jobs that make early retirement desirable from both the employer's and employee's perspective. Such enhanced benefits are generally provided to those employees who serve the public in law enforcement, fire fighting, and similar public safety roles. see McQuillin, Municipal Corporations (3d ed. rev.) § 45.13.05 (1992); 60A Am.Jur.2d Pensions and Retirement Funds § 1633; City of Chattanooga v. Harris, 223 Tenn. 51, 57, 442 S.W.2d 602, 604-05 (Tenn.1969) (recognizing that statutes providing for a benefit to police officers and firefighters based upon their greater risk of liability due to their peculiar duties was an example of classification based upon a reasonable difference between police officers and fire fighters, on one hand, and other city employees on the other.)

The case before us stems from the Metropolitan Government's treatment of some employees of the fire and police departments who are not police officers or firefighters ("civilian employees") in terms of their eligibility for the enhanced benefits pension plan. Although the Metropolitan Government and its predecessor governments have long maintained a pension system with enhanced benefits for firefighters and police officers, the dispute on appeal arose as a result of the adoption of a new government wide pension plan in 1995 and the transition from the previous plan to the new plan.

The old plan's provisions were designated as division A of the new plan and made applicable only to employees hired before July 1, 1995. Those employees were given the option of remaining in division A or applying to transfer to the new plan, designated as division B. There existed differences in benefit formulas under the two plans, individual considerations applied, and application for transfer had to be made to the Metropolitan Benefit Board ("Board").

Like the old plan, the new plan had a separate plan for public safety employees which provided enhanced benefits to its members, the Police and Fire Pension Plan. Members of the old Police and Fire Pension Plan hired before July 1, 1995, like employees in the General Employee Plan, could opt to remain in division A under the old provisions or request a transfer to the Police and Fire Pension Plan in the new plan, division B.1

During the transition from the old plan to the new, questions arose concerning the eligibility of certain employees in non-firefighting positions in the Fire Department for inclusion in the Police and Fire Pension Plan. The Board made two decisions in the fall of 1995 that resulted in eligibility of 46 civilian employees of the fire department for the Police and Fire Plan of division B. Those decisions triggered this lawsuit.

In October of 1996, two civilian employees of the Police Department and the Nashville Police Civilian Association brought suit against the Metropolitan Government and the Board alleging that the Board violated the equal protection rights of more than 400 civilian employees of the Police Department when it allowed 46 civilian employees of the fire department to participate in the Police and Fire Pension Plan. Some time after filing the lawsuit, the Association applied to the Board for its members to be included in the Police and Fire Pension Plan. At its March 3, 1997, meeting, after hearing from its attorney, the Board's Pension Committee decided to defer the application until the pending lawsuit was decided.

By agreement of the parties, the case proceeded as a declaratory judgment action, with the parties framing the issue to be addressed by the court and submitting it on stipulated facts. On March 12, 1998, the trial court issued a memorandum opinion that gave a declaratory judgment addressing the issue as framed by the parties. After subsequent modifications and corrections, an order reflecting that declaration was entered on July 2, 1998, stating that the Board's 1995 interpretation of the eligibility ordinance allowing civilian employees of the Fire Department to join the closed Police and Fire Pension Plan and its exclusion of civilian Police Department employees from that plan "violated the constitutional rights of similarly situation civilian employees of the Metropolitan Police Department . . ."

The sequence of events in the trial court are interrupted at this point to provide a historical backdrop to facilitate consideration of the issues.

Since 1947, employees serving the City of Nashville and its successor, the Metropolitan Government, have been offered three succeeding pension systems. Any person employed when a new system came into effect had the choice of staying in his or her existing system or applying to transfer into the new system, but the old system was closed to new members when the new system became effective. Those employed after the new system came into effect were covered by the new pension system. Each of the three succeeding pension systems consisted of two basic plans—a General Employees Pension Plan and a more generous Police and Fire Pension Plan.

Between 1947 and 1963, the City of Nashville Civil Service Pension System operated under this dual system that provided a separate pension system for the police and fire departments. During this time, all employees of the police and fire departments were eligible for the Policemen's and Firemen's Pension Plan whether or not they were actually police officers or fire fighters.2

In April of 1963, Davidson County and the City of Nashville were consolidated to form a new type of government by adoption of the Charter of the Metropolitan Government of Nashville and Davidson County ("Metropolitan Charter"). The Metropolitan Fire Department and the Metropolitan Police Department were both established on the effective date of the Charter.

The Charter preserved the rights of all existing employees in the county and city pension plans.3 Metropolitan Charter sections 12.12, 13.09. The Charter required the adoption of new employee benefit plans that included retirement benefits, but left the specifics of such plans to legislative action through the Metropolitan Council. Metropolitan Charter sections 13.01, 13.06. The Charter created the Metropolitan Benefit Board to "administer, manage and coordinate the employee benefit plans of the metropolitan government . . . ." Metropolitan Charter section 13.02.

A. The 1963 Pension Plan

Pursuant to the directives of the Charter, the Metropolitan Council enacted through ordinance a pension plan for employees of the Metropolitan Government that became effective September 1, 1964, but allowed entry or transfer into the plan for persons employed as of April 1, 1963.4 That pension system was composed of a General Employee Pension Plan and a Police and Fire Pension Plan.5 see Sections 3.32 and 3.36, of the Metropolitan Code of Laws ("MCL").

Under the 1963 Police and Fire Pension Plan, a member who was not specifically excluded by the Metro Charter and who had "credited fire and police service" was "eligible following termination to receive a pension in accordance with this chapter, provided he makes written application for such pension . . ." MCL, Section 3.36.010. The term "credited fire and police service" was defined as "the sum of prior police and fire service and current police and fire service." MCL, Section 3.08.010. "Prior police and fire service" means all service prior to April 1, 1963 of a "uniformed...

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