Imagine your boss approaches you one day, takes you aside, thanks you for your many years of dedicated service to the company, and then offers you a chance to retire early with increased retirement pay. Doesn’t sound too bad, does it? Now imagine that you accept the offer, taking early retirement in reliance on the specific amount of the offer, only to learn a few months later that your stipend amount was incorrectly calculated, resulting in an overpayment of benefits.
Worse yet, your former company decides to immediately correct your stipend amount resulting in a reduction of your monthly payments. Uh-oh. You confront your boss, but to no avail. While he sympathizes with your position and apologizes for the error, he says the company’s board of directors determines retirement benefits and the amounts can’t be increased by a calculating error. Now what?
A few years ago, 13 former Albemarle County employees found themselves in that exact situation. Each employee decided to retire in 2009, after the county offered them an incentive to do so. That incentive, provided by the Voluntary Early Retirement Incentive Program (VERIP), was in addition to their retirement benefits under the Virginia Retirement System. Unfortunately, a clerk in the county’s human resources department made a mistake in calculating the amount of the offer given to the employees and, upon discovering the error, the county reduced the employee’s agreed upon retirement compensation under VERIP.
After the Board of Supervisors disallowed payment on the promised retirement benefits in 2010, the retirees appealed to the circuit court of Albemarle County where a jury ultimately found that the county breached its contracts with the employees and awarded them their full promised benefits. The retirees’ success proved to be short-lived, however, as the Supreme Court of Virginia reversed the jury award and entered final judgment in favor of the county earlier this year due to a procedural error in the retirees’ original appeal. While a major setback, the Supreme Court’s decision was not the end of the story for the former county staff.
The former employees’ attorney, Edward Lowry, has brought a new complaint against the county and Board that argues for rescission of the retirement contracts because of a mutual mistake of fact—the amount of the stipend—and a declaration that the contracts are void. The fight isn’t over yet, and the remedy the plaintiffs are seeking is reinstatement to their prior positions at their previous salaries.
Jim Guynn, the attorney representing the county, maintains that the retirees’ new complaint is identical in all material respects to their original appeal and complaint. Accordingly, the State Supreme Court’s dismissal of the retirees’ original claim invalidates the viability of the new complaint, even though the dismissal was based on the retirees’ procedural error rather than on the merits of their claim.
“The county takes the position that the Supreme Court’s decision extinguished any claims the employees had,” Guynn said.
Illegal procedure
Whether the retirees will be successful with this new complaint is for the court to decide. Regardless of the outcome, there is an important takeaway from this case: If you plan on suing a Virginia county, be sure you follow the correct statutory procedure. To perfect their appeal to the Board, the retirees were required by law to execute a bond to the county and file a separate written notice of appeal on the clerk of the Board. They did not file the notice of appeal.
Virginia counties, being governmental districts of the Commonwealth, enjoy sovereign immunity against many types of lawsuits, which means a doctrine prevents the government or its political subdivisions from being sued without its consent. There are certain exceptions from immunity involving other civil disputes that allow citizens to sue counties but strict rules apply.
One such exception allows citizens to appeal the disallowance of their claims against a county by the governing body of that county, like the Board of Supervisors. However, the claimant must fulfill the bond and written notice of appeal requirements mentioned above. The retirees’ failure to file the notice was ultimately the reason the county prevailed at the Supreme Court.
The only question that remains is whether the Supreme Court’s dismissal of the retirees’ original appeal bars their current claims. Whatever the outcome, the retirees have made it clear from the start of this case that they intend to keep fighting for their promised benefits.
“[W]e remain disappointed in the county’s unwillingness to honor its commitments to its employees who relied on the county’s offer of a supplemental retirement payment when they chose to retire at the time they did,” said Lowry.
The county court is expected to issue a ruling on their appeal soon.
LAW STAR
Lori H. Schweller,
Partner at LeClairRyan
What type of law do you practice?
Primarily real estate law–both transactional and land use/zoning.
What is one case you’ve worked on that is particularly meaningful to you?
It’s always meaningful to me to help someone accomplish something or solve a problem. It’s particularly satisfying to come up with a creative solution to a difficult problem and then make it work. I’ve enjoyed working with several Virginia localities to help them amend zoning ordinance provisions relating to wireless communications towers because the work requires balancing my industry client’s needs and pertinent law with the concerns of local officials and citizens. It’s also very rewarding to complete a complex deal with lots of moving parts just because of the sheer volume of work and the energy it requires to pull everything together to meet a deadline.
What advice would you give newly graduated law students?
Law practice can vary greatly from firm to firm, public sector and in-house, so explore to find the type of work you like to do, the type of client you like to serve, and people with whom you enjoy working. Keep in mind that landing a job can be a matter of timing – so make your availability known so you’re called when needed.
What is one thing you like about practicing law in the Charlottesville/Albemarle community?
The real estate attorneys in our community are collegial and conscientious. We’re always learning from one another to improve our practices.