Opinion
Nos. 2008 CA 0258, 2008 CA 0259, 2008 CA 0260.
August 29, 2008.
ON APPEAL FROM THE TWENTY-FIRST JUDICIAL DISTRICT COURT IN AND FOR THE PARISH OF TANGIPAHOA, STATE OF LOUISIANA, DOCKET NOS. 2005-000411 C/W 2005-002124 C/W 2005-002669, DIVISION C, HONORABLE ROBERT H. MORRISON, III, JUDGE PRESIDING.
Andre G. Coudrain, Hammond, LA, Counsel for Appellants, City of Hammond and Mason Foster.
Gary N. Boutwell, III. Hammond, LA, Counsel for Appellate, Donald Day.
Jeffrey S. Johnson, Hammond, LA, Counsel for Appellees, John Dickens and Anthony Mauer.
John Feduccia, Hammond, LA, Counsel for Appellee, Hammond Municipal Fire and Police Civil Service Board.
BEFORE: GAIDRY, McDONALD, AND McCLENDON, JJ.
In this consolidated litigation, the City of Hammond (the City) and Mayor Mason Foster appeal a judgment awarding sick time accumulated prior to July 1, 1997 to classified civil service employees retiring from the city police and fire departments. For the foregoing reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
Pursuant to Ordinance 04-3023, effective June 1, 2004, Rule V-22(I) of the C. S. [Civil Service] Personnel Policies and Procedures Manual for [Hammond] City Employees (the City Manual) was amended to provide that "[i]f an employee does not use sick leave accrued up through December 31 of any given year, such unused balances shall be carried over and added to that which he/she accrues in the following year." Further, the amended rule provides that "[a]n employee may accrue a maximum of one hundred eighty (180) working days or 1440 hours" and that "[a]t the time of retirement from the City, employees shall be paid for any unused sick leave at the straight time rate of pay earned at the time of separation." At the time Ordinance 04-3023 was enacted, Rule XII, § 1(B)(5) of the Fire and Police Civil Service Board Rules for the City of Hammond (the Board Rules) provided that "[n]o cash payment may be made for accumulated sick leave." Accordingly, in August 2004, Section 1(B)(2)(h) of Rule XII of the Board Rules was amended to be consistent with the City Manual, specifically allowing for carryover of accrued sick leave and payment upon retirement for any unused sick leave "not to exceed a maximum of one hundred eighty (180) working days or 1440 hours." Neither the amended City Manual nor the Board Rules, as amended in August 2004, specified when sick leave would begin to accrue for purposes of payment upon retirement.
In July 2005, Rule XII of the Board Rules was further amended to provide that "[h]ours are to be accrued beginning the employee's first day of work." Since the litigants herein retired prior to that date, the July 2005 amendment is not applicable.
In October 2004, Anthony Mauer and John Dickens retired from the Hammond Fire Department following twenty and twenty-nine respective years of service. Approximately two months later, in December 2004, Donald Day retired from the Hammond Police Department after more than thirty years of service. At the time of their retirement, Mauer, Dickens, and Day (hereinafter collectively referred to as the "retirees") had each accrued the maximum 180 days, or 1440 hours, of sick leave. Upon retirement, however, the City refused to pay the retirees for the maximum amount of accrued leave, instead limiting payment to sick leave accrued since July 1, 1997.
There is some inconsistency in the record as to whether the first retiree's surname is "Mauer" or "Maurer." However, to the extent that his counsel has identified him as "Anthony Mauer" in the appellate brief filed with this Court, we will reference him by that name for purposes of this opinion.
Previously, the City had adopted an informal policy where it allowed its non-civil service employees to accrue sick leave for retirement purposes as of 1997. Therefore, the City chose to allow civil service employees under revised Rule XII to likewise accrue sick leave for retirement purposes as of July 1, 1997.
Following their retirement, the retirees filed claims with the Hammond Municipal Fire and Police Civil Service Board (the Board), seeking to recover the balance of their sick leave pay. Following a hearing on January 12, 2005, the Board issued written findings of fact on January 21, 2005, finding that Rule XII of the Board Rules requires the City to pay the balance of the accrued sick time up to 1440 hours to each of the retirees. Further, in separate written findings issued that same date, the Board ordered the City to pay Gary Boutwell, counsel for Donald Day, attorney fees in the amount of $1,000.00.
Following the decision of the Board on January 21, 2005, Deputy State Examiner Robert S. Lawrence sent correspondence to Joshua Fletcher, Chairman of the Board, advising the Board that the revisions to Board Rule XII, purportedly adopted in August 2004, were not properly posted and presented at a public hearing as required by La.R.S. 33:2478. Thus, the State Examiner's Office took the position that the revised rule was ineffective and that the Board may not have had the authority to hear the matter brought by the retirees. Nonetheless, the appellants have not challenged on appeal the enactment of revised Board Rule XII, and that rule has not been repealed. Thus, for purposes of this appeal, this court will treat the rule as if it were enacted in compliance with the formalities of law.
The City filed an appeal of the Board's decisions in the Twenty-first Judicial District Court for the Parish of Tangipahoa, captioned In Re: Ruling of Hammond Municipal Fire and Police Civil Service Board on Donald Day, Anthony Mauer and John Dickens, Docket No. 2005-000411, and assigned to Division C of the district court. On June 2, 2005, the district court dismissed the appeal on the ground that it had no appellate jurisdiction over the issues presented. In written reasons issued that same date, the district court explained that it was constrained by La.R.S. 33:2501 and could only review on appeal decisions by the Board regarding corrective or disciplinary action or the discharge of regular employees in classified service. Since there was no issue as to any corrective or disciplinary action therein and the retirees were not employees at the time of the Board hearing, the district court concluded that it lacked appellate authority, noting that the parties' remedy would be through some other judicial proceeding. On June 8, 2005 the City of Hammond filed a timely motion for new trial on the limited issue of attorney fees, asserting that the only authority in law for payment of the $1,000.00 awarded to Gary Boutwell is a finding of reversal of the City's action in a disciplinary action.
Louisiana Revised Statute 33:2501 provides, in pertinent part, as follows:
A. Any regular employee in the classified service who feels that he has been discharged or subjected to any corrective or disciplinary action without just cause, may, within fifteen days after the action, demand, in writing, a hearing and investigation by the board to determine the reasonableness of the action. The board shall grant the employee a hearing and investigation within thirty days after receipt of the written request.
. . . .
C. (1) After the investigation provided for in Subsection B of this Section, the board may, if the evidence is conclusive, affirm the action of the appointing authority. If the board finds that the action was not taken in good faith for cause under the provisions of this Part, the board shall order the immediate reinstatement or reemployment of such person in the office, place, position, or employment from which he was removed, suspended, demoted, or discharged, which reinstatement shall, if the board so provides, be retroactive and entitle him to his regular pay from the time of removal, suspension, demotion, discharge, or other disciplinary action. The board may modify the order of removal, suspension, demotion, discharge, or other disciplinary action by directing a suspension without pay, for a given period, a reduction in pay to the rate prevailing for the next lower class, a reduction or demotion to a position of any lower class and to the rate of pay prevailing thereof, or such other lesser punitive action that may be appropriate under the circumstances.
. . . .
E. (1) Any employee under classified service and any appointing authority may appeal from any decision of the board, or from any action taken by the board under the provisions of the Part that is prejudicial to the employee or appointing authority. This appeal shall lie direct to the court of original and unlimited jurisdiction in civil suits of the parish wherein the board is domiciled.
(2) The appeal shall be taken by serving the board, within thirty days after entry of its decision, a written notice of the appeal, stating the grounds thereof and demanding that a certified transcript of the record, or written findings of facts, and all papers on file in the office of the board affecting or relating to such decision, be filed with the designated court. The board shall, within ten days, after the filing of the notice of appeal, make, certify, and file the complete transcript with the designated court, and that court shall thereupon proceed to hear and determine the appeal in a summary manner.
(3) This hearing shall be confined to the determination of whether the decision made by the board was made in good faith for cause under the provisions of this Part. No appeal to the court shall be taken except upon these grounds and except as provided in Subsection D of this Section.
In challenging the award of attorney fees in its motion for new trial, the City seemingly relied on La.R.S. 32:2501.1, which provides:
When an appeal is taken by an employee in the classified service pursuant to R.S. 33:2501 to a municipal fire and police civil service board and the board determines, in reversing the decision of the appointing authority, that the corrective or disciplinary action taken by the appointing authority was without just cause as provided in R.S. 33:2501, the board may award to the appealing employee attorney fees to be assessed against the appointing authority not to exceed one thousand dollars in any one appeal.
On June 21, 2005, Donald Day filed a separate suit against the City of Hammond and Mayor Mayson Foster, seeking payment of sick leave accrued by him prior to July 1, 1997, either through mandamus, declaratory judgment, or judgment for damages, which matter was captioned Donald Day v. Mayson Foster and the City of Hammond, Docket No. 2005-002124, and was assigned to Division D of the district court. On June 29, 2005, Donald Day and the City of Hammond filed a joint motion to continue without date the rule on the pending motion for new trial in Suit No. 2005-000411 and to consolidate Suit No. 2005-002124 into the lower docket number, which motion was granted on July 5, 2005. Subsequently, on October 3, 2005, John Dickens intervened in Suit No. 2005-002124, also seeking payment of unpaid sick leave accrued prior to July 1, 1997.
In the interim, on August 2, 2005, the City filed a third suit in the Twenty-first Judicial District Court, seeking a declaratory judgment that Rule XII of the Board Rules, as revised in August 2004, is ultra vires, unlawful, and unconstitutional on the grounds that it increases the City's obligation for payment of unused sick leave. This matter was captioned City of Hammond v. Hammond Municipal Fire and Police Civil Service Board, Suit No. 2005-002699, and was assigned to Division D of the district court. On February 2, 2006, Mayor Foster and the City of Hammond filed a motion to consolidate Suit No. 2005-002699 into the previously consolidated suits, which motion was granted on November 30, 2006.
On March 2, 2007, the consolidated matters were tried before Judge Robert H. Morrison, III in Division C of the district court. The matter was taken under advisement, and on June 29, 2007, the trial court rendered judgment in favor of the plaintiff retirees and against the defendant, the City of Hammond, for sick leave accrued prior to July 1, 1997, as follows: (1) Donald Day-$21,652.47; (2) Anthony Mauer-$15,566.23; and (3) John Dickens-$18,978.15. The City of Hammond was further cast for all costs of the proceeding. On August 15, 2007, the City of Hammond and Mayor Mayson Foster (hereinafter, collectively referred to as the "appellants") were granted a suspensive appeal from that judgment.
We recognize that the district court curiously consolidated Suit Nos. 2005-002124 and 2005-002669 into Suit No. 2005-000411 after the judge presiding over the first filed suit rendered judgment finding that the trial court lacked jurisdiction over that matter. At the time of consolidation, however, we note that the issue of the propriety of the award of attorney fees in favor of Donald Day and against the City of Hammond remained pending in Suit No. 2005-000411 insofar as a motion for new trial had been filed as to that issue. Furthermore, we note that pursuant to a consent agreement filed into the record of all three suits on November 28, 2006, the parties agreed to consolidation of Suit No. 2005-002669 with Suit Nos. 2005-000411 and 2005-002124, and no party has subsequently complained on appeal that the consolidation was improper. Thus, under these unique facts and circumstances, we find no procedural defect in the consolidated trial of these matters in Division C of the district court and judgment thereon.
During trial, the parties jointly stipulated that all pleadings filed by John Dickens were amended to include Anthony Mauer as a petitioner and that all answers and pleadings filed by or on behalf of the City and the Board were amended to include the same allegations and defenses as to Mauer as previously raised in defense of the claim of Dickens. Thus, we find that the trial court did not err in considering and ruling upon the claims of Anthony Mauer.
ANALYSIS
On appeal, the appellants first argue that the trial court erred in finding that the Board can adopt and/or interpret a rule so as to impose an adverse fiscal liability on the City without the City's consent. In asserting this argument, the appellants recognize that the Board is a public body established in the Louisiana Constitution and is subject to the provisions of Chapter 5 of Title 33 of the Louisiana Revised Statutes. Generally, pursuant to La.Const. Art. X, § 10(A)(1)(a), the appellants admit that each civil service board is vested with broad and general rulemaking and subpoena powers for the administration and regulation of the classified service, including the power to adopt rules for regulating employment, promotion, demotion, suspension, reduction in pay, removal, certification, qualifications, political activities, employment conditions, compensation and disbursements to employees, and other personnel matters and transactions. The appellants submit, however, that the powers of the Board are not unlimited and point out that La.R.S. 33:2478 expressly provides that no rule, regulation, or order promulgated by the Board shall be contrary to any other provision of law.
The appellants correctly recognize that the City, in turn, is a municipality organized under a home rule charter. Section 5-04 of the Hammond City Charter specifically provides that "[n]o payment shall be made or obligation incurred against any allotment or appropriation except in accordance with appropriations duly made and unless the mayor or the mayor's designee first certifies that there is a sufficient unencumbered balance in such allotment or appropriation and that sufficient funds therefrom are or will be available to cover the claim or meet the obligation when it becomes due and payable." Section 5-04 of the charter further provides that "[a]ny authorization of payment or incurring of obligation in violation of the provisions of this charter shall be void and any payment so made illegal. . . ."
Under the legal scheme, the appellants submit that the rulemaking authority vested in the Board must be carefully balanced against the authority of the City, and that any claimed exception to the home rule abilities and immunities of the City are to be viewed with scrutiny. In the instant case, the appellants point out that Mayor Foster testified during trial that the fiscal impact of payment of sick leave to all retiring classified civil service employees from the date of first hire would be "significant" and "well into the hundreds of thousands of dollars." In light of Mayor Foster's testimony, the appellants argue that the adoption of revised Board Rule XII and/or the interpretation thereof proposed by the Board creates an adverse impact on the accrued liability of the City and conflicts with the authority granted to the mayor and city council under Section 5-04 of the City's home rule charter. In that sense, the appellants contend that the interpretation of Rule XII adopted by the Board and applied by the trial court is contrary to law and violates La.R.S. 33:2478. Moreover, the appellants suggest that revised Board Rule XII does not effectuate the purposes of classified civil service in that it neither ensures that classified employees are competitively selected on the basis of merit nor protects classified employees from dismissal or disciplinary actions for religious or politically motivated reasons. Thus, the appellants submit that this Court should not impose the fiscal consequences of the revised Board Rule XII on the City without limitation.
Secondly, the appellants argue that the trial court erred in finding that the City engaged in a prior course of conduct that created an implied agreement to pay all accrued sick leave upon retirement. In taking this position, the appellants recognize that Donald Day testified at trial that prior to his retirement from the Hammond Police Department, police officers were allowed to either "run out" their sick time prior to retirement or were paid a lump sum settlement for accrued sick leave upon retirement. Nonetheless, the appellants submit that such instances were never part of the common retirement procedure of the police department and constituted exceptional cases. Additionally, the appellants point out that no testimony was offered to show that employees of the Hammond Fire Department were ever allowed to "run out" their accrued leave or were reimbursed therefore in lump sums. The appellants, therefore, deny the suggestion that any informal policy was ever adopted by the City for payment of accrued sick leave prior to August 2004.
Upon further inquiry, Donald Day clarified that the unofficial "run out" policy enabled officers who were ready to retire to take the balance of their sick leave without reporting to work and to receive a regular paycheck during that time period. Upon exhaustion of their accrued leave, the officers would return to work for one day, at which time they would give notice of their retirement with immediate effect.
Further, even assuming for purposes of argument that the police and fire departments routinely paid retiring employees for accrued sick leave prior to the adoption of revised Board Rule XII, the appellants submit that such conduct was in direct violation of civil service rules in effect at that time, which only allowed the use of sick leave for illness and expressly prohibited cash payment for accumulated sick leave. Thus, the appellants argue that any reliance on such purported conduct by retiring employees would have been unwarranted.
Upon consideration of the arguments on appeal, we note that the appellants have overlooked several key facts. With respect to the adoption of revised Board Rule XII, for instance, the appellants entirely ignore the fact that the City of Hammond supported the passage of a revised rule. Indeed, Mayor Foster admitted upon inquiry at trial that he had a large role in the adoption of Rule V-22(I) of the City Manual, effective June 1, 2004, and that he later supported the adoption of a revised Board rule in an effort to achieve equality of treatment among classified employees, including firemen and policemen, and non-classified employees. Mayor Foster's testimony was corroborated by Joshua Fletcher, the chairman of the Hammond Municipal Fire and Police Civil Service Board, who testified that prior to and during the month of August 2004, the Board and the City were in continuous communications regarding the proposed rule change and that the City, acting through Mayor Foster and City Attorney Andre Coudrain, was at all relevant times a proponent of the revised rule.
Also, the appellants overlook the fact that the City made no apparent effort prior to the amendment of Board Rule XII to limit the application of the proposed rule to sick leave accrued on or after July 1, 1997. Rather, the City capped its potential exposure by limiting payment upon retirement to a maximum of 180 working days or 1440 hours. Mayor Foster's conclusory testimony that the fiscal impact of unlimited accrual of sick leave would be "significant" is unpersuasive, especially since no evidence has been offered by the appellants to show if and when a study was ever conducted by the City regarding the fiscal impact resulting from the payment of accrued leave to classified employees. Moreover, Mayor Foster's testimony that revised Board Rule XII imposed an undue financial burden on the City was contradicted by Joshua Fletcher, who testified that the City openly supported the rule because of its financial benefits. In particular, Fletcher testified that City Attorney Andre Coudrain was an advocate of the revised rule, because it enabled the City to immediately fill a retiree's position and prevented the accrual of additional annual leave by a retiring employee during the "run out" period.
Based on the testimony elicited at trial, we find that this case is factually distinguishable from Lafayette City-Parish Consol. Government v. Lafayette Mun. Fire Police Civil Service Bd., 2001-1460 (La.App. 3 Cir. 5/8/02), 816 So.2d 977, writ denied, 2002-1565 (La. 9/30/02), 825 So.2d 1194, and Civil Service Com'n of City of New Orleans v. City of New Orleans, 2002-1812, 2002-1815 (La. 9/9/03), 854 So.2d 322, the cases cited by the appellants. In Lafayette City-Parish Consol Government, the court recognized that the Lafayette Municipal Fire and Police Service Board could not adopt a rule to increase the number of annual leave days given to city police officers in contravention of the city's home rule charter, which prohibited any authorization of payment or incurring of financial obligation without prior certification by the city president or his designee, and in violation of La.R.S. 33:2478, which prohibits the adoption of a civil service board rule which is contrary to any other provision of law. Likewise, in Civ. Serv. Com'n of City of New Orleans, the court held, in pertinent part, that portions of the New Orleans civil service commission's rules that gave the commission the ex parte authority to suspend the effectiveness of privatization contracts entered into by the home rule city for personal or professional services were beyond the constitutional rulemaking power granted to the commission, and thus, were unconstitutional. The distinguishing factor of both of those cases is that they involved unilateral efforts by civil service boards to adopt rules impacting the home rule city governments. Herein, by contrast, the evidence shows that the Board did not act independently, but rather acted upon request by the City to revise Board Rule XII to provide for payment upon retirement of unused sick leave up to a maximum of 180 working days or 1440 hours. The City, therefore, cannot now complain that the Board violated law by adopting a rule that imposes an undue financial burden on the City without its consent.
Furthermore, in arguing that the City did not create an implied agreement to pay the maximum sick leave accrued upon retirement, the appellants focus exclusively on the practices of the City under the former version of Board Rule XII. The appellants ignore, however, the City's specific conduct in the fall of 2004 in implementing the revised rule with respect to the retirees involved in this litigation.
The uncontradicted testimony of the retirees at trial shows that they each relied on representations from the City that they would be paid for 180 days, or 1440 hours, of accrued sick leave upon retirement. Donald Day, for example, testified that approximately one month prior to his retirement from the police department in December 2004, Mayor Foster indicated to him during a conversation that he would benefit from the new leave policy. Day confirmed that he made plans for retirement based on a belief that he would be paid for 180 days of sick leave and that he otherwise would not have retired. Day, however, stated that he did not learn until after he had already submitted notice of his retirement that he might not be paid for the maximum amount of accrued sick leave. At that time, Day testified that he attempted to reinstate his employment so as to "run out" his sick time, but his request for reinstatement was refused.
Likewise, John Dickens testified that he tracked the proposal and enactment of revised Board Rule XII and attended all Board proceedings relative to the revised rule. Once the rule was passed, Dickens testified that Fire Chief Collura confirmed that he would be paid for accrued sick leave under the revised rule and that was one of the big factors that he considered in deciding to retire. Dickens stated that he did not become aware that he would not be paid for the full 180 days of accrued sick leave until approximately one month after he retired when he received his final reimbursement check.
Lastly, Anthony Mauer testified that he based his decision to retire solely on representations by Chief Collura that he would be paid for 180 days of accrued sick leave, and that he would not have retired otherwise. Mauer testified that he unknowingly forfeited benefits as a result of his decision to retire, both in terms of uncompensated accrued leave and loss of future benefits that would have otherwise accrued. Like Dickens, Mauer stated that he did not learn that he would not be paid for the maximum amount of accrued leave until he picked up his final paycheck.
We recognize that the Louisiana Supreme Court has previously held in the case of LaFleur v. City of New Orleans, 2001-3224 (La. 12/4/02), 831 So.2d 941, that a city's unwritten policy and practice of allowing police officers to "run out" sick leave before retiring did not create an enforceable implied contract. Nonetheless, the facts of this case are distinguishable from those considered by the Louisiana Supreme Court in LaFleur. Specifically, in LaFleur, no representations were made to the retirees that they would be allowed to run out their sick time. Indeed, the informal "run out" policy in that case was clearly contrary to the written civil service rules. Herein, by contrast, the retirees relied on a written rule adopted by the Board that allowed the payment of up to 180 days of accrued sick leave. The revised rule contained no indication that payment would be limited to leave accrued on or after July 1, 1997. Moreover, city officials expressly assured the retirees that they would be paid in full for leave accrued from the date of first hire up to the maximum provided by revised Board Rule XII. In summary, the evidence in this case establishes that the City consented to the enactment of revised Board Rule XII. Also, the testimony shows that the City engaged in a course of conduct, both through written and oral representations, that amounted to an implied agreement with the retirees to pay the entirety of leave accrued up to the maximum of 180 days, or 1440 hours, and that the retirees relied on the actions of the City in deciding to retire. Accordingly, upon review, we find that the trial court's judgment in favor of the retirees is abundantly supported by the evidence and testimony presented at trial and that the trial court did not manifestly err in its factual findings.
CONCLUSION
Based on the foregoing, and in light of the unique facts and circumstances of this case, we affirm the judgment of the trial court in favor of the retirees and against the City of Hammond in the following amounts: (1) Donald Day — $21,652.47; (2) Anthony Mauer — $15,566.23; and (3) John Dickens — $18,978.15. Nonetheless, we remand this matter to the trial court for assessment of court costs in a dollar amount as required by La.R.S. 13:5112(A). Further, we hereby assess the costs of this appeal in the amount of $2,121.00 against the appellants, Mayor Mason Foster and the City of Hammond.
AFFIRMED AND REMANDED.
While recognizing the significant contribution and personal sacrifice made by our police officers and fire personnel to protect our communities, ignoring the protections enacted to regulate the use of public funds would eventually operate to the detriment of the entire community, including police and fire department employees. Louisiana Revised Statutes 33:2478 provides that "No rule, regulation, or order shall be . . . contrary to any other provision of law." As noted in the majority opinion, section 5-04 of the Hammond City Charter specifically provides that "[n]o payment shall be made or obligation incurred against any allotment or appropriation except in accordance with appropriations duly made and unless the mayor or the mayor's designee first certifies that there is a sufficient unencumbered balance in such allotment or appropriation and that sufficient funds therefrom are or will be available to cover the claim or meet the obligation when it becomes due and payable." Section 5-04 further makes any such unauthorized payment "void" and "illegal." Thus, the Board's action, even in conjunction with the mayor's representations, cannot form the basis of a valid agreement to fund these benefits unless the mayor or his designee "certifies" that funds are available or will be available. See LaFleur v. City of New Orleans, 2001-3224, pp. 9-10, (La. 12/4/02), 831 So.2d 941, 946-47 (unenforceable if result prohibited by law). A statement by the mayor or a representative that the rule would be financially beneficial to the city does not meet the clear requirements of the city charter, and cannot be extrapolated to serve as a certification of availability of funds for a specific use or of a particular amount. For these reasons, I respectfully dissent.