Wiebenson v. Board of Trustees, Teachers' & State Employees' Retirement System , 123 N.C. App. 246 ( 1996 )

EAGLES, Judge.

I.

Petitioner first argues that the superior court erred in concluding that petitioner was not a State “employee” within the meaning of G.S. 135-1(10). All State “employees” are members of the Teachers’ and State Employees’ Retirement System. G.S. 135-3(1). G.S. 135-1(10) provides in pertinent part:

“Employee” shall mean all full-time employees, agents or officers of the State of North Carolina or any of its departments, bureaus and institutions other than educational, whether such employees are elected, appointed or employed. . . . Employees of State agencies, departments, institutions, boards, and commissions who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.

Petitioner argues that the nine month provision only applies to teachers or other State employees “working a teacher’s schedule.” We disagree. The language of the statute clearly provides that a person must work at least nine months per year to be an “employee” and be eligible to participate in the Retirement System. Petitioner only worked six months out of the year during the last seven and one-half years of her employment at the ARC. Pursuant to the plain language of the statute, petitioner was not an “employee.”

II.

Petitioner next argues that the State should be estopped from denying petitioner’s retirement coverage for the contested period based on her Director’s representations and her detrimental reliance on his representations. Petitioner relies on Fike v. Bd. of Trustees, 53 N.C. App. 78, 279 S.E.2d 910, disc. review denied, 304 N.C. 194, 285 S.E.2d 98 (1981), where this Court held that the State was estopped from denying Mr. Fike’s claim for retirement benefits. Mr. Fike and his wife were both employees of North Carolina State University. After Mr. Fike learned that his wife was terminally ill, he consulted Mrs. Ruth Ellis, the Payroll and Benefits Manager employed by North Carolina State University, “concerning retirement options, salary continuation and social security benefits for his wife.” Fike, 53 N.C. App. at 78, 279 S.E.2d at 911. Mr. Fike filled out various forms in Mrs. Ellis’s office on 15 August 1978, but Mrs. Ellis failed to file the retirement disability application. Id. After not receiving any payment by 29 September 1978, Mr. Fike discovered that the Retirement System had not received a disability retirement application for his wife. Id. at 79, 279 S.E.2d at 911. Mrs. Ellis was advised to immediately file the application. The Retirement System received the application on 2 October 1978 which meant that the earliest possible effective date for Mrs. Fike’s retirement was 1 November 1978. Id. at 79, 279 S.E.2d at 912. Mrs. Fike died on 13 October 1978. Id. The Board of Trustees for the Retirement System found that Mrs. Fike was never retired and was not entitled to a monthly benefit from the Retirement System because she died before the effective date of her retirement. Mr. Fike appealed the Retirement System’s decision, contending that Mrs. Ellis was the Retirement System’s agent and therefore the Retirement System was estopped from denying Mr. Fike retirement benefits.

In Fike, we stated that it was doubtful that the Retirement System had sufficient control over Mrs. Ellis or the University for Mrs. Ellis to be the Retirement System’s actual agent. Id. at 81, 279 S.E.2d at 913. However, the Retirement System Handbook, which Mr. Fike had read, provided that a retiree was to return the completed application to the retiree’s personnel officer and was not to return the application directly to the Retirement System. Fike, 53 N.C. App. at 81, 279 S.E.2d at 913. Because Mr. Fike had followed the procedures established by the Board and had “relied on Mrs. Ellis’ assertions that he had done all that was necessary,” we held that the Retirement System was estopped from denying Mr. Fike retirement benefits. Id.

Fike is arguably distinguishable from petitioner’s case. Here, petitioner has failed to show that she relied on any Retirement System publication which directed her to rely on her Director’s representations. Nevertheless, we conclude that the doctrine of ratification applies here to bind the Retirement System:

It is elementary that when one, with no authority whatever, or in excess of the limited authority given him, makes a contract as agent for another, or purporting to do so as such agent, the supposed principal, upon discovery of the facts, may ratify the contract, in which event it will be given the same effect as if the agent, or purported agent, had actually been authorized by the principal to make the contract prior to the making thereof.

Patterson v. Lynch, Inc., 266 N.C. 489, 492, 146 S.E.2d 390, 393 (1966). Here, petitioner’s supervising ARC director indicated to her in his memo that he had discussed the possibility of petitioner and Ms. Brank sharing one position with the Department of Human Resources and that DHR had approved the job-sharing option. Petitioner’s director also explicitly stated to petitioner in his memo that petitioner would continue to be a participating member of the Retirement System. We conclude that the ARC director, by his statements, purported to be the Retirement System’s agent and that petitioner reasonably relied on his representations. The record includes copies of yearly statements that the Retirement System provided to petitioner for each year from 1985 through 1990 which indicated that she was continuing to accumulate retirement credit in the Retirement System. We conclude that the Retirement System ratified the director’s representations and statements to petitioner by continuing to accept her contributions to the Retirement System and by continuing to send petitioner yearly statements indicating that petitioner was still a participating member of the Retirement System. Accordingly, we also conclude that the Retirement System may not now assert that petitioner, is not entitled to retirement credit for the years that she participated in the job-sharing program.

Reversed and remanded.

Judges WYNN and SMITH concur.