Denial of municipal pension not arbitrary and capricious.

 
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Byline: Barry Bridges

A town's pension administrator did not act in an arbitrary and capricious manner in denying benefits to a 22-year part-time municipal employee, according to a ruling issued by the Rhode Island Supreme Court.

Central to the question of whether the town of Coventry wrongfully denied those benefits to plaintiff Richard P. Sullivan was the fact that, pursuant to the pension plan's terms, the administrator in this case the Town Council enjoyed "complete control of the administration of the plan" and "complete discretion to construe or interpret" its provisions.

Writing for the court, Justice Gilbert V. Indeglia said the administrator acted rationally in exercising that control.

"While the plaintiff set forth strong arguments in support of his contention that he was entitled to benefits under the plan, we cannot say that the plan administrator's decision denying the benefits was unreasonable, irrational, or not made in good faith," Indeglia wrote.

Rather, he continued, the denial was a reasonable outcome and was sufficiently supported by testimony and other evidence adduced at a hearing.

The Supreme Court also agreed with a Superior Court judge that the lower court lacked jurisdiction to entertain the plaintiff's claim, as the administrator's operation in a quasi-judicial capacity dictated a certain appellate route.

"We have clearly explained that 'the proper procedure to gain review of a quasi-judicial action of a town council, except where a right of appeal is specifically provided by statute, is by a writ of certiorari to this court,'" Indeglia wrote.

The 20-page decision is Sullivan v. Coventry Municipal Employees' Retirement Plan, et al., Lawyers Weekly No. 60-023-19. The full text of the ruling can be found here.

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Vincent F. Ragosta Jr. of Providence, counsel for the municipal defendants, said on a practical level the outcome helps to "sustain the town of Coventry's underfunded and distressed pension plan" from a class of employees it was not intended to benefit.

From a legal perspective, he said, the holding lends clarity to the avenue of appellate review of quasi-judicial determinations of municipal pension disputes.

But according to Ragosta, the ruling's value lies mainly in its ratification of the applicable standard of review to be applied.

"The takeaway for attorneys who represent pension plan administrators is that the Supreme Court has bolstered and reinforced its adherence to the arbitrary and...

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