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City of Miami Firefighters' v. Castro

Florida Court of Appeals, Third District

September 18, 2019

City of Miami Firefighters' and Police Officers' Retirement Trust & Plan, et al., Appellants,
v.
Lieutenant Jorge Castro, et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

          Appeals from a non-final order from the Circuit Court for Miami-Dade County, Lower Tribunal Nos. 14-7987 & 14-7997 Michael A. Hanzman, Judge.

          Klausner, Kaufman, Jensen & Levinson, and Robert D. Klausner, Adam P. Levinson and Paul A. Daragjati (Plantation), for appellants.

          Sorondo Rosenberg Legal, PA, and R. Edward Rosenberg; The Silverstein Firm, LLC, and Ira B. Silverstein (Philadelphia, PA); James C. Blecke, for appellees.

          Before LOGUE, [1] SCALES and LINDSEY, JJ.

          SCALES, J.

         The Miami-Dade Circuit Court determined, as a matter of law, that the two City of Miami retirement boards and their respective boards of trustees were not protected by sovereign immunity from the breach of contract claims brought by certain City employees. We reverse because the subject pension ordinances, relied upon by the trial court in determining that the defendants owed contractual duties to the plaintiffs, do not impose the express contractual obligations that the plaintiffs alleged were breached. Thus, the retirement boards and their trustees are sovereignly immune from the alleged breach of contract claims.

         I. Case History

         A. The Parties

         This consolidated appeal is from an amended order on a motion to dismiss entered by the trial court on June 22, 2018. The order was entered in two cases below which, for ease of reference, we call the Castro case[2] and the Rodriguez case.[3] The plaintiffs in the Castro case (appellees here) are Lieutenant Jorge Castro and fellow former and current City of Miami Police officers. The three named defendants in the Castro case are: the City of Miami Firefighters' and Police Officers' Retirement Trust and Plan; the Board of Trustees of the City of Miami Firefighters' and Police Officers' Retirement Trust; and the City of Miami. The plaintiffs in the Rodriguez case (also appellees here) are Jose Rodriguez and fellow former and current City of Miami civilian employees. The three named defendants in the Rodriguez case are: the City of Miami Civil Employees' and Sanitation Employees' Retirement Trust and Plan; the Board of Trustees of the City of Miami Civil Employees' and Sanitation Employees' Retirement Trust; and the City of Miami. For the purposes of this opinion, the retirement boards and trustee defendants in both cases will be referred to collectively as "the Pension Defendants," and the City of Miami will be referred to as the "City."

         B. Relevant Background Procedure and Facts[4]

         The plaintiffs in each case were eligible to receive retirement benefits in accordance with the terms and conditions of their retirement plans administered, managed and operated by the Pension Defendants. Both retirement plans were created pursuant to, and are memorialized within, city ordinances.[5]

         Each retirement plan employed a pension administrator charged with assisting his or her board in the performance of its duties. Each retirement plan also offered participants a Deferred Retirement Option Program ("DROP"). Once an employee becomes eligible, he or she may enter DROP and, in exchange for certain guaranteed lump sum and future payments, the employee: (i) commits to retire within a specified time period; and (ii) agrees that his or her contributions (and the City's contributions) to the retirement plan will cease and he or she will no longer earn creditable service for pension purposes. So, upon entering DROP (an election binding once made), the employee effectively retires for pension purposes and each employee is obligated to cease work on or before a specified future date.[6]

         On July 28, 2010, the City declared "financial urgency" and proposed adopting an ordinance that - as alleged by the plaintiffs - threatened to adversely affect their vested pension benefits. Ordinance No. 10-010-91 (hereinafter the "Financial Urgency Ordinance") declaring the financial urgency - which was to become effective September 30, 2010 - was passed on first reading on September 14, 2010, and on second reading on September 27, 2010.[7] In their operative amended complaints, the plaintiffs alleged that, in the months leading up to the Financial Urgency Ordinance's effective date, rumors circulated concerning the ordinance's impact on their future pensions, and it became "common knowledge" that the only way an employee could avoid a substantial diminution of benefits was to retire or enter DROP prior to such effective date.

         The plaintiffs also alleged that: (i) the language of the Financial Urgency Ordinance (and of certain disclosure bulletins released by the City) was confusing; (ii) the unions, Pension Defendants and the City all issued differing and confusing interpretations of the Financial Urgency Ordinance; and (iii) a state of "confusion, panic and chaos" set in among the pension participants regarding the effect of the Financial Urgency Ordinances on their benefits.[8] The plaintiffs alleged that they sought advice ...


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