Shiomos v. Com., State Employes' Retirement Bd.

• Decision Date: 04 June 1993
• Citation: 626 A.2d 158,533 Pa. 588
• Parties: Thomas N. SHIOMOS, 1 Appellant, v. COMMONWEALTH of Pennsylvania STATE EMPLOYES' RETIREMENT BOARD, Appellee. Thomas N. SHIOMOS, Appellant, v. ADMINISTRATIVE OFFICE OF PENNSYLVANIA COURTS, Appellee. Bernard SNYDER, Appellant, v. ADMINISTRATIVE OFFICE OF PENNSYLVANIA COURTS, Appellee.
• Court: Pennsylvania Supreme Court

Page 158

626 A.2d 158

533 Pa. 588

Thomas N. SHIOMOS, ¹ Appellant, v. COMMONWEALTH of Pennsylvania STATE EMPLOYES' RETIREMENT

BOARD, Appellee.

Thomas N. SHIOMOS, Appellant, v. ADMINISTRATIVE OFFICE OF PENNSYLVANIA COURTS, Appellee.

Bernard SNYDER, Appellant, v. ADMINISTRATIVE OFFICE OF PENNSYLVANIA COURTS, Appellee.

Supreme Court of Pennsylvania.

Argued Jan. 24, 1992.

Decided June 4, 1993.

[533 Pa. 590] F. Emmett Fitzpatrick, III, Philadelphia, for appellant.

Jeffrey B. Clay, Acting Chief Counsel, Nicholas Joseph Marcucci, Deputy, Irene Mary Chiavaroli, Asst. Counsel, for appellee.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and CAPPY, JJ.

OPINION OF THE COURT

CAPPY, Justice.

In the present action this Court is asked to declare the Public Employee Pension Forfeiture Act ², as applied to appellant Shiomos, an unconstitutional impairment of contract under Article 1, Section 17 of the Pennsylvania Constitution. ³ (Hereinafter the Forfeiture Act shall be referred to as Act 140). We reject appellant's challenge to the constitutionality of Act 140, and for the reasons that follow, affirm the orders of the Commonwealth Court. ⁴

On January 3, 1972 appellant Shiomos entered judicial office and became a member of the State Employe's Retirement System (SERS). Act 140 was enacted on July 8, 1978. ⁵ The Act provides that public employees convicted of any one of the specifically enumerated crimes listed therein at § 1312, shall forfeit their right to receive pension benefits. Appellant's entitlement to receive retirement benefits under the provisions of the State Employes' Retirement Code vested on July 30, 1979 when he purchased 3.3778 years of military service, thus crediting him with the necessary ten years of service.

Appellant began his second term of office on January 4, 1982. On March 1, 1984 appellant retired with 15.5411 years of credited service. Upon retirement appellant withdrew from his pension fund his accumulated deductions (contributions and statutory interest) in the amount of $95,300.70, and began receiving a gross monthly annuity of $1,883.61. Appellant then assumed status as a senior judge. On November 18, 1986 appellant's assignment as a senior judge in the Philadelphia Court of Common Pleas was revoked by order of this Court. Appellant was forever barred from judicial office by order of this Court on November 4, 1987. ⁶

On June 29, 1988 appellant was convicted in the United States District Court for the Eastern District of Pennsylvania, of two counts of extortion under the Hobbs Act, 18 U.S.C. § 1951. Appellant's convictions were premised on the fact that he extorted, by use of his position as a Senior Judge of the Court of Common Pleas of Philadelphia County, approximately $300 from Stephen Traitz, Jr. and the Roofer's Union in December of 1985, and approximately $300 from attorney Barry Denker in October of 1986. On December 8, 1988 the State Employes' Retirement Board (SERB) notified appellant that his pension would be forfeited retroactive to June 29, 1988, the date of appellant's conviction in Federal Court, pursuant to Act 140. ⁷ The Commonwealth Court affirmed the order of SERB on April 2, 1990. This Court granted appellants' petition for allowance of appeal.

Appellant raises only one issue. He asserts that since his right to receive his pension had vested prior to his commission of the criminal acts violating the express terms of Act 140, taking away his vested pension would be an unconstitutional impairment of contract in violation of Article 1, Section 17 of the Pennsylvania Constitution. Essentially, appellant argues that his retirement contract with the State was fully executed, he had completed the necessary length of service and reached the specified age, and in fact was actually receiving his retirement benefits prior to the commission of the illegal acts; thus forfeiture of his remaining benefits under this scenario would vitiate a completed contract.

Before reaching the constitutional question we must initially determine if a senior judge who is presently receiving retirement benefits is subject to the forfeiture provisions of Act 140. The Act defines "Public Official" or "Public Employee" as Any person who is elected or appointed to any public office or employment including justices, judges and justices of the peace and members of the General Assembly or who is acting or who has acted in behalf of the Commonwealth or a political subdivision or any agency thereof including but not limited to any person who has so acted and is otherwise entitled to or is receiving retirement benefits whether that person is acting on a permanent or temporary basis and whether or not compensated on a full or part-time basis. This term shall not include independent contractors nor their employees or agents under contract to the Commonwealth or political subdivision nor shall it apply to any person performing tasks over which the Commonwealth or political subdivision has no legal right of control. However, this term shall include all persons who are members of any retirement system funded in whole or in part by the Commonwealth or any political subdivision. For the purposes of this act such persons are deemed to be engaged in public employment.

43 P.S. § 1312; P.L. No. 140, § 2 (emphasis added).

At the time the criminal conduct at issue was committed, appellant, as a senior judge, clearly fit within the definition of "public official" or "public employee" as set forth above.

Although appellant does not dispute this point we also find that the federal offense for which appellant was convicted falls within the scope of Act 140. Act 140 provides in 43 P.S. § 1312: "In addition to the foregoing specific crimes, the term ['Crimes related to public office or public employment'] also includes all criminal offenses as set forth in federal law substantially the same as the crimes enumerated herein." The specific crime, violation of the Hobbs Act, is equivalent to one of the enumerated state offenses found at 43 P.S. § 1312(8); namely 18 Pa.C.S. § 4701 (relating to bribery in official and political matters). See Petition of Hughes, 516 Pa. 89, 532 A.2d 298 (1987).

We now turn to the heart of appellant's argument regarding the constitutionality of the forfeiture of retirement benefits which he has already begun to receive. In support of his position appellant relies upon the decisions of this Court in Com., ex rel. Zimmerman v. Officers and Employees Retirement Board, 501 Pa. 293, 461 A.2d 593 (1983) "Zimmerman I " and the subsequent Per Curiam opinion on the same case after reargument at Com., ex rel. Zimmerman v. Officers and Employees Retirement Board, 503 Pa. 219, 469 A.2d 141 (1983) "Zimmerman II."

In Zimmerman I the District Attorney of Delaware County brought an action in mandamus against the Officers and Employees Retirement Board seeking to have it discontinue payment of retirement benefits to John Nacrelli, the former Mayor of the City of Chester. Nacrelli had been convicted in Federal District Court for the Eastern District of Pennsylvania of crimes involving the use of his public office, violative of the terms of Act 140. ⁸

Nacrelli contributed to the pension plan for officers and employees of the City of Chester from April 6, 1959 through April 27, 1979. He was indicted in Federal Court on May 18, 1978, and Act 140 was enacted 51 days later on July 8, 1978. Zimmerman I, 501 Pa. at 296 n. 3, 461 A.2d at 595 n. 3. At the time Act 140 was enacted Nacrelli's right to receive his pension benefits had not yet vested. Nacrelli was convicted on February 6, 1979, and resigned his position as Mayor on April 28, 1979.

In Zimmerman I this Court was presented with the fact that the terms of Nacrelli's pension contract had been set prior to the passage of Act 140. The Court found that the passage of Act 140 was a unilateral action affecting Nacrelli's contractual right to receive his pension, as such it could not alter the terms of that existing pension contract absent the mutual consent of both parties. The Court further held that, because Nacrelli had no notice that he would be subject to forfeiture of his pension at the time he committed the criminal acts constituting unfaithful public service, he could not be subject to the terms of Act 140; no deterrent effect would be accomplished by imposing a newly created punishment after the improper acts had already been committed.

In the later opinion, following reargument, the Court reaffirmed the decision to deny mandamus for the same reasons as set forth in Zimmerman I. Zimmerman II, 503 Pa. 219, 469 A.2d 141.

The situation presently before this Court regarding appellant Shiomos is distinguishable from that of the public employee in Zimmerman I & II. Although there are similarities to the facts in the Zimmerman cases, such as, the terms of Shiomos' pension contract had been set prior to the passage of Act 140 and Shiomos' right to receive his pension benefits had not vested prior to the enactment of Act 140, there is a significant difference. Unlike Nacrelli, appellant Shiomos assumed a second term of office in 1982, subsequent to the effective date of Act 140. This pivotal fact mandates a different outcome than the conclusion reached by this Court in the Zimmerman cases.

Admittedly the terms and conditions of Shiomos' pension contract were set in 1972 when he first assumed judicial office. Had Shiomos retired in 1982 without assuming any additional public service his pension contract would not be subject to the forfeiture provisions of Act 140, even though the Act was enacted before his right to receive his pension had vested. See Zimmerman I & II. However, when appellant Shiomos assumed his second term in office in 1982 he did so fully aware of the existence of Act 140 and its...