Dismissal of Local 1889’s suit against MFPD board affirmed

Summary judgment ‘a drastic remedy,’ appellate-court panel states in memo


An appellate court has affirmed a lower court’s ruling dismissing a lawsuit filed against the Mehlville Fire Protection District Board of Directors by Local 1889 of the International Association of Fire Fighters.

A three-judge panel of the Eastern District of the Missouri Court of Appeals last week issued an order affirming a February 2006 ruling by St. Louis County Circuit Court Judge Barbara Crancer dismissing the lawsuit filed against the board by Local 1889.

Local 1889 filed the lawsuit against the district’s three board members — Chairman Aaron Hilmer, Treasurer Bonnie Stegman and Secretary Dan Ottoline Sr. — in June 2005, asking the court to prohibit the board from implementing a disability-benefit contract with Standard Insurance and eliminating current disability benefits from the district’s existing pension plan.

Crancer granted a preliminary injunction in August 2005 prohibiting enactment of the proposed changes to the district’s disability plan. Crancer ruled that the Board of Directors did not follow the proper procedures to change retirement benefits under state law and the federal Employee Retirement Income Security Act, or ERISA. She also ruled that the Board of Directors did not violate the state’s Meet and Confer Law or the Open Meetings and Records Law, also called the Sunshine Law.

On Feb. 24, 2006, Crancer granted the board’s motion for summary judgment, dissolving the preliminary injunction and dismissing Local 1889’s suit.

Attorney Mathew Hoffman, who represents the fire district, told the Call, “We are definitely pleased with the decision of the Court of Appeals in affirming the decision of Judge Crancer. I’m very happy for the district and the board members who were also sued and named individually that hopefully this can be put behind them.

“At this point, we are still waiting to hear if the plaintiffs will appeal this to the state Supreme Court,” he said. “By rule, they have 15 days from the date of the decision to file an application to transfer.”

Attorney John Goffstein, who represents Local 1889, was unavailable for comment before the Call’s press time.

After Crancer dismissed the lawsuit, Goffstein’s firm filed motions asking her to set aside her ruling granting the board’s motion for summary judgment. On March 28, Crancer denied Local 1889’s motion for a new trial. On April 1, Crancer granted Local 1889’s motion for an injunction prohibiting enactment of the changes to the disability plan pending the outcome of an appeal.

In his appeal, Goffstein alleged that Crancer had erred in granting the district’s motion for summary judgment because the motion only addressed two of the six counts in Local 1889’s lawsuit in violation of the Missouri Rules of Civil Procedure’s Rule 74.04 relating to summary judgments.

In a memorandum supplementing the order affirming Crancer’s ruling, the three-judge appellate court panel wrote, “Summary judgment is a drastic remedy, which borders on denial of due process and effectively denies the party against whom it is entered a day in court … Therefore this court will review the record in the light most favorable to the party against whom judgment was entered and accord that party the benefit of all inferences which may reasonably be drawn from the record.”

The memorandum states, “In their sole point relied on, plaintiffs argue that the trial court erred in granting the district’s motion for summary judgment because the motion only addressed two of the six counts in plaintiffs’ petition in violation of Rule 74.04. More specifically, plaintiffs argue that the district addressed only counts one and two of their petition, relating to ‘meet and confer’ and ‘public notice’ and the trial court ruled upon those counts only. We have reviewed the motion and the trial court’s judgment and we find that both sufficiently address all counts of plaintiffs’ petition.”

The memorandum also addresses Local 1889’s response to the district’s motion for summary judgment, stating, “Plaintiffs answer the district’s uncontroverted facts with numbered paragraphs containing legal conclusions, argumentative statements and remarkably few citations to the record.”

Rule 74.04(c) requires that a response to a summary judgment “… shall support each factual statement asserted in the response with specific references to where each such fact appears in the pleadings, discovery or affidavits,” the memorandum states.

“Here, however, plaintiffs make conclusory statements such as ‘(t)he Standard Insurance Policy is fundamentally a sham …’ without citation to the record for any supportive authority. Plaintiffs deny district’s assertion that assets were not commingled by stating ‘(a) genuine dispute as to these material “facts” exists based upon uncontroverted evidence and summary judgment is certainly not appropriate for defendants in this action. In fact and law, based upon these and other facts that are stated herein, it is the plaintiffs who are entitled to summary judgment.’ Plaintiffs offered no citations to the record or supportive documentation,” according to the memorandum.

The three-judge panel also cited Crancer’s order granting summary judgment, which stated, “This court has never questioned the power of the defendants to enact the proposed changes, only the manner in which the proposed changes were sought to be implemented.”

After the preliminary injunction was issued, the board then complied with the statutory requirements to enact the changes, Crancer’s judgment stated.

Crancer’s ruling noted the remaining issue “is the breach of a fiduciary duty owed to the plaintiffs by the board and its members. The court finds that plaintiffs’ allegations of commingling of assets is serious, but unsubstantiated by any witness or competent evidence in the filings before this court.”

The appellate court memorandum stated, “The court found that there was no genuine dispute as to material fact and that the district was entitled to judgment as a matter of law on ‘all counts of the petition.’ Thus, the court considered all counts of plaintiffs’ petition and did not omit Counts III-VI …”

Local 1889 also filed another lawsuit — still pending — against the Board of Directors last March after the board voted 2-1 to adopt an amendment and two resolutions changing the district’s pension plan from a defined-benefit plan to a defined-contribution plan. Hilmer and Stegman voted in favor of the motions while Ottoline was opposed.

The defined-benefit plan was to end March 31 and the defined-contribution plan was to begin April 1 as a result of approval of Amendment 5 and the two resolutions. However, a temporary restraining order granted by St. Louis County Circuit Court Judge Thea A. Sherry stated that the board “shall maintain the current retirement and disability plan in full force and effect, without modification, as relates to the defined benefit plan, while this temporary restraining order remains in effect or until such further time as designated by the court in granting further temporary, preliminary or permanent injunctive relief.”

On May 25, Sherry granted Local 1889’s request for a preliminary injunction, prohibiting the board from making any changes to the pension plan.

In her judgment, Sherry wrote that after the election of Hilmer and Stegman in April 2005, “the directors set out to terminate the defined-benefit plan, ostensibly to reduce the cost to the (district), but without regard to the effect on the plan participants. The assurances from defendants that there will be no reduction in benefits to the current retirees and vested members were unpersuasive.

“The change in the plan affects future employees, retired employees and current employees, both vested and non-vested,” Sherry wrote. “There is no credible evidence that the aforedescribed Amendment 5 does not adversely affect the protected interest of at least the retired employees and vested current employees.”

Hoffman told the Call, “We have filed additional pleadings, including the recent decision of the Court of Appeals, which we think is also relevant to the current pending litigation in St. Louis County Circuit Court.”

In a pleading filed last week, the fire district’s legal counsel states, “While the case before Judge Crancer involved the decision to make changes to the disability plan and the instant case involves a change from the defined-benefit plan, the fact remains that both the disability plan and the defined-benefit plan fall under the same pension plan.

“There is only one Mehlville Fire Protection District Pension Plan. The funding source is the same — the taxpayers — whether the money is to fund the disability plan or the defined-benefit plan. There is only one plan document. That plan document pertains to both the disability plan and the defined-benefit plan. The statutory authority for the plans are the same. Section 321 (of Missouri Revised Statutes) governs disability plans as well as defined-benefit plans. Even the petitions in this case and the Judge Crancer case involve substantially the same allegations.

“Importantly, all of these issues are now before this court on defendants’ motion for summary judgment. This court should be guided by Judge Crancer’s ruling and the Court of Appeals’ decision to affirm her ruling,” the pleading states.

Of the ruling handed down by the Court of Appeals, Hilmer told the Call, “Obviously, Bonnie and I very pleased by it, but we’re also saddened. We’re sad that the employees chose to go this route, especially after we had begged and pleaded with them to bring us compromise ideas. In-stead, they chose to go all or nothing. Well, now they’ve got nothing, and they’ve cost the district millions of dollars by their actions. But that shouldn’t surprise anybody because, after all, this group and the puppets they run for office specialize in wasting people’s money.

“But I think this shows that they thought lawsuits, nasty letters and low-lifes sent to intimidate could make us roll over and stop the march of reform. Well, that’s not going to happen. Bonnie and I did what we had to do. They counted on us to be passive. They counted wrong,” he added.