Police Pension and Relief Bd. of City and County of Denver v. Bills

Decision Date20 November 1961
Docket NumberNo. 19659,19659
Citation148 Colo. 383,366 P.2d 581
PartiesPOLICE PENSION AND RELIEF BOARD OF CITY AND COUNTY OF DENVER and John M. Schooley, Ivan Eldher, Timothy Crow, Eugene Covello (substituted for Joseph Breuch), and James O'Donnell as Members of said Board; Thomas G. Currigan as Auditor of the City and County of Denver, State of Colorado; and City and County of Denver, a municipal corporation, Plaintiffs in Error, v. Lawrence U. BILLS, Leman Cottrell, Guy L. Countryman, Alton D. Eastis, Roger Johannsen, W. A. Lawless, Victor Lyreman, Earl Moon, Victor L. Moore, Leonard Nevin, Edgar L. Scott, Frederick L. Staab, and Edward T. Swank, Defendants in Error.
CourtColorado Supreme Court

Donald E. Kelley, Horance N. Hawkins, Jr., Denver, for plaintiffs in error.

Williams, Erickson & Brown, Denver, for defendants in error.

McWILLIAMS, Justice.

The present controversy involves a determination of the legal effect of an amendment to the charter of the City and County of Denver pertaining to the retirement of policemen and approved by a majority vote at a special election held on March 20, 1956.

Prior to June 1, 1947 the retirement of police officers of Denver was governed by ordinance. However, on May 20, 1947 the people of Denver approved an amendment to the city's charter which incorporated therein a comprehensive plan covering the retirement of policemen from the active force. This charter amendment, which became effective on June 1, 1947, provided for the following, inter alia: (1) created a 'Police Pension and Relief Board' and charged it with the responsibility of granting the pensions provided for by the amendment (2) created a 'Police Pension and Relief Fund' out of which the pensions or retirement benefits were to be paid; (3) required every member of the police department to contribute 3 1/2% of his salary to such fund; (4) authorized any member of the police department upon completion of twenty-five years of active service in the department to retire from further active service; (5) authorized payment of a pension from the fund to any such retired member, said pension to be in equal monthly installments and equal to one-half of the average monthly rate of salary which such member had received during the one year immediately preceding the date of termination of his active service; (6) and included a so-called 'escalator clause' which was as follows:

'In the event that salaries in the Denver Police Department shall be raised after the effective date of this amendment those members of said department who shall have previously been retired from active service and who are receiving a pension shall be entitled to an increase in the amount of their pension equal to one-half of the raise in pay granted in the rank said member held at the time he was retired.'

On March 20, 1956 the people of Denver by another amendment to their charter, which became effective on April 1, 1956, raised the salaries of all active members of the police department and at the same time purportedly altered the retirement program for policemen theretofore adopted in 1947 in the following particulars: (1) declared that for the purpose of computing the number of years of 'active service' in the department service in the armed forces should be deemed and considered 'active service'; (2) decreed that members of the police department who had retired prior to the effective date of this amendment (April 1, 1956) should not be entitled to any increase in their pension because of the increase in pay granted by said amendment; and (3) purported to 'repeal and delete' from the charter the 'escalator clause' adopted in 1947 and set forth in its entirety above.

Thereafter, on June 3, 1958, the qualified electors of Denver approved another amendment to the charter which provided, among other things, for a raise in salary for all members of the police department, effective July 1, 1958.

On March 14, 1960 the present action was instituted by thirteen former members of the Denver police department, each of whom had retired from the force subsequent to April 1, 1956 and prior to July 1, 1958, against the Police Pension and Relief Board, the City and County of Denver, and its Auditor, Thomas Currigan. Each of these thirteen retired policemen generally sought to have a determination as to his individual rights and status under the retirement program and in particular each sought a declaration that he was entitled to an increase in his individual pension equal to one-half of the raise in pay granted by the 1958 charter amendment.

These thirteen retired policemen can be classified as follows:

Group 1. Consists of plaintiffs Countryman, Johannsen, Lawless, Lyreman, and Nevin, who had completed 25 years of active service in the department prior to April 1, 1956 but had not retired and voluntarily remained in active service.

Group 2. Consists of Eastis, Moon, Scott and Swank, who had also completed 25 years of service in the department as of April 1, 1956, but only because of the provision in the 1956 amendment which permitted service in the armed forces to be deemed as active service in the police department.

Group 3. Consists of Bills, Cottrell, Moore and Staab, all of whom as of April 1, 1956 had completed more than 24 years of active service in the police department but none of whom had completed 25 years of such service. Specifically as of April 1, 1956 Bills had completed 24 years, 10 months and 23 days of active service; Cottrell and Moore had completed 24 years, 10 months and 20 days of active service; and Staab 24 years and 4 months.

Upon trial it was the basic contention of the defendants that none of the thirteen plaintiffs was entitled to any increase in his pension by virtue of the raise in pay granted the active members of the police department by the 1958 charter amendment, because the so-called 'escalator clause' adopted in 1947 by charter amendment had been expressly repealed by the charter amendment adopted in 1956. The plaintiffs in turn contended that the 1956 charter amendment did not apply nor in any manner affect their pension rights; that prior to 1956 their pension rights had ripened into a vested contractual obligation, or, if there had not been a complete vesting, then at the very least there was a limited vesting to the end that there could not thereafter be a unilateral, adverse change in their pension plan.

Upon conclusion of the trial the court made no detailed nor written declaration of the rights of these plaintiffs, but verbally commented that all were entitled to an increase in their pension equal to one-half of the raise in pay authorized by the 1958 amendment and pointedly closed with the observation that to hold to the contrary would 'beat' these plaintiffs out of something that was rightfully theirs. Judgment was entered for the plaintiffs against all defendants for $15,876, this sum representing the aggregate of the increased pensions claimed by the plaintiffs up to August 31, 1960. By writ of error the defendants seek reversal of this judgment.

The ultimate question to be resolved is whether under the circumstances the 1956 charter amendment, which, inter alia, purported to repeal and delete from the city charter the so-called 'escalator clause' adopted in 1957, is applicable to these thirteen individual plaintiffs. We conclude that this attempted 'repeal' of the 'escalator clause' by the 1956 amendment is inapplicable to these plaintiffs.

Historically, pensions to retired government employees have long been viewed as a mere gratuity from a benevolent sovereign, and this has been true even though the employee had himself contributed to the particular pension fund. Being a gift only, the pensioner acquired no right to a continuance...

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  • Pineman v. Oechslin, Civ. No. H 77-164.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • April 16, 1980
    ...City of Dothan, 279 Ala. 571, 188 So.2d 532 (1966); Yeazell v. Copins, 98 Ariz. 109, 402 P.2d 541 (1965); Police Pension & Relief Board v. Bills, 148 Colo. 383, 366 P.2d 581 (1961); State Teachers' Retirement Board v. Giessel, 12 Wis.2d 5, 106 N.W.2d 301 (1960); Eisenbacher v. City of Tacom......
  • Justus v. State
    • United States
    • Supreme Court of Colorado
    • October 20, 2014
    ...the holdings of Police Pension & Relief Bd. v. McPhail, 139 Colo. 330, 338 P.2d 694 (1959), and Police Pension & Relief Bd. v. Bills, 148 Colo. 383, 366 P.2d 581 (1961), they have a contractual right to the COLA in effect when they became eligible to retire or retired, which could not be re......
  • Justus v. State, Supreme Court Case No. 12SC906
    • United States
    • Supreme Court of Colorado
    • October 20, 2014
    ...the holdings of Police Pension & Relief Bd. v. McPhail, 139 Colo. 330, 338 P.2d 694 (1959), and Police Pension & Relief Bd. v. Bills, 148 Colo. 383, 366 P.2d 581 (1961), they have a contractual right to the COLA in effect when they became eligible to retire or retired, which could not be re......
  • Justus v. State
    • United States
    • Court of Appeals of Colorado
    • October 11, 2012
    ...the holdings of Police Pension & Relief Bd. v. McPhail, 139 Colo. 330, 338 P.2d 694 (1959), and Police Pension & Relief Bd. v. Bills, 148 Colo. 383, 366 P.2d 581 (1961), they have a contractual right to the COLA in effect when they became eligible to retire or retired, which could not be re......
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1 firm's commentaries
1 books & journal articles
  • Statutes as Contracts? The 'California Rule' and Its Impact on Public Pension Reform
    • United States
    • Iowa Law Review No. 97-4, May 2012
    • May 1, 2012
    ...of interpreting Alaska’s specific constitutional protection of public employee pensions. 260. Police Pension & Relief Bd. v. Bills, 366 P.2d 581, 584–85 (Colo. 1961); see also City of Aurora v. Ackman, 738 P.2d 796, 801 (Colo. App. 1987) (acknowledging the prior adoption of the Allen rule a......

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