On Appeal from the 19th Judicial District Court Parish of East Baton Rouge, Louisiana Docket No. 604, 100, Division "D" Honorable Janice Clark, Judge Presiding.
Floyd J. Falcon, Jr. Daniel L. Avant Avant& Falcon Baton Rouge, LA, Attorneys for Plaintiff-Appellee Ernest Roger Tully.
Mary E. Roper Parish Attorney Dawn N. Guillot Assistant Parish Attorney Baton Rouge, LA, Attorneys for Defendant-Appellant City of Baton Rouge.
Denise Nelson Akers Rebecca K. Wisbar Akers & Wisbar, L. L.C. Baton Rouge, LA, Attorneys for Defendant-Appellee Employees' Retirement System of the City of Baton Rouge and Parish of East Baton Rouge.
BEFORE: PARRO, GUIDRY, AND DRAKE, JJ.
This appeal stems from a suit by a retired police officer, Ernest Roger Tully, against the City of Baton Rouge (CBR), for certain disputed retirement benefits. His claim was first considered at an adjudicatory hearing by the board of trustees of the Employees' Retirement System of the City of Baton Rouge and Parish of East Baton Rouge (CPERS). When the board denied Mr. Tully's claim, he sought judicial review of the board's decision from the Nineteenth Judicial District Court. When the district court reversed the board, CBR filed the present appeal. For the following reasons, we convert this appeal to a supervisory writ; deny the writ in part, thus affirming the district court's ruling in part; grant the writ in part, thus reversing the district court's ruling in part; and remand to the district court for further proceedings in accord with this opinion.
Mr. Tully started working for the Baton Rouge Police Department (BRPD) in 1981. When he started with the BRPD, he also became a member of the local retirement system, now known as CPERS. Subsequently, the legislature changed state law to allow BRPD officers to voluntarily transfer from CPERS to the statewide Municipal Police Employees Retirement System (MPERS). In January 2000, Mr. Tully chose to make that transfer. In doing so, he entered into a fifteen-page agreement with CBR entitled "Agreement and Guarantee of Retirement Rights and Benefits" (guarantee agreement), which the Mayor-President also signed.
Viewed from a broad perspective, the guarantee agreement provides that MPERS will serve in a primary role to pay Mr. Tully's retirement benefits, and CBR will serve in a supplementary role. As the two systems differed in certain respects, the guarantee agreement served as a bridge between them. Generally, paragraph 2 of the agreement states that, if Mr. Tully's MPERS benefits should be less than what his CPERS benefits would have been if he had not transferred, then CBR would make up the difference. The parties to the guarantee agreement are CBR, Mr. Tully, and Mr. Tully's spouse. Neither CPERS nor MPERS is a party to the agreement. Thus, the guarantees in the agreement are guarantees that CBR makes to Mr. Tully and his spouse. The guarantee agreement starts from the premise that Mr. Tully is electing to transfer from CPERS to MPERS. The agreement notes that this transfer is also referred to as a "partial merger." Although, in normal use, the word "transfer" means leaving one entity and going to another, the guarantee agreement incorporates the concept that, upon or after transferring from CPERS to MPERS, Mr. Tully would retire from both.
Later, on August 13, 2010, Mr. Tully ended his employment with the BRPD, and sought to retire from CPERS effective on that date. The next day, he went to work at the Alexandria Police Department (APD). Although Mr. Tully was eligible to retire from MPERS when he left the BRPD, his new job with the APD qualified him to remain a member of MPERS, and Mr. Tully chose to remain in MPERS.
By letter dated August 27, 2010, the retirement administrator for CPERS, Jeffrey Yates, advised Mr. Tully that CPERS had concluded that, in choosing not to retire from CPERS and MPERS simultaneously, Mr. Tully had violated the guarantee agreement. Mr. Yates further advised Mr. Tully that such a violation voided the guarantee agreement, and therefore Mr. Tully would not be entitled to certain benefits that the agreement would have provided. In addition, CBR deemed that Mr. Tully had not retired from CPERS, but instead had resigned from CPERS.
After working for APD for ten months, Mr. Tully's employment there ended on June 9, 2011, at which point he did retire from MPERS. Mr. Tully then filed suit in district court against CBR, seeking certain benefits under the guarantee agreement that he claimed he had been denied, and which he called "his full CPERS retirement benefit." Specifically, Mr. Tully sought: (1) separation pay for accrued sick leave, (2) interest earned on his DROP account from October 28, 2006, until the DROP account principal was rolled over in August 2010, and (3) health insurance benefits. The guarantee agreement provided that any disputes were to be taken first to the CPERS board for resolution, and Mr. Tully's suit was put on hold in district court while the parties did so. Subsequently, the CPERS board held an adjudicatory hearing on Mr. Tully's claim, and issued a written decision denying the claim. Mr. Tully then filed a motion with the district court seeking judicial review of the board's decision. After a hearing in the district court, that court reversed the board's decision, which prompted CBR to file the present suspensive appeal. In it, CBR asserts three assignments of error:
A. The Trial Court erred in overturning the CPERS Board ruling. The finding of the Court did not satisfy La.R.S. 49:964(G) as required for judicial reviews of administrative hearings.
B. The Trial Court erred in finding that the [guarantee agreement] was [not] in accordance with the statutory provisions of La. R.S. 11:2225.
C. The Trial Court erred in finding that the [guarantee agreement] constituted an illegal forfeiture.
CPERS also has appeared in the appeal,  aligning itself with CBR, and it has put forward two assignments of error of its own:
1. The plain, unambiguous language of the Guarantee—specifically Sections  and —dictate that Mr. Tully forfeited his [CPERS] benefits by failing to retire from MPERS when he became eligible to do so.
2. The CPERS Board ruled as follows[:] The [Guarantee] of Benefits contract entered into voluntarily by Mr. Tully meets the requirements of La. R.S. ll:2225(A)(ll)(a) in providing to him "additional benefits not payable under the Municipal Police Employees' Retirement System." Louisiana law did not mandate specific benefits nor specific terms. The parties were free to contract with regard to those benefits. Thus Mr. Tully's violation of that contract caused him to forfeit the benefits otherwise guaranteed. Has Mr. Tully met his burden of proving that his substantial rights have been prejudiced by the CPERS'[s] Board's ruling in this matter?
At the outset, we consider on our own motion the question of our subject matter jurisdiction over this appeal. Williams v. Int'l Offshore Servs., LLC, 11-1240 (La.App. 1st Cir. 12/7/12), 106 So.3d 212, 217, writ denied, 13-0259 (La. 3/8/13), 109 So.3d 367.
The path this lawsuit followed to reach this court has been unusual. This case began as an ordinary proceeding for a monetary award under the guarantee agreement; then the parties agreed to place that suit on hold while they took the matter to the CPERS board for an adjudicatory hearing. As noted, such a procedure was set forth in the guarantee agreement. The board held an adjudicatory hearing, at which the parties entered into a detailed stipulation of facts, offered testimony, and adduced documentary evidence. After the hearing, the CPERS board issued a written decision and transmitted it and the entire hearing record to the district court. Mr. Tully then filed a motion with the district court, seeking a judicial review of that decision. That review procedure by the district court also was provided for in the guarantee agreement. The district court then heard oral argument and, at that hearing, noted that it was reviewing the case in its "appellate capacity, " in accordance with the Administrative Procedure Act (APA). The district court then rendered a judgment, overturning the CPERS board's decision, and that judgment led to CBR's present appeal.
It appears that the parties and the district court assumed that the case arrived back at the district court from the CPERS board under the authority of the APA. However, we find that assumption to have been incorrect. The APA itself specifically excludes municipalities and their boards from the definition of an APA-covered "agency." Louisiana Revised Statute 49:951(2) defines what is an "agency" under the APA, and since 1979 that definition has contained the following exclusion: "except ... any political subdivision, as defined in Article VI, Section 44 of the Louisiana Constitution, and any board, commission, department, agency, officer, or other entity thereof ... ." The statute's reference to Article VI, Section 44, incorporates the following definition of political subdivision: "a parish, municipality, and any other unit of local government, including a school board and a special district, authorized by law to perform governmental functions." LSA-Const. art. VI, § 44(2).
The CPERS board is a board created by an ordinance of the consolidated government of the City of Baton Rouge and Parish of East Baton Rouge. City of Baton Rouge v. Comm'n on Ethics for Pub. Employees, 94-2480 (La.App. 1st Cir. 5/5/95), 655 So.2d 457, 459-60, writs denied, 95-1417 and 95-1423 (La. 9/22/95), 660 So.2d 472 and 473. As an entity of the consolidated City and Parish government, the CPERS board is among the entities statutorily excluded from coverage under the APA. Therefore, the parties and the district court were incorrect in believing that this case should have been treated as an adjudication governed by the APA.
As explained below, the path that this case should have taken was to be decided by the district court in its capacity as a court of original jurisdiction, not appellate jurisdiction. The parties, by their contract, were not free to make their own procedure, contrary to statutory law and the state constitution. See, e.g., Gary v. Witherspoon, 98-1810 (La.App. 3rd Cir. 6/2/99), 743 So.2d 708, 713. Moreover, subject matter jurisdiction may not be waived by the parties to a dispute. See, e.g., Boeing Co. v. Louisiana Dep't of Econ. Dev., 94-0971 (La.App. 1st Cir. 6/23/95), 657 So.2d 652, 659.
Because the APA specifically excludes entities such as the CPERS board from its coverage, the logical next question is: what was the proper procedure for this dispute? As a general rule, under LSA-Const. art. V, § 16(A), the state district courts' original jurisdiction encompasses all civil matters. Crockett v. State Through Dep't of Pub. Safety & Corr., 97-2528 (La.App. 1st Cir. 11/6/98), 721 So.2d 1081, 1083. While LSA-Const. art. V, § 16(B), does authorize district courts to exercise appellate jurisdiction, that constitutional provision restricts that appellate jurisdiction to instances "as provided by law." The parties have directed us to no law that would have authorized the district court to exercise appellate jurisdiction in this case, and we have found none.
Moreover, a civil suit against a municipality over the validity and enforcement of a contract has been held by our supreme court to be a civil matter within the original jurisdiction of the state district courts. Central La. Elec. Co. v. Louisiana Pub. Serv. Comm'n, 601 So.2d 1383, 1387 (La. 1992). Like the suit in Central La. Elec. Co., Mr. Tully's suit is a civil suit against a municipality over the validity and enforcement of a contract. Thus, we conclude that Mr. Tully's suit was an ordinary civil matter within the original jurisdiction of the state district court. Therefore, the proper procedure here would have been for the state district court to have heard and initially decided this dispute, instead of having the CPERS board hear it and render the initial decision. As the district court did not exercise its original jurisdiction in this case, that procedural error prevents this court from acquiring appellate jurisdiction of this appeal in its present posture.
Nonetheless, considering the fact that there was a full hearing of this case by the CPERS board, that the parties entered into a detailed stipulation of facts at the CPERS board hearing, and that the parties did not argue about any factual disputes when the case was presented to the district court, the adjudicatory functions exercised by the CPERS board and the district court were arguably sufficient. Further, the record in this matter is already before us. Thus, while the oblique procedure used here was incorrect, under the particular circumstances in this case, we see no practical purpose that would be served by remanding the case to the district court and directing it to follow the proper procedure. The Louisiana Supreme Court has, at times, directed an appellate court to convert an appeal with procedural defects into an application for supervisory writs and decide the merits of the case. See, e.g., Miazza v. City of Mandeville, 10-0304 (La. 5/21/10), 34 So.3d 849. In Miazza, the supreme court instructed this court to exercise supervisory jurisdiction of an appeal of a district court's judgment ...