Anne Arundel County v. Muir

DEBORAH S. EYLER, J. In an action for judicial review, the Circuit Court for Anne Arundel County reversed a decision by the Board of Appeals (“Board”) of the appellant, Anne Arundel County (“County”), that the appellee, Allen Muir, a police officer with the Anne Arundel County Police Department, is not entitled to credit toward his pension for his prior service with the Baltimore City Police Department. We have reformulated the questions raised by the County as follows: 1. Did the circuit court incorrectly interpret Md.Code (1983 Repl.Vol., 1990 Supp.) sections 31 and 32 of former article 73B, as amended in 1990 by House Bill 687? 2. Is the County estopped to deny the transfer of service credit it effected for Officer Muir in 1992? 1 ⁶²¹ For the following reasons, we shall reverse the judgment of the circuit court, and remand the case with instructions to affirm the decision of the Board.

FACTS AND PROCEEDINGS From November 22, 1974, to April 26, 1979, Officer Muir was employed as a police officer by the Baltimore City Police Department (“BCPD”). He left that employment and immediately wTent to work for The Westinghouse Corporation as a security guard. His employment at Westinghouse ended on July 17, 1980. The next day, July 18, 1980, Officer Muir began employment as a police officer with the Anne Arundel County Police Department (“AACPD”).

During his employment by the BCPD, Officer Muir contributed to the Baltimore City Fire and Police Employees’ Retirement System (“BCPD Retirement System”). On June 1,1979, after leaving employment with the BCPD, Officer Muir was refunded the contributions he had made to the BCPD Retirement System. When Officer Muir began employment with the AACPD, he became a member of the County’s Retirement System. In 1990, the Maryland General Assembly passed House Bill 687, as chapter 595, Acts 1990.

The enactment added to sections 31 and 32 of what was then article 73B of the Maryland Code, governing pensions. Those sections addressed the circumstances under which a member or former member of a qualified state or local government subdivision retirement or pension plan could transfer service credit from that plan to another qualified state or local government retirement or pension plan. House Bill 687 amended the then-current law in part by creating a window of time for certain ⁶²² employees who had not applied for transfers of service credit, when they could have, to do so. On June 16, 1991, Officer Muir filed an application with the County’s Office of Personnel to transfer his service credit in the BCPD Retirement System to the County’s Retirement System.

The County’s Office of Personnel handled the “mechanics” of applications for transfers of service credit, and explained in a memorandum that an applicant whose prior service credit had been earned in a qualifying, contributory retirement plan would be required to document the pension refund the person had received. The refund then would be increased by 3% compounded interest from the date of receipt to the date of application for transfer of service credit, and the person would be required to deposit that amount into his account, “thus receiving immediate credit for any past service.” Thus, for those employees, a “buy-in” was required. Officer Muir spoke to Michael Valle, the Employee Benefits Administrator for the Office of Personnel, about his application to transfer service credit. On September 14, 1992, Mr. Valle wrote Officer Muir a letter stating that, before he could transfer service credit, he had to furnish verification of past employment and contribute the proper “buy-in” figure.

Mr. Valle stated that, based on the pension contribution figure Officer Muir had made to the BCPD Retirement System, the “buy-in” figure would be $4,020.16. Officer Muir was told by Mr. Vallee that he would receive credit with the County’s Retirement System for his service with the BCPD. On September 24, 1992, Officer Muir paid the County’s Retirement System the “buy-in” figure of $4,020.16. His retirement account with the County then was changed to reflect a “Pension Entry Date” of February 18, 1979.

That date was arrived at by tacking Officer Muir’s service time with the BCPD onto his hiring time with the AACPD. Eight years later, by letter dated July 26, 2000, Randall J. Schultz, Personnel Officer of the County’s Office of Personnel, informed Officer Muir that his service credit with the BCPD ⁶²³ had not been eligible for transfer because there had been a break in service between his employment by the BCPD and his employment by the AACPD, that is, the months he spent working for Westinghouse; and that the $4,020.16 Officer Muir had deposited with the County’s Retirement System would be refunded to him in 90 days, without interest. Officer Muir appealed the Office of Personnel’s decision to the Board. On November 30, 2000, the Board held an evidentiary hearing on the matter.

Officer Muir testified on his own behalf; the County called Andrew McCarra, a personnel analyst in the Office of Personnel; and numerous documents were admitted into evidence. The evidence presented was consistent with the facts we have recited, which are largely undisputed. Mr. McCarra acknowledged that Officer Muir’s application to transfer service credits had been accepted and approved by the County in 1992, and that he had been straightforward in the information he had furnished in support of his application. Mr. McCarra explained, however, that Mr. Valle and the Office of Personnel had misread article 73B, section 31(a), as amended by House Bill 687, to permit a transfer of service credit when the employee requesting the transfer had had a break in service between his employment by the state or local subdivision from which the service credit was to be transferred and the state or local subdivision to which the service credit would be transferred; and, in fact, the statutory language required that there be no break in service.

Mr. McCarra explained that the action taken by the County’s Office of Personnel in the year 2000 was to correct the mistake that had been made in allowing Officer Muir to transfer his BCPD Retirement System service credit at all. On January 17, 2001, the Board issued a final decision and order affirming the Office of Personnel’s decision but providing that the refund of Officer Muir’s $4,020.16 “buy-in” sum was to be paid with interest from September 28, 1992, at the same rate of return as the County’s pension plans. Two of the six Board members participating in the decision wrote a ⁶²⁴ concurrence, stating agreement with the outcome but expressing concern that Officer Muir had relied on the Office of Personnel’s decision, albeit incorrect, in 1990, only to learn eight years later that the decision was wrong. Officer Muir filed an action for judicial review in the Circuit Court for Anne Arundel County, in which the County participated as the respondent.

After memoranda of law were submitted and arguments of counsel were made, the court issued a memorandum order reversing the Board’s decision. The court ruled that the language of article 73B, section 31(a), as amended by House Bill 687, was ambiguous, and could have been properly interpreted to have allowed a transfer of retirement service credit for an employee who had had a break in service; that the County’s statutory interpretation therefore was not a mistake, and the action it took in the year 2000 was not the correction of a mistake; and that, under the doctrine of equitable estoppel, the County was precluded from undoing the transfer of service credit it had approved for Officer Muir eight years earlier. The County noted a timely appeal. We shall include additional facts in our discussion as pertinent to the issues.

STANDARD OF REVIEW In a circuit court action for judicial review, under Md.Code (1999 Repl.Vol.), section 10-222(h)(3) of the State Government Article, the court may reverse or modify the agency’s final decision “if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision” was unconstitutional; “exceed[ed] the statutory authority or jurisdiction of the [agency]”; “resulted] from an unlawful procedure”; was “affected by any other error of law”; was “unsupported by competent, material, and substantial evidence in light of the entire record as submitted”; or was “arbitrary or capricious.” ⁶²⁵ In Stover v. Prince George’s County, 132 Md.App. 373 , 752 A.2d 686 (2000), we explained that, on appeal from the decision of a circuit court in an action for judicial review of the final decision of an administrative agency, this Court performs the same function as did the circuit court: When reviewing a decision of an administrative agency, this Court’s role is “precisely the same as that of the circuit court.” Department of Health and Mental Hygiene v. Shrieves, 100 Md.App. 283, 303-304 , 641 A.2d 899 (1994) (citation omitted). “Judicial review of administrative agency action is narrow. The court’s task on review is not to ‘substitute its judgment for the expertise of those persons who constitute the administrative agency.’ ” United Parcel Service, Inc. v. People’s Counsel for Baltimore County, 336 Md. 569, 576-577 , 650 A.2d 226 (1994) (quoting Bulluck v. Pelham Wood Apts., 283 Md. 505, 513 , 390 A.2d 1119 (1978)). Rather, “[t]o the extent the issues on appeal turn on the correctness of an agency’s findings of fact, such findings must be reviewed under the substantial evidence test.” Department of Health and Mental Hygiene v. Riverview Nursing Centre, Inc., 104 Md.App. 593, 602 , 657 A.2d 372 , cert. denied, 340 Md. 215 , 665 A.2d 1058 (1995) (citation omitted). The reviewing court’s task is to determine “whether there was substantial evidence before the administrative agency on the record as a whole to support its conclusions.” Maryland Commission on Human Relations v. Mayor and City Council of Baltimore, 86 Md.App. 167, 173 , 586 A.2d 37 , cert. denied, 323 Md. 309 , 593 A.2d 668 (1991).

The court cannot substitute its judgment for that of the agency, but instead must exercise a “restrained and disciplined judicial judgment so as not to interfere with the agency’s factual conclusions.” State Administration Board of Election Laws v. Billhimer, 314 Md. 46, 58-59 , 548 A.2d 819 (1988), cert. denied, 490 U.S. 1007 , 109 S.Ct. 1644 , 104 L.Ed.2d 159 (1989) (quoting Supervisor of Assessments of Montgomery County v. Asbury Methodist Home, Inc., 313 Md. 614, 625 , 547 A.2d 190 (1988)). ⁶²⁶ The reviewing court’s analysis has three parts: 1. First, the reviewing court must determine whether the agency recognized and applied the correct principles of law governing the case. The reviewing court is not constrained to affirm the agency where its order “is premised solely upon an erroneous conclusion of law.” 2. Once it is determined that the agency did not err in its determination or interpretation of the applicable law, the reviewing court next examines the agency’s factual findings to determine if they are supported by substantial evidence, i.e., by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

At this juncture, ... “it is the agency’s province to resolve conflicting evidence, and, where inconsistent inferences can be drawn from the same evidence, it is for the agency to draw the inference.” 3. Finally, the reviewing court must examine how the agency applied the law to the facts. This, of course, is a judgmental process involving a mixed question of law and fact, and great deference must be accorded to the agency. The test of appellate review of this function is “whether, ... a reasoning mind could reasonably have reached the conclusion reached by the [agency], consistent with a proper application of the [controlling legal principles].” Comptroller of the Treasury v. World Book Childcraft Int’l, Inc., 67 Md.App. 424, 438-439 , 508 A.2d 148 , cert. denied, 307 Md. 260 , 513 A.2d 314 (1986) (quoting Ramsay, Scarlett & Co., Inc. v. Comptroller of the Treasury, 302 Md. 825, 834-838 , 490 A.2d 1296 (1985)).

Id. at 380-81 , 752 A.2d 686 . DISCUSSION I The County contends the circuit court erroneously interpreted article 73B, section 31(a), as amended by House Bill ⁶²⁷ 687, as having permitted Officer Muir to transfer the service credit he earned in the BCPD Retirement System to the County Retirement System when there was a break between the end of his service with the BCPD and the beginning of his service with the AACPD; and that the Board properly interpreted the statute as not having permitted a transfer of service credit in that circumstance. Officer Muir counters that the circuit court’s decision on that issue was legally correct and the Board’s decision was legally incorrect. During the relevant period in this case, the statutes pertaining to government pensions were codified in article 73B of the Maryland Code.

Sections 31 through 34 of that article appeared under the heading “Transfers Between Retirement or Pension Systems.” In 1989, before the passage of House Bill 687 during the 1990 legislative session, section 31 of article 73B, entitled “Acceptance of employment requiring participation in another systemf,]” read as follows: Any person who is a member of any retirement or pension system, operated on an actuarial basis, with contributions being made during the active service of members which are computed to be sufficient to provide the reserves needed to cover the benefits payable on their account, either under the laws of this State or under the laws of any political subdivision of this State, may transfer that membership to any other such retirement or pension system upon accepting office or employment which makes it possible or mandatory for the member to participate in the other system and if acceptance of the office or employment would make it impossible for the member to continue as a contributing member of the retirement system from which the member transfers. (Emphasis added.) House Bill 687 did not change this language. It recodified it as subsection 31(a), and assigned it the subcaption, “Acceptance of employment requiring participation in another system.” House Bill 687 added a new subsection, however, which ⁶²⁸ was codified as subsection 31(b). The new section, which was given the subcaption, “Transfers by former members,” stated: Any person who is a former member of any retirement or pension system, operated on an actuarial basis, with contributions being made during the active service of members which are computed to be sufficient to provide the reserves needed to cover the benefits payable on the member’s account, either under the laws of the state or under the laws of any political subdivision of the state, may transfer service credit attained as a result of that fanner membership to any other such retirement or pension system if: (1) The former member served as an elected or appointed official as a member of the retirement or pension system from which the service credit is to be transferred; (2) The fanner member is serving as an elected or appointed official of the state at the time of a request for the transfer of service credit; (3) A break in service occurred that prevents the former member from transferring membership under subsection (A) of this section; and (Jf) The current office of the former member makes it: (I) Possible or mandatory to participate in the retirement or pension system to tohich the service credit is to be transferred; and (II) Impossible far the member to continue as a contributing member of the retirement or pension system from which the service credit is to be transferred.

(Emphasis added.) After subsection 31(b) was added, the caption of section 31 was amended to read:. “Acceptance of employment requiring participation in another system; transfers by former members.” Also before House Bill 687 was passed, section 32 of article 73B governed transfers of service credit between certain types of pension or retirement systems. Specifically, it categorized the systems as those in which contributions were deducted on all earnable compensation or those in which contributions are ⁶²⁹ not deducted on all earnable compensation, and then in four subsections, (a) through (d), addressed the four possible eventualities of transfers from or to those systems. (Transfer from system in which contributions deducted on all earnable compensation to like system; transfer from system in which contributions deducted on all earnable compensation to system in which contributions not so deducted; the converse situation; and transfer from system in which contributions not deducted on all earnable compensation to like system.) For each eventuality, the statute set forth a deadline by which the transfer of service credit had to take place, if at all. For purposes relevant to this case, House Bill 687 amended section 32 to add a new subsection (e), governing “Transfers by former members[,]” that corresponded to the addition of subsection 31(b).

Subsection 32(e) provided, in pertinent part, that if service credit was transferred under subsection 31(b) “for a former member of a retirement or pension system, the former member shall receive the service credit for and in the amount of benefits in the system to which the member transfers[,J” subsection 32(e)(1), and that any claim for service credit had to be made on or before the later of July 1, 1991, or one year after the former member became a member of the retirement system into which service credit was to be transferred. Subsection 32(e)(2)© and (ii). Finally, section 2 of House Bill 687 stated: That any member of a retirement or pension system operated on an actuarial basis by the State or a political subdivision of the State may make a claim on or before June 30, 1991 lor service credit, if the member (1) On or before June 30, 1990, transferred from a retirement or pension system operated on an actuarial basis by the State or a political subdivision of the State to a retirement or pension system operated on an actuarial basis by the State or a political subdivision of the State; and (2) At the time of the transfer is eligible to claim service credit under Article 73B, § 32 of the Annotated Code of Maryland or under Chapter 327 of the Acts of the General Assembly of 1986. ⁶³⁰ The issue of the meaning of sections 31 and 32 of article 73B, as amended by House Bill 687, is a pure question of law that we review de novo. Total Audio-Visual Systems v. DLLR, 360 Md. 387, 394 , 758 A.2d 124 (2000).

The primary goal of statutory interpretation is to determine and put into effect the intention of the legislature. In re Mark M., 365 Md. 687, 711 , 782 A.2d 332 (2001). Because the best evidence of a statute’s meaning is the statute itself, the process of statutory interpretation “begins with, and frequently ends with, the words of the statute.” Total Audio-Visual Systems v. DLLR, supra, 360 Md. at 395 , 758 A.2d 124 . We interpret the words of a statute by using their plain meaning.

Stanford v. Maryland Police Training & Correctional Comm’n, 346 Md. 374, 380 , 697 A.2d 424 (1997). When statutory terms are unambiguous, we will give them plain and sensible meaning, Tidewater/Havre de Grace, Inc. v. Mayor & City Council of Havre de Grace, 337 Md. 338, 345 , 653 A.2d 468 (1995), and ordinarily will not look beyond the words of the statute to determine the legislative intent. Board of License Commissioners for Charles County, Maryland v. Toye, 354 Md. 116, 122 , 729 A.2d 407 (1999). Moreover, we “give every word effect, avoiding constructions that render any portion of