Brian C. Clark et al., Plaintiffs-Appellants, v. State Teachers Retirement System, Defendant-Appellee.
No. 18AP-105 (C.P.C. No. 16CV-7360)
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
Rendered on November 20, 2018
2018-Ohio-4680
TYACK, J. KLATT and SADLER, JJ., concur.
(REGULAR CALENDAR)
Rendered on November 20, 2018
On brief: Cohen Rosenthal & Kramer LLP, Joshua R. Cohen and James B. Rosenthal; J. Randall Nye, for appellants. Argued: Joshua R. Cohen.
On brief: Tucker Ellis LLP, Karl A. Bekeny, Benjamin C. Sasse, Michael J. Ruttinger and Christine M. Snyder, for appellee. Argued: Karl A. Bekeny.
APPEAL from the Franklin County Court of Common Pleas
TYACK, J.
{¶ 1} Plaintiffs-appellants, Brian C. Clark, Steven Conn, B. David Ridpath, Zhaohui Xu, and John Zipp (“appellants“), appeal the February 2, 2018 judgment of the Franklin County Court of Common Pleas in favor of defendant-appellee, State Teachers Retirement System (“STRS“). For the reasons that follow, we reverse the judgment of the court of common pleas.
I. Factual and Procedural History
{¶ 2} This appeal involves a challenge to the amount STRS collects as a “mitigating rate” from employers who have employees enrolled in alternative retirement plans (“ARPs“) instead of the traditional defined benefit plan provided by STRS.
{¶ 3} Under Ohio law, full-time employees of public institutions of higher education who would otherwise be subject to STRS, may elect to participate in an ARP rather than the public retirement system that otherwise covers the employee. The ARP must be a defined contribution plan qualified under section 401(a) of the Internal Revenue Code that provides retirement and death benefits through a number of investment options.
{¶ 4} STRS members who are not employees of a public institution of higher education have the option of a defined contribution plan (“DC Plan“). Under this plan, which operates similarly to an ARP, teachers can choose investment options for the funds they and their employers contribute towards their retirement. The benefits they receive depend on the return generated by those investments.
{¶ 5} If an employee is enrolled in an ARP or the DC Plan, not all of the employer contribution goes to the employee‘s individual account. The employer must contribute a portion of its employer contribution to STRS to offset any negative financial impact of the ARP or DC Plan participation on the state retirement system. The contribution is known as the “mitigating rate.”
{¶ 6}
assessing an appropriate mitigating rate.
{¶ 7} The mitigating rate for the DC Plan was controlled differently. The legislature gave STRS the authority to control the mitigating rate subject to actuarial studies.
{¶ 8} The DC Plan rate and the ARP rate remained the same until July 2013, when STRS raised the mitigating rate for the DC Plan to 4.5 percent. STRS determined the ARP mitigating rate should also be raised to 4.5 percent to match the DC Plan based on its interpretation of
{¶ 9} In 2015, the General Assembly enacted
{¶ 10} Appellants are a group of faculty members at Ohio‘s public colleges and universities who have opted for an ARP in lieu of participating in the traditional defined benefit plan provided by STRS. Appellants filed this action against STRS on August 8, 2016. Appellants sued for equitable restitution of the amounts collected by STRS when the mitigating rate was changed from 3.5 percent to 4.5 percent in July 2013 until the implementation of
{¶ 11} The parties filed cross-motions for summary judgment. STRS took the position that the July 2013 ARP mitigating rate increase was required by operation of law under
{¶ 12} The trial court granted STRS‘s motion for summary judgment on February 2, 2018. At the same time, it denied appellants’ motion for summary judgment and dismissed as moot appellants’ motion for class certification and appointment of class counsel.
{¶ 13} The trial court found that when ORSC failed to conduct the triennial actuarial studies required under
II. Assignments of Error
{¶ 14} Appellants have assigned the following four errors for our review:
[I.] The trial court erroneously granted summary judgment to Defendant State Teachers Retirement System (“STRS“) based on a misinterpretation of
R.C. 3305.061 that permitted STRS to increase the so-called “mitigating rate” for its Alternative Retirement Plans to coincide with an increase in the “mitigating rate” for its Defined Contribution Plan.[II.] In granting summary judgment to STRS, the trial court erroneously determined that decreases in the “mitigating rate” for Alternative Retirement Plans made pursuant to
R.C. 3305.061 did not actually change the rate but only limited the amount STRS could collect.[III.] In granting summary judgment to STRS, the trial court erroneously found that
R.C. 3305.061 permitted increases to the “mitigating rate” for Alternative Retirement Plans to matchincreases in the “mitigating rate” for STRS‘s Defined Contribution Plan. [IV.] The trial court erred in denying summary judgment to the Appellants on their claim for equitable restitution of the one-percent increase in the “mitigating rate” for Alternative Retirement Plans that STRS unlawfully and unfairly collected and retained.
III. Standard of Review
{¶ 15} This appeal was decided on cross-motions for summary judgment. When considering a motion for summary judgment, a court must determine if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.
{¶ 16} Here, the facts of the case are not in dispute, and the appeal presents a question of statutory construction in which the parties present differing interpretations of
{¶ 17} Resolution of the dispute rests on a review of the plain language of
{¶ 18} In enacting a statute, it is presumed that the entire statute is intended to be effective.
{¶ 19} Where, as here, a statute refers to other statutes that relate to the same subject matter, the in pari materia rule states that the court must read all statutes relating to the same general subject matter together to give proper force and effect to each one. In re Duke Energy Ohio, Inc., 150 Ohio St.3d 437, 2017-Ohio-5536, ¶ 27. The in pari materia rule may be used to interpret a statute, but only when some doubt or ambiguity exists. Id. If there is no ambiguity, there is no cause to resort to rules of statutory construction. Id.
IV. Analysis
A. Assignments of Error One through Three
{¶ 20} Assignments of error one through three are interrelated and will be addressed together.
{¶ 21} Appellants contend that under
{¶ 22} STRS acknowledges that under
{¶ 23} Under the statutory scheme in effect that is relevant to this lawsuit, STRS did not have the statutory authority to set the ARP mitigating rate. The ORSC had the authority to commission an actuarial study for purposes of setting the mitigating rate for ARPs pursuant to
{¶ 24} The statutorily required mitigating rate for ARPs is set by ORSC under
{¶ 25} Instead, when STRS set the DC Plan mitigating rate at 3.5 percent,
{¶ 26}
Notwithstanding section
171.07 [triennial actuarial study] and division (D) of section3305.06 [mitigating rate of 6% subject to actuarial studies] of the Revised Code, the percentage of an electing employee‘s compensation contributed by a public institution of higher education under division (D) of section3305.06 of the Revised Code shall not exceed the percentage of compensation transferred [mitigating rate] under section145.87 [PERS DC Plan],3307.84 [STRS DC Plan], or3309.88 [SERS DC Plan] of the Revised Code, as appropriate, by the state retirement system that otherwise applies to the electing employee‘s position. A change in the percentage of compensation contributed under division (D) of section3305.06 of the Revised Code, as required by this section, shall take effect on the same day a change in the percentage of compensation takes effect under section145.87 ,3307.84 , or3309.88 of the Revised Code, as appropriate.
{¶ 27} The “notwithstanding” language requires an examination of the interplay between
{¶ 28}
Each public institution of higher education employing an electing employee shall contribute on behalf of that employee to the state retirement system that otherwise applied to the electing employee‘s position a percentage of the electing employee‘s compensation to mitigate any negative financial impact of the alternative retirement program on the state retirement system. The percentage shall be six per cent, except that the percentage may be adjusted by the [Ohio Retirement
Study Council] to reflect the determinations made by actuarial studies conducted under [ R.C. 171.07 ].
{¶ 29} The six percent rate was adjusted by ORSC in 2000 to a rate of 5.76 percent based on an actuarial study.
{¶ 30} When
{¶ 31} The “shall not exceed” language in
{¶ 32} The question is what happens if the DC Plan rate is raised but is still less than the ARP mitigating rate set by ORSC? The statute appears to be silent on this issue.
{¶ 33} Appellants argue that, pursuant to former
{¶ 34} STRS argues that as long as the DC Plan mitigating rate is less than the rate set pursuant to
{¶ 35} The plain language of
{¶ 36} In the present case,
{¶ 37} Again, under the plain language of the statute, an increase in the DC Plan rate would not trigger a required increase in the ARP rate since the ARP rate would not exceed the DC Plan rate under those circumstances. The only change that could occur by operation of law under the statute would be a decrease in the ARP rate to match a decrease in the DC Plan rate.
{¶ 38} STRS urges this court to defer to its interpretation of the statute arguing that, if a statute is ambiguous, we should defer to the agency‘s interpretation. Doubts as to the interpretation of a statute should be resolved in favor of the agency if the interpretation is reasonable. State ex rel. Gill v. School Emp. Retirement Sys. of Ohio, 121 Ohio St.3d 567, 2009-Ohio-1358, ¶ 28. However, we find the statutes in question are clear and unambiguous. As such, our duty is to give effect to the plain words used in such a way as to give effect to each provision and giving force and effect to each statute. Accordingly, we sustain assignments of error one through three.
B. Fourth Assignment of Error
{¶ 39} In their fourth assignment of error, appellants argue that the trial court should have granted their motion for partial summary judgment on their equitable restitution claim. Unjust enrichment occurs when a person has and retains money or benefits which in justice and equity belong to another. Johnson v. Microsoft Corp., 106 Ohio St.3d 278, 2005-Ohio-4985, ¶ 20.
{¶ 40} The trial court‘s denial of appellants’ motion for summary judgment was based purely on the decision to grant summary judgment to STRS on a question of law regarding statutory interpretation. Having determined that decision was in error, we sustain the assignment of error for the limited purpose of remanding the case to the trial court to consider the merits of appellants’ motion for partial summary judgment on their unjust enrichment claim.
V. Disposition
{¶ 41} Having sustained the four assignments of error, the judgment of Franklin County Court of Common Pleas is reversed and the case is remanded for further proceedings in accordance with this decision.
Judgment reversed and remanded.
KLATT and SADLER, JJ., concur.