SANDRA M. TIERNAN
SETH MAGAZINER, IN HIS CAPACITY AS GENERAL TREASURER OF THE STATE OF RHODE ISLAND and FRANK J. KARPINSKI, IN HIS CAPACITY AS EXECUTIVE DIRECTOR OF EMPLOYEES' RETIREMENT SYSTEM OF RHODE ISLAND
Plaintiff: Gregory L. Boyer, Esq.
Defendant: Michael P. Robinson, Esq.
this Court is the appeal of Sandra M. Tiernan (Appellant or
Ms. Tiernan) from a final decision of the Retirement Board of
the Employees' Retirement System of the State of Rhode
Island (ERSRI). Seth Magaziner (Magaziner),  in his capacity
as General Treasurer of the State of Rhode Island, and Frank
J. Karpinski (Karpinski or Director Karpinski), in his
capacity as Executive Director of ERSRI (collectively
Respondents), have opposed the instant appeal. Jurisdiction
is pursuant to G.L. 1956 §§ 42-35-1, et
seq. of the Administrative Procedures Act (APA).
facts in this case are not in dispute. On April 25,
2002, Appellant sustained a work-related injury, which injury
caused her to suffer cervical strain, low back strain, and
left shoulder strain. Stipulated Facts ¶ 1. She
thereafter applied for, and was granted, workers'
compensation benefits through the Rhode Island Division of
Workers' Compensation (DWC). She began receiving those
benefits on April 26, 2002. Id.
Ms. Tiernan applied to ERSRI for accidental disability
benefits, which application was approved on March 9,
2005. Id. at ¶ 2. On the following
day, the DWC informed ERSRI that Ms. Tiernan was receiving
benefits in the amount of $266.04 per week. Id. at
¶ 3. Because the total amount of Ms. Tiernan's
workers' compensation benefits exceeded the $688.13
monthly disability benefits awarded to her, ERSRI initially
did not pay any disability benefits to Ms. Tiernan.
Id. at ¶ 4. In other words, the entirety of Ms.
Tiernan's disability pension benefits was offset from her
workers' compensation benefits. See ERSRI
Letter, Jan. 19, 2010.
November 28, 2007, DWC notified Appellant that it intended to
discontinue her supplemental benefits as of May 28, 2008.
Id. at ¶ 9. In response, Ms. Tiernan filed a
petition for continuation of benefits pursuant to G.L. 1956
§ 28-33-18(d), and later a petition for coordination of
benefits pursuant to § 28-33-45(a). See Second
Am. Compl. ¶ 6. In February of 2009, Appellant and DWC
executed a Suspension Agreement stating that Ms.
Tiernan's workers' compensation benefits would be
terminated on March 1, 2009. Stipulated Facts ¶ 5. At or
around the same time, the Workers' Compensation Court
(WCC) entered a Pre-Trial Order coordinating Ms.
Tiernan's workers' compensation benefits with her
disability benefits pursuant to G.L. 1956 § 28-33-45(a).
See WCC Pre-Trial Order 1, Feb. 25, 2009. The
purpose of the Pre-Trial Order was to ensure that Appellant
would receive "compensation and retirement benefits
equal to the greater of the compensation or retirement
benefits for which [she] was otherwise eligible . . . ."
Id. at ¶ 6. Accordingly, based upon her
receiving $1064.64 per month in workers' compensation
benefits, the WCC ordered DWC to supplement Ms. Tiernan's
weekly disability retirement benefits in the amount of $21.27
per week. Id. By mutual agreement of the parties,
the Order was subsequently modified to correct a computation
error, resulting in an increase of Ms. Tiernan's
supplemental benefits from $21.27 per week to $76.80 per
week, commencing March 1, 2009. Stipulated Facts ¶¶
April 28, 2009, ERSRI learned about the Suspension Agreement
and began paying Ms. Tiernan her disability retirement
benefits retroactive to March 2, 2009. See ERSRI
Letter, Jan. 19, 2010. Two days later, ERSRI was informed
about the monthly supplement that DWC would be giving to
Appellant pursuant to the February 25, 2009 WCC Order and
began deducting those benefits from the awarded disability
pension. Stipulated Facts ¶¶ 8, 12. Based upon this
deduction, counsel for Appellant complained to ERSRI and
requested a clarification of its position with respect to the
matter. Id. at ¶ 12. In December 2009, counsel
for Ms. Tiernan also filed a declaratory judgment action,
pursuant to § 42-35-7. Id. at ¶ 13.
ERSRI received notice of the mutual agreement between Ms.
Tiernan and DWC regarding the February 25, 2009 WCC Order,
which had increased Appellant's supplemental DWC benefits
to $76.80. Id. at ¶ 14. As a result, ERSRI
informed Ms. Tiernan that effective immediately, it was going
to offset her workers' compensation payments retroactive
to March 1, 2009. See ERSRI Letter 2, Jan. 19, 2010.
ERSRI offered to provide a hearing in the event that Ms.
Tiernan objected to the determination and indicated that she
was required to exhaust her administrative remedies before
pursuing an action in the Superior Court. Id.
Subsequently, the parties entered into a stipulation
indicating that the declaratory judgment action would be held
in abeyance until Appellant had exhausted her administrative
remedies. Stipulated Facts ¶ 16.
letter dated January 22, 2010, Ms. Tiernan formally requested
that ERSRI reconsider its position or, in the alternative,
refer the matter to a hearing officer. See Karpinski
Letter 1, Jan. 29, 2010. On January 29, 2010, ERSRI, through
its executive director, issued a formal administrative denial
of Ms. Tiernan's request. A subsequent hearing on the
matter was conducted on April 29, 2010. Id.
hearing, counsel for the parties submitted a stipulation of
facts, with attached exhibits. Tr. 2:18-20, Apr. 29, 2010.
Both sides agreed that the matter involved a narrow question
of law; namely, whether the coordination of benefits
provision of the Workers' Compensation Act is subject to
the offset provisions contained in § 36-10-31, which
allows for a deduction of amounts paid pursuant to the
provisions of the workers' compensation law. Tr.
5:2-25-7:1-8, Apr. 29, 2010. After hearing arguments of
counsel and reviewing their post-hearing memoranda, the
hearing officer issued a decision affirming the
administrative denial of Appellant's request to
reconsider the decision to offset her workers'
compensation benefits from her disability retirement
benefits. See, Decision 5, Oct. 15, 2015.
Thereafter, Director Karpinski notified Ms. Tiernan that the
Retirement Board had affirmed the decision of the Hearing
Officer, thereby constituting a final decision of ERSRI on
this issue. See Karpinski Letter 1, Dec. 16, 2015.
of note that after the hearing but prior to the final
decision, Director Karpinski also informed Ms. Tiernan that
ERSRI intended to recover overpayments retroactive to March
1, 2009. See Karpinski Letter 1, May 28, 2015.
Specifically, Director Karpinski indicated that since Ms.
Tiernan had been collecting her pension since March 2, 2009,
with no offset of the $76.80 per week she had been receiving
in workers' compensation benefits, ERSRI believed that
Ms. Tiernan had been overpaid by a total of $24, 396.24.
Id. He further indicated that "[s]ince the
overpayments were made over the course of 75 pay periods, we
will recoup the monies at $325.28 per month for 6 years and 3
months beginning in June 2015 . . ." Id.
Furthermore, because Ms. Tiernan was still receiving the
weekly workers' compensation supplement to her disability
retirement benefits, Director Karpinski indicated that ERSRI
intended to continue to offset her weekly payment of $76.80
for a total of $332.80 per month. Id. at 2. The
combined effect of these actions would leave the Appellant
with a monthly disability pension benefit in the amount of
$49.01 per month until such time as the overpayments were
December 14, 2016, Ms. Tiernan filed an Amended Complaint
adding an Administrative Appeal to the already existing
declaratory judgment action. Thereafter, she filed a Second
Amended Complaint adding an estoppel claim. It is the Second
Amended Complaint that is the operative pleading in this
matter. The Second Amended Complaint contains three counts: a
Declaratory Judgment action pursuant to § 42-35-7 (Count
I); an Administrative Appeal pursuant to the APA (Count II);
and, an Estoppel claim (Count III). On June 6, 2017,
Respondents moved for summary judgment as to Counts I and III
of the Second Amended Complaint and a hearing was scheduled
for August, 29, 2017. By agreement of the parties, that
hearing date was vacated and in the alternative the parties
requested that the Administrative Appeal be decided first.
support of her appeal, Ms. Tiernan advances several
arguments. As a threshold matter, Appellant maintains that it
is inappropriate for ERSRI to overturn a determination of the
WCC, which she maintains is what happened by virtue of the
decision to offset the supplemental workers' compensation
benefits she was receiving. Furthermore, Appellant argues
that even if ERSRI's decision did not encroach upon the
authority of the WCC, it is substantively defective in that
the statutory provisions of § 28-33-45 are controlling
in the instant matter. Specifically, Ms. Tiernan maintains
that because § 28-33-45, which provides for the
coordination and/or supplementation of benefits, was enacted
subsequent to the offset provisions of § 36-10-31, it
should be presumed that the Legislature intended for it to be
applied in place of the offset provisions. The Respondents
have replied by arguing that § 28-33-45 applies to a far
broader range of recipients than state employees receiving a
disability pension. Moreover, Respondents insist that §
36-10-31 explicitly requires ERSRI to offset any monies
received by public sector employees pursuant to the
provisions of the Workers' Compensation Act against sums
payable under a disability retirement pension. Accordingly,
ERSRI maintains the hearing officer's decision should be