Gzaskow v. Public Employees Ret. Bd., 35,161

Background

Retiree Michael Gzaskow (retired 2011) elected Form C and named Francoise Becker as survivor beneficiary; he married Becker after retirement and they signed a prenuptial agreement preserving Becker as beneficiary.
To address the risk of both spouses dying while traveling, Gzaskow repeatedly had PERA provisionally recalculate benefits if he "deselected" Becker and named his daughter; he signed forms and kept them with his daughter to deliver only if both died.
In October 2014 Gzaskow signed and (he contends mistakenly) delivered a one-time irrevocable deselection form to PERA, naming his daughter as beneficiary; PERA acknowledged the change and his monthly pension was reduced.
Upon returning, Gzaskow asked PERA to cancel the change, claiming mistake and that required spousal consent or required documents were lacking; PERA refused, citing irrevocability under the Act and its regulations.
Plaintiffs sued in district court seeking declaratory, injunctive, and equitable relief; the district court dismissed for lack of subject matter jurisdiction because plaintiffs had not exhausted administrative remedies under Section 10-11-120.
The Court of Appeals affirmed, holding plaintiffs must pursue the PERB administrative appeal (and then judicial review) because the statutory scheme provides a plain, adequate, and complete remedy and disputed facts require agency factfinding.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Smith declaratory-judgment exception excuses exhaustion	Smith exception allows declaratory actions to bypass agency when purely legal; plaintiffs invoked Declaratory Judgment Act	PERB argued Smith exception inapplicable because the case involves disputed facts and an exclusive statutory remedy	Court: Smith exception not available; disputed factual issues and statutory review scheme require exhaustion
Whether Section 10-11-120 is an exclusive, adequate remedy	Plaintiffs contended district court can decide legality/equity without agency review	PERB argued §10-11-120 grants comprehensive administrative review and judicial appeal under §39-3-1.1	Court: §10-11-120 is plain, adequate, and complete; remedy is exclusive and requires exhaustion
Whether disputed facts (mistake, PERA consultation, missing docs) preclude judicial resolution now	Plaintiffs claimed no material factual dispute; mistake and lack of required documents entitle them to relief	PERB pointed to factual disputes and PERB's capacity to resolve them via hearing	Court: Material factual disputes exist; agency factfinding appropriate and exhaustion required
Whether PERB lacks equitable/injunctive authority so plaintiffs can seek equity in court	Plaintiffs argued PERB only quasi-judicial and cannot grant equitable relief, so exhaustion unnecessary	PERB/respondent argued even if PERB lacked traditional "injunction" power, it can reverse/rectify PERA actions under statute; courts cannot grant equitable relief contrary to statute	Court: Even assuming limited equitable power, whether reversal is permitted is a statutory question for PERB first; equity cannot override statutory limits; exhaustion required
Whether deselection was void ab initio (spousal consent/docs)	Plaintiffs argued deselection invalid because Becker did not consent and required regulatory documents were not filed	PERB disputed the factual predicate and invoked its regulatory interpretation authority	Court: These validity issues should be addressed first by PERB on administrative appeal; exhaustion required

Key Cases Cited

State ex rel. Helman v. Gallegos, 871 P.2d 1352 (N.M. 1994) (background on PERA membership and retirement rights)
Smith v. City of Santa Fe, 171 P.3d 300 (N.M. 2007) (recognized declaratory-judgment exception to exhaustion but limited to purely legal issues without agency factfinding)
New Energy Econ., Inc. v. Shoobridge, 243 P.3d 746 (N.M. 2010) (exhaustion doctrine and separation of powers principles)
Chavez v. City of Albuquerque, 952 P.2d 474 (N.M. Ct. App. 1998) (administrative remedy must be plain, adequate, and complete)
Barreras v. N.M. Corr. Dep’t., 62 P.3d 770 (N.M. Ct. App. 2003) (test for exclusivity of administrative remedies; legislative intent)
Pangilinan v. Immigration & Naturalization Serv., 486 U.S. 875 (U.S. 1988) (equity cannot override explicit statutory limits)
AA Oilfield Service, Inc. v. New Mexico Corp. Comm’n, 881 P.2d 18 (N.M. 1994) (agency limited to quasi-judicial powers; context for equitable authority argument)
Leonard v. Payday Professional/Bio-Cal Co., 179 P.3d 1245 (N.M. Ct. App. 2008) (agency lacked authority to issue injunction under statutory scheme)