Rizzo v. City of Philadelphia

PELLEGRINI, Judge,

dissenting.

I dissent. There is no dispute that the Philadelphia Pension Plan, if Tucker qualifies, provides for a generous (some would say overly generous) pension as it has to over 100 others that were similarly situated. However, the wisdom of the providing of such pension benefits is not before us. The only issues before us are (1) whether Rizzo has standing to challenge Tucker’s pension and in what form, and (2) whether Tucker is eligible for a pension under Plan D of the Retirement Ordinance.

I.

The majority finds that Rizzo has standing as a taxpayer to maintain a suit in equity challenging the action of the Board of Pensions and Retirement (Pension Board). A taxpayer’s standing is bottomed on the principle that tax funds are being improperly expended. Because Tucker is to be paid from assets under the control of the Pension Board, the majority is under the misapprehension that it *27must be tax funds that are to be improperly spent if Tucker receives a police pension. Municipal pension funds have three sources of funding:1 member contributions (in the case of police officers, 6% of their salary); state aid; and mandated contributions from the city (§ 895.301). These “contributions” are co-mingled into a trust fund where they are no longer under the control of the municipality, but under the control of the Pension Board, whose fiduciary obligation is not to the taxpayers but to the members and beneficiaries of the fund. Any tax funds given to a pension fund lose their identity as such once they became assets of the Pension Board. For this reason alone, a taxpayer would not have standing.

Act 205 is in accord with this proposition, as well as the inability of a taxpayer to bring an action to challenge the Pension Board’s decision. The General Assembly made a specific legislative finding that the failure of a municipality to make its mandated contributions to a pension fund constitutes “a danger to the Commonwealth itself.” 53 P.S. § 895.306(a). While giving standing to members and beneficiaries of a pension fund to force the municipality to make those contributions, it foreclosed taxpayers from also bringing an action to rectify that danger. Section 306 C & D of Act 205, 53 P.S. § 306(c), (d) provides that:

(c) Persons beneficially interested. — Any person who is beneficially interested in the affairs of the municipal pension plan shall have standing to institute a legal proceeding for mandamus as provided for in this section. A beneficially interested person is any person who:
(1) has the relationship with the municipal pension plan of:
(i) an active member, whether or not any minimum service requirement for acquiring a vested right to a retirement benefit has been met;
*28(ii) an inactive member with a vested right to deferred receipt of a retirement benefit;
(iii) a retired member;
(iv) a recipient of retirement benefit other than a retired member;
(v) a former member with member contributions to the credit of the member with the municipal pension plan; or
(vi) a spouse, child or other potential beneficiary pursuant to the terms of the plan document or the municipal pension plan of any person described in subparagraphs
(i) and (v);
(2) serves in the position of a fiduciary with respect to the municipal pension plan;
(3) represents active members of the municipal pension plan as collective bargaining agreement; or
(4) serves as an elected or appointed official of the municipality.
(d) Others with standing to bring action. — The Public Employee Retirement Study Commission shall have standing to institute a legal proceeding for mandamus as provided for in this section. The Attorney General, or the district attorney of the county in which the municipality is located, in addition to any other powers and duties conferred on that office by law, shall also proceed in the name of the Commonwealth, upon request of the commission or upon the person’s own motion, to institute a legal proceeding for mandamus as provided for in this section.

The General Assembly, by excluding taxpayers from those persons beneficially interested in the affairs of a municipal pension plan, inferentially concluded that taxpayers have no standing to bring an action concerning distribution of such funds.

The Philadelphia Retirement System Ordinance (Retirement Ordinance) likewise recognizes that the Pension Board owes a fiduciary duty to its members to pay out pension funds only to those entitled to receive them. Section 121.1 *29of the Retirement Ordinance provides that any member or beneficiary can appeal “any decision or determination ... to the Board.”

Section 112.1 does not limit participation in the Pension Board proceeding to the member whose pension is at issue as Rizzo suggests, but instead states that any member shall have the right to appeal any determination of the Fund or the Association to the Pension Board. Thus, Rizzo, as a member, was free to challenge the award of Tucker’s pension before the Pension Board, and if necessary, appeal the Pension Board’s determination to the common pleas court.2

Rizzo did not participate in the Pension Board proceeding or appeal the Pension Board’s decision to the common pleas court. On January 18,1989, three months after the Pension Board approved Tucker’s pension, Rizzo filed this equity action in common pleas court. In Lundy v. City of Williamsport, 120 Pa.Commonwealth Ct. 520, 548 A.2d 1339 (1988), this Court noted:

In The Aquarian Church of Universal Science [Service] v. County of York, 90 Pa.Commonwealth Ct. 290, 494 A.2d 891 (1985), we held that where the legislative provides a mandatory and exclusive statutory remedy, equity is without power to act in relief of a party who fails to pursue the remedy, Appellant’s statutory remedy under Section 752 of the Local Agency Law, 2 Pa.C.S. § 752, and Section 933 of the Judicial Code, 42 Pa.C.S. § 933, is to appeal to the trial court. We have repeatedly held that failure to appeal a local governmental agency adjudication within thirty days from the date of the order complained of divests the trial court of jurisdiction. See Appeal of Federated Dept. Stores, Inc., 78 Commonwealth Ct. 346, 467 A.2d 908 (1985) [1983]. Appellant makes no argument that this statutory remedy is inadequate and offers no excuse as to why he did not pursue it.

*30Instead, Appellant argues that 2 Pa.C.S. § 753(b) gives him an independent right to pursue a separate equity action in the same case four months after his statutory right of appeal has expired. 2 Pa.C.S. § 753(b) states:

(b) Equitable Relief. — The remedy at law provided in subsection (a) shall not in any manner impair the right to equitable relief heretofore existing, and such right to equitable relief is hereby continued, notwithstanding the provisions of subsection (a). (Emphasis added.)

In Arsenal Coal Co. v. Department of Environmental Resources, 505 Pa. 198, 477 A.2d 1333 (1984), our Supreme Court interpreted 2 Pa.C.S. § 703(b) governing appeals from Commonwealth agencies. 2 Pa.C.S. § 753(b) is patterned after this Section with respect to appeals from local governmental agencies and the language is identical. The Supreme Court noted that a petitioner could seek equitable relief at the same time he pursued an agency appeal or could request pre-enforcement review of administrative regulations within the original jurisdiction of this Court.

But a court’s equity powers are limited by the existence of an adequate statutory remedy. Arsenal Coal Co., 505 Pa. at 208, 477 A.2d at 1338. In local governmental agency appeals jurisdiction and remedy is conferred by statute. A court has no equity powers if it has no jurisdiction. 2 Pa.C.S. § 753(b) may permit Appellant to pursue equitable relief existing before his statutory remedies are exhausted. But there is nothing in this Section that permits Appellant to file an equity action after his statutory remedy to the same relief has expired because he failed to appeal a local governmental agency adjudication thus depriving the trial court of subject matter jurisdiction over the action. Appellant certainly could have raised an estoppel argument in an appeal from the LERTA appeal board. Equity will not act to save Appellant from the failure to statutorily protect his interest where the statutory remedy, namely, appeal from the administrative agency is adequate to prevent the harm.

*31Chartiers Valley School District v. Virginia Mansions Apartments, Inc., 340 Pa.Superior Ct. 285, 489 A.2d 1381 (1985). The order of the trial court must be affirmed.

Lundy, 120 Pa.Commonwealth Ct. at 523-534, 548 A.2d at 1340-1341.3

Assuming that Rizzo preserved the notice issue, it is central to both the majority and concurring opinions that the local agency law appeal process was unavailable and an action in equity could be maintained concerning the Board’s action to award Tucker a pension. The concurring opinion would find that if Rizzo had received notice, then he would have had to exhaust his administrative remedies through a local agency appeal. The majority, more broadly, finds that because a taxpayer would never easily receive notice of a local agency action or it perceived that the agency would act contrary to the public’s good, that the local agency process is unavailable and, hence, has a right to maintain an equity action.

The concurring opinion finds that if Rizzo had notice, he would have had to utilize the local agency law process of appeal of the Pension Board’s decision, but since he did not, he did not have an adequate remedy at law, and accordingly, could maintain the action in equity. While this concurring opinion correctly finds that Rizzo had an adequate remedy, it was incorrect to hold that the remedy did not exist because he did not receive notice. If Rizzo was required to receive actual notice, once he receives such notice, the time period in which he is able to take the appropriate local agency appeal begins when he became aware of the Pension Board’s action. See Highland Park Community Club v. Zoning Board of Adjustment, 509 Pa. 605, 615-616, 506 A.2d 887, 892-893 (1986). Rizzo then had a local agency appeal right which he failed to pursue timely. Because Rizzo, at the time he filed the equity action, had an *32adequate administrative remedy which he failed to exhaust, his complaint must be dismissed.

The majority’s rationale is both more expansive and more troublesome. Despite Sunshine Law notices, the majority would have the effect of allowing a taxpayer to file in equity a challenge to any action of any board that may render a ruling that bestows a favorable result on the party before it. If a taxpayer desired to challenge in equity an alleged improper refund by the Board of Finance and Review, he could do so because it would involve the return of tax money. Similarly, a taxpayer, if he did not have notice, would have standing to challenge that action of a Board of Property Assessment in equity merely by alleging that it was improper and against the public good. The administrative agency system, both local and state, cannot operate efficiently if we accord a taxpayer such expansive standing rights without a more distinct injury and allow them to be able to bypass local agency procedures simply by alleging that they were unaware that the board may have acted against the public’s good.

For the reasons above, Rizzo’s complaint should have been dismissed and, accordingly, the trial court reversed.

II.

Whether he serves three years or thirty years, two reasons have been advanced as to why Tucker can never be eligible for coverage under Plan D. The majority finds that only those members who are covered by civil service are entitled to coverage by the Police Pension Fund. No requirement is contained in the Retirement Ordinance, as the concurring opinion correctly points out, that to be eligible for Plan D coverage, you must be covered by civil service.

Although finding that civil service coverage is not determinative, the concurring opinion goes to the nub of the issue in finding that the Police Commissioner is not eligible for Plan D coverage because he does not ordinarily perform police functions. By adopting this approach, the concurring *33opinion ignores both the powers that a Police Commissioner has and misperceives the nature of police work.

While it is true that the Police Commissioner does not ordinarily perform the function of a street officer, he has all of a street officer’s police powers (R. 319a) and more. He has a police badge as all police officers have (R. 319a); can give commands as to when police officers can shoot, search or arrest (R. 273a, 332a); can make arrests, execute searches and carry a gun without a license (R. 270a-275a, 319a-325a); can issue police directives (R. 270a-275a, 260a, 248a-251a); and can direct the detail of all police investigations (R. 83a, 259a, 273a, 331a). While he, like a number of uniformed police officers, does not ordinarily carry out those functions, he, like them, does have the power to carry out those functions.

The concurring opinion misperceives the nature of police work by failing to recognize that management of a police department is as integral to police work as making arrests. The policy of the Police Commissioner, planning, managing and staffing determines the quality and efficiency of police work or whether a crisis turns into a disaster.

Finally, we give great deference to the interpretation by an agency of its regulations. Pennsylvania Industries for the Blind and Handicapped v. Department of General Services, 116 Pa.Commonwealth Ct. 264, 541 A.2d 1164 (1988). In this case, the Board of Pensions and Retirement, its counsel and the City Solicitor have determined that the Police Commissioner is eligible for Plan D coverage.

Even if Rizzo had standing to maintain this action, I would find that Tucker was covered under Plan D of the Retirement Ordinance.

For the foregoing reasons, I would reverse the trial court.

DOYLE, J., joins in this dissenting opinion.

. See generally Municipal Pension Plan Funding Standard and Recovery Act, Act of December 18, P.L. 1005, 53 P.S. §§ 895.101-895.803 (Act 205).

. Neither the common pleas court nor Rizzo, in his response to Tucker’s contention that Rizzo must first bring a challenge to Tucker’s pension before the Pension Board, raises the issue of whether Rizzo received notice of the Pension Board’s proceeding.

. As pointed out in Lundy, the majority citation to Section 753(b) of the Local Agency Law, 2 Pa.C.S. § 753, is inappropriate because equity jurisdiction never “heretofore existed."