Appeal from the Circuit Court of Cook County. Honorable JOHN N. HOURIHANE, Judge Presiding.
Buckley, Campbell, Manning
The opinion of the court was delivered by: Buckley
JUSTICE BUCKLEY delivered the opinion of the court:
Plaintiff, Paul Cella, is a former employee of the Metropolitan Water Reclamation District of Greater Chicago (formerly known as the Metropolitan Sanitary District of Greater Chicago) (hereinafter "District"). On December 12, 1989, plaintiff, individually, and on behalf of all other similarly situated past, present and future employees of the District, and the widowed spouses and trustees thereof, filed a class-action complaint for declaratory judgment against defendant, the Sanitary District Employees' and Trustees' Annuity and Benefit Fund, seeking a declaration that defendant "acted arbitrarily and capriciously and in violation of constitutional and statutory provisions when it failed to properly calculate the average final salary in regards to [the] pension of plaintiff and other members of plaintiff's class as well as the determination of the damages due plaintiffs resulting from the incorrect calculation of pension amounts." The trial Judge granted defendant's motion for summary judgment (Ill. Rev. Stat. 1991, ch. 110, par. 2-1005 (now 735 ILCS 5/2-1005 (West 1992))) on the ground that plaintiff failed to show that defendant's interpretationof section 13-115 of the Illinois Pension Code (hereinafter "Code") (Ill. Rev. Stat. 1987, ch. 108 1/2, par. 13-115) which governs the method of computing pension benefits for district employees was "clearly erroneous, arbitrary or unreasonable." On appeal, plaintiff contends that the trial Judge erred in granting defendant's motion for summary judgment because defendant breached its fiduciary duty to plaintiff in a wilful and wanton manner by failing to provide plaintiff with the highest possible level of pension benefits.
According to the Code, the amount of a District annuitant's retirement annuity is calculated based upon a determination of that annuitant's "average final salary." (Ill. Rev. Stat. 1991, ch. 108 1/2, par. 13-302 (now 40 ILCS 5/13-302 (West 1992)).) Plaintiff retired from the District on April 29, 1988. At that time, the Code defined an annuitant's "average final salary" as:
"The highest average annual earnable salary for any 24 consecutive months within the last 10 years of service immediately preceding the date of retirement." (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 108 1/2, par. 13-115.)
Additionally, the Code defined "earnable salary" as:
"The full rate of salary payable for the full normal working time for the position, subject to the applicable work schedule governing hours or days of service for the respective positions prescribed by the sanitary district, and as defined by the rules of the retirement board. Earnable salary shall not exceed the limitations set forth under the definition of "Salary". (Ill. Rev. Stat. 1987, ch. 108 1/2, par. 13-114.)
Subsequently, the definition of "average final salary" was amended as follows:
"The highest average annual earnable salary for any 104 consecutive weeks within the last 10 years of service immediately preceding the date of retirement." (Emphasis added.) Ill. Rev. Stat. 1989, ch. 108 1/2, par. 13-115.*
According to the evidence, defendant does not actually calculate an annuitant's retirement benefits. Rather, defendant has delegated the responsibility of making the necessary calculations to the annuity firm of Donald Campbell & Associates (hereinafter the "firm"). DonaldCampbell testified that defendant never provided his firm with any rules, regulations or guidelines to follow when calculating annuities nor did defendant provide an official definition of "average final salary." Campbell stated that the firm calculates annuities for defendant by looking at an annuitant's highest earnable salary received during 52 consecutive bi-weekly pay periods. According to Campbell and several other employees at the firm, they assume that there is a maximum of 260 working days in a calendar year. Thus, the firm calculates an annuitant's average final salary for a 24-month period by counting back 520 working days from the annuitant's date of retirement without regard to the actual number of days actually worked in a given year.
According to the firm's calculations, plaintiff's average final salary was $67,644.12. This determination was based upon the following salary amounts which the firm concluded plaintiff received in the 24-month period immediately preceding his retirement: $25,690.10 for 1988, $67,791.91 for 1987, and $41,806.22 for the portion of 1986 which fell within the remaining 24-month period. The firm arrived at these salary amounts by its method of subtracting 520 working days from plaintiff's date of retirement. Campbell stated that this meant that their calculations began on May 3, 1986.
Plaintiff asserts, however, that his average final salary was $68,024.17 which is equivalent to $380.05 more per year than the amount calculated by the firm. He arrives at this figure by breaking his bi-weekly salary down into a daily rate of pay, ascertaining the actual number of days he worked in the 24-month period preceding his retirement, and then multiplying his actual work days by his "daily" pay rate. Plaintiff's amount is higher than that calculated by the firm because he retired on a Friday in a leap year and thus he actually worked 523 days during the applicable 24-month period.
Defendant filed a motion for summary judgment on the ground that its interpretation of the statute and manner of calculating annuities was not arbitrary, capricious or unreasonable. The trial Judge granted defendant's motion. In reaching his Conclusion, the Judge noted that deference must be given to defendant's interpretation of the statute and that defendant's interpretation will not be disturbed unless it is "clearly erroneous, arbitrary, or unreasonable." ( Rodgers v. Illinois Department of Employment Security (1989), 186 Ill. App. 3d 194, 198, 542 N.E.2d 168, 170, 134 Ill. Dec. 168.) He determined that any ambiguity in the statute was ...