RETIRED POLICEMEN & FIREMEN OF CITY OF LINCOLN PARK v. City of Lincoln Park

6 Mich. App. 372 (1967) 149 N.W.2d 206 RETIRED POLICEMEN & FIREMEN OF THE CITY OF LINCOLN PARK v. CITY OF LINCOLN PARK. Docket No. 2,036. Michigan Court of Appeals. Decided March 28, 1967. Leave to appeal denied July 25, 1967. James Thomson, for plaintiffs. Robert E. Butcher, City Attorney, for defendant. HOLBROOK, J. By charter amendment dated July 1, 1943, a pension plan known as the city of Lincoln Park policemen's and firemen's retirement system was created for the benefit of retired policemen and firemen of the city of Lincoln Park, Michigan. The benefits payable to each retiree under this plan were computed by means of a formula which consisted of a fixed fraction (1/50) of the employee's earnable compensation multiplied by the employee's number of years of service, not exceeding 25 years. The term "earnable compensation" is a variable designed to make the amount of pensions fluctuate up or down in accordance with fluctuations in the pay of active policemen and firemen. On April 12, 1957, the Lincoln Park charter was amended so as to delete all reference to earnable compensation. The formula used to determine pension benefits is now based on a fixed percentage (2%) of the employee's average final compensation. This 1957 amendment is still in effect. The plaintiffs, 8 in all, instituted this action on July 30, 1965, to recover claimed deficiencies in *375 pension payments. The complaint set forth the 1943 charter provisions referred to above and requested discovery and an accounting of the amounts alleged to be unpaid. The complaint also alleged fraud on the part of the defendant city. The defendant filed a motion for summary judgment on the ground that the complaint failed to state a claim upon which relief could be granted. The motion and supporting affidavit, filed pursuant to GCR 1963, 117.2(1), both set forth the 1957 change in the pension plan contained in the city charter. Although the motion was filed under GCR 1963, 117.2(1), the substance of the motion indicates that it was made under GCR 1963, 117.2(3), since no material issue of fact is raised by the record. This deficiency is not fatal.[1] In response to this motion, plaintiffs filed an amended complaint, incorporating by reference the original complaint. The amended complaint, aside from incorporating the original complaint, consisted wholly of an itemization of the sums alleged to be owing to each individual plaintiff, and did not address itself to the amended charter provisions.[2] This was not sufficient to meet the issue raised in defendant's motion and supporting affidavit. Durant v. Stahlin (1965), 375 Mich 628, 658. The lower court granted defendant's motion for summary judgment without opinion and plaintiffs appeal. "Once again we are met with the devastating consequences of a motion for summary judgment when a plaintiff must scramble to `put his house *376 in order' and to make sure that he may not be successfully challenged as to the existence of the facts upon which he purports to build his case. "It is obvious that the motion for summary judgment, directed to the sufficiency of the pleadings, immediately brings plaintiffs under a duty to allege facts in their affidavits which could justify a trial court in finding a meritorious cause of action." Beck v. Delta Recreation Corporation (1966), 2 Mich App 518, 522, citing Dionne v. Pierson Contracting Company (1965), 2 Mich App 134. The summary judgment procedure provided for in GCR 1963, 117, has a twofold purpose: first, to test the legal validity of claims and defenses, and second, to expose a sham claim or defense. 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 358. When either of these purposes may be served, summary judgment must be entered. GCR 1963, 117.3. In the instant case, an examination of the pleadings in the record fails to disclose any factual issues. The original complaint contains a brief allegation of fraud in the following language: "That the defendants have defrauded these plaintiffs out of their just and legal benefits under their retirement system given to them by the taxpayers and voters of the city of Lincoln Park." Plaintiffs' attorney failed to file affidavits setting forth facts in support of this allegation. It would appear also that this allegation of fraud would be subject to attack under GCR 1963, 111.1(1) because the vague and unspecific language of the paragraph does not inform the defendant of the nature of the cause it is called upon to defend. The original complaint demanded discovery and an accounting. Plaintiffs' attorney failed to file affidavits setting forth facts in support of either demand. The motion for summary judgment and affidavit in support thereof interposed *377 the 1957 charter amendment. Nowhere in the record of this case has plaintiffs' attorney even mentioned this amendment. From the foregoing it is manifest that plaintiffs' attorney did not have enough faith in his own pleading to attempt to buttress it with an affidavit setting out the particulars of the allegations contained therein. It is also manifest that there are no factual issues raised by the record of this case. The only issue is a legal one. The plaintiffs in this case all retired between 1948 and 1953, while the 1943 pension provisions were still in effect. The question is whether the city, by altering the pension formula, may reduce the annuities payable to pensioners. In Brown v. City of Highland Park (1948), 320 Mich 108, plaintiff Brown, a policeman, retired in 1943. The city charter pension provisions were amended in 1945, resulting in reduced pension payments. In response to plaintiff's claim that he had a vested contractual interest in the higher pension, the court at pp 113, 114 said: "We entertain no doubt that it is competent for the city of Highland Park to adopt a pension system reasonable in its provisions, but the important question in this case is whether a contract was entered into on the part of the city of Highland Park with each of the plaintiffs, the obligation of which the city is forbidden by the Federal Constitution to impair. * * * "We are convinced that the majority of cases in other jurisdictions establishes the rule that a pension granted by public authorities is not a contractual obligation, that the pensioner has no vested right, and that a pension is terminable at the will of a municipality, at least while acting within reasonable limits. At best plaintiffs in this case have an expectancy based upon continuance of existing charter provisions." (Emphasis supplied.) *378 This ruling has been changed by virtue of Const 1963, art 9, § 24, which makes the financial benefits of a pension plan a contractual obligation of the city. However, with respect to the obligations created by pension plans prior to the effective date of the 1963 Constitution the Brown decision, supra, still controls. Also, even though pensions are now given contractual status, the terms thereof still remain otherwise unchanged. As applied to the instant case, this means that the 1957 amendment to the Lincoln Park city charter remains in full force and effect, with the only change being that the rights thereunder are now vested. A case which on the surface appears to be more helpful to plaintiffs in the instant case is Campbell v. Judges Retirement Board (1966), 378 Mich 169, where it was held that the rights of retired judges in their pension system were of a contractual nature and therefore could not be impaired. The distinguishing factor between Campbell, supra, and the instant case, however, is that in Campbell the judges voluntarily entered into the pension plan and made contributions thereto from their own funds resulting in a contractual relationship. Where municipal employers are concerned, however, prior to the effective date of the 1963 Constitution, deductions from salaries do not create a vested right in a pension. Van Coppenolle v. City of Detroit (1946), 313 Mich 580. Nowhere in the record does it appear that plaintiffs have claimed that they are not receiving the correct pension amounts under the terms of the 1957 amendment. Plaintiffs have not even challenged the effectiveness of that amendment. We conclude, therefore, that this case was a proper one for summary judgment and that the lower court, in view of the existing law on the *379 subject, decided the legal issue correctly in favor of defendant. J.H. GILLIS, J., concurred. LESINSKI, C.J. (dissenting). Since the defendant failed to join issue by filing an answer in the cause, it is not in a position to test the genuineness of issues of fact alleged in the pleadings, by motion and affidavit, under GCR 1963, 117.2(3). An issue of fact does not exist until issue is joined. The defendant is not entitled to summary judgment under the provisions of GCR 1963, 117.2(1), for, on their face, plaintiffs' pleadings state a cause of action. The ground for the relief requested must, if at all, appear on the face of the pleading so attacked. See Mr. Justice SOURIS' concurring opinion in Durant v. Stahlin (1965), 375 Mich 628, 643, 644. I would vote to set aside the summary judgment. NOTES [1] CLS 1961, § 600.2315(3) (Stat Ann 1962 Rev § 27A.2315[3]). [2] There is no indication in either the amended complaint or in the original complaint as to what the effect of the 1957 amendment was on plaintiffs' pension benefit, i.e., were these benefits frozen by the 1957 amendment or did the 1957 amendment as applied to plaintiffs result in lower pension benefits?