Court Opinion

ID: 4423336
Source: CourtListenerOpinion
Date Created: 2019-08-07 14:48:39.129189+00
Date Added: 2024-06-11T14:51:18.317163
License: Public Domain

[Cite as DeMoss v. Silver Lake, 2019-Ohio-3165.]

STATE OF OHIO                    )                      IN THE COURT OF APPEALS
                                 )ss:                   NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                 )

GARY W. DEMOSS, et al.                                  C.A. No.       28559

        Appellants

        v.                                              APPEAL FROM JUDGMENT
                                                        ENTERED IN THE
VILLAGE OF SILVER LAKE                                  COURT OF COMMON PLEAS
                                                        COUNTY OF SUMMIT, OHIO
        Appellee                                        CASE No.   CV 2012-09-5141

                                DECISION AND JOURNAL ENTRY

Dated: August 7, 2019

        HENSAL, Presiding Judge.

        {¶1}    Gary Demoss, Carl Harrison, and Mark Kennemuth appeal a judgment of the

Summit County Court of Common Pleas that entered judgment for the Village of Silver Lake on

their declaratory judgment action. For the following reasons, this Court affirms.

                                                   I.

        {¶2}    The facts of this case are not in dispute.         In 1972, the Village enacted an

ordinance to provide health care and life insurance benefits to its employees. The ordinance also

provided that the Village would continue to provide those benefits to retired employees, as long

as they had worked for the Village for at least 15 years at the time of their retirement. In the

years that followed, Mr. Demoss, Mr. Harrison, and Mr. Kennemuth (collectively “the

Employees”) each began working for the Village. By the end of 1994, they had each completed

15 years of service.
                                                   2

       {¶3}    In 1995, the Village repealed the employee benefits ordinance and replaced it

with a new one. The new ordinance provided that employees of the Village would be provided

with health care and life insurance but did not contain a provision regarding retired employees.

       {¶4}    As the Employees began to retire, they filed a complaint for declaratory judgment

in common pleas court, asking it to declare that the Village had to provide them with health care

and life insurance following their retirement because they had satisfied the requirements for

vesting under the 1972 ordinance. The case was assigned to a magistrate, who determined that

the Employees did not have any vested rights under the 1972 ordinance and that the 1995

ordinance had eliminated any benefits to employees who retired after its passage.             The

Employees objected to the magistrate’s decision. Although the trial court sustained some of their

objections, it concluded that the magistrate had correctly denied the Employees’ requested

declaratory judgment because the 1995 ordinance cancelled any life or health insurance benefits

to be paid to retirees under the 1972 ordinance.

       {¶5}    The Employees appealed the trial court’s judgment. Upon review, this Court

determined that the trial court had failed to analyze the Employees’ argument that the 1995

ordinance violated the Ohio Constitution’s retroactivity clause. It also determined that the trial

court’s judgment contained inconsistencies. On remand, the trial court determined that the 1995

ordinance did not apply retroactively and did not infringe on any of the Employees’ vested

rights. In particular, it concluded that the Employees could not have any vested rights under the

1972 ordinance until they both worked for the Village for 15 years and retired. It, therefore,

declared that the Village does not have to pay the Employees’ health care and life insurance

premiums following their retirement. The Employees have appealed, assigning two errors.
                                                3

                                               II.

                                 ASSIGNMENT OF ERROR I

       THE TRIAL COURT ERRED AS A MATTER OF LAW IN HOLDING THAT
       PLAINTIFFS DID NOT HOLD A VESTED RIGHT TO THE REQUESTED
       HEALTH CARE BENEFITS BECAUSE THEY HAD NOT RETIRED WHILE
       THE 1972 ORDINANCE WAS IN EFFECT.

       {¶6}    The Employees argue that the trial court incorrectly concluded that the 1972

ordinance had two requirements for their rights to trigger. They argue that, under the language

of the 1972 ordinance, their rights vested as soon as they completed 15 years of service. They

argue that, like other pension systems, the fact that they were not entitled to receive their

retirement benefits until they actually retired does not mean that they did not acquire vested

rights earlier. “This Court applies a de novo standard of review to an appeal from a trial court’s

interpretation and application of an ordinance.” Meeker v. Akron Health Dept., 9th Dist. Summit

No. 24539, 2009-Ohio-3560, ¶ 11; see also Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-

3208, ¶ 13 (providing that an appellate court reviews questions of law in a declaratory judgment

action de novo).

       {¶7}    The 1972 ordinance provided “[t]hat section 139.05 Medical Coverage and

Insurance, is hereby amended and enacted to read as follows[:]”

       A.      All permanent regular employees shall be provided with hospitalization,
               surgical, major medical and life insurance coverage in such form and
               under such terms as Council may periodically determine after establishing
               specifications therefor and after legal advertising and taking bids.

       B.      Such coverage as is herein established or may be hereafter modified by
               Council shall also be continued for those employees retiring hereafter
               under PERS or Police Pension who have completed at least fifteen (15)
               years of service to the Village, or any retiree presently covered under the
               group hospitalization and medical insurance of the Village.
                                               4

According to the Employees, the “retiring hereafter” language indicates that the Village knew

that the health care coverage would be used by retirees in the future and set a certain length of

employment to establish eligibility for that benefit. They also note that the ordinance did not

have any language regarding when retirement must take place. They argue that the ordinance put

any employee who worked 15 years on the same footing as those who had already retired. They

also note that the retirement benefit was simply a continuation of a benefit Village employees

received through the term of their employment. The Employees further argue that they relied on

the Village’s promise to provide them benefits when they retired.

        {¶8}   Initially, public retirement benefits were viewed purely as a gratuity that did not

grant vested rights and that could be modified or repealed by future legislatures. State ex rel.

Drage v. Jones, 37 Ohio App. 413, 415 (9th Dist.1930). In 1954, however, the Ohio Supreme

Court held that a pensioner acquired a vested right to the installment of a pension when the

installment became due. State ex rel. Hanrahan v. Zupnik, 161 Ohio St. 43 (1954), paragraph

one of the syllabus. Shortly thereafter, it held that the General Assembly could not deny or

restrict a disability retirement allowance that had already vested. State ex rel. McLean v.

Retirement Bd., Public Emps. Retirement Fund, 161 Ohio St. 327, 330-331 (1954). In McLean,

the Ohio Supreme Court held that an employee’s right to a disability retirement allowance is

“governed by the statutes in force when such member becomes eligible for and is granted such

retirement * * *.” Id. at paragraph one of the syllabus. Thus, the General Assembly could not

pass legislation in 1947 to restrict compensation that the employee had begun receiving in 1945.

Id. at 330.

        {¶9}   The Village’s 1972 ordinance provided that the benefits provided under

subsection A. would be “continued for those employees retiring hereafter[.]”         Giving that
                                                5

language its most natural reading, we conclude that “retiring” is one of the eligibility

preconditions under subsection B. In this case, none of the Employees “retir[ed]” while the 1972

ordinance was in effect. We, therefore, conclude that the trial court correctly concluded that they

did not acquire a vested right to post-retirement health care and life insurance benefits under the

1972 ordinance. The Employees’ first assignment of error is overruled.

                                 ASSIGNMENT OF ERROR II

       THE TRIAL COURT ERRED AS A MATTER OF LAW IN FAILING TO
       ONCE AGAIN CONDUCT THE PROPER ANALYSIS WITH REGARD TO
       RETROACTIVE APPLICATION OF THE 1995 ORDINANCE.

       {¶10} In their second assignment of error, the Employees argue that the trial court failed

to follow all of this Court’s remand instructions. Specifically, they argue that the trial court

failed to complete both steps of the Ohio Supreme Court’s retroactivity test. In the Employees’

reply brief, however, they concede that the issue has been made moot by the Village’s

concession that it did not intend for the 1995 ordinance to act retroactively. Upon review of the

record, we note that the reason the trial court did not conduct the second step of the analysis is

because it determined that the Village did not intend the 1995 ordinance to be retroactive.

Accordingly, we agree that this issue is moot. The Employees’ second assignment of error is

overruled.

                                               III.

       {¶11} The Employees’ assignments of error are overruled. The judgment of the Summit

County Court of Common Pleas is affirmed.

                                                                               Judgment affirmed.
                                                 6

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellants.

                                                      JENNIFER HENSAL
                                                      FOR THE COURT

SCHAFER, J.
RICE, J.
CONCUR.

(Rice, J., of the Eleventh District Court of Appeals, sitting by assignment.)

APPEARANCES:

LARRY SHENISE, Attorney at Law, for Appellants.

JOHN T. MCLANDRICH, FRANK H. SCIALDONE, and TAMMI Z. HANNON, Attorneys at
Law, for Appellee.