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Retirement Board of Employees' Retirement System of City of Providence v. Corrente

Supreme Court of Rhode Island

December 15, 2017

Retirement Board of the Employees' Retirement System of the City of Providence
v.
Frank E. Corrente and Mayor of the City of Providence et al.

         Providence County Superior Court (PB 08-6508) Associate Justice Michael A. Silverstein

          For Plaintiff: Raymond A. Marcaccio, Esq.

          For Defendant: John B. Harwood, Esq. John D. Plummer, Esq.

          Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

          OPINION

          SUTTELL PAUL A. CHIEF JUSTICE

         These consolidated appeals arise from a decision of the Retirement Board of the Employees' Retirement System of the City of Providence (the board or city board) to reduce the pension benefits of Frank E. Corrente (Corrente) following multiple federal convictions.[1] Specifically, pursuant to the Honorable Service Ordinance (HSO), Chapter 17, Article VI, Sec. 17-189.1 of the City of Providence Code of Ordinances (as enacted in 1999), [2] the board revoked a portion of Corrente's pension benefits and ordered him to return a portion of the benefits that he had received.

         The matters now before this Court are: (1) Corrente's appeal from a Superior Court judgment denying his request for a tax credit on pension benefits that he had received but was required to return to the board; (2) the appeal of the Mayor of the City of Providence (the mayor) and the City of Providence (the city) who, as intervenors, had challenged the board's decision to reduce, rather than revoke, Corrente's pension benefits; and (3) the board's cross-appeal from the judgment allowing the mayor and the city to intervene as a matter of right under Rule 24(a) of the Superior Court Rules of Civil Procedure. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

         I

         Facts and Travel

         A

         Procedural Background

         The facts underlying this case are set forth in detail in Retirement Board of the Employees' Retirement System of Providence v. Corrente, 111 A.3d 301, 303-05 (R.I. 2015) (Corrente I), where this Court vacated the Superior Court's judgment for lack of subject-matter jurisdiction and remanded it to the Superior Court for further proceedings. Below, we outline the facts pertinent to the present appeal.

         Corrente had two terms of city employment. His first term of employment commenced on June 26, 1967, when Corrente began working in the controller's office, and continued until he retired from his position as the city controller on April 12, 1987. Corrente received pension benefits for his first term of employment until he returned to work for the city on December 31, 1990, for his second term of employment, as the director of administration under then-Mayor Vincent A. Cianci, Jr. Corrente retired from this position on July 4, 1999, and received an increased monthly pension based on a higher gross salary for his second term of employment.

         On June 24, 2002, Corrente was convicted of six felony counts in the United States District Court for the District of Rhode Island. On October 23, 2002, the board suspended Corrente's pension benefits, pending a hearing, pursuant to the HSO, which provided in pertinent part:

"Whenever any employee is convicted of or pleads guilty or nolo contendere to any crime related to his or her public employment, the retirement board shall conduct a meeting, with the employee having the opportunity to be heard, to determine if a recommendation of revocation or reduction of any retirement allowance or annuity or other benefit or payment to which the employee is otherwise entitled to under this chapter is warranted." Chapter 17, Article VI, Sec. 17-189.1(a)(5).

         On April 23, 2003, the board appointed Larry Ritchie, a professor at Roger Williams University School of Law, as an "independent hearing officer." On December 27, 2007, after Corrente's release from prison, a hearing was held; and on March 12, 2008, Prof. Ritchie issued a report and recommendation to the board. He determined that all of the crimes that Corrente committed occurred during his second term of employment with the city as the director of administration; and accordingly, he recommended that the board: (1) revoke the retirement benefits that derived from Corrente's second term of employment; (2) pay him a reduced pension based on his first term of employment; (3) return the contributions that Corrente paid into the retirement system during his second term of employment; and (4) offset any retirement benefits and interest due that were suspended in October 2002 with the retirement benefits paid to Corrente following his retirement from his second term of employment.

         On July 30, 2008, the board met, and both Corrente and Prof. Ritchie were present. Professor Ritchie discussed the issue of taxes, stating, "[T]he one thing that * * * didn't come up at the hearing and I did not include at all in the recommendation had to do with taxation. * * * I would agree * * * that ought to be included in with the calculations." Following Prof. Ritchie's comments, a member of the board asked him if the board should add an additional item to his recommendation, about the tax issue, to which Prof. Ritchie responded affirmatively. Another member of the board clarified Prof. Ritchie's recommendation regarding the tax credit. He explained that Corrente would pay back to the city the amount of pension benefits from his second term of employment that he had received and that the board had since revoked, less the taxes that Corrente paid on that amount. On August 13, 2008, the board voted to adopt Prof. Ritchie's report and recommendation;[3] however, it did not adopt the recommendation concerning the tax credit.

         On October 10, 2008, the board initiated an action in the Superior Court, fashioned as a miscellaneous petition, to confirm its decision pursuant to Sec. 17-189.1(a)(5) of the HSO. Section 17-189.1(a)(5) of the HSO provided that the board "shall initiate a civil action in the [S]uperior [C]ourt for the revocation or reduction of any retirement allowance or annuity or other benefit or payment to which the employee is otherwise entitled to under chapter 17." Corrente also sought confirmation of the board's decision and filed a counterclaim for three "additional requests, " including: (1) a lump-sum payment, with interest, for the benefits deriving from his first term of employment that were suspended, from the date of suspension through the date of resumption; (2) a tax credit for any taxes he paid on the revoked amount of pension benefits, deducted from the total amount that he owed to the board; and (3) that Corrente not have to reimburse the city for the amount of pension benefits that were paid to him from the date of his second retirement through the date that his benefits were suspended.

         B Intervention

         On January 29, 2009, the mayor and the city moved to intervene pursuant to Rule 24(a) of the Superior Court Rules of Civil Procedure.[4] They asserted that intervention was appropriate because the interests of the city and its taxpayers were not adequately represented by the existing parties. The board objected to the motion. On March 13, 2009, the trial justice held a hearing on the motion to intervene. The mayor and the city maintained that the interests of the existing parties-the board and Corrente-were "perfectly aligned." They argued for intervention to protect the public interest and to assert their position that a de novo review was the appropriate standard of review in civil actions brought by the board in the Superior Court pursuant to the HSO. The board maintained that the interests of the mayor and the city were adequately represented through the two mayoral appointments to the board. The board also disagreed with the assertion that its interests were aligned with Corrente's and insisted that "there's adversity between the existing parties."

         In deciding the motion, the trial justice noted the four requirements of Rule 24: (1) the applicant must file a timely application to intervene; (2) the applicant must claim an interest relating to the property or transaction that forms the basis of the action; (3) disposition of the action may impair or impede the applicant's interest; and (4) the current parties to the action do not adequately represent the applicant's interest. See Hines Road, LLC v. Hall, 113 A.3d 924, 927 (R.I. 2015). The trial justice determined that the mayor and the city had satisfied the first requirement of Rule 24(a). The trial justice found that the intervenors also met the second requirement because "the transaction at issue is of high significance to the City of Providence." With respect to the third requirement, the trial justice determined that disposition of the pending action threatened to impair or impede the ability of the mayor and the city to protect its interest. Specifically, he found that the intervenors' position would not otherwise be raised by the existing parties because the positions of the board and Corrente were "essentially the same with respect to a substantial portion of the recommendation."

         Lastly, the trial justice found that neither of the existing parties to the action would adequately represent the interest of the mayor and the city. He first determined that Corrente would not adequately represent the interest of the mayor and the city because they held different positions in the case. With respect to the board, the trial justice deemed it "absurd" to find that it would adequately represent the interest of the mayor and the city because "there is a vast gulf between the position of the [r]etirement [b]oard and the position espoused by the [c]ity and the [m]ayor." Thus, the trial justice granted the motion to intervene.

         C Prior Appeals

         On April 13, 2009, the trial justice consolidated five related cases involving the board and different plaintiffs, including the action between the board and Corrente, to address three issues related to the HSO: (1) whether a criminal conviction was necessary for the board to take action to reduce or revoke pension benefits pursuant to the HSO; (2) whether the Superior Court had jurisdiction to review civil actions brought by the board pursuant to the HSO; and (3) what standard of review applied in the Superior Court when reviewing civil actions brought by the board.

         On September 8, 2009, the trial justice issued a decision in the consolidated cases finding that: (1) a conviction was not a prerequisite to the board taking action to revoke or reduce benefits; (2) its jurisdiction over equity actions along with its declaratory-judgment powers gave the Superior Court jurisdiction; and (3) the appropriate standard of review was that used for administrative appeals, as articulated in G.L. 1956 § 42-35-15 of the Administrative Procedures Act (APA). One of the plaintiffs in the consolidated cases appealed to this Court in Ryan v. City of Providence, 11 A.3d 68, 70 (R.I. 2011). In Ryan, we vacated the Superior Court's judgment and held that a criminal conviction was necessary before the board could take action to reduce or revoke pension benefits. Id. at 76. We did not reach the issue of the standard of review for civil actions brought by the board pursuant to the HSO. Id.

         After our ruling in Ryan, the board again moved to confirm its decision to reduce Corrente's pension benefits. In response, the intervenors objected to the board's motion and moved for summary judgment. On June 23, 2011, there was a hearing on the motions. At the hearing, the intervenors explained that their motion requested that the Superior Court deny the board's motion to confirm and either enter an order that revoked Corrente's pension entirely or remand the matter to the board for further proceedings. On September 28, 2011, the trial justice issued a decision that denied the intervenors' motion for summary judgment and confirmed the board's decision to reduce Corrente's pension.[5]

         In his written decision, the trial justice addressed the standard of review to apply to actions brought by the board pursuant to the HSO. He cited to his previous opinion in Retirement Board of the Employees Retirement System of Providence v. Annarino, Nos. 02-5196, 08-5442, 07-2175, 08-6508, 08-7268, 2009 WL 3328480, at *13 (R.I. Super. Ct. Sept. 8, 2009), where he found a "striking similarity" between the board's process under the HSO and that of the Retirement Board of the Employees' Retirement System for the State of Rhode Island (state retirement board), which is an "agency" subject to the APA pursuant to § 42-35-1. Specifically, the trial justice likened the city board's two-tiered procedure to the state retirement board's two-tiered review process under the APA. He therefore adopted the APA standard of review set forth in § 42-35-15(g). Under the APA's deferential standard of review, the trial justice determined that the board's decision was supported by substantial evidence, not arbitrary and capricious, not unlawful or unconstitutional, and not in excess of its authority. The trial justice also addressed Corrente's three additional requests that he set forth in his answer and counterclaim to the board's motion to confirm. He found that "Professor Ritchie's Report & Recommendation, and the Retirement Board's adoption thereof, specifically contemplated and appropriately dealt with the first and last prong of Mr. Corrente's 'Additional Relief, '" and he therefore declined to modify the adopted recommendation with respect to the first and last requests. The trial justice, however, remanded the tax-credit issue to the board "for a proper determination."

         On October 18, 2011, the trial justice entered a judgment that reflected his written decision; he denied the intervenors' motion for summary judgment, confirmed the board's decision, and remanded the tax-credit matter to the board.[6] On November 4, 2011, the intervenors appealed to this Court. Subsequently, the board cross-appealed the trial justice's grant of the motion to intervene.[7]

         On appeal, this Court ordered additional briefing on the issue of the Superior Court's subject-matter jurisdiction. Corrente I, 111 A.3d at 305. On March 9, 2015, we issued an opinion. Id. at 309-10. This Court held that the Superior Court lacked jurisdiction over an action brought by the board pursuant to the HSO and that therefore its judgment was void. Id. at 309. However, we concluded that the newly-enacted statute, G.L. 1956 § 36-10.1-5, vested the Superior Court with jurisdiction.[8] Corrente I, 111 A.3d at 309. Therefore, this Court remanded the matter to the Superior Court to conduct further proceedings consistent with our opinion or to re-enter its previous judgment. Id. at 309-10.

         D Tax Credit

         As noted above, prior to the appeal in Corrente I, the trial justice remanded the tax-credit issue to the board to decide. Pursuant to the Superior Court's order, the board discussed the tax-credit issue at two meetings, on April 18, 2012, and May 23, 2012. At the latter meeting, the board voted to deny Corrente's request for a tax credit.[9] On July 31, 2012, Corrente moved in the Superior Court to overrule the board's decision to deny his request for a tax credit.

         On January 31, 2013, the same trial justice heard the parties on Corrente's motion. Corrente asserted that the board's decision to deny him a tax credit was "unreasonable." The board maintained that it was not required to grant Corrente a tax credit; rather, it had discretion to decide whether or not to adopt Prof. Ritchie's recommendation to grant a tax credit. The board also distinguished Prof. Ritchie's "off-the-cuff" recommendation regarding the tax credit from the recommendation of "a hearing officer who deliberates on it and has a well-reasoned decision." The trial justice reviewed the board's decision and found that it was not an abuse of discretion. Accordingly, on February 1, 2013, he entered an order that denied Corrente's motion to overrule the board's decision to deny his request for a tax credit.

         E Present Appeal

         Following this Court's remand in Corrente I, the trial justice re-entered his previous orders on April 29, 2015. He again granted the mayor and the city's motion to intervene, confirmed the board's decision, [10] denied the intervenors' motion for summary judgment, and denied Corrente's motion to overrule the board's denial of a tax credit.[11] On the same day, the trial justice also entered a corresponding judgment.

         On May 8, 2015, Corrente appealed to this Court. On May 11, 2015, the intervenors appealed. On May 14, ...


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