RICHARD A. CAMPANA vs. BOARD OF DIRECTORS OF THE MASSACHUSETTS HOUSING FINANCE AGENCY & another. [Note 1]

ABRAMS, J. The plaintiff, Richard A. Campana, was terminated from his employment with the Massachusetts Housing Finance Agency [Note 2] (MHFA) on August 15, 1979. At that time, the plaintiff was a member of the contributory retirement system for public employees. G. L. c. 32 (1984 ed.). Members of this system who are "employees," [Note 3] and meet certain age and length-of-service requirements, are entitled to various rights on retirement, removal, or discharge. [Note 4] G. L. c. 32, Section 16. Because the plaintiff is a veteran and has served more than ten years' "creditable service," [Note 5] he met the basic requirements necessary for entitlement to the rights provided in Section 16 of G. L. c. 32. The primary issues presented here are (1) whether the plaintiff is an employee who is entitled to the procedural protections outlined in c. 32; and (2) if he is entitled to these protections, what is the appropriate remedy for the violation

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of these provisions. Both the judge who heard his action for declaratory relief in the Superior Court and a single justice of this court ruled that the provisions of G. L. c. 32, Section 16, apply to the plaintiff and that the appropriate remedy is reinstatement. We agree. We affirm those rulings and remand this matter to the Superior Court for a hearing on damages.

The plaintiff was hired originally by the MHFA as a mortgage analyst in 1971. In the spring of 1978, the plaintiff changed positions within the MHFA and assumed the position of office manager. As office manager, the plaintiff worked under both the special assistant to the executive director and the executive director. In 1979, a series of disputes arose between the plaintiff and the executive director of the MHFA. As a result of these disputes, in August, 1979, the director sent a notice of termination to the plaintiff which detailed the reasons for his discharge.

The plaintiff responded to the director's charges by letter shortly after he was terminated. In addition, the secretary of the MHFA retirement board advised the plaintiff that he had the right to request a hearing before the retirement board. [Note 6] The plaintiff also was advised of his right to seek review of any action taken by the retirement board in a District Court.

Initially, the plaintiff sought a review of his termination by the board of directors of the MHFA. The plaintiff's attorney made a presentation before the board of directors on September 16, 1980. The transcript of the directors' meeting indicates that the board concluded that the plaintiff's only avenue of relief was through the courts. [Note 7] Approximately eighteen months later, in March of 1982, the board of directors notified the

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plaintiff that it was the board's position that he was properly discharged and that the board would take no further action.

In May of 1980, the plaintiff's attorney also requested a hearing before the retirement board of the MHFA pursuant to G. L. c. 32, Section 16 (2). On October 7, 1980, the retirement board met and voted [Note 8] not to grant the plaintiff a hearing. The board's position was that the matter was not within its authority. Moreover, the retirement board determined that because the MHFA board of directors had decided not to take action on the plaintiff's request for reinstatement, it would not be appropriate for the retirement board to overrule that judgment. The retirement board notified the plaintiff of its decision by letter dated October 8, 1980.

The plaintiff accepted another position in March of 1981 with the Committee on Criminal Justice of the Commonwealth. The plaintiff worked in this position for one year. The salary was approximately the same as the plaintiff had been earning at the MHFA. In the spring of 1982, the plaintiff took a leave of absence from the Committee on Criminal Justice to run for a seat on the Governor's Council. The plaintiff has not, as of the date of the record, sought reinstatement with the Committee on Criminal Justice. [Note 9]

In a letter dated March 2, 1982, the chairman of the board of directors of the MHFA sent written notice to the plaintiff of the board's refusal to take any further steps regarding his dismissal. In response to this letter, the plaintiff instituted an action for declaratory relief in the Superior Court on March

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3, 1982. [Note 10] See G. L. c. 231A (1984 ed.). On June 25, 1982, the plaintiff moved for summary judgment asserting that, as a matter of law, he was entitled to the procedural protections set out in G. L. c. 32, Section 16. After hearing, this motion was denied. The motion judge ruled that questions of fact existed concerning the plaintiff's status as a veteran and his years of creditable service. [Note 11]

In June, 1983, the matter went to trial. The trial lasted two days and, in August, the judge rendered his decision. Because the parties stipulated at the outset of the trial that the plaintiff was a veteran with ten or more years of creditable service, the primary focus of the trial was on the nature of the plaintiff's duties and the scope of the plaintiff's authority at the MHFA. There is no dispute as to the plaintiff's job title. The trial judge found that, as office manager, the plaintiff did not have supervisory authority. Because the plaintiff was an employee who lacked authority and responsibility and was required to report to one or two supervisors who possessed the authority and responsibility for the job, the judge concluded that, as a matter of law, the provisions of G. L. c. 32, Section 16, were applicable and that the plaintiff was entitled to a hearing before the retirement board of the MHFA. [Note 12] The trial judge also concluded

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that the plaintiff's termination was ineffective, and that the plaintiff was entitled to reinstatement without loss of pay. The judge ruled that a hearing should be held to determine the plaintiff's damages. Finally, the judge determined that the plaintiff was entitled to legal fees pursuant to Mass. R. Civ. P. 36. See Mass. R. Civ. P. 37, as amended, 390 Mass. 1208 (1984).

The defendants have never complied with the decision of the Superior Court. After trial, despite the findings and conclusions of the trial judge, the MHFA did not reinstate the plaintiff. [Note 13] Instead, one month after the judge's ruling, the board of director filed with the retirement board a "fair summary of facts" on which the plaintiff's termination was based. That summary was not filed by the appropriate authority, as required by Section 16 (1), (2). See Appendix. Nevertheless, without further action by the Superior Court judge, the retirement board held a hearing on October 13, 1983. The plaintiff appeared at the hearing and argued that the retirement board did not have jurisdiction over the matter. [Note 14] The board ruled that jurisdiction was proper without deliberating on the issue. In conducting the hearing on the merits, the board decided that the plaintiff would not have the right to cross-examine witnesses. At that point, the plaintiff and his attorney refused to participate in the proceeding and left the hearing. The board held the hearing despite the plaintiff's absence, and the only witness was the plaintiff's supervisor, the executive director of the MHFA at

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the time of the plaintiff's discharge. The director stated his reasons for terminating the plaintiff. The hearing was concluded after this testimony.

Because the plaintiff was not present at the hearing, in a letter dated the same day as the hearing, the retirement board requested that the plaintiff submit any material which he wanted the retirement board to consider in making its decision. The letter stated that the retirement board would render a decision on October 28, 1983. Without notice to the plaintiff, on October 26, 1983, the retirement board met and voted that the removal of the plaintiff was justified. Because of this determination, the defendants have not reinstated the plaintiff.

After the retirement board rendered its decision, the plaintiff sought review of the matter pursuant to G. L. c. 32, Section 16 (3), in the Boston Municipal Court. At that same time, the defendants filed various motions in the Superior Court seeking to persuade the trial judge to reconsider his rulings in light of the action of the retirement board. No action has been taken on these motions. [Note 15]

Against this background, the plaintiff commenced an action under G. L. c. 211, Section 3 (1984 ed.), for extraordinary relief from a single justice of this court. The single justice reviewed the findings and conclusions of the trial judge. The single justice concluded that there was no error in these findings and conclusions, see infra at 501-504, and ruled that the plaintiff's discharge was not effective because the defendants did not comply with G. L. c. 32, Section 16. Moreover, the single justice

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concluded that the plaintiff is entitled to benefits and back pay, with interest, from the date of the ineffective discharge to the present. The single justice also agreed with the trial judge in the award of attorney's fees pursuant to Mass. R. Civ. P. 37 (c). Finally, the single justice ruled that the hearing held by the retirement board was without legal basis and thus the plaintiff's action in the Boston Municipal Court could not be maintained. The single justice ordered the case transferred to the Superior Court for the hearing on damages.

The defendants appeal from the memorandum and order of the single justice. [Note 16] The defendants argue that the plaintiff was not entitled to a hearing under G. L. c. 32 because he was hired as a "professional [or] business adviser []." [Note 17] The defendants also argue that even if the plaintiff were entitled to a hearing, the appropriate remedy at this time would not be reinstatement, but instead the holding of the hearing. Finally, the defendants contend that the award of attorney's fees pursuant to Mass. R. Civ. P. 36 was erroneous. We find no merit in these contentions.

The determination whether the plaintiff is entitled to a hearing upon his termination with the MHFA is controlled by the plain language of the contributory retirement act. Nationwide

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Mut. Ins. Co. v. Commissioner of Ins., 397 Mass. 416, 420 (1986). Conroy v. Boston, 392 Mass. 216, 219 (1984). See Appendix. Section 16 (2) provides that the removal or discharge of any member [Note 18] of the State retirement system "shall not become effective unless and until" written notice containing "a fair summary of the facts" has been filed by the head of the department with the retirement board (emphasis added). The only exception to the protections of this section is provided in Section 16 (5) which states that right of an employee to a hearing before the retirement board or to review in the District Court shall not apply to "the removal or discharge of any state official or of any official of any political subdivision . . . for which provision is otherwise made."

While the term "official" is not defined in the act, the term "State official" is defined in G. L. c. 32, Section 1, as "any person appointed by the governor to a position in the service of the commonwealth." We have interpreted the scope of Section 16 (5) in Welch v. Contributory Retirement Appeal Bd., 343 Mass. 502 (1962), and Chartrand v. Registrar of Motor Vehicles, 347 Mass. 470 (1964). In Welch, the plaintiff was removed from his position as director of public works in Medford. We determined that Welch's position was "of sufficient importance to come within the ambiguous term `official,' as used in Section 16 (5)." Welch, supra at 509. Moreover, we noted that "one reason for the use of the word `official' in Section 16 (5) may have been to limit the application of Section 16 (5) to key officers." Id. at 510. Using a similar analysis in Chartrand, we concluded that the plaintiff, who was an examiner of applicants for motor vehicle licenses, was entitled to the protections of Section 16 because he was not a "State official" as defined in Section 16 (1). Chartrand, supra at 476.

The defendants argue that these cases mandate the finding that the plaintiff was an "official . . . for which provision is otherwise made." We do not agree. It is uncontested here that

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the plaintiff was hired by the MHFA as a mortgage analyst and there is no evidence that the plaintiff was appointed to this position by the Governor. The parties agree that the plaintiff's title was office manager. In his findings of fact, the Superior Court judge found that the position as office manager was not one which entailed significant authority or responsibility. Instead, the judge found that the two supervisors of the plaintiff had the primary responsibility. Based on these findings, the judge concluded that the plaintiff was covered by G. L. c. 32, Section 16, and entitled to a hearing. The judge's findings are not clearly erroneous and are amply supported by the record. See Freyermuth v. Lutfy, 376 Mass. 612, 615 (1978). See also Mass. R. Civ. P. 52 (a), 365 Mass. 816 (1974). Further, we agree with the judge's ultimate determination that, under the statute, the plaintiff was entitled to a hearing after proper notice. [Note 19]

According to the statute, the plaintiff's discharge is ineffective because he was denied a hearing on his removal. G. L. c. 32, Section 16 (2). The trial judge concluded that the proper remedy included the reinstatement of the plaintiff. Because the plaintiff's termination was ineffective under the statute, he must be reinstated, and he is entitled to back pay from the date of his ineffective termination. See Bagley v. Contributory Retirement Appeal Bd., 397 Mass. 255, 258-259 (1986); Chartrand, supra at 476.

Instead of reinstating the plaintiff as ordered by the Superior Court judge, the defendants sought a hearing before the retirement board. The trial judge's order, however, required that

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the plaintiff was to be reinstated until proper notice, complying with the statutory requirements, was given. The defendants disregarded the judge's ruling. As the single justice concluded, the hearing held in contravention of the trial judge's order was a "nullity." [Note 20] It also follows that the action initiated in the Boston Municipal Court cannot be maintained.

The defendants challenge the award of attorney's fees under Mass. R. Civ. P. 36. See Mass. R. Civ. P. 37. The defendants argue that their denial to the request for admission of the plaintiff's status as an "employee," as defined by the statute, was crucial to their good faith defense and thus the trial judge erred in awarding attorney's fees on that basis. It appears in the record that the trial judge awarded attorney's fees pursuant to rule 36 not because of the defendants' denial that the plaintiff was an employee, but because the defendants failed to admit that the plaintiff is a veteran who had worked the requisite number of years of creditable service. [Note 21]

The board of directors denied the request for admission of the facts that would have established the plaintiff's status as a veteran and his term of creditable service. The retirement board refused to answer the plaintiff's request for admission as to these facts on the ground that the records provided to the

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plaintiff speak for themselves. The purpose of admissions pursuant to Mass. R. Civ. P. 36 is "to define and limit the matters in controversy between the parties." 8 C.A. Wright & A.R. Miller, Federal Practice and Procedure Section 2252, at 704-705 (1970 & 1986 Supp.). See Reynolds Aluminum Bldg. Prods. Co. v. Leonard, 395 Mass. 255, 261 (1985). The rule promotes both economy and judicial administration. By admitting to facts which will not be disputed at trial, parties are relieved of the cost of proving such facts. More importantly, admissions reduce the time necessary to try a case and may render a trial unnecessary if the matter can be resolved by summary judgment.

The defendants' responses to the plaintiff's requests caused the plaintiff needless expense in preparing to prove facts which were stipulated to on the first day of trial. Rule 37 "affords a judge broad discretion to impose whatever sanctions are just in order to ensure that the discovery process operates efficiently." Corsetti v. Stone Co., 396 Mass. 1, 26 (1985). See Partlow v. Hertz Corp., 370 Mass. 787, 790 (1976). We find no abuse of discretion in the imposition of attorney's fees on these facts. [Note 22]

In sum, the plaintiff is entitled to a judgment declaring that the provisions of G. L. c. 32, Section 16, are applicable to any action commenced by the MHFA to terminate his employment. The plaintiff is also entitled to be reinstated to his position as office manager "unless and until a written notice . . . containing a fair summary of the facts has been filed with the retirement board" by the then head of the department. The hearing held by the retirement board is of no legal effect and the action in

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the Boston Municipal Court to review the board's decision is to be dismissed. [Note 23]

If this is a nightmare for the defendants, it is one of their own making. Most of the delay in this case is attributable to the actions taken by the defendants after discharge, during the discovery process, at the motion for summary judgment, and after trial in the Superior Court. The case is transferred to the Superior Court for a determination of damages, as the plaintiff is entitled to back wages from the date of the ineffective termination to the present, plus interest. [Note 24] A declaration is to be entered in the Superior Court in accordance with this opinion.

So ordered.

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APPENDIX.

General Laws c. 32, Section 16 (1984 ed. & 1985 Supp.), provides, in relevant part: "(1) Involuntary Retirement and Right to a Hearing. -- (a) Any head of a department who is of the opinion that any member employed therein should be retired for superannuation, ordinary disability or accidental disability, in accordance with the provisions of section five, six, or seven, as the case may be, may file with the board on a prescribed form a written application for such retirement. Such application shall include a fair summary of the facts upon which such opinion is premised. The applicant shall forthwith deliver to such member by registered mail, with a return receipt requested, a true copy of such application, together with a brief statement of the options available to such member on his retirement and a statement of his right, if any, to request a hearing with regard to such retirement and of the right, if any, of review available to him, as provided for in this section, in case he is aggrieved by any action taken or decision of the board rendered or by failure of the board to act upon his request or to render a decision within the time specified in this subdivision. Upon such delivery to such member the head of the department, or one acting in his behalf, shall file with the board under the penalties of perjury a written notice of such delivery, including the date thereof.

". . . .

"(2) Right to Hearing upon Removal or Discharge. -- The removal or discharge of any member in service classified in Group 1, Group 2 or Group 4 who has attained age fifty-five and has completed fifteen or more years of creditable service, or any member so classified who has not attained age fifty-five but who has completed twenty or more years of creditable service, or any such member who is a veteran and has completed ten or more years of creditable service, shall not become effective unless and until a written notice thereof containing a fair summary of the facts upon which such action was based has been filed with the board. The procedure set forth in subdivision (1) relative to delivery of copies, statement of service thereof, notice, hearing if requested, and the filing of a certificate of findings and decision, so far as applicable, shall apply to all proceedings involving such removal or discharge. Unless the board shall find that such removal or discharge was justified, such member shall forthwith be restored to his office or position without loss of compensation.

"(3) Right of Review by District Court. -- (a) Any member classified in Group 1, Group 2 or Group 4 who has attained age fifty-five and completed fifteen or more years of creditable service, or any member so classified who has not attained age fifty-five but who has completed twenty or more years of creditable service, or any such member who is a veteran and has completed ten or more years of creditable service, and who is aggrieved by any action taken or decision of a board or the commissioner of public employee retirement rendered with reference to his involuntary retirement

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under the provisions of subdivision (1) or to his removal or discharge as set forth in subdivision (2), or any member who is aggrieved by any action taken or decision of a board or the commissioner of public employee retirement rendered with reference to his dereliction of duty as set forth in section fifteen, may, within thirty days after the certification of the decision of the board, bring a petition in the district court within the territorial jurisdiction in which he resides praying that such action and decision be reviewed by the court. After such notice as the court deems necessary, it shall review such action and decision, hear any and all evidence and determine whether such action was justified. If the court finds that such action was justified the decision of the board or the commissioner of public employee retirement shall be affirmed; otherwise it shall be reversed and of no effect. If the court finds that such member was unjustifiably retired, removed or discharged from his office or position he shall be reinstated thereto without loss of compensation. The decision of the court shall be final.

". . . .

"(5) Provisions Not Applicable to Certain Members. -- The provisions of this section relative to the right of any member to a hearing or to the right of review by the district court shall not apply in the case of the removal or discharge of any state official or of any official of any political subdivision of the commonwealth for which provision is otherwise made in any general or special law, anything in this section to the contrary notwithstanding."