Tiernan v. Magaziner

Decision Date08 March 2022
Docket Number2019-101-M.P., No. 2019-306-Appeal.,PC 09-7242
Citation270 A.3d 25
Parties Sandra TIERNAN v. Seth MAGAZINER, in his capacity as General Treasurer of the State of Rhode Island, et al.
CourtRhode Island Supreme Court

Gregory L. Boyer, Esq., for Plaintiff

Michael P. Robinson, Esq., for Defendants

Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.

Justice Long, for the Court.

The plaintiff, Sandra Tiernan (Ms. Tiernan or plaintiff), appeals from and seeks review on certiorari of a judgment of the Superior Court in favor of the defendants, Seth Magaziner and Frank J. Karpinski, in their capacities as General Treasurer of the State of Rhode Island and Executive Director of the Employees' Retirement System of the State of Rhode Island, respectively (collectively defendants or ERSRI).1 Ms. Tiernan challenges the Superior Court's determination that G.L. 1956 § 36-10-31 required ERSRI to offset against Ms. Tiernan's accidental disability pension amounts she received pursuant to a Workers' Compensation Court award of coordinated benefits under G.L. 1956 § 28-33-45. For the reasons stated herein, the judgment of the Superior Court is affirmed.

Facts and Procedural History

The facts that gave rise to this case are not in dispute. On April 25, 2002, Ms. Tiernan sustained severe injuries while in the course of her employment, injuries that left her disabled. Prior to this undoubtedly life-altering event, Ms. Tiernan was employed by the State of Rhode Island; as such, she was a member of the Employees' Retirement System of the State of Rhode Island (the state retirement system).

Following the date of injury, a judge of the Workers' Compensation Court (WCC) found Ms. Tiernan to have a continuing "partial incapacity" and granted her petition for workers' compensation benefits. Ms. Tiernan received payment of those benefits from 2002 to 2009.

In March 2005, ERSRI notified Ms. Tiernan that the full Retirement Board of the Employees' Retirement System of the State of Rhode Island (the retirement board) had approved her application for an accidental disability pension. ERSRI determined her disability pension to be $688.13 per month. The Rhode Island Division of State Employees Workers' Compensation (the division) thereafter notified ERSRI that Ms. Tiernan continued to receive workers' compensation benefits in the amount of $266.04 per week, or approximately $1,064 per month. Because Ms. Tiernan's continued workers' compensation benefits exceeded her disability pension benefit, ERSRI did not pay her a disability benefit.

However, when the division notified Ms. Tiernan of its intention to terminate her workers' compensation benefits effective May 28, 2008, she sought a continuation of benefits and applied for a coordination of benefits pursuant to the relevant provisions of the workers' compensation act. In February 2009, the division agreed to suspend Ms. Tiernan's workers' compensation benefits effective March 1, 2009, and the WCC resolved her request for coordination of benefits. Specifically, a judge of the WCC entered a pretrial order awarding Ms. Tiernan a coordinated benefit pursuant to § 28-33-45(a), which provides that a person receiving workers' compensation at retirement "shall[, subject to certain exceptions,] receive compensation and retirement benefits in a sum equal to the greater of the compensation or retirement benefits for which that person was otherwise eligible[.]"

For reasons not at issue in this appeal, Ms. Tiernan and the state, in its capacity as her employer, subsequently amended the WCC award by mutual agreement.2 The plaintiff's final coordinated benefit award was $76.80 per week, or approximately $332.80 per month (the coordinated benefit). The mutual agreement awarded payment of this coordinated benefit retroactive to March 1, 2009, the originally scheduled effective date of Ms. Tiernan's disability retirement and termination of her workers' compensation payments.

A few months later, counsel for Ms. Tiernan sent a letter to ERSRI contesting deductions from her pension based upon her workers' compensation benefits and asserting that she was entitled to both her full disability retirement pension and the coordinated benefit. In December 2009, counsel for Ms. Tiernan filed the present declaratory judgment action in the Superior Court against ERSRI and the state. In both the letter and the complaint, Ms. Tiernan asserted that she was entitled to the coordinated benefit awarded pursuant to § 28-33-45(a) without a corresponding reduction of her accidental disability retirement pension by ERSRI pursuant to § 36-10-31, which mandates that ERSRI offset against disability benefits "[a]ny amount paid or payable under the provisions of any workers' compensation law[.]"

ERSRI disagreed with Ms. Tiernan's assertion; on January 19, 2010, ERSRI sent a letter to counsel for Ms. Tiernan explaining that § 36-10-31 required ERSRI "to offset any amount paid or payable under the provisions of any workers' compensation law." Accordingly, ERSRI concluded that, "effective immediately, ERSRI will begin to offset Ms. Tiernan's pension benefit retroactive to March 1, 2009 by the workers['] compensation weekly benefit of $76.80, as confirmed by the mutual agreement." The parties subsequently agreed to have the declaratory judgment action held in abeyance until Ms. Tiernan exhausted her administrative remedies on the matter.

On January 29, 2010, ERSRI responded to Ms. Tiernan's request for reconsideration by issuing an administrative denial. ERSRI repeated its view of the requirements of § 36-10-31, and further stated:

"In January 2010, the Division of Workers' Compensation indicated that Ms. Tiernan has been collecting a weekly benefit from them in the amount of $76.80 ($332.80 monthly) since March 1, 2009. Again, by law this amount is to be offset against Ms. Tiernan's monthly pension benefit of $688.13 retroactive to March 1, 2009. Her pension benefit would be reduced to $355.80 per month."

In April 2010, the parties appeared before an ERSRI hearing officer. The parties stipulated to an agreed statement of facts and made brief arguments on the issue of law raised by Ms. Tiernan: Whether she was entitled to her coordinated benefit and disability pension without ERSRI offsetting the coordinated benefit against her disability pension. The parties submitted post-hearing memoranda on or before June 1, 2010; inexplicably, the hearing officer failed to render a decision on the matter for more than five years.

While a decision was still pending, but still more than five years later, ERSRI sent a letter to Ms. Tiernan and counsel dated May 28, 2015. The letter indicated that ERSRI had not until that point offset against Ms. Tiernan's disability pension the amounts paid for the coordinated benefit, but stated that ERSRI would "immediately reduce Ms. Tiernan's monthly pension benefit * * * retroactive to March 1, 2009[.]" The letter further indicated that Ms. Tiernan had been overpaid by more than $24,000 due to ERSRI's failure to implement the offset. Between recouping the amounts overpaid and implementing the offset going forward, ERSRI began reducing Ms. Tiernan's monthly disability pension to $49.01 until the overpayments were recovered.

In October 2015, the hearing officer finally issued a decision, affirming the January 29, 2010 administrative denial and upholding the offset. Ms. Tiernan contested the hearing officer's decision before the full retirement board, again arguing only the legal issue relating to whether she was entitled to her coordinated benefit and disability pension without the coordinated benefit being offset against her disability pension. The retirement board unanimously upheld the decision of the hearing officer. The decision "constitute[d] a final decision of ERSRI."

Litigation before the Superior Court resumed in February 2016. Ms. Tiernan amended her complaint twice, first adding a count entitled "Administrative Appeal Pursuant to RIGL § 42-35-7" (count two), and later adding a third count entitled "Estoppel" (count three). In counts one and two, her declaratory judgment claim and administrative appeal, Ms. Tiernan directly challenged ERSRI's administrative decision to implement the offset. In count three, Ms. Tiernan claimed estoppel, to prevent recovery of the amount totaling more than $24,000 in overpayments made between 2010 and 2015, because, Ms. Tiernan alleged, ERSRI had complied with the pretrial order of the WCC and mutual agreement without asserting a challenge in the WCC.

ERSRI first moved for partial summary judgment as to counts one and three; by agreement of the parties, the trial justice first rendered a decision as to count two, the administrative appeal. In doing so, the court upheld ERSRI's final decision to offset Ms. Tiernan's workers' compensation payments against her disability pension. The court acknowledged that § 28-33-45 and § 36-10-31 "appear[ed] to be contradictory[,]" but ultimately rejected Ms. Tiernan's arguments, finding that the Legislature intended to include amounts paid pursuant to § 28-33-45 within the broad reach of § 36-10-31.

The trial justice subsequently rendered a decision granting ERSRI's motion for partial summary judgment as to the declaratory judgment and estoppel claims. In disposing of the declaratory judgment claim, the trial justice adopted her reasoning as set forth in her prior decision on count two, concluding that ERSRI's application of § 36-10-31 to Ms. Tiernan's coordinated-benefit payment was not erroneous.

The trial justice also granted summary judgment in favor of ERSRI on Ms. Tiernan's estoppel claim. The trial justice reasoned that Ms. Tiernan had failed to demonstrate the elements of estoppel, because the record did not evince that ERSRI "made an affirmative representation" to Ms. Tiernan with the purpose or effect of inducing reliance, or that any representations had induced her to act to her detriment. The trial justice further reasoned that ERSRI's...

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