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ORTIZ v. REGAN

October 22, 1990

BERNICE ORTIZ, PLAINTIFF,
v.
EDWARD V. REGAN, AS COMPTROLLER OF THE STATE OF NEW YORK AND AS TRUSTEE OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, GREGORY O. CHILDS, PERSONALLY AND AS DIRECTOR, RETIREMENT BENEFITS OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, AND JANE A. O'CONNOR, PERSONALLY AND AS ASSISTANT DIRECTOR OF THE RETIREMENT BENEFITS BUREAU OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, DEFENDANTS.



The opinion of the court was delivered by: Mukasey, District Judge.

OPINION AND ORDER

Plaintiff Bernice Ortiz is a New York State and Local Retirement Systems pensioner. In this action, under 42 U.S.C. § 1983, she claims, inter alia, that by arbitrarily cutting off and later reducing her monthly retirement benefits without notice and an opportunity to challenge the action, defendants New York State and Local Retirement Systems (NYSLRS) and Edward V. Regan have deprived and continue to deprive her of property without due process of law. The complaint also alleges that the failure of defendants to adopt rules and regulations to prevent wrongful termination or reduction of retirement benefits has deprived and will continue to deprive plaintiff of property without due process of law. After an initial cutoff of five months, plaintiff's retirement benefits were restored, albeit at a lower rate than that to which she believes she is entitled. Defendants move to dismiss her claims on the ground that the availability of administrative review for four months following the resumption of benefits satisfies the requirements of due process. For the reasons set forth below, defendants' motion is denied.

I.

The following facts are based on the verified complaint. Plaintiff's retirement became effective on May 27, 1989, and she received her first retirement check on or about June 28, 1989. That payment was to be the first of a series of payments, constituting an advance on retirement benefits ("advance retirement benefits"), to be paid monthly pending the final calculation of her regular retirement benefit. The first check was accompanied by the following letter from NYSLRS:

June 28, 1989

  Bernice Ortiz
  1237 Boynton Avenue # 2r
  Bronx N Y 10472

Dear Pensioner:

  We enclose our check in the amount of $296.00
  representing a partial advance of your retirement
  allowance. You will receive this amount monthly
  until your normal retirement allowance has been
  calculated.
  This advance payment is to provide you with some
  income during the period required to compile all
  the data necessary to accurately compute your
  allowance. No deductions are taken from partial
  payments. Once the final calculations have been
  completed you will receive your first regular
  retirement check which will be retroactive and
  include all monies due you from your effective
  date of retirement, less of course, the amount of
  advance payments you receive.
  We will make this final calculation as soon as
  possible.

Sincerely,

  /s/ Philip C. Bazicki
  Philip C. Bazicki
  Employees' Retirement System Examiner VI

Verified Complaint, Exh. E.

Ortiz received a second advance retirement benefit check, dated August 1, 1989, in the amount of $296.00. The complaint alleges that without affording her a hearing, without notifying her of any reasons, and without notifying her of its contemplated action, defendant NYSLRS simply ceased payment of the monthly advance retirement benefits. This complete cutoff of advance retirement benefits lasted for nearly six months until February 9, 1990, when Ortiz received a third advance retirement check, again in the amount of $296.00.

On February 15, 1990, Ortiz received a form letter from NYSLRS, dated February 12, 1990, informing her that a "final calculation" of her retirement allowance had been completed and that based on her "final average salary" and the number of years of "service credit," her maximum monthly regular benefit amount would be $294.99. This letter (the "final calculation letter") was accompanied by check in the amount of $1519.50 representing "the amount payable from your effective date of retirement 05/27/89 through 01/31/90 less $888.00 previously advanced." Verified Complaint, Exh. P. Notably for purposes of this litigation, the final calculation letter did not show the date of birth on which the benefit amount was based or the available procedures for challenging any information used to calculate a retiree's monthly benefit.

In the period between about September 1, 1989, when she expected to receive her third advance retirement check, and mid-February 1990, when payments resumed and she received the final calculation letter, plaintiff frantically attempted to first, secure some explanation of the cutoff and, second, comply with confusing and contradictory requests for documentation from NYSLRS. During this five-month period, the chronology of which is outlined below, Ortiz did not receive the monthly advance retirement payments previously promised.

After failing to receive the expected September 1, 1989 advance retirement check, Ortiz telephoned NYSLRS' Albany office and, after being given (as she wrote later) the "run-around," she was informed for the first time, but without explanation, that her payments had been intentionally stopped. Ortiz then wrote a letter dated September 27, 1989 to Peter Buckley, Director of Members' Services of NYSLRS, stating that she never received any official notification of the cutoff and was unaware of any reason that would justify it, and that the situation was hurting her health.

In response, Ortiz received a letter dated October 3, 1989, from defendant Gregory O. Childs informing her for the first time that NYSLRS had found a discrepancy regarding her date ...


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