HARRISBURG - On Aug. 1, the Commonwealth Court of Pennsylvania affirmed a pension payment dispute for the City of Scranton after it overpaid a former city worker in benefits.
The City of Scranton Non-Uniform Pension Board realized that it was paying Joseph Schimes and other ex-city workers twice as much as it should have been in allotted pension payments. It cut future payments in half.
Schimes sued the board, the city and the city's mayor, but a lower court backed the board's action, and the Commonwealth Court affirmed.
The court first agreed with the lower court that Schimes forfeited his first two issues – that the board’s decision was illegal and that the board’s solicitor didn’t properly investigate the matter – “due to his failure to develop either one in the briefs he submitted in support of his statutory appeal,” the court ruled.
As for his third issue, that the board didn’t have authority to decrease the payments, the Commonwealth Court said Section 28 of the Second Class A City Code grants the board the authorization to fix any errors made by adjusting payments.
Schimes also said the lower court should not have dismissed the mayor and the city from the lawsuit. But the appeals court agreed that the only thing Schimes had an issue with was the board’s decision. Considering this, the board was the only relevant party that Schimes could sue, the court said.
Schimes said breaking his payments in half is a violation of res judicata because the lower court previously ruled that he could buy more years of his pension.
The court said it didn't fit res judicata because the two aren’t related. Its 2006 ruling was related to Schimes buying more years to put toward his pension; the board’s decision is connected to the dollar amount Schimes will receive regularly.
Schimes was put on his current plan in 2002 amid a one-time proposal from the city that would allow employees to retire early with pension and health care benefits. Since his wife was extremely ill at the time, Schimes accepted the proposal and retired at 50 years old. After another dispute, the city said it would extend its early retirement offer to other workers who were in similar situations as Schimes in 2007.
The overpayment was brought to the board’s attention after it “received a question relating to a double pension benefit that a retiree was allegedly receiving,” according to the ruling. The board realized that its secretary issued two letters to the plan’s administrator claiming the city passed ordinances that would authorize backdated pension increases to workers who retired on the 2002 early retirement offer. There weren’t any such ordinances passed, and the increased payments weren’t valid.
The state Department of Auditor General determined the plan was not legit. It suggested the city and board decide who was entitled to the double-pay incentive and whether the board should keep paying it, as well as whether the city should recover what it already overpaid.
Hearing officers said there’s no legal backing for double payment and said the board could fix it moving forward but could not recover what it already overpaid. That led to the board cutting Schimes' payments in half and his subsequent lawsuit.
Judge Ellen Ciesler wrote the opinion. Judges Robert Simpson and Anne E. Covey were also on the panel.