Purcell v. City of Portland

JOHNSON, J. This is an action at law in contract alleging that Multnomah County and the City of Portland agreed to pay plaintiff certain contingent supplemental pension benefits as part of his compensation as Director of Public Safety for the county.1 The case was tried to the court and judgment was entered against the county for $15,752, together with a declaration that defendant pay plaintiff future supplemental benefits in the amount of $492.27 per month. The trial court dismissed the action against the city. The county appeals. The county makes several assignments of error which can be summarized as follows: (1) There was insufficient evidence to support the trial court’s findings of fact; (2) the contract between plaintiff and the county had not been ratified by the Board of County Commissioners; and (3) the county did not have legal authority to enter into the contract. Plaintiff was appointed Director of Public Safety for the defendant county on February 4, 1970 and served in that capacity until March 14, 1974. He had previously served for over 30 years as a police officer for the City of Portland and held the rank of Captain. At the time of the appointment the county urgently required a new Director of Public Safety. The then Chairman of the Multnomah County Board of County Commissioners, James Gleason, asked plaintiff if he would accept the appointment. Plaintiff was concerned what effect his acceptance would have on his future retirement benefits. At that time under the City of Portland retirement plan a retiring police officer’s pension was based upon a fixed percentage of the salary of a patrolman regardless of the officer’s actual salary or rank. The city and the state legislature were [488] considering at that time legislation which would provide for "in-grade” retirement. Under in-grade retirement the pension benefit would be based upon a percentage of the officer’s actual salary at the time of retirement. If plaintiff accepted the offered position with the county, this would have foreclosed him from enjoying the higher benefits that would result if the city or state adopted in-grade retirement. The trial court found that the Chairman and the plaintiff entered into an agreement on February 4, 1970 under which the county agreed to pay plaintiff as retirement compensation an amount equal to the difference between the retirement benefits he would receive from the city and the amount he would receive as Director of Public Safety for the county under an in-grade retirement plan. The promise to pay the supplemental pension benefit was contingent upon passage by the city or legislature of an in-grade retirement plan for Portland police officers. The city adopted in-grade retirement in 1973. The county argues that the plaintiff and the Chairman had not reached any agreement, but had only agreed on a general objective. There is undisputed evidence that the precise amount of benefits and the amount the plaintiff would contribute to the county’s pension fund had not been agreed upon and indeed that the parties had understood that this would be worked out at a later date. The fact that such details were not finalized is understandable. The alleged promise was to pay a supplemental benefit subject to a condition subsequent. Until that condition occurred the amount of the retirement benefit could not be determined. Commencing on the first day of plaintiffs employment the county began withholding pension contributions from his paycheck. We conclude that the promise was sufficiently certain to be contractual and that there was substantial evidence to support the trial court’s finding that a contract was made and the findings concerning the terms thereof. [489] Plaintiff concedes that in order for the contract to be valid, it had to be ratified by the Board of County Commissioners. Viewing the evidence most favorably to plaintiff what occurred was this: Following the negotiations between plaintiff and the Chairman, the Chairman informally contacted the other county commissioners and advised them that it was essential that there be an immediate appointment of a Director of Public Safety and the terms of his agreement with plaintiff. Each of the commissioners informally assented to the agreement. On the following day the Board approved the following order: "It appearing to the Board that the Chairman desires to appoint JOHN BARDELL PURCELL as the Director of the Department of Public Safety for Multnomah County; and the Board now being fully advised in the premises, does hereby "APPROVE the appointment of JOHN BARDELL PURCELL as Director of the Department of Public Safety effective upon the date to be determined by the Chairman.” (Emphasis supplied.) The only argument advanced by the county is that the order merely affirmed the appointment and not the contract. The ultimate question, however, is whether there was in fact a ratification of the contract. The evidence of the previous conversations between the Chairman and members of the Board, added to the fact that the order states that the Board was "now being fully advised in the premises,” and that the county began making pension deductions from plaintiffs paycheck and continued to do so until late 1972 was sufficient evidence to support the trial court’s finding that the order approving the appointment was also a ratification of the contract. The county does not cite any authority that there is a requirement of any particular formality to effectuate a ratification. McKenna v. McHaley, 67 Or 443, 136 P 340 (1913), cited by the plaintiff, holds on facts similar to the present case that an informal ratification is sufficient. [490] Finally, the county argues that the contract was illegal because it purports to be a legislative act. As we understand the county’s position, it is not arguing that the terms of an employment contract are per se a legislative act requiring enactment of an ordinance. The county’s argument in effect is that pensions for county employees are comprehensively governed by ordinances and that such ordinances cannot be modified or amended by contract. The only ordinance which the county cites which was effective at the time of making the agreement was Ordinance No. 25 which deals with pensions for "sworn law enforcement personnel.”2 The ordinance expressly does not cover personnel who enter county service at or above the age of 32. Plaintiff was over the age of 32. There is nothing, however, in the ordinance that expressly or impliedly excludes, either by another ordinance or contract, pension plan compensation for noncovered employees. The contract did not conflict with nor amend the ordinance.3 Defendant also makes assignments of error concerning the trial court’s dismissal of the action against the City of Portland. There was substantial evidence to support the trial court’s findings that no contract existed with the city. Affirmed. Footnotes [1] The complaint alleges two causes of action. The first cause is for damages for breach of contract in the form of all supplemental pension benefits due and owing to the plaintiff. The second cause prays for a declaration of the future rights and obligations of the parties under the contract with respect to monthly supplemental pension benefits. [2] It is not clear that the Director of the Department of Public Safety was within the classification of "sworn law enforcement personnel” as defined in the ordinance. Subsequent amendments to the ordinance make it clear that the Director is not in this classification. See Multnomah County Ordinance No. 29. [3] The dissent relies on section 7.50 of the Multnomah County Home Rule Charter as indicating that any action of the county concerning pension benefits is legislative in nature. We do not believe that the charter provision mandates legislative action by the county. Presumably, the county could "provide a retirement system” by contract with all its employees. In any event, we do not reach this issue because the county neither cites nor relies on section 7.50. The county’s reason for not relying on section 7.50 may have been a concern that this charter provision would be interpreted as imposing a duty on the county to provide some form of retirement plan for plaintiffs benefit. Section 7.50 states that "[t]he board of county commissioners shall provide a retirement system for a//persons in the county service who desire retirement benefits in return for their services * * (Emphasis supplied.)