Opinion
No. 91-1389.
August 12, 1992.
Appeal from the Circuit Court, Broward County, Estella May Moriarty, J.
Bruce Rogow of Bruce S. Rogow, P.A., and Beverly A. Pohl, Fort Lauderdale, for appellant/cross appellee.
Joseph H. Serota of Weiss Serota Helfman, P.A., Miami, and Rafael Suarez-Rivas of Katz Kutter Haigler Alderman Davis Marks Rutledge, Fort Lauderdale, for appellee/cross appellant.
Frank R. Branca appeals from a final declaratory judgment the trial court entered on April 17, 1991, in favor of the City of Miramar. The City of Miramar sought a declaratory judgment pursuant to Chapter 86, Florida Statutes, with respect to a City of Miramar Ordinance that had created a pension plan of which appellant was the only vested beneficiary. The trial court held the ordinance to be unconstitutional under Article X, Section 14, Florida Constitution, and invalid under Chapter 112, Part VII, Florida Statutes. The City cross-appeals the court's award of attorney's fees to Branca to compensate him for defending the suit, as well as the court's refusal to reserve jurisdiction in the final judgment to award supplemental relief the City requested. We affirm all issues on appeal; on the City's cross-appeal we affirm, although we note harmless error as to the second point.
Appellant first argues that the City lacked standing to seek a declaratory judgment regarding the validity of its own ordinance. The record shows that the idea for Ordinance 88-16 originated in 1988 when appellant, who was then Mayor of the City of Miramar, approached the City's Finance Director, Jack Neustadt and requested that Neustadt inquire into exclusive retirement systems for elected officials in Florida. Thus, the ordinance was requested by the administration, which at that time was under appellant's direction. Eventually, the ordinance was presented to the City Commission and approved. Soon after the ordinance was enacted, an election took place in the City that resulted in the election of some new commissioners. It was publicly stated by the officials who were running for office that they would make every attempt to defeat the pension plan and ordinance. The ordinance was in fact repealed on May 15, 1989, by the City Commission. Appellant's pension payments continued, however. The monies were paid from a budget item entitled "disputed benefits payable." The City Clerk submitted Ordinance 88-16 to the State of Florida Department of Administration, Division of Retirement ("Division") for review. The Division's general counsel reviewed the ordinance and concluded that it violated Article X, Section 14, of the Florida Constitution and Part VII of Chapter 112, Florida Statutes. Soon after receipt of the Division's legal opinion, the City filed a complaint in order to obtain a definitive ruling in the form of a declaratory judgment with regard to the constitutionality and enforceability of Ordinance 88-16.
In accordance with the ordinance, the only contribution to be made by the elected official was 5 percent of his or her salary. An elected official retiring after twenty years would receive annually 50 percent of his or her average annual salary for the preceding five years. Earlier retirement reduced the pension benefits. When these contributions were exhausted, the ordinance provided that the benefits "shall be paid by the City from its general funds". Appellant's contributions were exhausted two months after he retired.
The new commissioners were elected in 1988. Appellant retired in April and the Commission repealed Ordinance 88-16 on May 15, 1989, through its enactment of Ordinance 89-30.
Under the facts presented, we hold that the City had standing to seek this declaratory judgment, because the circuit court is the proper tribunal to determine the constitutionality of ordinances and proposed ordinances. § 86.011, Fla. Stat.; see generally, City of Miami v. Butcher, 303 So.2d 378 (Fla. 3d DCA 1974); West Palm Beach Assoc. of Firefighters v. Board of City Commissioners of the City of West Palm Beach, 448 So.2d 1212 (Fla. 4th DCA 1984); Lamar-Orlando Outdoor Advertising v. City of Ormond Beach, 415 So.2d 1312 (Fla. 5th DCA 1982). At bar there is also a compelling public interest in settlement of controversy involving the disbursement of public funds. See Kaulakis v. Boyd, 138 So.2d 505 (Fla. 1962).
Appellant argues that the City's proper recourse would have been to sue its actuarial consultant, since the actuary advised the City that the ordinance was constitutional. However, we agree with the City that such action would have left unresolved the constitutional issue.
Appellant next argues that the City should be estopped from denying him pension benefits, notwithstanding the ruling that Ordinance 88-16 is unconstitutional, because he retired in good faith reliance on representations that "the pension was legal, valid and good." The trial court found "[t]hat there was no representation of any fact by the City of Miramar relative to Defendant Branca's retirement rights under Miramar Ordinance 88-16, which the City now seeks to deny." It is undisputed that the City paid appellant pension benefits after his retirement and continued to do so after the City Commission repealed Ordinance 88-16, until the ordinance was declared unconstitutional. We conclude that the City's representations to appellant, on which appellant relied, were representations of law. As a result, estoppel will not lie. See The Department of Revenue v. Anderson, 403 So.2d 397, 400 (Fla. 1981). Notably, however, even where there is reliance upon representations of fact, logically estoppel will not be applied where such application would achieve an illegal result or one contrary to public policy. We now turn to the issue of whether Ordinance 88-16 is unconstitutional.
Section 112.048, Florida Statutes, predates the enactment of Article X, Section 14, Florida Constitution (1968), and Chapter 112, Part VII, Florida Statutes. Article X, Section 14, provides:
Section 112.625(1)(a-f) define six types of retirement or pension plans that are exempt from the funding and actuarial requirements stated in Part VII.
A governmental unit responsible for any retirement or pension system supported in whole or in part by public funds shall not after January 1, 1977, provide any increase in the benefits to the members or beneficiaries of such system unless such unit has made or concurrently makes provision for the funding of the increase in benefits on a sound actuarial basis.
Section 112.048 mandates that cities must provide a retirement benefit of half-pay of an elective officer who voluntarily retires and who has held office in that city for a period of twenty (20) consecutive years. It does not mandate retirement benefits for officials who serve less than the twenty consecutive years. The trial court found, and certainly an argument can be made, that the creation and establishment of a retirement plan for Miramar elected officials under Ordinance 88-16 was an increase in benefits as contemplated in Article X, Section 14, because no such pension benefits existed for elected officials prior to the enactment of Ordinance 88-16 apart from those mandated in section 112.048, Florida Statutes. As such, Ordinance 88-16 would be subject to the requirements of Article X, Section 14.
The trial court found that if appellant had not retired as Mayor in mid-term on April 3, 1989, and had completed his term in office, he would have served the City of Miramar for eighteen (18) consecutive years. His term of office began March 6, 1973 and would have ended March 12, 1991. His resignation was a voluntary act. Whether appellant would have been reelected in 1991 to permit him to complete twenty (20) years with the City, would be speculative.
We acknowledge that section 112.625(1)(b), Florida Statutes, provides an exception to the foregoing funding requirements in the case where the plan is unfunded and maintained by an employer primarily for purposes of providing deferred compensation to a select group of management or highly compensated individuals. However, there is substantial, competent evidence in the record to support the trial court's finding that Ordinance 88-16 did not constitute a deferred compensation plan. Notwithstanding, we need not resolve the issue of whether the Ordinance's enactment constituted an "increase" in benefits under Article X, Section 14, Florida Constitution. Rather, we certify the following question:
Mr. Palmquist, the actuary who assisted with creation of the Ordinance, testified that the Ordinance was a plan of deferred compensation as just described; however, he admitted that he did not mention this exception at any public hearing held in connection with the Ordinance's enactment. Mr. Palmquist further conceded that he first went on record as describing the Ordinance as being one of deferred compensation, after the Division's legal opinion that found the pension plan to be unconstitutional. Furthermore, the Ordinance, according to Mr. Palmquist, did not provide for a "named fiduciary" or "plan administrator" as required by section 112.625. The City's expert witness, Fred Mabry, testified that the ordinance did not create a deferred compensation plan. Moreover, nowhere in the ordinance is it described as creating a deferred compensation plan; the City Attorney also testified that it was never intended to create a deferred compensation plan.
WHETHER ARTICLE X, SECTION 14, AND THE REQUIREMENTS THEREOF APPLY ONLY TO EXISTING COUNTY OR MUNICIPAL PENSION PLANS, OR WHETHER THE REQUIREMENTS ALSO APPLY TO COUNTY OR MUNICIPAL PENSION PLANS THAT INCREASE OTHER EXISTING GOVERNMENTAL [i.e., STATE] PENSION PLAN BENEFITS.
As to the first issue on the City's cross-appeal, we hold that the trial court's award of attorney's fees to appellant Branca was proper. A public official is entitled to representation at the public's expense where the litigation (1) arises out of or in connection with the performance of their official duties and (2) serves a public purpose. See Thornber v. City of Ft. Walton Beach, 568 So.2d 914 (Fla. 1990). The subject of the action below was an ordinance enacted while appellant was Mayor of the City of Miramar. As Mayor, he initiated the process of drafting said Ordinance. In view of the fact that the outcome of the litigation would determine whether the City would be obligated to pay appellant a substantial sum of money in public funds over his lifetime, it served a public purpose. Thus, we affirm the trial court's attorney fee award to appellant.
Regarding the City's second point on cross-appeal, we hold that any error the court committed when it struck its provision reserving jurisdiction in the proposed final judgment for supplemental relief, is harmless. Appropriate supplemental relief under section 86.061, Florida Statutes, may be sought notwithstanding a lack of express reservation of jurisdiction in the final declaratory judgment. Haft-Gaines Co. v. Lakes of Inverrary Condominiums, Inc., 432 So.2d 729, 731 (Fla. 4th DCA 1983). As a result, the trial court's striking of the provision does not constitute reversible error.
Accordingly, we affirm all points on appeal with the exception of the constitutional question, which we certify herein; we affirm both points on cross-appeal.
ALDERMAN, JAMES E., Senior Justice, concurs.
FARMER, J., dissents with opinion.
If a private employer created a pension plan for his employees and, when one of his qualified employees retired in reliance on it, only then unilaterally terminated the plan and stopped paying benefits, we should not have to search for reasons to find against the employer in the retiree's lawsuit for benefits. For, unlike a good many other employment benefits and perquisites, pension benefits are different. The retiree is usually especially vulnerable as to the ability to return to the job market and make "cover". Even if he could, his dependency on the lost pension benefits for the necessaries of life would render almost any judicial relief ineffectual, or too late to matter.
Pension benefits are indeed different. A suit for one's retirement income comes as close as anything I can imagine to dealing with a fundamental necessity of life. A contract respecting such income should come into court with a generous tolerance for the plight of the retiree, assuming the essentials of contract law have been met. Here, there is no serious suggestion by anyone that former Mayor Branca did not fully comply with all conditions precedent to retirement benefits under city ordinance 88-16. Nor does anyone deny that Mayor Branca retired on the basis of ordinance 88-16. In fact, he sought the opinion of the city attorney and an actuary hired by the city before he retired, both of whom told him that he was eligible and qualified for the specified benefits.
Frankly, I do not understand how the fact that his employer, the payor of his retirement funds, is a municipality empowers it to effect a non-consensual, unilateral termination of benefits to one of its retirees. Simply because the city exercises governmental powers does not entitle it to make a bargain with its employees and then decide not to live up to its agreement. The mere fact that it is a city no more enables it to stop paying agreed retirement benefits to one of its retired workers than it would authorize the city to refuse wages or salary to an employee for a days work. Even local government must follow the law. That the city was ill-advised to vote to set up this, perhaps too generous, plan is surely no reason to allow it to disavow any obligation to pay benefits to one of its qualified employees who retired in reliance on its terms. The fact that a contract turns out to be a bad one for one of the parties has never been any reason to relieve that party of his agreed duty to perform.
The city looks for its authority to cancel this plan in certain state constitutional and statutory provisions relating to the actuarial soundness of public employer retirement plans in Florida. But I do not understand how the fact that this plan may violate these provisions yields the conclusion that the city can just stop paying one of its retirees. I should have thought that the remedy for the constitutional/statutory violation would be to order the city to make the plan actuarily sound out of its own pockets (whether from tax increases or other revenues) but not to order it to stop paying retirement income. Shall we next order government to stop providing health care services at public hospitals because they are not economically managed or, in the terms used here, actuarily sound?
At bottom there seems to be a notion that local government — just because it is a government — can invite its employees to accept or continue employment with the promise of certain retirement benefits when they decide to retire, and then walk away from that obligation for reasons that the city alone has created and controlled. This eccentric idea has no support in the suggested actuarial difficulties of this retirement plan.
Local governments have long been equitably estopped from denying obligations that the government has itself created by its own conduct. See, e.g., Hollywood Beach Hotel Co. v. City of Hollywood, 329 So.2d 10 (Fla. 1976), City of Lauderdale Lakes v. Corn, 427 So.2d 239 (Fla. 4th DCA 1983), and Town of Largo v. Imperial Homes Corp., 309 So.2d 571 (Fla. 2d DCA 1975). As then-Judge Grimes said in Town of Largo:
Stripped of the legal jargon which lawyers and judges have obfuscated it with, the theory of estoppel amounts to nothing more than an application of the rules of fair play. One party will not be permitted to invite another onto a welcome mat and then be permitted to snatch the mat away to the detriment of the party induced or permitted to stand thereon.
309 So.2d at 573. If cities can be estopped from exercising their zoning and building regulation powers (where they have wide latitude) by this rule of fair play, surely the same rule can be used to bar the city from withholding retirement benefits from its own retiree.
The court's perspective in this case is all askew. We should not be focusing on whether the city attorney was making legal or factual representations to its prospective retiree (probably it was a little of both), or whether the city was "under" Branca's administration (even if it was, a majority of its legislative body had to, and did, vote for the plan), or whether the city has "standing" to seek a declaratory judgment as to the enforceability of one of its own laws (section 86.021 plainly allows "any person" to sue for such a declaration), or even whether actuarily unsound municipal retirement plans violate "public policy" (obviously they do). We should instead ask ourselves what is the real public policy which governs this situation.
The essential rationale for the constitutional and statutory provisions cited by the city, from which I deduce public policy, is not that, if a particular plan is unsound, no one should get paid their retirement. Rather, the policy is to ensure that all retirees actually get paid by making the plans financially trustworthy and capable of meeting reasonably foreseeable obligations. To deny benefits to a retiree where the plan is unsound but the city is able to pay is to shoot the patient rather than to find the cure.
This analysis is not affected one whit by the fact that Branca was the mayor when the plan was adopted, or that he was the lone beneficiary when the plan was terminated, or that he worked for only one year after the plan was adopted, or that his current term as mayor when he retired would not have netted him a full 20-years of service, or even that the city's revocation of the plan was done by a duly adopted ordinance of the city repealing the plan. These may have been good arguments against adopting the plan in the first place. They hardly empower us to relieve the city of its bad judgment. The remedy for the bad judgment was for the citizens to rise up on election day and choose new stewards for their affairs. The remedy for the constitutional/statutory violations is, if Branca or another beneficiary should seek it, to enjoin the city to comply with the constitution and statutes by making the plan sound.
Feeling that we have focused on this case from the wrong view, I dissent.
I have no quarrel with the award of attorney's fees to the beneficiary from the city. Otherwise, we should allow the city to cheat one of its employees but then require him to pay for the privilege.