Opinion
C.A. No. 19019-NC
Date Submitted: December 20, 2001
Date Decided: March 13, 2002
John Bialecki, Esquire of BIALECKI BRAGG, P.C., Wilmington, Delaware; Attorney for Plaintiffs.
Scott G. Wilcox, Esquire of NEW CASTLE COUNTY DEPARTMENT OF LAW, New Castle, Delaware; Attorney for Defendants.
MEMORANDUM OPINION
Under challenge in this action is the validity of New Castle County Ordinance 97-114 Substitute No. 1, adopted on October 21, 1997 (the "Ordinance"). The Ordinance established a contributory funded pension program for current and former employees of New Castle County. The plaintiffs, who are current and former New Castle County employees, brought this action against the County and its representatives (collectively, the "County") for a declaration that the Ordinance is invalid, and also for an injunction that would require the County to permit the plaintiffs to participate in the pension program retroactively.
In addition to New Castle County, the named defendants are the County Council of New Castle County; Thomas P. Gordon, County Executive of New Castle County; Christopher A. Coons, County Council President; and Richard L. Abbott, J. Robert Woods, Robert S. Weiner, Penrose Hollins, Karen Venezky and J. Christopher Roberts, Members of the County Council of New Castle County.
The County has moved to dismiss the complaint in its entirety. As discussed below, the motion will be granted with respect to the plaintiffs' Delaware statutory claims, and will be denied with respect to their Federal Civil Rights Act claim brought under 42 U.S.C.A. § 1983.
I. FACTUAL BACKGROUND
The facts recited below are derived from the well-pled allegations of the complaint. On October 21, 1997 the County adopted the Ordinance that established the pension program. The Ordinance gave New Castle County employees until October 21, 1998 to elect to purchase pension time they had earned from their former employment with a governmental entity other than the federal government (the "buy-in provision"). The purchased pension time could then be credited to the employee's New Castle County pension eligibility.
Weinberger v. UOP, Inc., 409 A.2d 1262, 1263-64 (Del.Ch. 1979).
Immediately after the Ordinance was adopted, several New Castle County employees who were United States military veterans protested the exclusion from the pension program of their time they had previously sewed in the military. In response, the County's representatives told the plaintiffs that the exclusion of the veterans' military time from the pension program was a mistake that would be corrected. The plaintiffs allege they relied on those representations and that as a result, they did not bring this action to enforce their rights until after the two-year statute of limitations period had expired.
On March 6, 2000, the County formally notified the plaintiffs that it would not initiate legislation to amend the pension program to include prior employment time for County employees who were military veterans and former federal governmental employees.
This lawsuit followed.
II. THE CLAIMS AND ISSUES
The complaint alleges three grounds for relief. First, the plaintiffs claim (in Counts I and IV) that the pension program violated the statutory guidelines prescribed by 9 Del. C. § 3101 and 3102 for creating a County pension plan. The plaintiffs allege that Section 3101 required that any pension plan created thereunder must permit any and all County employees to participate in the plan. Because former federal employees are not allowed to credit their prior federal government employment time towards the pension plan (but former state employees are allowed to credit their prior state employment time), the plan violates the statutory requirement that all employees be allowed to participate. The plaintiffs further claim that the County violated Section 3102 by failing to create an alternate pension plan as that statute required. For the reasons next discussed herein, I conclude that Counts I and IV do not state cognizable claims and must therefore be dismissed.
Those provisions were subsequently repealed on July 13, 1998 by 71 Del. Laws, ch. 401, § 90, but were in force at the time of the events complained of here.
Second, the plaintiffs claim (in Count II) that the pension program violates 29 Del. C. § 5551-5595, which enacted a pension plan that Delaware counties and municipalities may use for their employees (the "State pension plan"). The County contends that it is not subject to Sections 5551-5595 because it elected not to participate in the State pension plan. Because the plaintiffs have made no serious effort to support this claim or to respond to the County's pro-dismissal arguments in their brief, that claim will be dismissed as well.
Third, and finally, the plaintiffs argue (in Count III) that the pension program violates the Federal Civil Rights Statute, 42 U.S.C.A. § 1983. With respect to that claim, the only issue presented on this motion is whether the claim is barred by the statute of limitations or the doctrine of laches. The County argues that the claim is time-barred because the applicable period of limitations is two years, and the defendants waited four years to bring this action. In response, the plaintiffs contend that the County is equitably estopped from raising this defense because during the period in which the suit could be timely brought, the County misled the plaintiffs into believing that their exclusion from the pension program was a mistake that would be rectified in future legislation. I find for the purposes of this motion, that the complaint states a cognizable claim that the County is equitably estopped from raising a statute of limitations or laches defense.
The bases for these rulings are next addressed.
III. ANALYSIS
A. Does the Pension Program Violate 9 Del. C. § 3101 and 3102?
The plaintiffs first claim that the adoption of the Ordinance violated 9 Del. C. § 3101 and 3102 because it "established a contributory funded pension program which by its own terms did not permit any existing employee of New Castle County to participate, but instead discriminated against certain classes of employees (veterans and military employees)." Count IV further alleges that because the Ordinance violated those statutes, the County's enactment of the Ordinance was arbitrary and capricious.
Complaint ¶ 25 (emphasis omitted from original).
These claims rest upon the proposition that all State employees must, by law, be deemed eligible for every available benefit under any pension plan that is created under Section 3101. A plain reading of Section 3101, however, shows otherwise. Section 3101 provides that:
Upon the establishment of a contributory funded pension program, any existing employee of New Castle County who elects to participate in said program and all employees hired after the effective date of said program who are covered by said program shall be entitled to the benefits for which they qualify under this chapter.
9 Del. C. § 3101 (emphasis added).
The quoted language makes it plain that County employees will be entitled not to all pension benefits, but only to the benefits for which they qualify under the County pension program. In this case, the County determined that for a New Castle County employee to be eligible to credit employment service with a former employer (under the buy-in provision), that previous employer must have been a state or any political subdivision thereof. Thus, contrary to the plaintiffs' position, former employees of the federal government, including the armed forces, do not "qualify" for that particular benefit within the meaning of Section 3101, and nothing in that statute prohibits that exclusion.
Pl. Ans. Br. at Ex. B.
The plaintiffs also claim (apparently in the alternative) that the County failed to enact "an alternate pension plan for employees who did not elect or could not participate in the plan adopted by the Ordinance" as required by 9 Del. C. § 3102. In response, the County argues that it satisfied the requirements of that Section when it created an alternate pension plan in 1971. The County's argument that the alternate pension plan complies with Section 3102 appears on its face to be a reasonable interpretation of the statute and the alternate pension plan. In their answering brief, however, the plaintiffs make no reasoned effort to show otherwise. They simply reassert their conclusory allegation that "[t]he county also failed to adopt an alternate contributory funded pension program pursuant to § 3102." The plaintiffs do not (i) address the existence of the alternate pension plan that was specifically created to satisfy Section 3102 and that (at least facially) complies with the statute or (ii) state, in their complaint or brief, how the alleged failure to adopt an alternate pension plan relates to or supports their request for declaratory and injunctive relief. That omission is also fatal because the plaintiffs' conclusory allegation fails to confront the fact that the County could legally adopt a Section 3102 pension plan that also disqualifies former federal employees from crediting their previous employment time. In short, the Section 3102 claim fails for lack of specificity and legal support.
Complaint ¶ 26. Section 3102 states that "New Castle County shall, by ordinance enacted prior to September 23, 1971, provide a pension plan for existing employees of New Castle County who do not elect to participate in the pension program authorized by § 3101 of this title."
Del. Op. Br. at 7; see New Castle County C. §§ 26.04.200-209, formerly §§ 26-636-646 (New Castle County Alternate Pension Plan, adopted pursuant to 9 Del. C. § 3102).
Pl. Ans. Br. at 8.
9 Del. C. § 3102 only requires a pension plan created under that Section to "provide the benefits heretofore provided under former Chapter 17 of Title 9." Chapter 17 does not allow former federal employees to credit their previous employment towards their New Castle County Pension Plan.
Accordingly, the plaintiffs' first claim, based on 9 Del. C. § 3101 and 3102, is not legally cognizable and will be dismissed. Because Count IV derives its force from Count I, that Count must be dismissed as well. B. Does the Pension Program Violate 29 Del. C. § 5551-5595?
Count IV alleges that the County's actions were arbitrary and capricious because the Ordinance was not adopted in compliance with Sections 3101 and 3102. Thus, the validity of Count IV depends on the legal validity of Count I.
Count II of the complaint alleges, in its entirety, that "[t]he ordinance adopted by the Council was in conflict with the provisions of 29 Del. C. § 5551 et seq[.] regarding County and Municipal Pension Plans." The County argues that Count II must be dismissed because (i) the State pension plan only applies to counties and municipalities that elect to participate in the specific plan created by that statute, and (ii) New Castle County elected to create its own pension plan under 9 Del. C. § 3101 and 3102, and therefore Sections 5551-5595 do not apply to the County's current pension scheme. The plaintiffs do not seriously contest the County's position. They simply argue that they need to take discovery to determine "if and why the County Council Attorney failed to approve the Ordinance, and what effect this gives to the validity of the Ordinance." That argument — that the Ordinance may have been invalidly enacted because it was not approved by the County attorney — is a new claim, not pled in the complaint, that appears for the first time in the plaintiffs' brief. For that reason, that claim will not be considered for purposes of this motion. Because the plaintiffs have not responded in any meaningful way to the County's pro-dismissal arguments, Count II must be dismissed for failure to state a claim upon which relief can be granted. C. Is the Claim Brought Under 42 U.S.C.A. § 1983 Barred by Laches?
Complaint ¶ 27.
See 29 Del. C. § 5555 (providing that "[a]ny county or municipality . . . may elect to participate in the State Employees' Pension Fund.").
Pl. Ans. Br. at 8.
Haber v. Bell, 465 A.2d 353, 357 (Del.Ch. 1983).
Del. Ch. R. 12(b)(6); Friedman v. Alcatel Alsthom, 752 A.2d 544, 549 (Del.Ch. 1999).
Lastly, the plaintiffs allege in Count III of their complaint that the Ordinance violates 42 U.S.C.A. § 1983. The only issue presented on this motion is whether that claim is time-barred by reason of the applicable statute of limitations or the equitable defense of laches.
42 U.S.C.A. § 1983 provides that any person who under the color of state law "subjects, or causes to be subjected, any citizen of the United States . . . to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law [or] suit in equity."
Because the plaintiffs are seeking equitable relief (an injunction and a declaratory judgment), the statute of limitations period will not (technically speaking) automatically bar the action, because most actions in equity are time-barred by application of the equitable doctrine of laches. Atlantis Plastics Corp. v. Sammons, 558 A.2d 1062, 1064 (Del. Ch. 1989). The essential elements of laches are: "(i) plaintiff must have knowledge of the claim and (ii) there must be prejudice to the defendant arising from an unreasonable delay by the plaintiff in bringing the claim." Fike v. Ruger, 752 A.2d 112, 113 (Del. 2000). Although a statute of limitations is often not binding on a court of equity, absent circumstances that would clearly make the application of that rule inequitable and unjust, the analogous statute of limitations is given great weight in deciding whether a claim is barred by laches. Adams v. Jankouskas, 452 A.2d 148, 157 (Del. 1982); The Scott Fetter Co. v. Douglas Components Corp., 1994 WL 148282 at *3 (Del.Ch.).
The facts pertinent to that issue are as follows: (i) the Ordinance was approved by the County Executive on October 21, 1997 and (ii) the plaintiffs filed their complaint on November 13, 2001, over four years thereafter, and over two years after the applicable statute of limitations had expired. As a result, the County argues, the plaintiffs' claim is time-barred. In response, the plaintiffs contend that the County is equitably estopped from raising the statute of limitations and laches defenses.
The United States Supreme Court has held that a court in a § 1983 action must apply the applicable statute of limitations for a personal injury claim under the forum state's law. Wilson v. Garcia, 471 U.S. 261, 276 (1985); see also Marker v. Talley, 502 A.2d 972, 975 (Del.Super.Ct. 1985) (applying a two-year statute of limitations set forth in 10 Del. C. § 8119 to a claim brought under 42 U.S.C.A. § 1983). In Delaware, the statute of limitations for a personal injury claim is two years. 10 Del. C. § 8119. Although that two-year period is not technically binding on this Court of Equity, in this particular case the statutory period of time will be used, by analogy, to decide (for purposes of the laches defense) whether the plaintiffs' action was timely brought.
In appropriate circumstances the doctrine of equitable estoppel will operate to toll the running of the statute of limitations. Specifically, a claim will not be time-barred if the defendant "`took active steps to prevent the plaintiff from suing, as by promising . . . not to plead the statute of limitations pending settlement talks or by concealing evidence from the plaintiff that he needed in order to determine that he had a claim.'" Thus, the County could be estopped from asserting the limitations (or laches) defense in this case if the County engaged in misleading conduct upon which the plaintiffs detrimentally relied by not filing their suit within the limitations period. But, a party asserting an estoppel defense "must allege facts with sufficient specificity to indicate a defendant affirmatively acted to mislead and induce that party from bringing suit in order to allege the existence of an estoppel."
Van de Walle v. Salomon Bros., Inc., 733 A.2d 312, 316 n. 11 (Del.Ch. 1998), aff'd, 734 A.2d 160 (Del. 1999) (quoting Singletary v. Continental Ill. Nat'l Bank, 9 F.3d 1236, 1241 (7th Cir. 1993)).
First Fed. Sav. Loan Ass'n v. Nationwide Mut. Fire Ins. Co., 460 A.2d 543, 545 (Del. 1983). Although First Federal involved tolling of a contractual 12-month suit limitation provision in an insurance policy, I see no reason why the same estoppel concepts would not apply in these circumstances. See, e.g., 51 Am. Jur. 2d Limitation of Actions § 383 (2000) ("[E]stoppel tolls the statute of limitations if the party asserting the statute of limitations engages in misconduct that fraudulently or inequitably causes the plaintiff to miss the filing deadline, the plaintiff relies on the defendant's misrepresentation, the conduct occurs before the statute of limitations expires, and the plaintiff exercises due diligence in bringing the action.") (footnotes omitted). "Although `equitable estoppel' is sometimes used interchangeably with `fraudulent concealment,' the latter is, strictly, a subset of the former, since neither fraud nor concealment is required for equitable estoppel, only conduct or representations by the defendant that prevent the plaintiff from suing before the statute of limitations has run." Van de Walle, 733 A.2d at 314 n. 4 (quotations and citations omitted).
Ensminger v. Merrit Marine Constr., Inc., 597 A.2d 854, 855 (Del.Super.Ct. 1988).
According to the complaint, immediately after the enactment of the Ordinance the plaintiffs began discussing with the County's representative the denial of pension benefits to veterans. The plaintiffs were told by the County that the exclusion of the veterans from the plan was not intentional, but rather was a "mistake [that] would be addressed and corrected" by amending the Ordinance to allow veterans and former federal government employees to avail themselves of the benefit being afforded to other County employees. Not until after the two-year statute of limitations period had expired did the County inform the plaintiffs that it would not rectify what it had earlier told them was a mistake that would be corrected. The plaintiffs also allege that in pursuing their grievance with the County, they were diligent throughout the statutory period.
Complaint ¶ 14.
I conclude that the § 1983 claim (Count III) survives the County's dismissal motion, because the plaintiffs have pled facts that support a claim of estoppel.
That conclusion, however, only advances this claim to the next stage. In any determination on the merits, to avoid dismissal of their § 1983 claim on time-bar grounds the plaintiffs will need to present evidence that the County specifically represented to the plaintiffs that the omission of their prior military service was a mistake that would be corrected, that that representation was made continuously during the two-year statute of limitations period and that it was reasonable for the plaintiffs to rely on those representations. The case law holds that a mere offer by the defendant to remedy a plaintiff's injury (thus, causing the plaintiff to forego filing suit until the injury is cured) will not toll the statute of limitations unless that offer persisted throughout the statutory period. In short, a plaintiff must show that he or she reasonably believed, because of representations by a defendant, that there was no reason to bring suit, and the plaintiff became aware of the need to bring suit only after it was too late. Ontario Hydro v. Zallea Sys. Inc., 569 F. Supp. 1261, 1272 (D. Del. 1983) (citing DiBiase v. A D, Inc., 351 A.2d 865 (Del.Super.Ct. 1976) (no estoppel claim); State Farm Mut. Auto. Ins. Co. v. Budd, 175 N.W.2d 621 (Neb. 1970) (estoppel claim)).