Hilligoss v. LaDow
| Decision Date | 08 November 1977 |
| Docket Number | No. 2-1276A448,2-1276A448 |
| Citation | 368 N.E.2d 1365,174 Ind.App. 520 |
| Parties | Thomas J. HILLIGOSS and Kay Berryman, on behalf of themselves and all others similarly situated, Appellants (Plaintiffs below), v. Arthur J. LaDOW, as Mayor of the City of Kokomo, Indiana, Elva W. LaDow as Treasurer of Howard County, Indiana, Keith Anderson, as Chief of Police of the City of Kokomo, Indiana, Jerry C. Wilson, Henry Melton, Lawrence R. Darlin, Robert E. Lytle, Jerry K. Cody and Harold P. Braden, as members of the Board of Trustees of the Police Pension Fund of the City of Kokomo, Indiana, Robert E. Massey, Ralph W. Neal, Douglas Hogan, Robert M. Louks, James T. Papacek, James S. Sutterfield, John W. Kennedy, James Mannion and Stephen Dailey, as members of the Common Council of the City of Kokomo, Indiana, Appellees (Defendants below). Gerald SWING and Margaret Tomlinson, on behalf of themselves and all others similarly situated, Appellants (Plaintiffs below), v. Arthur J. LaDOW, as Mayor of the City of Kokomo, Indiana, Robert E. Donaghue, as Chief of the Fire Force of the City of Kokomo, Indiana, William D. Carter, Raymond D. Johnson, Morris J. Nichols, Robert M. Cox and William F. Hudelson, as members of the Board of Trustees of the Firemen's Pension Fund of the City of Kokomo, Indiana, Robert E. Massey, Ralph W. Neal, Douglas Hogan, Robert M. Louks, James P. Papacek, James S. Sutterfield, John W. Kennedy, James Mannion and Stephen Dailey, as members of the Common Council of the City of Kokomo, Indiana, Appellees(Defendants below). |
| Court | Indiana Appellate Court |
Donald A. Schabel, Indianapolis, Paul I. Hillis, Kokomo, for appellants.
William R. Nolan, II, Kokomo, William P. O'Mahoney, Kokomo, for appellees.
The issues upon appeal involve health insurance benefits and clothing allowance payments and whether they constitute an inclusive factor upon which police or fire department pensions must be computed.
The case originally involved two separate class actions for mandate. Appellants Hilligoss and Berryman filed suit on behalf of themselves and all others similarly situated who are entitled to benefits from the Policemen's Pension Fund of the City of Kokomo pursuant to I.C. 19-1-24-1 et seq. (Burns Code Ed. 1974). The class was defined as comprising all retired members of the City of Kokomo Police Department and the widows and dependents of former policemen.
Appellants Swing and Tomlinson filed suit as representatives of those entitled to benefits under the Firemen's Pension Fund of the City of Kokomo pursuant to I.C. 19-1-37-1 et seq. (Burns Code Ed. 1974). Their class was similarly defined as comprising all retired members of the City of Kokomo Fire Department and the widows and dependents of former firefighters.
The complaint in each action sought an order from the trial court directing the Board of Trustees of the respective Pension Funds and the Common Council of the City of Kokomo to include, in the base for computation of pension benefits, certain items of compensation which theretofore had been excluded and to correct the alleged corresponding deficiencies in past pension payments.
Because of the similarity of issues, the two actions were consolidated for trial. Submission was to the trial court without jury and on September 16, 1976 a judgment was entered. Appellants received an adverse determination with respect to two items of compensation and this forms the basis for their appeal. The trial court concluded that the statutory formula for computing pension benefits does not include the health insurance benefits or clothing allowance payments provided by the City.
We affirm. As a matter of law, we hold that these two items are not part of the "salary" received by a first-class patrolman or "monthly wage" received by a first-class fireman within the meaning of the applicable pension provisions.
We deal first with the City of Kokomo's health insurance program. The City maintains a group plan of family health insurance and makes contributions thereto on behalf of those policemen and firemen who elect to participate in the program. 1 The authority for the program is not apparent from the record. The trial court's decision notes that, there being no statutory authorization, the program is "probably founded upon a contract or possibly a city ordinance".
The police pension fund, on the other hand, is created by statute. I.C. 19-1-24-1 (Burns Code Ed. 1974). The third section of the chapter, I.C. 19-1-24-3 (Burns Code Ed. 1974), deals with the pension benefits payable to policemen in all but first-class cities and reads, in relevant part, as follows:
" . . . such fund shall be used and devoted to the following purposes:
(3) To any member of the police department of such city who retires from active service after twenty (20) or more years of such active service by such member, an annual pension equal to fifty per cent (50%) of the salary of a first-grade patrolman in such police department, plus two per cent (2%) of such first-grade patrolman's salary for each year of service of such retired member over twenty (20) years, provided that such pension shall not exceed in any year an amount greater than seventy-four per cent (74%) of the salary of a first-class patrolman. Such pensions shall be computed on an annual basis but shall be paid in twelve (12) equal monthly installments. At any time that the salary of a first-grade patrolman is increased or decreased, the pension payable hereunder shall be proportionately increased or decreased.
(4) To the payment of funeral benefits to the heirs or estate of any active or retired member of the police force who has suffered death from any cause, an amount fixed by ordinance, but no less than six hundred dollars ($600).
Except as herein otherwise provided, to the payment to the widow of any police officer who may die under the circumstances set out above, an amount fixed by ordinance, but not less than a sum equal to thirty per cent (30%) of the monthly pay of a first-class patrolman per month to continue during her life while unmarried, and the payment to each child of any such deceased police officer under the age of eighteen (18) years, an amount fixed by ordinance but no less than a sum equal to ten per cent (10%) of the monthly pay of a first-class patrolman per month to each of such children, such payments to a minor child or children under the age of eighteen (18) years to continue only so long as such child or children shall remain under the age of eighteen (18) years;
At any time that the salary of a first-grade patrolman is increased or decreased, the pension payable hereunder shall be proportionately increased or decreased." (Emphasis supplied)
The firemen's pension statute contains similar language, except that "salary" is used interchangeably with "monthly wage" rather than "monthly pay". I.C. 19-1-37-14 (Burns Code Ed. 1974). 2 We note, as a preliminary matter, that judicial interpretation of the statutory language is warranted because its meaning is unclear. 3 The benefit formulas do not contain express inclusions or exclusions, nor can we obtain guidance from the ordinary definition of the word "salary".
In a broad sense, salary refers to compensation for services rendered and thereby embraces any form of remuneration paid in exchange for services. Yet salary also has a more restricted meaning as a category of or special type of compensation, i. e., a fixed amount payable at regular intervals for services rendered. The word thus lends itself to different meanings, depending upon the context in which it is used. E. g., State ex rel. Shea v. Billheimer (1911) 178 Ind. 83, 96 N.E. 801; Board of School Com'rs. of Indianapolis v. Wasson (1881) 74 Ind. 133; Cowdin v. Huff (1857) 10 Ind. 83. See also, Annot., 14 A.L.R.2d 634; 38 Words & Phrases, "Salary", p. 44 et seq.; Webster's Third New International Dictionary (1971), p. 2003.
A broad interpretation which equates salary with compensation in general would compel a result in favor of appellants. These insurance contributions represent compensation to each participating employee in the form of a fringe benefit that supplements his regular salary. The health insurance program is not a mere gratuity. As added inducement to employment, it is an integral part of the compensation package. See, Epmeier v. United States (7th Cir. 1952) 199 F.2d 508, 510-11.
By comparison, the more restricted meaning of salary would compel the opposite result. Employer insurance programs and other fringe benefits are not salary in the sense of a fixed amount payable as stated intervals. They represent another form of compensation distinct from the employee's regular salary. E. g., County of Erie v. Hoch (1966) 26 A.D.2d 4, 270 N.Y.S.2d 225, modified, 19 N.Y.2d 854, 280 N.Y.S.2d 584, 227 N.E.2d 399.
Fortunately, we are not without some guidance in ascertaining which of these two alternative approaches the General Assembly intended to adopt. Subsequent to the perfection of this appeal, the Indiana General Assembly amended the pension statutes in several respects pertinent to the issues under consideration here.
Acts 1977, P.L. 9 (Special Session), § 1, specifically defines the "(s)alary of a first-class patrolman" to exclude "remuneration or allowances for fringe benefits, incentive pay, holiday pay, insurance, clothing, automobiles, firearms, education, overtime, or compensatory time off". Section 2 defines the "(s)alary of a first-class firefighter" in the same manner. 4 The Act (§ 15) further attempts to clarify the legislative intent with respect to prior law by stating:
" . . . it has never been the intention of the general assembly that remuneration or allowances for fringe benefits, incentive pay, holiday pay, insurance, clothing, automobiles, firearms, education, overtime, or compensatory time off be used in the...
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