Di Giacomo v. City of New York

Silverman, J. (dissenting).

We would affirm the judgment appealed from.

We think there is no issue of fact in the case requiring a trial. We have simply a question of interpretation of a statute, section B18-46.0 of the Administrative Code of the City of New York, and two written intruments—a question of law. The case is ripe for final judgment for one side or the other.

The issue in this case is whether New York City police officers who are retired on ordinary disability after more than 20 years of service are entitled to have their total retirement allowance increased by a pension for "increased-take-home-*359pay” for service time beyond 20 years of service. I think they are not.

The governing statute is section B18-46.0 of the Administrative Code. Plainly, and really by definition, the statute does not provide for such a pension on top of the statutory retirement allowance. That really should be the end of the matter.

Petitioners contend, however, that a collective bargaining agreement entered into in May, 1968 by their labor union, the Captains Endowment Association, requires such an additional pension.

The letter agreement of May 10, 1968 provided in relevant part:

"8. Retroactive to January 1, 1967 the City shall contribute five percent to the pension for increased take home pay of each member with each such member receiving an appropriate cash refund as a result of this increased City contribution. This cash refund shall be distributed to each member no later than sixty days after enactment into law of the enabling legislation.
"9. The City’s pension contribution providing for increased take home pay shall be applicable to members who have more than 20 years of service even though these members are not now required to contribute to the pension system, thereby increasing their retirement allowance accordingly.”

The letter agreement of May 13, 1968 provided in part:

"3. Pension Beneñt
"With respect to members who have completed 20 years of service, effective January 1, 1967, the City will provide a pension for increased take-home pay at the rate of 5% for each year of service after the completion of 20 years of service and after January 1, 1967.”
"Full details of the agreement” were to be "spelled out in a formal contract to be entered into at a later date.” But the letter agreement was nevertheless expressly declared to be binding on both sides.

In our view, the primary thrust of this agreement was to benefit the usual case of officers who retired for service (pursuant to Adminsitrative Code, § B18-45.0), rather than on disability (pursuant to Administrative Code, § B18-46.0).

This was obviously the contemporaneous interpretation of the parties. Almost immediately following the letter agreement, the police pension fund statute was amended to carry

*360into effect this agreement (L 1968, ch 587, eff June 16, 1968). The amendment added paragraph (b) of subdivision 2 to section B18-45.0 so as to provide:

"2. For each additional year of service in the police force, or fraction thereof, beyond his required minimum service, a member shall be entitled to, in addition to the benefits provided in subdivision one of this action: * * *
(b) a pension-providing-for-increased-take-home-pay which shall be the actuarial equivalent of the reserve-for-increased-take-home-pay to which he may be entitled, if any, for all periods of such service in the police force rendered both (1) after the completion of such required minimum service in such police force and (2) after December thirty-first, nineteen hundred sixty-six.”

The amendment thus made was an amendment only of section B18-45.0, the service retirement section and not of section B18-46.0, the ordinary disability retirement section. This cannot have been an oversight.

It is true that petitioners, having retired for ordinary disability, did not actually have their pension increased because of the quoted provision of the contract. But at the time the contract was entered into there was presumably no way of knowing whether any particular officer would ultimately retire for service, or for ordinary disability, or for accident disability. The vast majority of officers, of course, would presumably retire for service. Thus petitioners, along with all other officers, received the assurance at the time of the contract that if, as was most probable, they ultimately retired for service, they would have an increased pension because of the contract. Indeed, petitioners, having served more than 20 years (all but two of them more than 25 years), could presumably have elected to take service retirement (Administrative Code, § B18-4.0, subd c) and thus have had a pension increased because of the contract provisions. As it turned out, these petitioners retired for ordinary disability where the scheme of retirement is such that the increased-take-home-pay provision made no monetary difference in the pensions (but presumably resulted in an over-all retirement allowance greater than if petitioners had chosen service retirement).

It is not unusual in labor contracts to have a general provision in terms applicable to all employees which, however, in a particular contingency, brings no additional benefit to a special subgroup because, in that contingency, they already *361have a special provision governing their case which is either just as good or better than the general contractual provision or so specially constructed that the general contractual provision does not increase their benefits.

That, indeed, was the case here with respect to the contingency of retirement for ordinary disability. For, in essence, in that contingency, the officers already had a guarantee of a total retirement allowance beyond the pension for increased-take-home-pay. Therefore an increase in the pension for increased-take-home-pay made no difference to them as long as the increase would not bring their total retirement allowance beyond the guaranteed retirement allowance. In a sense this was not because they were not getting the benefit of the increased-take-home-pay provision but rather because, to the extent that they got such benefit, it merely duplicated a benefit which they were already guaranteed.

This is apparent from the structure of the statute with respect to ordinary disability. Thus section B18-46.0 provides:

"Upon retirement for ordinary disability, a member shall receive a retirement allowance which shall consist of:
"1. An annuity which shall be the actuarial equivalent of his accumulated deductions at the time of his retirement; and "2. A pension which is the actuarial equivalent of the reserve-for-increased-take-home-pay to which he may then be entitled, if any, and
"3. A pension, which, together with his annuity and the pension, providing-for-increased-take-home-pay, if any, shall be equal to” (emphasis added).

Thus, in the case of retirement for ordinary disability, an increase of item 2, the pension for increased-take-home-pay, merely reduces item 3. In this respect, the statutory structure and provision with respect to retirement allowance for ordinary disability are different from those for service retirement or accident disability retirement, in both of which the statute then and now does not provide for crediting the pension for increased-take-home-pay against some other over-all guaranteed figure but adds it on top of other provisions.

We note that the percentage provisions for ordinary disability retirement allowance are apparently such that for each year of service in excess of 20 years, ordinary disability retirees receive a larger benefit than either service retirees or accident disability retirees.

*362We should be very cautious in the consideration of a claim made eight years after a contract is written that it extended pension benefits to an area apparently not recognized by the parties at the time. At least where the statute speaks with clarity, the statute is the only safe guide through the arcane area of public employees’ pension rights.

• The suggestions that the judgment appealed from impairs or diminishes petitioners’ pension rights in derogation of the State Constitution or violates their rights to equal protection seem to us to be without merit.

Capozzoli, J., concurs in an opinion; Markewich, J., concurs in an opinion; Birns and Silverman, JJ., dissent in part in an opinion by Silverman, J.

Order, Supreme Court, New York County, entered on July 28, 1976, and judgment entered thereon August 6, 1976, modified, on the law, to the extent of denying the respondents’ cross motion to dismiss except as to petitioner Thomas McMahon and as so modified affirmed, without costs and without disbursements, and the matter remanded to Special Term for a hearing with the direction that Special Term notify the Comptroller of the State of New York pursuant to CPLR 1012 (subd [c]).