Stover v. Retirement Bd. of City of St. Clair Shores Firemen and Police Pension Under Act 345, Public Acts 1937, Docket No. 27897

• Decision Date: 20 September 1977
• Docket Number: Docket No. 27897
• Citation: 78 Mich.App. 409,260 N.W.2d 112
• Parties: Gordon STOVER, Plaintiff-Appellant, v. RETIREMENT BOARD OF the CITY OF ST. CLAIR SHORES FIREMEN AND POLICE PENSION SYSTEM UNDER ACT 345, PUBLIC ACTS 1937, as Amended, Defendant-Appellee. 78 Mich.App. 409, 260 N.W.2d 112
• Court: Court of Appeal of Michigan — District of US

Page 112

260 N.W.2d 112

Gordon STOVER, Plaintiff-Appellant, v. RETIREMENT BOARD OF the CITY OF ST. CLAIR SHORES FIREMEN AND POLICE PENSION SYSTEM UNDER ACT 345, PUBLIC ACTS

1937, as Amended, Defendant-Appellee.

Docket No. 27897.

78 Mich.App. 409, 260 N.W.2d 112

Court of Appeals of Michigan.

Sept. 20, 1977.

Rehearing Denied Oct. 31, 1977.

Released for Publication Dec. 8, 1977.

Leave to Appeal Denied Feb. 8, 1978.

[78 MICHAPP 410] Gregory, Van Lopik & Higle by Nancy Jean Van Lopik, Detroit, for plaintiff-appellant.

Yoe & Brooke by John H. Yoe, Detroit, for defendant-appellee.

Before T. M. BURNS, P. J., and BRONSON and SIMON, ^* JJ.

SIMON, Judge.

The plaintiff was employed by the City of St. Clair Shores Police Department for over 31 years. He retired from that job in July of 1974. At the time of his retirement the plaintiff was paid cash for his accumulated and unused sick days and for his accumulated and unused vacation days. These payments were made pursuant to the collective bargaining agreement between the St. Clair Shores Police Officers Association and the City of St. Clair Shores.

In 1950, St. Clair Shores adopted 1937 P.A. 345, as amended, M.C.L.A. § 38.551 et seq.; M.S.A. § 5.3375(1) et seq. The defendant is the "retirement board" under the Act. When the defendant computed plaintiff's pension it did not include the payments for unused sick and vacation days in determining plaintiff's "average final compensation". The defendant[78 MICHAPP 411] did include base salary, longevity pay, shift differential pay, holiday pay and overtime pay in its calculations.

Plaintiff filed suit in circuit court, alleging that the defendant's failure to include the payment for unused sick and vacation days in its computation of plaintiff's average final compensation violated Sec. 6(1)(e) of the Act, M.C.L.A. § 38.556(1)(e); M.S.A. § 5.3375(6)(1)(e), now Sec. 6(1)(f), M.C.L.A. § 38.556(1)(f); M.S.A. § 5.3375(6)(1)(f), which provides:

"Average final compensation" shall mean the average of the highest annual compensation received by a member during a period of 5 consecutive years of service contained within his 10 years of service immediately preceding his retirement, or leaving service, or, if so provided in a collective bargaining agreement entered into between a municipality under this act and the appropriate recognized bargaining agent, may mean the average of the 3 years of highest annual compensation received by a member during his 10 years of service immediately preceding his retirement or leaving service. If he has less than 5 years of service, then average final compensation shall mean the annual average compensation received by him during his total years of service."

The defendant argued that the unused sick and vacation day payments were not part of plaintiff's base salary and were not intended by the Legislature to be included in a determination of average final compensation.

The trial court concluded:

"This Court holds that the terminal payment emanating from unused vacation and sick leave is not to be used in determining the 'Final Average Compensation' per MCLA 38.556, Subsection 6(e). To hold otherwise would misconstrue the concept of averaging income over a number of years as is provided for in the Act. An [78 MICHAPP 412] Order denying the Writ of Superintending Control shall enter in pursuance hereof."

The plaintiff now appeals.

The only issue raised is whether cash payments for unused sick and vacation days which are paid upon retirement to a member of a retirement system established under 1937 P.A. 345, as amended, M.C.L.A § 38.551 et seq.; M.S.A. § 5.3375(1) et seq., be included in determining the retiree's "average final compensation" under the act.

As both parties observe, resolution of this issue depends on the meaning of "average final compensation". It is our duty to give effect to the intent of the Legislature at the time the Act was passed. Husted v. Consumers Power Co., 376 Mich. 41, 54, 135 N.W.2d 370 (1965). If a statute is plain and unambiguous, there is no room for judicial interpretation or construction. Lansing v. Lansing Twp., 356 Mich. 641, 648-649, 97 N.W.2d 804 (1959). However, if a statute is ambiguous, we must interpret the language in a manner consistent with reason, considering any factors which may aid us in determining the intent of the Legislature. See Sergeant v. Kennedy, 352 Mich. 494, 90 N.W.2d 447 (1958), Schoolcraft County Board of Commissioners v. Schoolcraft Memorial Hospital Board of Trustees, 68 Mich.App. 654, 657, 243 N.W.2d 708 (1976), lv. den., 397 Mich. 838 (1976).

We have no particular difficulty in determining the meaning of the statute in question. Average final compensation means the average of the highest annual compensation received by a member during a certain number of years immediately preceding that member's retirement. Annual compensation received refers to that pay which is received by a member each year for work done [78 MICHAPP 413] that year. Annual compensation received includes base salary, longevity pay, shift differential pay, holiday pay and overtime pay because those payments are made and received annually for work done that year. Annual compensation received does not include unused sick or vacation payments because those payments are not made regularly during a worker's tenure with the City. Those payments are properly viewed as a retirement bonus received at retirement and not as annual compensation received during a certain number of years immediately preceding the member's retirement.

Even if the language were considered to be ambiguous, we are not persuaded that the plaintiff's interpretation of the Act would be correct. Dictionary definitions of compensation, while helpful, do not discuss compensation in the context of the Act in question.

And while both parties cite Banish v. Hamtramck, 9 Mich.App. 381, 157 N.W.2d 445 (1968), lv. den., 381 Mich. 779 (1968), for various propositions, Banish did not discuss the statute under consideration in the present case. Banish was concerned with a city charter provision which provided for pensions for police and fire fighters based on the pay of the member's rank at retirement. Banish did not involve accumulated sick or vacation days and their relationship to pensions.

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