judge's decision over dimasi's pension

8/9/2019 Judge's Decision Over DiMasi's Pension

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Commonwealth of Massachusetts

Suffolk, ss Trial Court of the CommonwealthBoston Muncipal Cour DepartentCentral DivisiouCivil Docket No. 201001 CV 0373

Salvatore F. DiMasi, PlaintiVs.State Board of Retirernent,

Defendant

MEMORANDUM OF DECISIONAN ORDER

The Plaintif brings ths civil action pursuant to M.G.L chapter 32, section 16(3) seekingreview of the Defendant's decision of October 29, 2009 to suspend PlaintifPs retirementallowance beging November 2009.

STATEMENT OF THE CASE

The Plaintiff, in January of2009, notified the Members of the Massachusetts House ofRepresentatives of his intention to resign his position as the state Representative from theThid Sufolk District effective Januar 27, 2009. On or about February i 1,2009 thePlaintiff filed his Board of Retirement application with the Defendant indicating aJanuar 27,2009 retirement date. Shorty thereafter, the Plaintiff began receiving amonthly pension allotment from the Defendant. On June 2, 2009, a federal grand jurretUred an indictment against the Defendant and others alleging various violations of theUnited States Code. J

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Immediately thereafter, the Defendat, by letter of its Executive Director to the Plaintiffdated June 9,2009, notified the Plaintiff that it had received information regarding thefederal charges and it was initiating a proceeding to review the charges in conjunctionwith M.G.L. 32, section 15. The letter furter informed the Plaintiff that "Due to theinitiation of these proceedings and until final disposition of this matter...the board(Defendant) would "withhold any furher issuance of your (his) retirement allowance".The letter indicated the Defendant's uncertainty about scheduling a hearing, but informedthe Plaintiff that if such hearing were to be scheduled that he would have the opportuntyto present testimony and evidence On his behalf aiid be represented by cO'usel at his ownexpense. The Defendant cited an opinion of the state Attorney General as the basis of itsauthority to act in such fashion. The letter did not inform the Plaintiff that thewitholding would continue until the resolution of the criminal case, but that it wouldcontinue until the final disposition of the Defendant's open proceeding. On the next daycounsel for the Defendant wrote 10 the Plaintiff.

In a letter dated June 10, 2009, the Defendant's Associate General Counsel transmitted aNotice fBea:jng of same date to PlaintifPs counsel. The Notice, issued by theDefendant's Deputy General CounseL, advised the Plaintiff of the scheduling of a hearingon the merits (In the matter of Salvatore F. DiMasi, Docket No. 09-3215-0303) for July22,2009. Furher, the Defendant deemed that the purpose offue hearng was to be "... todetermine whether the Board (Defendant) should take any action in connection with your(Plaintiff's) retirement benefits". The letter invited the PJantiffto provide a summar ofhis contentions, any documents he wanted to present in support of his contentions, as wellas the names and addresses of all prospective witnesses including curriculum vitae for allexpert witnesses. The Defendant required that all such material be submitted no laterthan five (5) days before the scheduled hearing. In anticipation of the hearng on themerits; the Defendant issued a subpoena duces tecum.On June 16,2009 by way of a cover letter addressed to the Deparment ofElementaiyand Secondar Education the Defendant's Associate General Counsel transmitted asubpoena duces tecum t6 said deparent requiring its appearance and testimony at the

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scheduled July 22, 2009 hearng pertaing to the Plaintiffs retirement allowance. It alsorequired said deparent to forward certed copies of its complete records regardingmatters specifically described therein to the Defendant withn ten (10) days of its receiptof the subpoena. Nowhere in therecord is there any indication that said deparentresponded. Eight (8) days after issuing the subpoena the Defendant received a letter fromthe United States Attorney's Office.

In a June 24, 2009 letter, the Acting United States Attorney wrote to the Defendat afterhe had been informed that the Defen.dant had initiated proceedings to suspend the pensionbenefits of the Plaintiff. In this letter the Acting United States Attorney Generaldiscussed troubles involved with parallel criminal and civil proceedings and requestedthat the Boards pending proceeding (to suspend the Plaintiffs pension benefitsJ bedeferred until the conclusion of the criminal case. The Plaintif was not made aware ofthis letter until some time in July 2009. There is no indication of any direct response tothe US Attorney's request, but tle Defendant on July 20,2009, through a cover letter tothe Plaintiff provided its proposed exhibits for the July 22, 2009 scheduled hearing.

In a document entitled "State Board ofRetireinents Proposed Exhbits" dated July 20,2009, the Defendant notified the Plaintiff that its proposed exhbits would be limted tofive (5) documents; namely, the Notice of Hearing, its June 9, 2009 letter to Plaintiff,Plaintiff s retIlement application, the indictment, and the Acting US Attorney's letterdated June 24,2009. The Defendant, for the first time since issuing the Notice ofHearing, and two days before the scheduled hearing, indicated to the Plaintiff a shift inthe proposed hearing on the merits to one based solely upon the indictment returnedagainst the Plaintiff. The filing of Defendants proposed exhbits followed by thee (3)days the Plaintift s Response to the Notice of Hearing that had been submitted on July17,2009_On July 17, 2009, five (5) days prior to the hearing, the Plaintiff as previously directedby the Defendant, submitted his Response to Notice of Hearing. The Response laid outthe Plaintiff's contentions and identified proposed witnesses and documents. The

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Plaintiff drafed his Response document predicated upon the Notice of Hearing datedJune 10,2009 and based upon an understading that the July 22nd hearng involved anevidentiar hearing on the merits. Without any furher filings the July 22,2009 hearingwent forward.

On July 22, 2009) the Defendant went forward with the scheduled proceeding at itsoffices located at One Ashburon Place, Boston, MA; the proceeding, conducted by theDefendant's Deputy General Counsel acting as the hearing officer, lasted for fifty-four(54) minutes. During the proceeding the hearig officer admitted into evidence six (6)exhibits. In addition to those five (5) proposed exhibits identified by the Defendant onJuly 20,2009, the hearing officer admitted into evidence a letter dated June 11, 2009.That letter originating with the Plaintiff was transmitted to the Defendant's ExecutiveDirector; it requested a hearng and it alleged that Defendanfs actions as described in itsJune 9, 2009 regarding the Plaintiff were improper. The proceeding boiled down to theparies' making legal arguments for and against the actions taken by the Defendant in itsJune 9, 2009 letter to the Plaintiff. The Plaintiff and the Defendant were given untilAugust 21,2009 to fie any follow-up submissions. Thereafter, on August 21,2009, theDefendant and the Plaintif submitted post-hearing briefs. On October 23, 2009 theHearing Officer notified the Plaintiff that he had completed his recommended decision,and itwould be presented to the Defendant's Board for action on Oetober29, 2009. Thesixteen (16) page documentconcIudes with a Recommendation section in which thehearing officer fiuds that M.G.L. 32, section 15 (1) gives the Defendant the authority tosuspend the payment of a retirement allowance. Furer, he finds that the Defendant iswith itsriglit to delay a full evidentiar hearng since the Plaintiff has been aforded theopportunity to be heard on the suspension of his retirement allowance. He specifcallyconcludes that the Plaintiff wil be offered a full evidentiary hearing after the criminaltrial.

Subsequently, the Defendant's board met on October 29,2009 and considered the hearingofficer's findings and recommendations. At that meeting the Board voted to adopt thefindings of the hearing officer, and it established an effective date of suspension as of

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November 1,2009. Since that date, the Plaintiffs monthly pension payment has beenand continues to be withheld by the Defendant. On Janua 6,2010 the Defendantnotified the Plaintiff of certfication i of same. Following the certfication of the Board'sdecision, the Plaintif timely tled his petition in tlus cour on Februar 2,2010.Thereafter, on May 14,2010 the Plaintifffied a Motion for Sum Judgment alongwith a Memorandum in support and an affidavit. The Defendant fied its Memorandumiri Opposition to Summar Judgment on June 14, 2010. On June 30, 2010 the cour heardarguments from the Plaintiff and the Defendant and took the matter under advisement.The federal indictment remains unesolved.

ISSUE PRESENTED

Was the action taken by the Defendant to withhold pension payments from the Plaintiffjustified?

DISCUSSIONA. Plaintiffs ContentionsThe Plaintiff contends that the applicable law is M.G.L. chapter 32, section 15 (1). Hefurher asserts that the fact that the Defendant failed to accord him an evidentiary hearngas required by said section bars the Defendant from witholding pension payments.The Plaintiff contends that the court must limit its consideration to the express statutorylanguage in section 15( 1) that provides, n part "Any member who has been charged withthe misappropriation of funds or propert.. . shall be granted a hearing... (and) i(l)f theboard after hearing fl1ds the charges to be true, such member shall forfeit all rights...". Itis Plaintiff s position that the law is unambiguous. Plaintiff argues that the remainingi Although the Plaintiff argues that no ccrtification occurred by reason ofthc omission of said word, the court finds thiltthe Board did certfy the record in said letter and the clock began to run at that time for filing of an appeaL.

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provisions in section 15 apply strictly to those situations involving the conviction of amember, not a member who is charged under an indictment and nothing more. Furer,Plaintiff argues that legislative history surounding Chapter 32 indicates that the power tosuspend payments has been enacted, and the board has been granted limited authorityunder certain crcmstances, but not when a member is facing tnal under an indictment.That, Plaintiff contends, is a clear legislative mandate not to include suspensionthoughout Chapter 32. He contends that MOL chapter 32, section 20 (5) (b) does notempower the Defendant to suspend a retirement allowance. Plaintiff also argues that hehas been denied due process by reason of being deprived of property without ameanngful hearg. He argues that M.G.L. chapter 30, section 59 and chapter 268A,section 25 have no applicability as they apply only in situations of suspension from one'semployment, not from receiving a pension allowance.

B. Defendant's Contentions

The Defendant contends that the applicable laws are M.G.L. chapter 32, sections, 15 and20, which provide implied authority to suspend pension allowances without a hearng onthe merits.

The Defendant takes an opposing view and contends that M.G.L. 32, section 15 applies toa member under indictment by implication. The Defendant takes the position that section20 (b )(5) provides it with the power to temporarily suspend benefit payments andspecifically identifes its abilty to adopt by-laws and make rules and regulations as tosections 1 though 28 of Chapter 32 as a source of that authority. It argues that theexistence of the indictment itself is sufficient for action. Defendant points to M.G.L.chapters 30, section 59 and 265A, section 25 as addressing and putting to rest any dueprocess contention. It argues that the suspension is not a final action, but only atemporar one that can be addressed upon resolution ofthe pending indictment.Moreover) the Defendant contends that it has a duty and obligation to stem any possiblelosses that might incur depending upon the outcome of the indictment. Finally, theDefendant argues that the court should defer to its expertise in this area.

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DISCUSSIONThe cour allows the Plaintiff s Motion fOT Summary Judgment. After carefulconsideration of all the materials submitted throughout the course of this matter,arguents of counsel, and relevant case law cited by the paries the cour finds that thestatute as it curently exists does not grant the Defendant the authority to temporarilywithhold retirement benefits under the circumstances of this case. In a June 9,2009 letterthe Defendant via its Executive Director indicated that it had initiated a proceeding andwas reviewing the charges pending in the United States District Court for the District ofMassachusetts against the Plaintiff member and reserving the right to take fuer actionunder M.G.L. chapter 32, section 15. At the same time it notified the Plaintiff that byreason of the proceedings opened by the Defendant it was witholding any fuerpayment of his retirement allowance pursuant to an opinion of the Attorney Generaldating back to 1962. This letter also ilustrates the Defendant's ambivalence as to how itshould proceed in this matter, and also that it wanted to act in a timely fashion to cut offPlaintiff s stream of retiement income. By the following day the Defendant's directionhad solidified.In its Notice of Hearing dated June 10,2009, the Defendant gave Plaintiff notice that itwould conduct a hearing on the merits pursuant to M.G.L. 32, section 15. The onlypertinent provision in section 15 is subsection I thereof that provides for a hearing andaction by the Defendant if the charges are found to be true. That Notice required thePlaintiff to provide certain information to the Defendant five (5) days before thescheduled hearing of July 22, 2009. This action by the Defendant appeared to removeany uncertainty of the prior day. Furter solidification of the Defendant's positionoccured n less than a week.On June 16, 2009 the Defendant served a subpoena duces tecum upon the Department ofElementa and Secondar Education for appearancesi testimony and records for July 22,2009, the scheduled hearng date. The Department was requied to produce all records

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referenced in the subpoena within ten (10) days of its receipt. At tls junctue of theproceedings, it is clear that the Defendant was moving forward with a hearing undersubsection 1 of section 15 of chapter 32 and that the Plaintiff would be accorded allnecessar safeguards prior to any adverse action by the Defendant. Withi eight (8) daysthough, the situation would radically change and eventually the Plaintiff would be denieda hearing on the merits as originally proposed.

On June 24,2009, the US Attorney's office requested that the Defendant forego itsproceeding with a hearing because of the pending criminal charges against the Plaintiff.Subsequently, for whatever reason, the Defendant opted to forego a full hearing on themerits as contemplated in M.G.L. chapter 32, section 15(1) and attempted to sustain itsaction of withholding of the retirement allowances upon a combination of sectionscontained within M.G.L. chapter 32. Whether intended Or not, the effect offue AttorneyGeneral's letter has placed the Plaintif in a conundrum - his pension payment has beencut off at a time of serious financial need, and he has not been able to secure a hearing onthe merits of the Defendants withholding action. The Plaintiff has been unable tomeaningfully confront the Defendant's action. From all of the available materal in thiscase we see that the Defendant's change in direction was not make knovv to thoseoutside of the retirement board until afterthe Plaintiff fied his Response to the Notice ofHearng on July 17, 2009. That Response laid out the Plaintiff s contentions, prospectivewitnesses and documents. Withn three (3) days thereafter the Defendant's new positionwould be revealed to the Plaintiff.

On July 20,2009 the Defendant issued its State Board of Retirement's Proposed Exhbits.That document made it clear tht the Defendant would not be providing the Plantif witha hearing on the merits, but would rely solely upon the indictment returned against thePlaintiff. Also, the document revealed to the Plaintiff for the first time the existence ofthe US Attorney's letter and accompanyng request This occured two days prior to thehearing. While the Defendant alleges that the change was made independently of the USAttorney's letter and that it was tring for some unknown reason to independently protectthe crimnal process. The court does not find such to be convincing.

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As grounds for withholding benefits the Defendant avers a legal obligation to protect itsassets. If there is such a duty, the Defendant could discharge same by proceeding with anevidentiar hearing on the merits and make its own findings as to the trth of the chalges.However, the Defendant has knowingly chosen to become concerned with the criminalcharges for some unstated reason and has refused to provide the Plaintiff with the hearingto which he is entitled pursuant to subsection 1, supra. Rather than do so, the Defendantmodified its strategy and attempts to have the cour fill in the statute to include a right ofsuspension when one does 110t exist.

The Defendant is the part who established the original procedural plan. Under that planit could have arved at its goal by finding the charges to be true. .Unfortuntely, theDefendant became entagled in the crimal process at the federal level and lost its focus.It allowed the plan to slip away and now tries to utilize statutory construction in order to .justify its earlier action of withholding benefits from the Plaintiff Such argument isunconvincing.

The court finds that the applicable statute for dealing with the facts and circumstancespresented in this case is M.G.L. chapter 32, section 15 (1). As such, the Plaintif wasentitled to a hearing on the merits. The court finds that the so called "hearing" conductedon July 22,2009 does not begin to meet ~ie requirements of section 15. Further, there isno implicit authority in chapter 32 that allows the Defendant to withhold pensionbenefits. The court also finds that neither M.G.L. chapter 30, section 59 nor M.G.L.chapter 268A, section 25 avaJ to the benefit of the Defendant. Those are statutoryexamples of instances where the legislatue clearly gave the power to suspend employeeswithout pay and without a hearing. The Defendant has requested that this court givedeference to the Defendane s expertise regarding retiement issues including itsknowledge pertaining to the authority conferred upon it by law. While the court ismindful ofits obligation, it finds that the matters presented for review involve narowlegal interpretations of existing statutes and accordingly renders it decision on ths matteras mandated by M.G.L. c.32, section 16(3). The cour takes no position as to the validity

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of the pending indictment b~cause the contents of the indictment do not in any way affectits decision. That said, the court fids tht the existence of the indictment itself is

insuffcient to lead to a conclusion that that charges are tre under M.G.L. chapter 32,section 15 (1).

RULING AND ORDERFrom all of the material presented, the cour finds that there is no genuine issue as to anymaterial fact, and accordingly, the Plaintiff is entitled to judgment as a matter of law.The cour finds that the Defendant's actions described herein were notjustifIed. TheDefendant is ordered to immediately cease withholding the Plaintiffs retirement benefitsand to repay Plaintiff for any benefits witheld to date. This order shall not bar theDefendant from takng futUre action in the event that the facts and circumstaces chage.

July 9,2010 ~?Y~Associate JusticeBoston Muncipal Cour Deparent

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judge's decision over dimasi's pension

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