Judge Edmead Decides Locklear v Teachers' Retirement Sys. of the City of New York

New York State Supreme Court Justice Carol Edmead rules that "...no City pension fund member can earn service credits from both funds [TRS and NYCERS] simultaneously, whether petitioner signed a waiver is inconsequential.



Matter of Locklear v Teachers' Retirement Sys. of the City of New York

2011 NY Slip Op 50663(U)
Decided on April 4, 2011
Supreme Court, New York County
Edmead, J.


Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Matter of Locklear v Teachers' Retirement Sys. of the City of New York


2011 NY Slip Op 50663(U)

Decided on April 4, 2011

Supreme Court, New York County

Edmead, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on April 4, 2011
Supreme Court, New York County

In the Matter of the Application of Elizabeth Locklear, Petitioner, For a Judgment pursuant to Article 78 of the Civil Practice Law and Rules

against

Teachers' Retirement System of the City of New York, Respondent.

113595/06

ATTORNEY FOR THE PLAINTIFF :
Firm: LLOYD SOMER
Address : 330 SEVENTH AVENUE, 15TH FL.
NEW YORK, NY 10001
Phone : 212 629-7001

ATTORNEY FOR THE DEFENDANT :
Firm: TEACHERS' RETIREMENT SYSTEM - Prose
Address : OF THE CITY OF NY
55 WATER STREET
NEW YORK NY 10041

Carol R. Edmead, J.

Petitioner Elizabeth Locklear ("petitioner") moves for an order pursuant to Article 78 of the CPLR, directing respondent the Teachers Retirement System ("TRS") to process her application for retirement, and provide her with a service retirement pension based on her service time and credits.

Background Facts

The New York City Police Department ("NYPD") hired petitioner on July 3, 1973 as a Police Administrative Assistant ("PAA"), and petitioner became a member of the New York City Employees' Retirement System ("NYCERS") when she enrolled on July 19, 1973. (Exhibit 1).

Fifteen years later in 1988, while working nights as a PAA, petitioner began working [*2]during the day for the New York City Department of Education ("DOE") (see Petition ¶4).[FN1] Petitioner became a substitute teacher, and then an attendance teacher in 1998 (Answer, Exh. 4), at which time, she filed her TRS application under the "Tier III/IV" benefits plan, dated November 22, 1998. (Id.). Petitioner's TRS application stated that she was a member of NYCERS under membership number 711265.

Petitioner then retired from the DOE on October 29, 2009, and from the NYPD on November 22, 2009.[FN2]

In response to her application for TRS retirement benefits, TRS advised petitioner that it was "reviewing" her application and that "the processing of [her] application may take additional time if we need to verify information from other agencies. Once we process your retirement application, we will notify you as to whether your eligible for retirement. If you are eligible, your prospective date of retirement would be 10/29/2009." (October 29, 2009 letter, Answer, Exh. 7). TRS advised that to "provide [petitioner] with retirement income as soon as possible," TRS would send her "advance payments" approximately one to two months after her effective retirement date.

During this process, on November 10, 2009, NYCERS notified TRS that the petitioners' membership with NYCERS began in 1973, that petitioner was in good standing, and that petitioner applied to retirement effective November 22, 2009.[FN3] NYCERS next advised that petitioner's TRS membership "should be considered invalid because her NYCERS membership would take precedence" and that her membership in TRS "should be withdrawn" immediately (Answer, Exhibit 8).

On the same date, November 10, 2009, TRS's Correspondence Unit notified petitioner that they were "unaware"of her "active membership" in NYCERS, and that since "dual membership in two New York City retirement systems is prohibited" and her NYCERS membership precedes her TRS membership, her TRS membership is invalid, rendering her unable to receive retirement benefits from TRS (hereinafter, the "cancellation letter") (Answer, Exhibit 9). TRS advised that she could receive her "erroneous contributions" through a refund process (id.).

Notwithstanding TRS's cancellation letter, TRS's Retirements/Withdrawals Unit then informed petitioner on November 16, 2009, that she would be receiving monthly advance payments in order to provide her with retirement income as soon as possible. However, TRS's Retirements/Withdrawals Unit then advised petitioner that her membership in TRS was going to be cancelled because her TRS members was invalid. This letter reiterated the reasons stated in the earlier November 10, 2009 cancellation letter sent from TRS's Correspondence Unit, and advised that she would receive a refund of her contributions.

However, TRS's Retirements/Withdrawals Unit sent another letter to petitioner on [*3]January 13, 2010, advising that when petitioner retired, she had "10 years, 4 months, and 0 days of total service credit" and that TRS members attain "vested rights when they have at least five years of total service." As a result, petitioner was a vested member, with certain options concerning her contributions and balances in her account. The letter advised, for example, that petitioner could lever her fund balances with TRS in order to receive a retirement allowance beginning as early as age 55; however, to do so, petitioner would have to file a service retirement application for her tier, and contact "TRS before you file your retirement application to obtain information about your eligibility; the letter also noted that she could transfer her membership to "another eligible public retirement system within New York State." The options available were reiterated in a subsequent letter sent by TRS's Member Status Unit on February 26, 2010.

Thereafter, TRS reimbursed petitioner for all contributions she made over the course of her tenure as a teacher, and this petition ensued.

Petitioner's Contentions

Petitioner argues that under caselaw, TRS must be estopped from denying her a pension, in that Petitioner was informed throughout her career that she would receive two pensions as a result of working for both entities. When petitioner took on both jobs, it was with the expectation and understanding that she would receive two pensions. Petitioner received a combined W-2 tax form from the City of New York while jointly employed by the NYPD and the DOE. In 2006, petitioner spoke to a TRS representative concerning purchasing prior service credit in the amount of 9 years, 2 months, and 25 days. During the conservation, petitioner never hid from her employers, NYCERS, or TRS, the fact that she was employed by both the NYPD and the DOE. When petitioner met with her unions in 2009 for pension counseling, she was informed that she would receive both pensions. Petitioner also completed a form in 2009 to combine her time for the two pensions.

Petitioner argues that if she was informed from the beginning that she would not be eligible for a TRS pension, then she would have sought a position in the private industry to gain a second pension. Petitioner maintained both jobs with the expectation that she would receive a pension for her y years of employment.

Petitioner argues that it is an injustice to deny her TRS pension, after working for the City of New York with the expectation and the understanding that she would receive two pensions.

Thus, petitioner urges the Court to rule that TRS should process her retirement application in order for petitioner to receive her pension.

Petitioner further argues that any bar to her joining TRS while a member of NYCERS is of no effect because she was never asked to sign a waiver pursuant to NYC Admin. Code § 13-104(2).

Respondent's Contention

TRS argues that under caselaw, New York City Pension Funds have a statutory obligation to follow NYC Administrative Code §13-184 as written, and that attempts to modify the law on equitable grounds have been rejected. According to Admin. Code § 13-184, a member of NYCERS cannot simultaneously be a member of another New York City retirement system. Thus, petitioner's membership in TRS is a nullity because she remained an active member of NYCERS while she was enrolled in TRS. Thus, TRS's determination was not arbitrary, capricious, or an abuse of discretion. [*4]

Further, in canceling petitioner's membership, TRS was exercising its governmental function, and caselaw holds that estoppel is not available against a governmental agency in the exercise of its governmental functions. And, the few instances in which the doctrine of estoppel has been applied to governmental agencies are distinguishable since such instances involved NYCERS taking a position inconsistent with the governing law.

And, petitioner cannot rely on conversations she had with pension counselers, her union, and TRS representatives because such conversations are unsubstantiated. In any event, it has been held that advice given to pension fund members regrading interpretations of controlling laws cannot bind the pension fund. Nor can TRS be bound by the letters sent out in error in November 2009, January 2010, and February 2010, which mistakenly informed petitioner that she was considered retired.

Petitioner's claim that she would incur financial harm should she be denied TRS membership is untrue, as she is receiving a pension from NYCERS, and was reimbursed for all her contributions.

Respondent contends that if a member of another City pension fund wants to join either TRS or NYCERS, he or she must submit a waiver of all present and prospective benefits provided by the city, pursuant to NYC Admin. Code § 13-304(3). Thus, a member may receive two pensions upon retirement from both funds as long as the member suspends his or her membership with the first fund while he or she is active in the second fund. However, no City pension fund member can be active in two funds and earn service credits from both funds simultaneously regardless of whether he or she signed a waiver. When petitioner joined TRS, she never suspended her then active membership with NYCERS. Thus, petitioner was never entitled to become a member of TRS, and her membership is a nullity. Since petitioner does not meet the requirements for TRS benefits, TRS's determination that her membership is invalid and its cancellation of petitioner's membership was proper.

Discussion

CPLR 7803 states that the court review of a determination of an entity, such as the Board of Education, consists of whether the determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion, including abuse of discretion as to the measure or mode of penalty imposed (CPLR 7803(3) (see Windsor Place Corp. v New York State DHCR, 161 AD2d 279 [1st Dept.1990]; Mazel v DHCR, 138 AD2d 600 [1st Dept1988]; Bambeck v DHCR, 129 AD2d 51 [1st Dept 1987], lv. den. 70 NY2d 615 [1988]). An action is arbitrary and capricious, or an abuse of discretion, when the action is taken "without sound basis in reason and . . . without regard to the facts" (Matter of Pell v Board of Education, 34 NY2d 222, 231 (1974)). Rationality is the key in determining whether an action is arbitrary and capricious or an abuse of discretion (Matter of Pell v Board of Education, 34 NY2d at 231). The court's function is completed on finding that a rational basis supports the DHCR's determination (see Howard v Wyman, 28 NY2d 434 [1971]). Where the agency's interpretation is founded on a rational basis, that interpretation should be affirmed even if the court might have come to a different conclusion (see Mid-State Management Corp. v New York City Conciliation and Appeals Board, 112 AD2d 72 [1st Dept], affd 66 NY2d 1032 [1985]).

NYC Admin. Code § 13-184, which governs the parties' dispute, provides in relevant part as follows: [*5]

No other provision of law which provides wholly or partly at the expense of the city for pensions or retirement benefits for employees in the city-service, shall apply to such employees who become members or beneficiaries of the retirement system provided for by this chapter, their widows or their other dependents. . . . Notwithstanding the foregoing provisions of this section, nothing therein contained shall prevent a member of this retirement system whose membership is authorized by subdivision three of section 13-104 of this chapter, upon his or her retirement from this retirement system . . . from receiving benefits from this retirement system, as well as benefits to which they may be entitled from any other retirement system or pension fund maintained by the city.

"It is implicit in the language of the Administrative Code provision that joining one City retirement system automatically bars joining another system subsequently and remaining a member of both" (Zimet v Teachers' Retirement Bd., 41 AD2d 919, 343 NYS2d 617 [ Dept 1973]). Thus, a member of NYCERS cannot simultaneously be a member of another New York City pension fund.

Petitioner's argument that TRS should be estopped from canceling her membership is unavailing. The doctrine of estoppel only applies "against a governmental entity if failure to apply the doctrine would defeat a right legally and rightfully obtained. Estoppel cannot operate to create a right where none exists (Owens v McGuire, 121 AD2d 292, 503 N.Y.S.2d 387 [1st Dept 1986], citing Matter of McLaughlin v Berle, 71 AD2d 707, 708, 418 NYS2d 246, affd. 51 NY2d 917, 434 NYS2d 994). Further, estoppel is not available against a governmental entity in the exercise of governmental functions (Owens, supra citing Mtr. of Daleview Nursing Home v Axelrod, 62 NY2d 30, 33, 475 NYS2d 826 ). "[E]stoppel may not be invoked against a governmental agency to prevent it from discharging its statutory duties," except in "unusual factual situations" (Scheurer v New York City Employees' Retirement Sys., 223 AD2d 379, 636 NYS2d 291 [1st Dept 1996], citing Matter of E.F.S. Ventures Corp. v Foster, 71 NY2d 359, 369-370, 526 NYS2d 56). Application of the doctrine should be made "only when failure to do so would operate to defeat a right legally and rightfully obtained" ( Scheurer v New York City Employees' Retirement Sys., citing, Matter of Hauben v Goldin, 74 AD2d 804, 805, 426 NYS2d 273). "It cannot operate to create a right . . . Nor can it operate to relieve one from the mandatory operation of a statute" (Scheurer, supra). Lastly, "[t]he courts must weigh the degree of manifest injustice against the effect, in the particular case, of intervention into the public processes" (Scheurer, supra). And, in such unusual factual situations, the Court must determine that certain conditions are initially satisfied: the governmental body "must know the facts ... he must intend that his conduct shall be acted on ... the [other party] must be ignorant of the true facts; and ... he must rely on the former's conduct to his injury" (Brennan v New York City Housing Auth., 72 AD2d 410, 424 NYS2d 687 [1st Dept 1980]).

Here, it is uncontested that petitioner's TRS service credits accrued during her simultaneous membership in NYCERS, which is strictly prohibited by NYC Admin. Code § 13-184. Therefore, TRS's determination was not arbitrary, capricious or irrational.

Brennan v New York City Housing Auth., cited by petitioner, is not controlling. In Brennan, plaintiffs with years of service on the Housing Authority's police force were New York State residents at the time of their appointment. The examination taken prior to appointment did [*6]not specify a residence requirement, other examinations given at the same time for other peace officer positions specified residence in certain areas within New York State. Thereafter each purchased a home in New Jersey and Connecticut and lived there for an average of seven years. Parenthetically, several plaintiffs have resided out of State for over 15 years. "Most, if not all, moved only after receiving assurances from superior officers that their then contemplated move was lawful. Prior to moving, these officers were aided by defendant in securing mortgages on their property. After their moves, defendant rendered further aid by securing New York State driver's licenses and domiciliary pistol permits for plaintiffs." (Emphasis added).

The Court held that it was "evident that defendant Housing Authority knew the residential status of their employees, and the law applicable to them. The open publication of examinations for entry level and promotional positions without a residence requirement, coupled with the affirmative aid given by defendant prior and subsequent to the out-of-State relocations rendered foreseeable plaintiffs' reliance thereon."

It cannot be said that the alleged knowledge that TRS had about petitioner's then current enrollment in NYCERS was evident. While petitioner's TRS application provided information about her enrollment in NYCERS, the application actually calls for "prior" service. Petitioner's alleged conversations with TRS representatives of being informed that she would receive two pensions, in and of themselves, are insufficient to rise to the level of knowledge by TRS that she was simultaneously enrolled in NYCERS. Nor are such representations inconsistent with the position TRS now takes to cancel her membership; NYC Admin. Code § 13-184 bars simultaneous membership; not the receipt of two pensions. It does not appear that petitioner would be precluded from receiving two city pensions if she did not earn such service credits simultaneously. And, petitioner points to no affirmative action undertaken by TRS prior to her application for retirement, in assisting her to maintain simultaneous membership in both pensions from NYCERS and TRS.

Further, the Court notes that petitioner's allegation that she had been repeatedly informed that she would receive a TRS pension is vague and conclusory. In any event, errors in opinions made by pension fund employees cannot bind the pension fund (Zucker v New York City Emp. Retirement Sys., 27 AD2d 207, 277 NYS2d 978 [1st Dept 1967]; Distelman v Regan, 128 AD2d 935, 512 NYS2d 586 [3d Dept 1987] (stating that "[t]he doctrine of estoppel will not reach so far as to hold an individual eligible for vested retirement where by statute, he clearly does not qualify for such eligibility")).

Unlike the case cited by petitioner, Eden v Board of Trustees of State University (49 AD2d 277, 374 NYS2d 686 [2d Dept 1975]), estoppel did not operate so to compel the governmental agency from violating any Administrative or statutory laws (Eden, granting petitioners/applicants application for estoppel and to compel respondent to operate a podiatry school, where they were accepted into respondent's podiatry program, but later told that the opening of school "has been deferred"); Tamulinas v Board of Educ. of Jericho Union Free School Dist., 279 AD2d 527, 719 NYS2d 660 [2d Dept 2001] (annulling NYCER's determination that petitioner was not eligible for retroactive membership, after "she was specifically misinformed that she was not eligible to join the TRS" notwithstanding her "right to join the TRS").

The Court further notes that petitioner's claim of financial hardship is belied by the fact [*7]that she is receiving her NYCERS pension and was reimbursed her contributions into TRS. Also, her claim that she would have worked in the private sector had she known she was ineligible to receive two pensions is conclusory and unsupported by the record.

Finally, as to the failure of TRS to provide petitioner with a waiver, petitioner's failure to execute such a waiver does not entitle her to receive pension benefits to which she is not entitled or for which she is not qualified. Since no City pension fund member can earn service credits from both funds simultaneously, whether petitioner signed a waiver is inconsequential.

Conclusion

Based on the foregoing, it is hereby

ORDERED and ADJUDGED that the petition for an order pursuant to Article 78 of the CPLR, directing respondent the Teachers Retirement System to process petitioner's application for retirement, and provide her with a service retirement pension based on her service time and credits, is denied, and the petition is dismissed; and it is further

This constitutes the decision and order of the Court.

Dated: April 4, 2011______________________________________

Hon. Carol Robinson Edmead, J.S.C.

In accordance with the accompanying Memorandum Decision, it is hereby

ORDERED and ADJUDGED that the petition for an order pursuant to Article 78 of the CPLR, directing respondent the Teachers Retirement System to process petitioner's application for retirement, and provide her with a service retirement pension based on her service time and credits, is denied, and the petition is dismissed; and it is further

This constitutes the decision and order of the Court.

Footnotes

Footnote 1:According to the "Record of Prior Service" attached to petitioner's TRS enrollment form, she began working as a substitute teacher from November 1989.

Footnote 2: In connection with her retirement from the DOE, petitioner filed an retirement application with TRS, dated October 21, 2009, requesting that she be retired as of October 29, 2009.

Footnote 3: Petitioner is currently receiving retirement benefits from NYCERS.