Police & Firemen's Dis. & Pension v. Akron, 20996.

• Decision Date: 18 September 2002
• Docket Number: No. 20996.,20996.
• Citation: 2002 Ohio 4863,778 N.E.2d 68,149 Ohio App.3d 497
• Parties: POLICE AND FIREMEN'S DISABILITY AND PENSION FUND, n.k.a. Ohio Police and Fire Pension Fund, Appellant, v. CITY OF AKRON, Appellee.<SMALL><SUP>*</SUP></SMALL>
• Court: Ohio Court of Appeals

Page 68

778 N.E.2d 68

149 Ohio App.3d 497

2002 Ohio 4863

POLICE AND FIREMEN'S DISABILITY AND PENSION FUND, n.k.a. Ohio Police and Fire Pension Fund, Appellant, v. CITY OF AKRON, Appellee.^*

No. 20996.

Court of Appeals of Ohio, Ninth District, Summit County.

Decided September 18, 2002.

Sarah D. Morrison and Charles R. Saxbe, Columbus, for appellant.

William Moul, Columbus, for appellee.

BAIRD, Presiding Judge.

{¶ 1} Appellant, the Police and Firemen's Disability and Pension Fund, now known as the Ohio Police and Fire Pension Fund, appeals from the judgment of the Summit County Court of Common Pleas, which granted the motion for summary judgment of appellee, the city of Akron. We affirm.

I

{¶ 2} The Police and Firemen's Disability and Pension Fund ("Fund") is a multiple-employer public employee retirement system established by R.C. Chapter 742. The city of Akron ("City") is a participating employer in the Fund. The Fund administers pension, disability, and health care benefits to qualified police and firefighters. The Fund calculates benefits for retired police and firefighters based upon information obtained from the participant's employer.

{¶ 3} Prior to retirement, a member of the Fund may choose either the Cost-of-Living Allowance ("COLA") or the Non-Cost-of-Living Allowance ("Non-COLA") method by which pension benefits are calculated. A different formula is used to calculate benefits depending upon which method of calculation the participant selects. The employer provides the participant's final salary to the Fund in order for the Fund to calculate the benefits. For members selecting the non-COLA method of calculation of benefits, the member's final salary includes compensatory time. This appeal concerns the calculation of pension benefits paid to 68 retired firefighters from the city of Akron Fire Department, each of whom selected the non-COLA method of calculation.

{¶ 4} In September 1998, the Fund contacted the Auditor of State's Office ("AOS") and requested that the AOS perform a special audit to determine the accuracy of the City's calculation of the members' compensatory time. The AOS released its report of the special audit, which covered the period of January 1, 1985 through August 31, 1999. The report stated that the City submitted incorrect amounts of compensatory time for the retired firefighters, which resulted in both over- and underpayments of monthly retirement benefits.

{¶ 5} As a result of the report, the Fund filed a complaint against the City, alleging a cause of action to recover illegally expended public money pursuant to R.C. 117.28, seeking $731,300. The Fund later amended its complaint to include causes of action for negligence, misrepresentation, and breach of duties under R.C. Chapter 742. The actions for negligence and misrepresentation were voluntarily dismissed by the Fund. The City filed a motion for summary judgment on the remaining causes of action.

{¶ 6} On February 19, 2002, the trial court granted the City's motion for summary judgment. The court found that before a suit is brought under R.C. 117.28, an audit report must make a finding for recovery of illegal expenditure. The trial court found that because the report in this case did not make such a finding, the Fund could not satisfy the statute. The court also found that breach of a duty under R.C. Chapter 742 did not constitute a separate cause of action. This appeal followed.

II Assignment of Error No. 1

{¶ 7} "The trial court erred as a matter of law in concluding that the audit report issued by the State Auditor did not meet the statutory requirements of R.C. 117.28 for the Ohio Police & Fire Pension Fund to bring an action against the City of Akron."

{¶ 8} In its first assignment of error, the Fund challenges the summary judgment entered in favor of the City on the Fund's R.C. 117.28 claim. The Fund argues that the trial court erred when it found that the audit report did not set forth a finding for recovery of illegal expenditure, and, consequently, the Fund could not bring suit against the City pursuant to R.C. 117.28.

{¶ 9} We begin by noting that an appellate court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241. We apply the same standard as the trial court, viewing the facts in the case in the light most favorable to the nonmoving party and resolving any doubt in favor of the nonmoving party. Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 12, 13 OBR 8, 467 N.E.2d 1378.

{¶ 10} Pursuant to Civ.R. 56(C), summary judgment is proper if:

{¶ 11} "(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party." Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 364 N.E.2d 267.

{¶ 12} To prevail on a motion for summary judgment, the party moving for summary judgment must be able to point to evidentiary materials that show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264.

{¶ 13} While the City disputes the Fund's interpretation and definition of compensatory time, the only issue before this Court relevant to this assignment of error is the construction of R.C. 117.28.

{¶ 14} When a statute's language is plain and unambiguous, this court applies the statute as written and makes no further inquiry either into the legislative intent or the consequences of the trial court's construction. State v. Hurd (2000), 89 Ohio St.3d 616, 618, 734 N.E.2d 365. The words and phrases in a statute are to be given their plain, ordinary meaning and are to be construed "according to the rules of grammar and common usage." R.C. 1.42; Petro v. N. Coast Villas Ltd. (2000), 136 Ohio App.3d 93, 97, 735 N.E.2d 985. A statute cannot be extended by construction to persons or things not falling within its terms, although they may appear to be within the reason and spirit of the statute. Pepper Pike v. Landskroner (1977), 53 Ohio App.2d 63, 76, 7 O.O.3d 44, 371 N.E.2d 579.

{¶ 15} R.C. 117.28 provides:

{¶ 16} "Where an audit report sets forth that any public money has been illegally expended, * * * the officer receiving the certified copy of the report pursuant to section 117.27 of the Revised Code may, within one hundred twenty days after receiving the report, institute civil action in the proper court in the name of the public office to which the public money is due or the public property belongs for the recovery of the money or property and prosecute the action to final determination."¹

{¶ 17} The plain language of the statute dictates that before a civil action may be instituted under this provision for the recovery of funds, the report must set forth that public money has been illegally expended. The Fund argues that the audit report sets forth the City's illegal expenditure of public funds. The City argues that the audit report fails to make such a finding.

{¶ 18} The AOS conducts audits of public offices as provided in R.C. Chapter 117. As part of that duty, the AOS determines whether any public money has been illegally expended, any public money collected has not been accounted for, any public money due has not been collected, or any public property has been converted or misappropriated. See R.C. 117.24. The AOS then compiles an audit report, which includes such findings. R.C. 117.25.

{¶ 19} "[T]he Auditor of State is required `to determine whether any public money has been illegally expended.'" 1994 Ohio Atty.Gen.Ops. No. 94-048, quoting 1976 Ohio Atty.Gen.Ops. No. 76-017, at 2-52. "[T]he Auditor of State [determines], in the first instance, whether an illegal expenditure has occurred after the facts and circumstances of the expenditure have been fully and thoroughly investigated." 1987 Ohio Atty.Gen.Ops. No. 87-074, citing 1976 Ohio Atty.Gen.Ops. No. 76-017, at 2-52. Once the AOS determines that public money has been illegally expended, the AOS incorporates that finding into an audit report. 1994 Ohio Atty.Gen.Ops. No. 94-048. Furthermore, "the Auditor of State is required to make a finding for recovery if he determines that public money has been `illegally expended.'" Id.

{¶ 20} In support of its motion for summary judgment, the City submitted a copy of the audit report and the deposition transcript of Daniel Schultz, a Chief Deputy Auditor of State. The audit report describes the procedures used for the special audit. The AOS met with the City to determine the procedures followed with regard to compensatory time accumulation, usage, and maintenance of balances. The AOS reviewed labor agreements and calculated the compensatory time earned by the retirees in question. The AOS's calculations were then used to calculate the retirees' benefits based upon a spreadsheet provided by the Fund. The AOS compared these calculations of benefits with the amount of benefits actually received.

{¶ 21} Schultz supervised the preparation of the final audit report in this case. Schultz described the procedure used by stating, "[W]e accumulated raw data and provided that data to the Fund. They performed the calculation and then that calculation was compared to what was actually paid to come up with the variance." He further stated that the AOS did not evaluate the calculation methods incorporated into the spreadsheet that was used by the Fund to calculate the monthly benefits of the retirees.

{¶ 22} He testified that the audit report in this case contains no finding for recovery under R.C. 117.28, because the AOS did not believe that there was anything in the report that...