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Castille, C.J., Saylor, Eakin, Baer, Todd, Mccaffery, Orie Melvin, Jj. v. City of Pottsville

December 21, 2010

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, MCCAFFERY, ORIE MELVIN, JJ. RONALD GONTARCHICK, SUSAN ANN GONTARCHICK, HIS WIFE; MARLIN REED, MARY JANE REED, HIS WIFE; AND MATTHEW REED, THEIR SON, APPELLANTS
v.
CITY OF POTTSVILLE, APPELLEE



Appeal from the Order of the Commonwealth Court entered on 12/12/08 at No. 176 CD 2008 reversing and remanding the order of Schuykill County Court of Common Pleas entered on 1/4/08 at No. S-1049-03

The opinion of the court was delivered by: Mr. Justice Saylor

[J-34-2010]

ARGUED: May 11, 2010

OPINION

This appeal concerns the appropriate method, under the Third Class City Code, for calculating police pension benefits.

Appellants, Ronald Gontarchick and Marlin Reed, each served as full-time police officers for Appellee, City of Pottsville, for more than twenty years. Upon retirement, both submitted demands for pension benefits to the City's police pension fund, as established under the Third Class City Code.*fn1 The demands were based on each officer's total gross compensation in the last month of his service, including compensatory time, overtime pay, clothing allowance, and service increments.

In calculating benefits, the City's pension board used a gross-compensation figure consistent with the demands. Nevertheless, the board refused to base the calculation on the actual, last-month-of-service rate of compensation as Appellants sought. Instead, consistent with past practices, the board averaged Appellants' compensation over their last twelve months of service, before reducing the resultant figure by one-half to determine the monthly pension benefit. See Pottsville, Pa., Ordinances ch. 46, art. I, §10(B) (providing for police pension benefits at one-half of monthly salary or the highest annual salary from the last five years).

In response, Appellants commenced a civil action in the court of common pleas --containing declaratory judgment, mandamus, and civil rights counts -- seeking a recalculation of benefits consistent with their demands. Appellants relied on Article XLIII, Section 4303 of the Code, which provides, in relevant part, that police pensions are to be based on officers' "rate of monthly pay" as of the retirement date, as follows:

The basis of the apportionment of the pension shall be determined by the rate of the monthly pay of the member at the date of . . . retirement, or the highest average annual salary which the member received during any five years of service preceding . . . retirement, whichever is the higher[.]

53 P.S. §39303(a) (emphasis added).*fn2 Although the phrase "rate of monthly pay" is not defined in the statute, Appellants took the position that the words denote the actual gross rate of all compensation paid in the last month of service.

On cross-motions for summary judgment, the common pleas court agreed with Appellants' position, which it regarded as consistent with Section 4303's governing language. The court reasoned that, had the General Assembly intended the use of an average of the last twelve months' salaries, it would have expressly said as much. Thus, the common pleas court entered judgment in Appellants' favor.

On appeal, the Commonwealth Court reversed and remanded for entry of judgment in favor of the City. See Gontarchick v. City of Pottsville, 962 A.2d 703 (Pa. Cmwlth. 2008). Initially, the court expressed concern that Appellants' construction of Section 4303 resulted in an inexplicable disparity between police and firefighter pensions, which it characterized as inequitable and unreasonable, and thus, contrary to presumptions applicable in statutory construction. See, e.g., 1 Pa.C.S. §1922(1) (reflecting the presumption that the Legislature does not intend a result that is absurd or unreasonable). Furthermore, the Commonwealth Court highlighted the presumption that the General Assembly intends to favor public over private interests. See Gontarchick, 962 A.2d at 708 (referencing, indirectly, 1 Pa.C.S. §1922(5)). The court reasoned that Appellants' construction would not serve the interests of the City and the public, as it would generate uncertainty regarding future pension fund needs. The Commonwealth Court thus concluded that the City's approach of using an average of the last twelve months of salary to arrive at a rate of monthly pay for police officers was a reasonable and appropriate reading of the governing statute.

As reflected in the Commonwealth Court's opinion, this case presents an issue of statutory construction, over which the appellate review is plenary.

In their arguments to this Court, Appellants maintain that the plain terms of Section 4303 unambiguously require consideration of a retiring officer's actual last month's gross compensation. See, e.g., Brief for Appellants at 13 ("If the General Assembly intended a twelve (12) month average, as advocated by the City, it would have expressly done so as it did in the second calculation method, which requires the high [sic] annual average salary over the last five years."). They also emphasize the mandatory language of the statute, highlighting that the required method of calculation is non-discretionary. According to Appellants, averaging to determine a "monthly rate" renders the five-year look-back alternative superfluous (based on the assumption that a final years' compensation will always be highest). ...


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