Davidson County v. Alfred O. Hibler, II

The Metropolitan Government of Nashville and Davidson County (“Metro”) brought this action alleging that Alfred O. Hibler, II, had failed to report earned income as required in order to avoid a reduction in the amount of his Metro disability pension, resulting in significant pension overpayments to Mr. Hibler. The income in dispute consisted of distributions of excess earnings of an S corporation owned by Mr. Hibler. The issue is whether this income is properly characterized as “earned income,” defined by the Metro Code as including “wage or salary – not rent, interest, dividends or capital gains.” After a trial, the trial court ruled that the distributions, labeled “draws” by the S corporation, were not earned income required to be reported to Metro for purposes of calculating Mr. Hibler’s disability pension, and dismissed the action. We affirm the judgment of the trial court.