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Tepper v. City of Philadelphia Board of Pensions

Commonwealth Court of Pennsylvania

June 2, 2017

Frank Tepper, Appellant
v.
City of Philadelphia Board of Pensions and Retirement

          Submitted: February 9, 2017

          BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE JOSEPH M. COSGROVE, Judge, HONORABLE JAMES GARDNER COLINS, Senior Judge.

          OPINION

          RENÉE COHN JUBELIRER, Judge.

         Frank Tepper appeals from the May 12, 2016 Order of the Court of Common Pleas of Philadelphia County (common pleas) denying his appeal and affirming the February 26, 2015 Decision of the City of Philadelphia Board of Pensions and Retirement (Board). In its Decision, the Board permanently disqualified Tepper from pension eligibility pursuant to Section 22-1302(1)(a)(.5) of the City of Philadelphia Public Employees Retirement Code (Retirement Code).[1]Tepper was a police officer from October 25, 1993, until his discharge effective January 30, 2010, for disciplinary reasons. On appeal, Tepper argues that common pleas erred: (1) because first degree murder, the crime of which he was convicted, did not occur during the course of, nor was it related to, his employment with the City of Philadelphia (City); and (2) by applying res judicata and collateral estoppel to the issue of whether he acted "in [his] office or employment" under Section 22-1302(1)(a)(.5) based on a civil federal jury's verdict that Tepper was a state actor who had acted "under color of state law" under 42 U.S.C. § 1983 (Section 1983) when he committed the crime. Tepper contends that, because the City argued strenuously during the federal civil rights case that Tepper was not acting within his City employment, it cannot now argue that he was. Because the federal jury's finding that Tepper acted "under color of state law" is conclusive on the issue of whether he acted "in [his] office or employment, " and, therefore, the Board's application of collateral estoppel was not in error, we affirm.

         The facts are as follows. Tepper was hired as a police officer by the City's Police Department on October 25, 1993. (Common pleas' op. (Op.), Aug. 5, 2016, at 1, S.R.R. at 12b.) On November 21, 2009, Tepper shot and killed his neighbor, William "Billy" Panas, Jr. (Panas), with his personal weapon following a neighborhood dispute in front of his home. (Id.); Panas v. City of Phila., 871 F.Supp.2d 370, 372 (E.D. Pa. 2012). Tepper was off duty and had been drinking at the time of the shooting. Tepper was fired from the police department effective January 30, 2010, for conduct unbecoming an officer, disobedience of orders, and neglect of duty in connection with the shooting. (Statements of Charges Filed and Action Taken, Board Reproduced Record (B.R.R.) at 193-97.) On March 23, 2012, Tepper applied for Optional Early Retirement Benefits from the City. (Op. at 1, S.R.R. at 12b; Pension Documents, B.R.R. at 3.)

         These facts formed the basis for three judicial proceedings: (1) a criminal trial in Philadelphia common pleas court for murder; (2) a federal civil action by Panas's family for damages for his murder; and (3) the instant action by Tepper for reinstatement of his pension. At the criminal trial, a unanimous jury convicted Tepper of Murder of the First Degree, pursuant to Section 2502(a) of the Crimes Code, 18 Pa. C.S. § 2502(a), as amended, [2] and related charges.[3] (Op. at 1, S.R.R. at 12b; Trial Disposition and Dismissal Form, B.R.R. at 9.) Tepper was sentenced to confinement in a state correctional institution for life without the chance of parole on April 4, 2012, and was ordered to pay restitution in the amount of $12, 686.00. (Common pleas Order, Apr. 4, 2012, S.R.R. at 35b.)

         The civil rights action filed by Panas's family in the United States District Court for the Eastern District of Pennsylvania (District Court) against the City and Tepper, asserted federal constitutional claims pursuant to Section 1983[4] and state law tort claims, and sought compensation for the loss of their son. In order "[t]o state a claim under [Section] 1983, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law." West v. Atkins, 487 U.S. 42, 48 (1988) (citations omitted) (emphasis added). The City moved for summary judgment, arguing that Tepper was off-duty at the time of the murder and was not a state actor.[5] The District Court denied the motion in part as to the Section 1983 claims, and the case went to trial. Panas, 871 F.Supp.2d at 371-72.

         At the trial's conclusion, on the issue of Tepper's individual liability, the jury found, by a preponderance of the evidence, that: Tepper was a state actor at the time that he murdered Panas; Tepper violated Panas's Fourth Amendment rights; and Tepper's conduct was the factual cause of Panas's death. (Jury Verdict Slip, S.R.R. at 83b.) Judgment was entered against Tepper who did not appeal the federal jury verdict. (Dist. Ct. Order, filed Dec. 13, 2012, S.R.R. at 86b.) Tepper did file a Motion for a New Trial, which the District Court denied. (B.R.R. at 73-76.)

         With this background, we reach the instant action regarding Tepper's pension eligibility. Tepper had applied for his retirement benefits after his conviction for first degree murder. At the Board's regular meeting on March 27, 2014, it voted to permanently disqualify Tepper from pension eligibility pursuant to Section 22-1302(1)(a)(.5) of the Retirement Code, and it notified Tepper via letter the next day. (Board Case Summary, Mar. 27, 2014, B.R.R. at 77; Board Letter to Tepper, Mar. 28, 2014, B.R.R. at 78.) Tepper timely requested a hearing before the Board, which was held on December 17, 2014. (Op. at 2, S.R.R. at 13b.) Tepper did not appear at the hearing, but counsel appeared on his behalf.

         At the hearing, Tepper argued that there were two reasons the City was bound by its prior position that Tepper was not acting in his office or employment. First, the Philadelphia Police Department had made this determination when reviewing his conduct. (Hr'g Tr., Dec. 17, 2014, at 7-8, 30-31, B.R.R. at 95-96, 118-19.) Second, the City consistently asserted in the federal Section 1983 action that Tepper was not a state actor when he murdered Panas. (Id. at 5-9, B.R.R. at 93-97.) Tepper argued that the City could not afterwards take the opposite position. Tepper also argued that murder is not a separately enumerated offense, and the issue of whether he was disqualified for committing "[m]alfeasance in office or employment" under Section 22-1302 of the Retirement Code requires an examination of his criminal conviction, which is a distinct and different area of law than civil liability under Section 1983. (Id. at 14, 27, B.R.R. 102, 115.) Tepper argued that there is no evidence that he was acting in his job as a police officer when he committed the murder and, for support, cited DiLacqua v. City of Philadelphia Board of Pensions and Retirement, 83 A.3d 302, 310 (Pa. Cmwlth. 2014) (conviction for mail fraud committed as volunteer charter school board member did not disqualify police officer from receiving pension).

         In contrast, the City argued that the jury's verdict in the federal Section 1983 action was a factual determination that Tepper had acted in his official capacity when he killed Panas, and thus, issue preclusion applied. Therefore, according to the City, the City and the Board were bound by this determination which established that Tepper was "in office or employment" at the time of the murder. Both the City and Tepper filed legal memoranda with the Board, attaching several exhibits, including transcripts from the criminal trial, Tepper's criminal conviction, depositions from the civil proceeding, the civil jury instruction, and the civil jury slip.

         The Board denied Tepper's appeal at its regular meeting held on February 26, 2015, and notified Tepper of its Decision via letter the next day. (Board Letter Re: Appeal of Pension Disqualification, B.R.R. at 449.) Tepper timely filed a statutory appeal of the Board's Decision in common pleas, and the Board thereafter submitted its Findings of Fact and Conclusions of Law to common pleas. The Board determined that, under the doctrine of collateral estoppel, it was bound by the jury verdict finding that Tepper was a state actor under Section 1983 when he committed murder, which satisfied Section 22-1302's requirement that the offense be committed "in office or employment." (Board Conclusions of Law (COL) ¶¶ 4-6, 11.) The Board also concluded that murder committed by a police officer as a state actor met the standard for "malfeasance in office or employment" pursuant to Section 22-1302(1)(a)(.5) of the Retirement Code. (COL ¶¶ 12-15.) The Board found that the City was not bound by its prior position under the doctrine of judicial estoppel because a party cannot assume a position inconsistent with his or her assertion in a previous action, if that contention was successfully maintained. However, because the City's prior position was not successfully maintained, the Board concluded that it was Tepper who was estopped from asserting he did not act in office. (COL ¶¶ 17-19.)

         On appeal to common pleas, both Tepper and the Board submitted briefs reiterating their prior arguments, and oral argument was held on April 28, 2016. (Tepper's Br., R.R. at 9-19 (relying on DiLacqua); Board's Br., R.R. at 20-32; see also Op. at 6, S.R.R. at 17b.) After considering the record, briefs, and oral arguments, [6] common pleas denied Tepper's appeal by Order dated May 12, 2016, and affirmed the Board's Decision. (R.R. at 8.) Tepper filed a Notice of Appeal with this Court on May 18, 2016, and common pleas ordered Tepper to file a brief statement of errors complained of on appeal pursuant to Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure, Pa. R.A.P. 1925(b), [7] which he did. (S.R.R. at 9b-10b.)

         In its Opinion explaining the reasoning for its Order, common pleas explained that the Board properly applied the doctrine of collateral estoppel, or issue preclusion, to find that Tepper engaged in "malfeasance in office or employment" under Section 22-1302(1)(a)(.5) and that common pleas did not err in finding that Tepper was collaterally estopped from challenging the federal jury's determination. (Op. at 10-11, S.R.R. at 21b-22b.) Common pleas determined that the issues in the federal action and in this action are identical: "was [Tepper] a state actor when he committed the crime?" (Op. at 10, S.R.R. at 21b (citing West, 487 U.S. at 49 ("acting under color of state law requires that the defendant in a [Section] 1983 action have exercised power possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law.") (internal quotations omitted)).) Common pleas concluded that the Board properly determined that first degree murder constitutes malfeasance under the Retirement Code, citing Merlino v. Philadelphia Board of Pensions and Retirement, 916 A.2d 1231 (Pa. Cmwlth. 2007) (construing the term "malfeasance" under the Retirement Code), and that Tepper's reliance on DiLacqua was misplaced. (Op. at 11 n.3, 12, S.R.R. at 22b n.3, 23b.)

         On appeal, [8] Tepper argues that common pleas erred because the crime of which he was convicted, murder, which is not an enumerated disqualifying offense under the Retirement Code, did not occur during the course of, nor was it related to, his employment with the City. Tepper argues that common pleas erred by applying res judicata and collateral estoppel to preclude him from litigating before the Board whether he acted in his office or employment when he committed the crime based on the federal jury's verdict that Tepper was a state actor who had acted under color of state law under Section 1983.

         Section 22-1302(1)(a)(.5) of the Retirement Code provides that an employee shall not be entitled to receive retirement benefits if the employee pleads guilty or is found guilty of one of the enumerated offenses in that section, the relevant offense here being "[m]alfeasance in office or employment." Phila. Pub. Employees Ret. Code, § 22-1302(1)(a)(.5).[9] Thus, for Tepper to be disqualified from receiving pension benefits, first degree murder must constitute malfeasance and "must be committed in connection with [his] employment or public office." DiLacqua, 83 A.3d at 311.

         Although "malfeasance" is not defined in the Retirement Code, it has been defined by case law as "not merely error in judgment or departure from sound discretion, but the act, omission or neglect must be wilful, corrupt and amount to a breach of duty legally required by one who has accepted public office." Bellis v. Bd. of Pensions and Ret., 634 A.2d 821, 825 (Pa. Cmwlth. 1993) (internal quotations omitted) (holding that bribery constitutes malfeasance under the former Retirement Code). "[M]alfeasance occurs when there is 'either the breach of a positive statutory duty or the performance by a public official of a discretionary act with an improper or corrupt motive.'" Merlino, 916 A.2d at 1235 (quoting Bellis, 634 A.2d at 825 (citations omitted)). The focus is on "the underlying illegal act, as opposed to the particular crime, [that] form[s] the basis for a forfeiture . . . ." Id. (citing Bellis, 634 A.2d at 825). We have construed the undefined term "malfeasance" "according to its common and approved usage, " that is as a wrongful or unlawful act, especially wrongdoing or misconduct by a public official. Id.; see also Black's Law Dictionary 976 (8th ed. 2004). For example, in Merlino, the Court held that a police officer who had pled guilty to making false statements to a federal agency had committed "a wrongful and unlawful act, " which constituted "malfeasance in office or employment, " and affirmed the Board's denial of pension benefits. Merlino, 916 A.2d at 1235.

         Tepper's argument to this Court is not that first degree murder cannot be considered malfeasance, [10] but that his actions here cannot be considered "malfeasance in office or employment." He contends that he was not on duty or in uniform, did not use police equipment, used his personal weapon, and the murder resulted from a personal altercation between neighbors. Because, throughout the federal civil litigation, the City forcefully made these same contentions in asserting that Tepper was not acting as a police officer when he committed the murder, he argues that the City should not now be able to argue the opposite for its financial benefit. Moreover, the jury verdict in a civil action cannot be used to foreclose this inquiry because, according to Tepper, the standard in Section 22-1302 of ...


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