State ex rel. Gill v. School Emps. Retirement Sys. of Ohio , 121 Ohio St. 3d 567 ( 2009 )


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  • [Cite as State ex rel. Gill v. School Emps. Retirement Sys. of Ohio, 
    121 Ohio St.3d 567
    , 2009-
    Ohio-1358.]
    THE STATE EX REL. GILL, APPELLEE, v. SCHOOL EMPLOYEES
    RETIREMENT SYSTEM OF OHIO, APPELLANT, ET AL.
    [Cite as State ex rel. Gill v. School Emps. Retirement Sys. of Ohio,
    
    121 Ohio St.3d 567
    , 
    2009-Ohio-1358
    .]
    Public employees — Disability-retirement benefits — R.C. 145.35(E) — Grant of
    disability-retirement benefit by Public Employees Retirement System is
    final — Member of two separate public-employee retirement systems who
    applies for and receives disability-retirement benefits solely from PERS
    may not later apply for combined disability-retirement benefits from PERS
    and second retirement system.
    (No. 2008-1211 ─ Submitted February 3, 2009 ─ Decided March 31, 2009.)
    APPEAL from the Court of Appeals for Franklin County,
    No. 07AP-286, 
    2008-Ohio-2302
    .
    __________________
    Per Curiam.
    {¶ 1} This is an appeal from a judgment granting a writ of mandamus to
    compel appellant, the School Employees Retirement System (“SERS”), to render
    a final decision on the merits of an appeal by appellee, William J. Gill Jr., from
    the retirement system’s initial denial of his application for combined disability-
    retirement benefits. We reverse the judgment of the court of appeals and deny the
    writ because SERS did not abuse its discretion in declining to decide the merits of
    an applicant’s appeal when the applicant has applied for and is receiving
    independent disability-retirement benefits from another retirement system.
    Gill’s Initial Application for Combined Disability-Retirement Benefits
    {¶ 2} Gill is a member of both the Public Employees Retirement System
    (“PERS”) and SERS. His membership in PERS began in 1988 when he was
    SUPREME COURT OF OHIO
    employed by the city of Cleveland and later by Cuyahoga County; his
    membership in SERS began when he was employed as a high school coach in
    1999.
    {¶ 3} In March 2003, Gill was injured when he lifted a heavy condenser
    pump while in the course of his employment with Cuyahoga County.               He
    experienced excruciating pain in his low back and right leg and has not worked
    since.
    {¶ 4} In July 2004, Gill applied for combined disability-retirement
    benefits with PERS. He specified in his application that he wanted to combine his
    PERS account with his SERS account. The county’s fiscal officer certified April
    4, 2003, as the final day for which he was paid by the county. PERS then notified
    Gill that because his most recent public employment was covered by SERS, he
    was required to file his application for combined benefits with SERS rather than
    PERS.
    Filing and Initial Denial of Second Application
    {¶ 5} Gill followed PERS’s instructions and filed a disability-retirement
    application with SERS. He listed May 31, 2003, as his last day of paid service for
    his job as a high school coach. The school district’s treasurer also certified May
    2003 as Gill’s last date of SERS service.
    {¶ 6} In January 2005, the SERS retirement board denied Gill’s
    application for combined disability-retirement benefits. Gill appealed.
    Application for PERS Disability-Retirement Benefits
    {¶ 7} A month after SERS’s denial of his application, Gill informed
    PERS that it was mistaken in concluding that his last date of service was with
    SERS and that he was therefore entitled to have his 2004 PERS application
    processed immediately. PERS again informed Gill that his most recent service
    was with SERS, and his PERS application for combined disability-retirement
    benefits could be processed only if SERS first approved his application. PERS
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    January Term, 2009
    also notified Gill that in lieu of applying for combined benefits, he could apply for
    disability-retirement benefits on an independent basis, i.e., solely for his 21.105
    years of PERS service credit, without regard to his four years of SERS credit.
    {¶ 8} Gill filed a third application, this time for independent disability-
    retirement benefits with PERS, while his appeal from the initial denial of his
    application for combined disability-retirement benefits was still pending before
    SERS. This application contained the following preprinted language:
    {¶ 9} “If you have membership with SERS and/or STRS, this credit may
    be used in the calculation of your OPERS benefit or you may elect to retire on an
    independent basis using only OPERS service and salary. Make your choice
    below.”
    {¶ 10} Gill checked the box below this language next to the sentence
    “NO, DO NOT combine my SERS and/or STRS account with my OPERS
    account.” (Boldface sic.)
    {¶ 11} In June 2005, PERS approved Gill’s independent application for
    disability-retirement benefits.
    Appeal of SERS’s Denial of Combined Disability-Retirement Benefits
    {¶ 12} Gill appeared with his attorney before the SERS retirement board
    and informed it that PERS had approved his application for independent
    disability-retirement benefits without regard to his SERS service.         Later he
    notified SERS that he disputed the earlier determinations that his last covered
    service was with SERS rather than with PERS. Gill claimed that his last date of
    service was actually with the county, so that PERS should determine his
    application for combined disability-retirement benefits.
    {¶ 13} PERS declined Gill’s request for recalculation of his disability-
    retirement benefits based upon his combined service with PERS and SERS,
    stating again that any new determination was dependent upon SERS’s action.
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    SUPREME COURT OF OHIO
    {¶ 14} Gill then requested that SERS decide his appeal from its denial of
    his application for combined benefits and that SERS recertify Gill’s final date of
    service so that PERS could assume control over his application. SERS rejected
    Gill’s requests. It reasoned that when Gill was granted independent disability
    from PERS, he was no longer eligible to seek combined disability-retirement
    benefits.    Moreover, SERS’s determination of the last date of service was
    supported by the treasurer’s certification and Gill’s own application for benefits.
    Mandamus Case
    {¶ 15} Gill subsequently filed a complaint in the Court of Appeals for
    Franklin County for a writ of mandamus to compel SERS to grant his application
    for combined disability-retirement benefits, recertify the last date of covered
    SERS service as March 31, 2003, transmit the recertification to PERS, and
    transfer all of his SERS funds to PERS. Gill also sought to compel PERS to
    accept the SERS recertification and transfer of funds and to administer his
    combined PERS/SERS disability-retirement benefits.
    {¶ 16} In May 2008, the court of appeals, in a two-to-one decision,
    granted a writ of mandamus to compel SERS to render a final decision on Gill’s
    appeal.
    {¶ 17} This cause is now before us upon SERS’s appeal as of right.
    Mandamus - General Standard
    {¶ 18} The court of appeals granted a writ of mandamus to compel SERS
    to decide Gill’s appeal of its initial denial of his application for combined
    disability-retirement benefits. To be entitled to the writ, Gill was required to
    establish a clear legal right to a decision on the merits of his appeal, a
    corresponding clear legal duty on the part of SERS to issue a merits decision, and
    the lack of an adequate remedy in the ordinary course of the law.
    {¶ 19} For the requirements of clear legal duty and clear legal right, “
    ‘mandamus is available to correct any abuse of discretion by SERS.’ ” State ex
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    January Term, 2009
    rel. VanCleave v. School Emps. Retirement Sys., 
    120 Ohio St.3d 261
    , 2008-Ohio-
    5377, 
    898 N.E.2d 33
    , ¶ 22, quoting State ex rel. Stiles v. School Emps. Retirement
    Sys., 
    102 Ohio St.3d 156
    , 
    2004-Ohio-2140
    , 
    807 N.E.2d 353
    , ¶ 13. “An abuse of
    discretion occurs when a decision is unreasonable, arbitrary, or unconscionable.”
    
    Id.
     Therefore, we must determine whether the SERS decision not to address the
    merits of Gill’s appeal from the denial of his application for combined disability-
    retirement benefits under SERS and PERS was unreasonable, arbitrary, or
    unconscionable.
    The Pertinent Statutes
    {¶ 20} “The Public School Employees Retirement System was established
    for the purpose of providing retirement allowances and other benefits to public
    school employees other than teachers.” State ex rel. McMaster v. School Emps.
    Retirement Sys. (1994), 
    69 Ohio St.3d 130
    , 133, 
    630 N.E.2d 701
    , citing 1 Baker &
    Carey, Ohio School Law (1993) 399, Section 8.25. Similarly, PERS was created
    to provide retirement allowances and other benefits to certain state and local
    public employees. See R.C. Chapter 145.
    {¶ 21} Under the pertinent statutes, SERS and PERS provide independent
    disability coverage to each member who has at least five years of total service
    credit. See R.C. 3309.39(A) (“The school employees retirement system shall
    provide disability coverage to each member who has at least five years of total
    service credit”) and 145.35(B) (“The public employees retirement system shall
    provide disability coverage to each member who has at least five years of total
    service credit”).
    {¶ 22} In lieu of seeking independent disability-retirement benefits solely
    from SERS, PERS, or the State Teachers Retirement System (“STRS”), members
    of more than one of these public-employee retirement systems may choose a
    combined disability-retirement benefit. “At the option of a member, or of a
    beneficiary, total contributions and service credit in the public employees
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    SUPREME COURT OF OHIO
    retirement system and the school employees retirement system and STRS must be
    used in determining the eligibility and total allowance for the purpose of service
    retirement and a disability benefit.” Hastings, Manoloff, Sheeran, Stype & Jaffe,
    Ohio School Law (2007) 283, Section 11:20. Thus, service credit earned in these
    retirement systems “may be combined in order to determine eligibility for
    retirement and to compute benefits.” Id. at 362, Section 14:15.          See R.C.
    145.37(B) (PERS), R.C. 3307.57(B) (STRS), and 3309.35(B) (SERS), which
    contain comparable provisions concerning combining disability-retirement
    benefits under two or more of these three retirement systems.
    Election of Independent or Combined Disability-Retirement Benefits
    {¶ 23} SERS determined that once Gill began receiving disability-
    retirement benefits based solely on his PERS membership, SERS lacked authority
    to act on the merits of his pending appeal from the initial denial of the combined-
    benefits application based on his service in both PERS and SERS.
    {¶ 24} Neither R.C. 145.37 nor 3309.35 specifies when a member of more
    than one of the specified retirement systems must choose between independent
    and combined benefits. Nor do the statutes expressly authorize a member who is
    already receiving benefits under one system to rescind that benefit choice and
    receive a combined benefit in its place.
    {¶ 25} For the following reasons, SERS did not abuse its discretion in
    determining that once PERS approved and began disbursing an independent
    PERS benefit to Gill without regard to his SERS service, SERS lacked authority
    to modify the retirement award by acting on Gill’s application for combined
    benefits under both systems.
    {¶ 26} First, as statutorily created entities, SERS, which was established
    by R.C. 3309.03, and PERS, which was established by R.C. 145.03(A), can pay
    benefits only as expressly authorized by statute. See, e.g., Cosby v. Cosby, 
    96 Ohio St.3d 228
    , 
    2002-Ohio-4170
    , 
    773 N.E.2d 516
    , ¶ 15, 19; Dreger v. Pub. Emps.
    6
    January Term, 2009
    Retirement Sys. (1987), 
    34 Ohio St.3d 17
    , 20-21, 
    516 N.E.2d 214
    ; Hansford v.
    Pub. Emps. Retirement Sys., 
    170 Ohio App.3d 603
    , 
    2007-Ohio-1242
    , 
    868 N.E.2d 708
    , ¶ 12; Ohio Pub. Emps. Retirement Sys. v. Coursen, 
    156 Ohio App.3d 403
    ,
    
    2004-Ohio-1229
    , 
    806 N.E.2d 197
    , ¶ 7. Neither of the pertinent statutes expressly
    authorizes SERS or PERS to consider the merits of an application for combined
    disability-retirement benefits when a member has already repudiated the
    combined-benefits option by requesting and receiving independent benefits from
    one of the retirement systems.
    {¶ 27} Second, R.C. 145.35(E) provides that the action by PERS granting
    Gill a disability-retirement benefit “shall be final.” By Gill’s own request, that
    benefit was not combined with his SERS service time. The General Assembly
    has not provided any mechanism for either PERS or SERS to modify a final
    decision by later considering an application for combined disability-retirement
    benefits. When the General Assembly has intended to permit a modification of
    benefits after they have been approved and received, it has so provided. See, e.g.,
    R.C. 145.37(B)(2) and 3309.35(C) (subjecting former PERS and SERS members
    receiving combined disability-retirement benefits to recovery by the state of any
    overpayments if the member is reemployed in a state retirement system that
    participated in the combined benefit), 3309.46(C) (SERS member can change
    election of service-retirement benefit plan until first payment of retirement
    allowance), 3309.46(E) (specifying circumstances under which retirement plan
    may be changed after payments have been received), and 4123.52 (conferring
    continuing jurisdiction on Industrial Commission to make certain modifications or
    changes in findings and orders regarding benefits). The General Assembly has
    not done so here.
    {¶ 28} Third, insofar as the statutes are silent on this issue, we must
    accord SERS the deference to which it is entitled in interpreting the pertinent
    legislation. State ex rel. Schaengold v. Ohio Pub. Emps. Retirement Sys., 114
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    Ohio St.3d 147, 
    2007-Ohio-3760
    , 
    870 N.E.2d 719
    , ¶ 23. “A court must give due
    deference to the agency’s reasonable interpretation of the legislative scheme.”
    Northwestern Ohio Bldg. & Constr. Trades Council v. Conrad (2001), 
    92 Ohio St.3d 282
    , 287, 
    750 N.E.2d 130
    .
    {¶ 29} SERS reasonably interpreted the relevant statutes as precluding it
    from acting on Gill’s application for combined disability-retirement benefits after
    he had applied for and received independent disability-retirement benefits from
    PERS. The court of appeals erred in determining that PERS had agreed to
    administer Gill’s combined benefits if SERS first approved, notwithstanding his
    receipt of independent PERS benefits. In fact, a thorough reading of the PERS
    letter relied on by Gill and cited by the court of appeals reveals the contrary.
    PERS had rejected Gill’s requests and stated it would defer to SERS to make the
    transfer and certification of funds to PERS. PERS stated that this determination
    was “subject to SERS processing, review and determination of eligibility” and
    that “contact with SERS indicates that statutory limitations may prohibit * * * the
    transfer of [Gill’s] account funds” from SERS to PERS. Furthermore, in its merit
    brief in the court of appeals, PERS noted that Gill himself caused the problems by
    filing another disability-retirement application with PERS in which he explicitly
    rejected the receipt of combined benefits even while his combined-disability
    application with SERS was still unresolved.
    {¶ 30} Finally, Gill effectively waived his right to pursue combined
    disability-retirement benefits under both PERS and SERS when he opted to seek
    disability-retirement benefits solely from PERS without regard to his SERS
    service time. “Waiver is a voluntary relinquishment of a known right and is
    generally applicable to all personal rights and privileges, whether contractual,
    statutory, or constitutional.” Glidden Co. v. Lumbermens Mut. Cas. Co., 
    112 Ohio St.3d 470
    , 
    2006-Ohio-6553
    , 
    861 N.E.2d 109
    , ¶ 49. PERS had notified Gill
    that if he applied for disability-retirement benefits from PERS on an independent
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    January Term, 2009
    basis, his SERS credit would not be included, and Gill specifically applied for
    independent benefits from PERS with that knowledge. By seeking and obtaining
    PERS approval of his independent application and ultimately receiving those
    benefits, Gill waived his statutory right to pursue a merits determination on his
    combined disability-retirement application.
    {¶ 31} SERS did not act in an unreasonable, arbitrary, or unconscionable
    manner by refusing to address the merits of Gill’s application for combined
    disability-retirement benefits. SERS correctly concluded that it lacked authority
    to proceed on Gill’s application for combined benefits after Gill had effectively
    abandoned that application by requesting and receiving independent benefits
    based solely on his PERS service. Moreover, Gill did not meet the five-year
    service requirement to request independent benefits from SERS.
    Remaining Claim
    {¶ 32} SERS next claims that the court of appeals erred in determining
    which of Gill’s employment positions is to be the focus of a disability
    determination in a combined-benefits case.      The remaining claim is moot,
    however, because of our disposition of SERS’s first claim.         This result is
    consistent with our well-settled precedent that we will not indulge in advisory
    opinions. State ex rel. Davis v. Pub. Emps. Retirement Bd., 
    120 Ohio St.3d 386
    ,
    
    2008-Ohio-6254
    , 
    899 N.E.2d 975
    , ¶ 43.
    Conclusion
    {¶ 33} Therefore, because SERS did not abuse its discretion by refusing
    to make a merits determination on Gill’s appeal from the initial denial of his
    combined disability-retirement application when the retirement system lacked
    authority to do so, the court of appeals erred in granting the writ of mandamus.
    Accordingly, we reverse the judgment of the court of appeals and deny the writ.
    Judgment reversed
    and writ denied.
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    SUPREME COURT OF OHIO
    MOYER, C.J., and O’CONNOR, LANZINGER, and CUPP, JJ., concur.
    PFEIFER, LUNDBERG STRATTON, and O’DONNELL, JJ., dissent.
    __________________
    LUNDBERG STRATTON, J., dissenting.
    {¶ 34} Ohio Adm.Code 3309-1-41(A)(1) requires the School Employees
    Retirement System (“SERS”) to notify the applicant or benefit recipient by letter
    of the retirement board’s decision whether to grant an appeal. Nearly three and a
    half years after Gill’s SERS disability-retirement appeal was heard by the SERS
    retirement board, Gill still has not received the written notice of SERS’s decision
    on his appeal.
    {¶ 35} The majority argues that because the statutes are silent on this
    issue, we must accord SERS deference in interpreting the pertinent legislation.
    Yet, as a statutory entity, SERS can only act as expressly authorized by statute.
    Cosby v. Cosby, 
    96 Ohio St.3d 228
    , 
    2002-Ohio-4170
    , 
    773 N.E.2d 516
    . As both
    the magistrate and the court of appeals found, there is no statutory authority
    supporting SERS’s claim that Gill’s application for combined disability-
    retirement benefits with SERS was automatically “voided” after PERS approved
    his independent disability-retirement benefit.     Neither is there any case law
    supporting this position.
    {¶ 36} Further, the majority contends that Gill has waived his right to
    pursue combined disability-retirement benefits under both PERS and SERS when
    he opted to seek disability-retirement benefits solely from PERS without regard to
    his SERS service time. I disagree. Gill attempted to follow the instructions given
    to him by both PERS and SERS in filing his application for combined disability-
    retirement benefits. After hearing nothing for several months from SERS, Gill
    had little choice but to pursue his retirement-disability benefits under PERS.
    {¶ 37} If SERS’s position denying disability-retirement benefits is
    reversed (a strong probability given that PERS found disability on the same set of
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    January Term, 2009
    facts), the original application for combined disability-retirement benefits would
    be reinstated, and PERS has indicated that it is willing to combine and administer
    the benefits pursuant to statute.
    {¶ 38} More important, PERS did not file any objections to the
    magistrate’s decision, nor did PERS join in the appeal to this court. Rather, PERS
    stated in a December 9, 2005 letter that it was willing to administer Gill’s
    combined benefits should SERS find Gill disabled. In my view, SERS has no
    standing to assert any position on behalf of PERS.
    {¶ 39} Today’s decision is, in my opinion, unsupported by the governing
    statutes and contrary to the public policy allowing combining disability-retirement
    benefits under two or more of the three retirement systems. R.C. 145.37(B)
    (PERS), 3307.57(B) (State Teachers Retirement System) and 3309.35(B) (SERS).
    The majority robs Gill of an option I believe he was intended to have. Nor is this
    decision supported by any legal authority. By this ruling, we have created a new
    trap for disabled employees. Accordingly, I respectfully dissent and would affirm
    the judgment of the court of appeals and grant the writ of mandamus.
    PFEIFER and O’DONNELL, JJ., concur in the foregoing opinion.
    __________________
    Thomas P. O’Donnell & Associates and Thomas P. O’Donnell, for
    appellee.
    Richard Cordray, Attorney General, and Todd A. Nist, Assistant Attorney
    General, for appellant.
    ______________________
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