May 25, 2022
Supreme Court
Albert A. Faella et al. :
v. : No. 2019-445-Appeal.
(PB 10-311)
Town of Johnston et al. :
Alan Ross :
v. : No. 2019-447-Appeal.
(PB 10-60)
Town of Johnston. :
NOTICE: This opinion is subject to formal revision
before publication in the Rhode Island Reporter. Readers
are requested to notify the Opinion Analyst, Supreme
Court of Rhode Island, 250 Benefit Street, Providence,
Rhode Island 02903, at Telephone (401) 222-3258 or
Email opinionanalyst@courts.ri.gov, of any typographical
or other formal errors in order that corrections may be
made before the opinion is published.
Supreme Court
Albert A. Faella et al. :
v. : No. 2019-445-Appeal.
(PB 10-311)
Town of Johnston et al. :
Alan Ross :
v. : No. 2019-447-Appeal.
(PB 10-60)
Town of Johnston. :
Present: Suttell, C.J., Goldberg, Robinson, and Long, JJ.
OPINION
Justice Long, for the Court. In these consolidated appeals arising from two
consolidated Superior Court civil actions, the defendants, the Town of Johnston and
Joseph Chiodo, in his capacity as finance director for the Town of Johnston
(defendants or the town), appeal from a judgment of the Superior Court granting
declaratory judgment in favor of the plaintiffs, Andrea DiMaio, as duly appointed
Administratrix of the Estate of John DiMaio (Mr. DiMaio); Alan Ross (Mr. Ross);
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and Albert Faella (Mr. Faella) (collectively plaintiffs).1 The trial justice determined
that certain accounts bearing the names of the respective plaintiffs constituted
deferred compensation, governed by Internal Revenue Code § 457; declared the
accounts to be the plaintiffs’ property; and ordered the associated funds be remitted
to the plaintiffs. For the reasons stated herein, we reverse the judgment of the
Superior Court and remand these consolidated cases for entry of final judgment
consistent with this opinion.
A summary of the facts relevant to these appeals follows, and additional facts
are included in the discussion of the issues on appeal.
Facts and Procedural History
This case stems from a long-running dispute between plaintiffs and the Town
of Johnston regarding the entitlement to funds in accounts held first by Aetna Life
Insurance and Annuity Company and then by ING Life Insurance and Annuity
Company (ING)2 on behalf of the town (the funds). The facts of this case may be
familiar to the reader; these cases were previously before this Court in Faella v.
1
The original complaint in PB 10-311 was brought by plaintiffs Albert Faella and
John DiMaio. John DiMaio passed away during the pendency of this case, and
Andrea DiMaio, in her capacity as administratrix of his estate, was substituted as
plaintiff. For the sake of clarity, we at times refer in this opinion to John DiMaio as
plaintiff.
2
Aetna Life Insurance and Annuity Company (Aetna) was ING’s predecessor-in-
interest with respect to the agreement at issue in this appeal. For purposes of clarity,
we refer primarily to ING except where it is necessary to refer to Aetna.
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Chiodo, 111 A.3d 351 (R.I. 2015). In those consolidated appeals, this Court vacated
the trial justice’s grant of summary judgment in favor of plaintiffs pursuant to a 1993
contract entitled “Town of Johnston Police Department Pension Plan” (the 1993
pension plan). Faella, 111 A.3d at 354, 356, 358. Following our opinion in that
case, a nonjury trial took place in the Superior Court, and the decision of the trial
justice is the subject of the present appeals. The following facts are largely
undisputed.
The plaintiffs were police officers employed by the town beginning between
1983 and 1985. During their tenures with the Johnston Police Department, plaintiffs
were members of their local chapter of the International Brotherhood of Police
Officers, a police union (the local IBPO). Throughout plaintiffs’ employment with
the police department, the local IBPO negotiated collective bargaining agreements
(CBAs) on behalf of union members.
The CBAs governed, among other items, police officers’ retirement benefits.
The CBAs indicated that the following pension scheme was in effect for officers
retiring after July 1, 1979. The CBAs provided for a pension equal to a percentage
of an officer’s annual salary at the time of retirement or separation from service, for
the remainder of the officer’s life. The percentage increased with time served on the
force. With respect to officers who were injured in the line of duty, the CBAs
provided for a disability pension equal to sixty-six and two-thirds percent of the
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officer’s annual salary at the time of retirement, even if that officer would not have
qualified for that rate if the officer retired other than on a disability pension.
Pursuant to these CBA provisions, between 2004 and 2008 plaintiffs began
receiving disability pensions after sustaining serious injuries in the line of duty that
left them unable to perform their duties as police officers.
While continuing to receive their disability pensions, plaintiffs also sought
distribution of funds held by ING that were attributable to their contributions and
the town’s matching contributions. The plaintiffs maintained that the ING accounts
held funds to which they were entitled as part of their retirement package with the
town. For their part, defendants disputed that plaintiffs were entitled to distribution
of the funds in the accounts because, defendants asserted, the accounts contained
contributions from police officers and the town to fund the town’s pension
obligations under the applicable CBAs. The defendants therefore refused to execute
procedures to remit the funds in the ING accounts, giving rise to this controversy.
The plaintiffs filed the instant actions in Superior Court in 2010, seeking
declarations that they were entitled to distribution of all amounts contributed to the
ING accounts, as well as mandatory injunctive relief to that effect. Originally named
as a party, ING subsequently filed a motion to interplead the funds, which the trial
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justice granted. ING thereafter deposited the funds into the registry of the court,
where the funds remain, and the trial justice dismissed ING from the actions.
As was the case when this Court reviewed the trial justice’s grant of summary
judgment in 2011, the parties disputed the history and purpose of the ING accounts
at trial. See Faella, 111 A.3d at 353. As evidence in support of plaintiffs’ view of
the ING accounts, they introduced and relied upon an agreement executed by ING
and the town, effective April 1984, pursuant to which ING created the accounts (the
ING agreement). The ING agreement was labeled on its face as the “Johnston Town
Hall Deferred Compensation Plan” and identified the contract holder as “Johnston
Town Hall.” The master application, which was incorporated into the ING
agreement, identified the name of the plan as “Town of Johnston Deferred
Compensation – Police Officers” and the type of plan as a “457” under the Internal
Revenue Code. The ING agreement established two “group contracts,” contract
number VB 1965 and contract number VB 1966. Each contract created an account,
one housing payroll deductions from police officers, and the other housing
contributions made by the town (collectively the accounts).
The accounts segregated contributions by social security number, and
plaintiffs received quarterly statements tracking contributions. They could also view
the accounts using a personal identification number provided by ING, and, at some
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point, they were permitted to decide how the individual contributions should be
invested.
According to plaintiffs, the ING agreement established a retirement savings
program for police officers that was separate and distinct from the police pension
plan established under the CBAs; plaintiffs maintained that, under this purported
separate retirement savings program, police officers who chose to participate
contributed six percent of each of their salaries to the accounts, and the town
contributed a twelve-percent match. In support of this assertion, plaintiffs relied
upon deposition testimony from Christina Menard, an ING employee who serviced
the accounts, wherein she stated that the ING agreement established a § 457 deferred
compensation plan.
In addition to relying on the deposition testimony of Ms. Menard, plaintiffs
also called as witnesses Dennis Quaranta, the town finance director in 1993; Robert
Civetti, a certified public accountant whose company provided auditing for the town
from 1994 through 2014; Ronald Capraro Jr., a CitiGroup Global Markets, Inc.
investment adviser who was a broker of record for the accounts from about 2006 to
2012; and Vincent Baccari Jr., who was the town clerk from 2007 through the time
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of his trial testimony in 2017. Additionally, plaintiffs provided testimony and
documentary evidence, such as enrollment forms and account statements.
The plaintiffs also sought relief under, and presented evidence concerning, the
1993 pension plan, which the trial justice initially admitted de bene. The 1993
pension plan was ultimately deemed inadmissible at trial, however, and the
relationship between the 1993 pension plan, the ING agreement, and the resulting
accounts remains opaque as developed in the trial record. The plaintiffs have not
taken issue on appeal with the trial justice’s ruling on this evidentiary matter.
At the close of plaintiffs’ case-in-chief, defendants moved for judgment on
partial findings pursuant to Rule 52(c) of the Superior Court Rules of Civil
Procedure. After considering the parties’ arguments, the trial justice reserved
decision on the motion.
In presenting their case-in-chief, defendants did not dispute that plaintiffs
contributed six percent of their salaries to the accounts, or that the town contributed
a twelve-percent match. Rather, defendants maintained throughout the trial that
plaintiffs were not entitled to distribution of the funds held in the ING accounts,
arguing that the accounts held mandatory contributions to, and were a funding
mechanism for, the town’s pension obligations under the CBAs. The defendants
further maintained that the CBAs established the pension benefit for all town police
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officers, and that it was pursuant to the CBAs that plaintiffs had been receiving a
disability pension since the time of their respective retirements.
At the close of trial, defendants renewed their Rule 52(c) motion for judgment
on partial findings; the parties agreed to close with posttrial memoranda.
In their posttrial memorandum, plaintiffs narrowed the relief they sought.
Because the 1993 pension plan was ultimately deemed inadmissible at trial, plaintiffs
withdrew their claims for relief pursuant to that document and relied solely on the
ING agreement as establishing entitlement to the funds. The plaintiffs further
withdrew their claims for a mandatory injunction with respect to the accounts,
conceding that the claim was moot because the funds were held in the court registry
and therefore an injunction was not necessary to distribute the funds if declaratory
judgment was granted in their favor. Thus, plaintiffs ultimately sought only one
form of relief: a declaration that plaintiffs were entitled to distribution of the funds
pursuant to the ING agreement, an outcome that would include an order to the Clerk
of the Court to distribute the funds accordingly.
The trial justice rendered a written decision in favor of plaintiffs in August
2019. The trial justice made findings of fact regarding the ING accounts, the ING
agreement governing the accounts, plaintiffs’ contributions to the accounts, and the
applicable CBAs. The trial justice found that the accounts contained deferred
compensation held pursuant to an I.R.C. § 457 deferred compensation plan. The
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trial justice awarded plaintiffs distribution of both the employee and employer
contributions attributable to each of plaintiffs, as follows:
VB 1965 VB 1966
Albert Faella $102,400.73 $176,106.94
John DiMaio $92,424.09 $169,768.15
Alan Ross $97,278.07 $187,502.74
The town timely appealed, and presents the following questions for consideration:
(1) whether the trial justice erred by reserving decision on defendants’ Rule 52(c)
motion at the close of plaintiffs’ case-in-chief, and (2) whether the trial justice erred
by granting declaratory judgment in favor of Mr. Ross, Mr. Faella, and Mr. DiMaio,
and awarding distribution of the funds pursuant to the ING agreement.3
Rule 52(c) Judgment on Partial Findings
The defendants assign error to the decision of the trial justice to reserve
judgment on the town’s motion for judgment on partial findings at the close of
3
While the trial justice’s decision with respect to all plaintiffs was entirely based on
the declaratory-judgment counts, the final judgment in PB 10-60 entered in favor of
Mr. Ross as to count three of his amended complaint, his request for mandatory
injunction. This appears to be consistent with the written decision of the trial justice,
which misstates the counts remaining with respect to Mr. Ross. Specifically, the
written decision states that Mr. Ross withdrew all counts except that seeking
mandatory injunction, while in fact Mr. Ross withdrew all counts except that count
seeking declaratory judgment with respect to the ING agreement. When pressed on
these inconsistencies at oral argument before this Court, however, counsel for Mr.
Ross did not clarify the issue. We deem the references to count three of Mr. Ross’s
amended complaint to be typographical errors, and we proceed with analyzing the
propriety of declaratory judgment in his favor on count one of his amended
complaint.
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plaintiffs’ case-in-chief. Rule 52(c) permits a party in a nonjury case to move for
judgment as a matter of law at the close of an opponent’s case. E.g., Hernandez v.
JS Pallet Co., Inc., 41 A.3d 978, 983 (R.I. 2012). However, the rule is discretionary
and specifically provides that “the court may decline to render any judgment until
the close of all the evidence.” Super. R. Civ. P. 52(c) (emphasis added); see Robert
B. Kent et al., Rhode Island Civil and Appellate Procedure § 52:7 (West 2022)
(“[T]he court is not obliged to entertain the motion and may defer judgment until the
close of all the evidence.”) (citing Shove Insurance, Inc. v. Tenreiro, 667 A.2d 532,
534 (R.I. 1995) (construing former Super. R. Civ. P. 41(b)(2), the predecessor to
Super. R. Civ. P. 52(c))). Accordingly, we summarily reject defendants’ first
assignment of error and hold that the trial justice did not err by reserving on the
town’s motion for judgment on partial findings at the close of plaintiffs’ case-in-
chief.
Declaratory Judgment
The Uniform Declaratory Judgments Act, chapter 30 of title 9 of the general
laws, “vests the Superior Court with the ‘power to declare rights, status, and other
legal relations whether or not further relief is or could be claimed.’” N & M
Properties, LLC v. Town of West Warwick ex rel. Moore, 964 A.2d 1141, 1144 (R.I.
2009) (quoting G.L. 1956 § 9-30-1). It is well-settled that the decision to grant or
deny declaratory judgment rests within the sound discretion of the trial justice. E.g.,
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Town of Barrington v. Williams, 972 A.2d 603, 608 (R.I. 2009). Nevertheless, this
discretion “is not absolute and is subject to appropriate appellate review.” Rhode
Island Republican Party v. Daluz, 961 A.2d 287, 293 (R.I. 2008) (quoting Sullivan
v. Chafee, 703 A.2d 748, 751 (R.I. 1997)). “[T]his Court reviews a declaratory
judgment to determine ‘whether the court abused its discretion, misinterpreted the
applicable law, overlooked material facts, or otherwise exceeded its authority.’”
Town of Barrington, 972 A.2d at 608 (quoting Sullivan, 703 A.2d at 751).
Moreover, “[i]t is the function of the trial justice to undertake fact-finding and
then decide whether declaratory relief is appropriate.” Town of Barrington, 972 A.2d
at 608. This Court accords great weight to the factual findings of a trial justice sitting
without a jury. E.g., Kilmartin v. Barbuto, 158 A.3d 735, 746 (R.I. 2017). These
factual findings are subject to appropriate appellate review, and this Court will
disturb the findings if clearly erroneous; the trial justice misconceived or overlooked
material evidence; or the decision fails to do substantial justice between the parties.
E.g., McBurney v. Roszkowski, 875 A.2d 428, 436 (R.I. 2005); Town of Barrington,
972 A.2d at 609; see Rhode Island Republican Party, 961 A.2d at 294 (“[T]his Court
reviews a declaratory judgment to determine ‘whether the court abused its discretion,
misinterpreted the applicable law, overlooked material facts, or otherwise exceeded
its authority.’”) (quoting Sullivan, 703 A.2d at 751).
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The trial justice granted plaintiffs’ request for declaratory judgment on the
basis of the ING agreement, which had been entered into between ING and the town,
finding that “[t]he plan at issue is a § 457 deferred compensation plan” that entitled
plaintiffs to immediate distribution of the funds. Based on our thorough review of
the record in this case, however, including the trial transcripts, we conclude that
(1) plaintiffs failed to satisfy their burden that they were entitled to declaratory
judgment on the basis of the ING agreement and (2) the trial justice abused his
discretion when he made clearly erroneous findings of fact.
The only exhibit at trial that referred to a § 457 plan was the ING agreement
between the town and ING. While giving due deference to the trial justice’s
findings, this Court cannot find an adequate factual basis for the trial justice’s
implicit inference that the ING agreement constituted an agreement to defer
compensation. See 26 C.F.R. § 1.457-2(k) (defining a “plan” for purposes of § 457
as “any agreement or arrangement between an eligible employer and a participant or
participants * * * under which the payment of compensation is deferred”). The ING
agreement did not contain an agreement between plaintiffs and the town to defer
compensation, and there is no indication in the record that plaintiffs ever saw the
ING agreement prior to their retirements.
As defendants strenuously argued at trial, the ING agreement between the
town and ING was just that—a contract between two entities to establish the
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accounts. The ING agreement was not an employment or compensation agreement
between plaintiffs and the town, and it did not set out the rights and obligations
between the town and police officers in its employ with respect to the funds.
In fact, plaintiffs failed to establish any competent evidence indicating that the
town and plaintiffs had an agreement to defer compensation or to establish any other
program that entitled plaintiffs to the immediate distribution of the funds. That
plaintiffs did not establish an entitlement to the funds—particularly through the ING
agreement—is best illustrated by the fact that neither the ING agreement nor any of
plaintiffs’ other evidence establishes any basis for the six-percent and twelve-percent
obligations. That is, the parties do not dispute that plaintiffs contributed six percent
of their salaries to the accounts or that the town contributed a twelve-percent match;
however, plaintiffs offered no evidence that establishes the town’s obligation to
make such a contribution, nor did they provide evidentiary support for their assertion
that the town established a separate and distinct retirement savings program to which
the town contributed.
The plaintiffs’ own testimony as to the circumstances surrounding their
authorization of the six-percent payroll deductions was equivocal. Mr. Ross testified
about and provided enrollment and participation forms, which indicated that he had
enrolled in a governmental “deferred compensation plan” pursuant to which he
contributed six percent of each paycheck. He testified that he signed the enrollment
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form with the understanding that he “would be enrolling in a deferred compensation
plan, savings plan, through Aetna[.]” Mr. Ross explained that the basis of his
understanding came from a representative of Aetna, who assisted him in authorizing
the withholdings. Mr. Ross did not know where the six-percent or twelve-percent
figures came from. Mr. Faella testified only that he understood the ING accounts to
be an annuity.
Mr. DiMaio’s deposition testimony—admitted as a full exhibit by stipulation
of the parties—was also equivocal. He testified that he was called to a meeting with
an ING representative, that the representative told him the six-percent withholdings
were required under his contract, and that eventually he would get a “return” on the
contributions. He also testified that, while he knew about a twelve-percent
contribution by the town, he understood that to be funding for the police pension
plan.
The plaintiffs’ reliance on Ms. Menard’s deposition testimony is similarly
unavailing. In their posttrial memorandum, plaintiffs emphasized that Ms. Menard
was an ING employee who had handled the accounts for some time and that she was
the person most familiar with the ING agreement and the accounts created pursuant
thereto. The plaintiffs highlighted the following exchange during Ms. Menard’s
deposition testimony:
“[Question:] And how would you—what is the type of
plan that is set up [by virtue of the ING Agreement]?
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“[Ms. Menard:] A 457 deferred—governmental deferred
compensation plan.”
This testimony, though heavily relied upon by plaintiffs, also fails to establish
plaintiffs’ entitlement to the funds. There is no doubt that the ING agreement was
labeled as a “§ 457”; therefore Ms. Menard, an employee of ING—a party to the
ING agreement—testified as much. Nevertheless, Ms. Menard testified only to her
knowledge of the accounts. She did not testify to the relationship between plaintiffs
and the town. For example, Ms. Menard testified that, while the accounts were set
up as § 457 accounts on ING’s side, any plan documents between employer and
employee would supersede the ING agreement. Similarly, Ms. Menard made it clear
that ING did not play any intermediary role between plaintiffs and the town. The
following exchange is illustrative:
“[Question:] What about when a triggering event happens?
An employee that’s a participant in the plan reaches, say,
retirement age, a triggering event occurs, who’s entitled to
those funds upon a triggering event occurring?
“* * *
“[Ms. Menard:] It’s—we don’t—ING doesn’t—we’re not
interested—we don’t care. I mean, it could go—if they
tell us to pay it to the town, we pay it to the town. If it’s
paid to the employee, it’s checked off to pay the employee,
we pay the employee. If it tells us to pay to another
provider, we pay it to the other provider.
“* * *
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“ING doesn’t track the status of employees because, again,
we’re only the investment provider.”
By contrast, the town produced ample evidence—which was overlooked by
the trial justice—that did establish an agreement that governed the various rights and
obligations between plaintiffs and the town, including an obligation pursuant to
which plaintiffs contributed six percent of each paycheck, and the town contributed
a twelve-percent match. The defendants consistently maintained that the CBAs
established a pension plan of which plaintiffs were a part and that the ING agreement
established an investment vehicle to fund that pension plan. The parties presented
as a full exhibit the serially negotiated CBAs, which undisputedly since 1986 had
contained language that,
“[i]f an officer resigns between one (1) and ten (10) years
of service on the Johnston Police Department, said police
officer may withdraw from the retirement fund his or her
six (6) percent contribution as well as the Town’s twelve
(12) percent contribution into the fund, for a total of
eighteen (18) percent.” (Emphasis added.)
The CBAs were the only documents admitted at trial establishing an
agreement governing the various rights and obligations as between plaintiffs and the
town. Those CBAs undisputedly stated that the police officers were to contribute
six percent of their paychecks to a pension fund, while the town contributed a twelve-
percent match. Further, the CBA in effect from 2005 through 2008—the CBA under
which both Mr. Faella and Mr. Ross retired—explicitly contained a section entitled
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“Pension Contributions,” which stated: “For years one (1) through thirty (30),
officers shall contribute six percent (6%) of their gross pay * * * .”
The defendants also provided testimony from two former town police officers.
They each testified that, during their tenures as police officers, contemporaneous
with plaintiffs’ service, they contributed six percent of each paycheck to fund police
officers’ pensions, while the town contributed a twelve-percent match. One officer,
David aRusso, also authenticated and testified about a letter he received in August
1984 from then-Mayor Ralph R. aRusso,4 which stated, in relevant part,
“On July 13, 1984 a committee including your Union
Attorney and President, representing your interest, met
with me and Aetna Insurance Co. personnel regarding the
Town of Johnston Police Pension Fund. The following
items have been cleared up.
“#1 The Town of Johnston is contributing 12% and police
personnel are contributing 6% of salary toward funding
your pension. This fact is part of your union contract.
“* * *
“#4 Under the new program, if you should decide to
terminate your employment with the town before
retirement, the entire accumulation of 12% and 6% will be
yours.
“* * *
“#5 In order to impliment [sic] the new program, YOU
MUST RETURN THE POLICY NOW IN YOUR
4
Mayor aRusso was David aRusso’s father.
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POSSESSION, so that the funds can be rolled over into
the new program.”
The defendants also supplied a second communication from Mayor aRusso sent to a
second officer—Peter Mancini—which provided identical information.
The plaintiffs have never disputed that they were bound by the applicable
CBAs and that at all times relevant hereto have received their pensions promised in
said CBAs.5 They did not submit any evidence that they had made an additional,
separate contribution of six percent of their salaries to a different fund. Nevertheless,
they have asserted that they are entitled to both continued receipt of their pension
and a full distribution of their six-percent contributions and the town’s twelve-
percent contributions.
We discern no factual entitlement to the funds in the record developed by
plaintiffs and conclude that the trial justice was clearly wrong when he found
otherwise. We are persuaded that the trial justice overlooked and misconceived
material evidence when he concluded that plaintiffs and the town had a deferred
compensation plan pursuant to which plaintiffs were entitled to immediate
distribution of the funds in addition to continued receipt of their pensions,
5
Mr. Faella receives a reduced disability pension following resolution of a dispute
regarding the town’s decision to place him on disability retirement; in accordance
with the settlement of that dispute, he receives a sixty-percent disability pension,
rather than sixty-six and two-thirds percent.
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particularly in light of the town’s uncontroverted evidence that plaintiffs were indeed
contributing to a police pension fund.
Having had the opportunity to establish an entitlement, plaintiffs failed to
meet their evidentiary burden to do so. The plaintiffs’ evidence—recited throughout
this opinion—did not establish the factual substance of any agreement between
plaintiffs and the town to treat the parties’ six-percent and twelve-percent
contributions as deferred compensation. The only remaining evidence was that
plaintiffs contributed six percent of their paychecks to a pension fund as part of the
applicable CBAs with the town.
The plaintiffs assert that the town conceded that the ING agreement
constituted, as a matter of federal law, an I.R.C. § 457 “plan” based on the town’s
statement in its papers before this Court that “[o]n or about April 26, 1984, the Town
established the Town of Johnston Deferred Compensation Plan with Aetna Life
[I]nsurance and Annuity Company[.]” (Emphasis omitted.) This assertion takes the
town’s argument out of context and elevates semantics over substance.
An examination of the town’s brief before this Court as a whole and in the
context of the trial proceedings makes clear that defendants were referring to the title
of the ING agreement, which, as elucidated previously, was labeled as a deferred
compensation plan. However, since the genesis of the present cases, the town has
disputed that there was ever an agreement between the town and plaintiffs to defer
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compensation or that plaintiffs had any other entitlement to the funds separate and
apart from their pensions.
We observe that the only other basis for relief articulated by plaintiffs is their
assertion that I.R.C. § 457 entitles them to distribution as a matter of law; plaintiffs
urge this Court to accept that provision as determinative of their right to the funds.
We decline plaintiffs’ invitation to rely on § 457—a provision of the Internal
Revenue Code contained in Subtitle A, Income Taxes; Chapter 1, Normal Taxes and
Surtaxes; Subchapter E, Accounting Periods and Methods of Accounting; Part II,
Methods of Accounting; Subpart B, Taxable Year for Which Items of Gross Income
Included—as establishing a property right, particularly in the absence of any citation
to regulations or caselaw that supports their assertion. Because of our previously
articulated conclusion that plaintiffs failed to establish as a factual matter that they
had an agreement with the town to defer compensation, we need not reach the issue
of the effects of I.R.C. § 457. However, we do not pass on the propriety of the
town’s actions relative to the various federal laws pertaining to retirement plans and
taxation; rather, we limit our opinion to the issue of the trial justice’s factual
conclusion that the town and plaintiffs agreed to defer compensation pursuant to
26 U.S.C. § 457.
Having concluded that there was no sufficient factual or legal basis for doing
so, we hold that the trial justice abused his discretion by granting the plaintiffs’
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request for declaratory judgment based on the ING agreement between the town and
ING.
Conclusion
For the foregoing reasons, we reverse the judgment of the Superior Court and
remand the cases to the Superior Court for entry of final judgment consistent with
this opinion.
Justice Lynch Prata did not participate.
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STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903
OPINION COVER SHEET
Albert A. Faella et al. v. Town of Johnston et al.
Title of Case
Alan Ross v. Town of Johnston.
No. 2019-445-Appeal.
(PB 10-311)
Case Number
No. 2019-447-Appeal.
(PB 10-60)
Date Opinion Filed May 25, 2022
Justices Suttell, C.J., Goldberg, Robinson, and Long, JJ.
Written By Associate Justice Melissa A. Long
Source of Appeal Providence County Superior Court
Judicial Officer from Lower Court Associate Justice Michael A. Silverstein
For Plaintiffs:
Michael J. Lepizzera, Esq
Attorney(s) on Appeal Timothy J. Robenhymer, Esq.
For Defendants:
William J. Conley, Esq.
SU-CMS-02A (revised June 2020)