HUGH A. WELLS, Judge of the North Carolina Court of Appeals (Retired) v. CONSOLIDATED JUDICIAL RETIREMENT SYSTEM OF NORTH CAROLINA, A corporation; BOARD OF TRUSTEES OF THE TEACHERS’ AND STATE EMPLOYEES’ RETIREMENT SYSTEM OF NORTH CAROLINA, A body politic and corporate; and THE STATE OF NORTH CAROLINA
No. 156A00
IN THE SUPREME COURT OF NORTH CAROLINA
Filed 9 November 2001
354 N.C. 313
MARTIN, Justice.
Justice Butterfield joins in this dissenting opinion.
Pensions and Retirement— overlapping judicial and executive service
The Board of Trustees of the Teachers’ and State Employees’ Retirement System of North Carolina (TSERS) did not err by suspending plaintiff‘s benefits under the Consolidated Judicial Retirement System of North Carolina (CJRS) where plaintiff was appointed Chair of the Utilities Commission after retiring from the judiciary. TSERS was created in 1941, CJRS was created in 1974, and the General Assembly eventually codified the Retirement System in Chapter 135 of the General Statutes, incorporating both TSERS (Article 1) and CJRS (Article 4).
Justice ORR dissenting.
Appeal pursuant to
Boyce & Isley, PLLC, by G. Eugene Boyce, Philip R. Isley, and Laura B. Isley; and Schiller Law Firm, LLP, by Marvin Schiller and David G. Schiller, for plaintiff-appellant.
Michael F. Easley, Attorney General, by Alexander McC. Peters, Special Deputy Attorney General, for defendant-appellees.
MARTIN, Justice.
Plaintiff served on the North Carolina Utilities Commission (NCUC) from 1 January 1970 to 30 April 1975 and from 1 July 1977 through 17 August 1979. During his tenure at the NCUC, plaintiff was a member of the Teachers’ and State Employees’ Retirement System of North Carolina (TSERS).
Plaintiff served as a judge on the North Carolina Court of Appeals from 29 August 1979 to 30 June 1994. During his tenure at the Court of Appeals, plaintiff was a member of the Consolidated Judicial Retirement System of North Carolina (CJRS).1 His judicial retirement benefits vested in August 1984, following five years of creditable service. Upon his retirement from the judiciary in 1994, plaintiff applied for and received a judicial service retirement allowance from the CJRS for the month of July 1994.
In July 1994 the Governor of North Carolina appointed plaintiff as Chair of the NCUC. As a result of this appointment, plaintiff again received a monthly salary from the State of North Carolina and again became a member of the TSERS. Plaintiff‘s monthly CJRS retirement
On 30 September 1997 plaintiff brought suit against the CJRS, the Board of Trustees of the TSERS (Board), and the State of North Carolina on the ground that he was entitled to receive his monthly retirement allowance under the CJRS while he was earning a salary as Chair of the NCUC and contributing to the TSERS. On 5 June 1998 an administrative law judge determined that plaintiff‘s judicial retirement allowance was properly suspended while he worked at the NCUC. On 4 August 1998 the Board accepted that recommendation and entered its final agency decision. On 29 March 1999 the trial court affirmed the final agency decision and entered summary judgment in favor of defendants.
On 7 March 2000, the Court of Appeals, in a split decision, affirmed the trial court. Wells v. Consolidated Jud‘l Ret. Sys. of N.C., 136 N.C. App. 671, 526 S.E.2d 486 (2000). The Court of Appeals held that the Board properly suspended plaintiff‘s retirement allowance for the period of time he served as Chair of the NCUC. Id. at 677, 526 S.E.2d at 491. The majority based its decision on an interpretation of the interplay of several statutes elaborating the TSERS and the CJRS. Id. at 673-77, 526 S.E.2d at 488-91. Judge Horton dissented on the grounds that the “restored to service” provision in Article 1 of the Retirement System applied only to retirees under the TSERS and could not be applied to plaintiff, a retiree under the CJRS. Id. at 678, 526 S.E.2d at 491 (Horton, J., dissenting).
The General Assembly codified the Retirement System within Chapter 135 of the General Statutes of North Carolina. Chapter 135, entitled “Retirement System for Teachers and State Employees; Social Security; Health Insurance Program for Children,” incorporates, among other things, both the TSERS in Article 1 and the CJRS in Article 4. The General Assembly enacted Article 1 in 1941 and Article 4 in 1974. Because this case turns upon the interpretation of and interplay among sections within Chapter 135, it is instructive to set out preliminarily the provisions of the CJRS in Article 4 and the
The retirement benefits of any person who becomes a justice or judge on or after January 1, 1974, shall be determined solely in accordance with the provisions of this Article.
In the event that a retired former member should at any time return to service as a justice or judge, his retirement allowance shall thereupon cease and he shall be restored as a member of the Retirement System.
Should a beneficiary who retired on an early or service retirement allowance be restored to service for a period of time exceeding six calendar months, his retirement allowance shall cease, he shall again become a member of the Retirement System and he shall contribute thereafter at the uniform contribution rate payable by all members.
Our review of the statutory scheme leads us to conclude that the legislature anticipated the possibility that recipients under the Retirement System might return to active employment on behalf of the State of North Carolina. See
The narrow question presented by this appeal is whether plaintiff‘s monthly CJRS retirement allowance was properly suspended
Section 135-52 makes the provisions of Article 1 applicable to the other articles in Chapter 135.
References in Article 1 of this Chapter to the provisions of “this Chapter” shall not necessarily apply to . . . Article [4]. However, except as otherwise provided in this Article, the provisions of Article 1 are applicable and shall apply to and govern the administration of the Retirement System established hereby. Not in limitation of the foregoing, the provisions of G.S. 135-5(h), 135-5(n), 135-9, 135-10, 135-12 and 135-17 are specifically applicable to the Retirement System established hereby.
Article 1, section 135-3(8)(c) prohibits simultaneous contribution into the TSERS and receipt from the Retirement System.
Our interpretation of
Should a beneficiary who retired on an early or service retirement allowance under this Chapter be restored to service as an employee or teacher, then the retirement allowance shall cease as of the first of the month following the month in which the beneficiary is restored to service and the beneficiary shall become a member of the Retirement System and shall contribute thereafter as allowed by law at the uniform contribution payable by all members.
Relying on Judge Horton‘s dissent, plaintiff further argues that an interpretation of
Section 135-71 was intended to, and does, apply to one specification: when a retired member of the CJRS returns to active membership in the CJRS. Section 135-71 therefore effects a valid legislative purpose. The definitional precision of section 135-71 leaves no room for the inclusion of judges who elect to become contributing members of TSERS. Accordingly, section 135-71 does not act as the type of exception contemplated by section 135-52. Rather,
Plaintiff contends that the absence of
Plaintiff further contends that application of
We emphasize that the agency established to administer the retirement statutes has adhered to the same interpretation on this matter since the 1970s, which was corroborated in the deposition of Timothy Bryan, Deputy Director of the Retirement Systems Division of the Department of State Treasurer. See, e.g., Thornburg v. Consolidated Jud‘l Ret. Sys. of N.C., 137 N.C. App. 150, 150-51, 527 S.E.2d 351, 352 (2000) (observing suspension of Judge Thornburg‘s CJRS retirement benefits by CJRS officials during his service as Attorney General of North Carolina from 1985 through 1992). The legislature is presumed to act with full knowledge of prior and existing law. Polaroid Corp. v. Offerman, 349 N.C. 290, 303, 507 S.E.2d 284, 294 (1998), cert. denied, 526 U.S. 1098 (1999). When the legislature chooses not to amend a statutory provision that has been interpreted in a specific way, we assume it is satisfied with the administrative interpretation. Id. Nevertheless, it is ultimately the duty of courts to construe administrative statutes; courts cannot defer that responsibility to the agency charged with administering those statutes. State ex rel. Util. Comm‘n v. Public Staff, 309 N.C. 195, 306 S.E.2d 435 (1983).
This does not mean, however, that courts, in construing those statutes, cannot accord great weight to the administrative interpreta-
In upholding the Board‘s long-standing administrative interpretation, we express no opinion concerning the wisdom of the statutory prohibition on “double-dipping“—as this public policy determination was properly resolved by the General Assembly. See In re Appeal of Philip Morris U.S.A., 335 N.C. 227, 231, 436 S.E.2d 828, 831 (1993) (whether to prohibit or allow contingent fee arrangements for private tax auditors is a public policy determination for the General Assembly), cert. denied, 512 U.S. 1228 (1994); State v. Ballance, 229 N.C. 764, 767, 51 S.E.2d 731, 733 (1949) (“[A] court is not concerned with what the law ought to be, but its function is to declare what the law is.“). In any event, if the legislature chooses to permit “double-dipping” by those individuals who receive judicial retirement benefits and who return to active service as state employees, it may do so. See Martin v. N.C. Housing Corp., 277 N.C. 29, 41, 175 S.E.2d 665, 671-72 (1970) (holding that the General Assembly is to establish the public policy of this state). Indeed, it is clear from the ratification and subsequent repeal of
For the reasons stated, the Court of Appeals properly affirmed the trial court‘s decision to affirm the Board‘s suspension of plaintiff‘s CJRS benefits during his service as Chair of the North Carolina Utilities Commission from 1 August 1994 through 31 December 1996.
Justice ORR dissenting.
The majority in this case strains mightily to construct a statutory rationale for depriving plaintiff, Judge Hugh Wells, of his retirement benefits earned under the Consolidated Judicial Retirement System. Because of his subsequent service as Chairman of the North Carolina Utilities Commission, the majority concludes that Judge Wells had to forgo receiving those benefits during that period of time. In its effort to appease a purported legislative intent to thwart such conduct, the majority ignores the plain language of the applicable statutes, applies provisions that have no bearing on benefits earned by plaintiff, and constructs a veritable house of legal cards that is held up more by hot air than substance.
In an overview, this case deals with two separate retirement systems created by the General Assembly over thirty years apart. The Teachers’ and State Employees’ Retirement System (“TSERS“) was passed in 1941 and applied to those two categories of individuals—our public school teachers and state employees. In 1974, the General Assembly created a separate retirement system for members of the judiciary—the Uniform Judicial Retirement System, which was changed in 1985 to the Consolidated Judicial Retirement System (“CJRS“). As would be expected, CJRS has its own independent comprehensive statutory framework for its application and implementation. TSERS was included in Chapter 135 of the General Statutes as Article 1, and years later, CJRS was added to that Chapter as Article 4.
As noted by the majority, plaintiff retired in 1994 after fourteen years as a judge on the North Carolina Court of Appeals. As such, he was eligible for and received retirement benefits under CJRS. Upon being requested by Governor Hunt to chair the North Carolina Utilities Commission, plaintiff accepted that appointment and thereupon was deprived of his right to draw retirement benefits that he had previously earned (including substantial portions that he had contributed himself). The majority says that such a result is mandated by the laws of this state. I strongly disagree and therefore dissent.
The premise relied on by the majority to the effect that
(a) References in Article 1 of this Chapter to the provisions of “this Chapter” shall not necessarily apply to this Article. However, except as otherwise provided in this Article, the provisions of Article 1 are applicable and shall apply to and govern the administration of the Retirement System established hereby. Not in limitation of the foregoing, the provisions of G.S. 135-5(h), 135-5(n), 135-9, 135-10, 135-12 and 135-17 are specifically applicable to the Retirement System established hereby.
The effort by those in the majority to expand the reach and scope of Article 1‘s interplay with Article 4 is critical to their reasoning because they must rely on a provision in Article 1 if they are to successfully deprive Judge Wells of his benefits obtained under Article 4. The provision in question is section 135-3(8)(c) of Article 1 (later amended and recodified as section 135-3(8)(d)), which provides in pertinent part:
Article 1.
Retirement System for Teachers and State Employees.
. . . .
§ 135-3. Membership.
The membership of this Retirement System shall be composed as follows:
. . . .
(8) The provisions of this subsection (8) shall apply to any member whose membership is terminated on or after July 1, 1963 and who becomes entitled to benefits hereunder in accordance with the provisions hereof.
c. Should a beneficiary who retired on an early or service retirement allowance be restored to service for a period of time exceeding six calendar months, his retirement allowance shall cease, he shall again become a member of the Retirement System and he shall contribute thereafter at the uniform contribution rate payable by all members.
Even if the effort to apply section 135-3(8)(c) to Article 4 could be done in some sort of general fashion, the specific language of the section clearly precludes it from applying to any benefits received under Article 4 and thus from applying to Judge Wells. First and foremost, the introductory language in subsection (8) categorically applies its terms to any “member” entitled to benefits. “Member” is defined in Article 1 as “any teacher or State employee included in the membership of the System as provided in G.S. 135-3 and 135-4.”
Secondly, the language in (8)(c) relied on by the majority specifically applies to “a beneficiary” restored to service as an “employee” or “teacher.” The word “restored” is defined as “[t]o put (someone) back in a former position.” The American Heritage Dictionary of the English Language 1538 (3d ed. 1992). Judge Wells could not be restored as an employee or teacher because the definition of “employee” in Article 1 specifically excludes someone covered under CJRS, and Judge Wells was obviously not a teacher.
Thirdly,
The majority makes several efforts to bolster its result. They can be summarily disposed of as follows:
(1) The majority relies in part on the expansive definition of “beneficiary” in
(2) The majority relies on the amendment to
(3) The majority also relies on Thornburg v. Consolidated Jud‘l Ret. Sys. of N.C., 137 N.C. App. 150, 527 S.E.2d 351 (2000), to support the proposition that the administrators of the various retirement systems have interpreted the statutes consistent with the majority‘s position. While Thornburg as a case has no relevance to the issue before us, the opinion does include a statement that Thornburg‘s benefits under CJRS were suspended while Thornburg was Attorney General of North Carolina. That the interpretation of this statute has been interpreted that way for a number of years by the personnel administering the system is not contested. What is contested is whether that interpretation is correct. I conclude that it is not.
What is perfectly clear is that there is absolutely no language in Article 1 or Article 4 that says someone going to work under TSERS loses retirement benefits earned under CJRS while so employed. Article 1 says you cannot retire from TSERS and go back to work under TSERS and still draw a retirement benefit,
This Court has stated numerous times that “‘[w]hen the language of a statute is clear and unambiguous, there is no room for judicial construction, and the courts must give [the statute] its plain and definite meaning.‘” Smith Chapel Baptist Church v. City of Durham, 350 N.C. 805, 811, 517 S.E.2d 874, 878 (1999), quoting Lemons v. Old Hickory Council, BSA, Inc., 322 N.C. 271, 276, 367 S.E.2d 655, 658 (1988). As a necessary corollary, the doctrine of administrative deference has no application to a clear and unambiguous statute. See Watson Indus. v. Shaw, 235 N.C. 203, 211, 69 S.E.2d 505, 511 (1952) (interpretation of statute by agency charged with its enforcement entitled to deference only in case of ambiguity); see also In re Total Care, Inc., 99 N.C. App. 517, 520, 393 S.E.2d 338, 340 (1990), disc. rev. denied, 327 N.C. 635, 399 S.E.2d 122 (1990).
In conclusion, whatever the General Assembly may have intended either in the past or the present, it surely has failed to specifically address by statute the scenario now before us. How very simple to say that a person cannot draw a retirement benefit from any retirement system enacted by the state while working for the state. As previously noted, the General Assembly has specifically said that a person cannot draw benefits from TSERS and go back to work under TSERS, and it has specifically said that a person cannot draw benefits under CJRS and go back to work under CJRS. If the General Assembly intended to prohibit moving from one system to another and still draw retirement benefits, it clearly could have said so, but the General Assembly did not. The only relationship between Article 1 and Article 4 deals with the administration of the two distinct systems. Otherwise, each retirement system is independent with different definitions of terms and provisions governing the respective operations. In fact,
On 30 June 1994, at the age of seventy-two, Judge Hugh Wells retired after a distinguished career of public service including fourteen years as a judge on the North Carolina Court of Appeals. Having done so, he could have easily retired to his home in Shelby, done nothing, and still draw a monthly retirement income of $5,182, a substantial portion of which he contributed from his salary over the years. He also could have drawn additional salary by becoming “of counsel” to a law firm, by teaching at a private law school, or by engaging in any other type of business in the private sector and still continue to draw his retirement benefits. However, heeding the request of Governor Hunt, Judge Wells opted instead to continue working in public service as Chairman of the North Carolina Utilities Commission, despite a steadily debilitating fight with Parkinson‘s disease. His salary in this new position was $6,781 per month.
Judge Wells served as Chairman of the Utilities Commission from July of 1994 until December of 1996. As a result, the practical effect of suspending his judicial retirement benefits for that period of two and a half years is that Judge Wells worked full-time for our state in a challenging and difficult position for a net increase in income of less than $1,600 per month over what he could have drawn in retirement income back home relaxing in Shelby. If this is the public policy intended by the legislature, interpreted by the bureaucracy, and endorsed by the majority of this Court, then I find it a poor policy and of little, if any, benefit to the public. The broad result of such a policy is to penalize a public servant of our state willing to move from one branch of our government to another under entirely distinct and separate retirement systems while imposing no such penalty on any other person coming to work in state government with retirement benefits from another state, the federal government, or private industry. All those persons could serve as Chairman of the Utilities Commission without loss of retirement benefits—but, according to the majority, Judge Hugh Wells could not. Judge Wells died on 4 December 2000, having drawn his full judicial retirement for only four years, despite having contributed to the Judicial Retirement System for fourteen years. His commendable service to this state was dutifully noted at his passing. It is now dutifully noted that the retirement benefits he earned and paid for in part will not be paid because he heeded the request of the Governor of this state and
The majority has misconstrued the law of our state and imputed a bad public policy to the General Assembly. Therefore, I dissent.
THE ESTATE OF KENNETH B. FENNELL, by and through its Administrator, Annie B. Fennell, and ANNIE B. FENNELL v. RICHARD L. STEPHENSON, in his personal and official capacity; THE NORTH CAROLINA STATE HIGHWAY PATROL; and OTHER UNKNOWN NORTH CAROLINA STATE HIGHWAY PATROL EMPLOYEES in their personal and official capacities
No. 267PA00
IN THE SUPREME COURT OF NORTH CAROLINA
Filed 9 November 2001
1. Statute of Limitations— unconstitutional detention—state trooper—suit in official capacity
Although plaintiffs contend in their claim for unconstitutional detention that defendant state trooper while acting in his official capacity unconstitutionally detained or seized decedent who was shot and killed by the state trooper during a traffic stop, plaintiffs failed to name the state trooper as a party in his official capacity within the three-year time period of the statute of limitations under
2. Statute of Limitations— sovereign immunity—constitutional claims
The Court of Appeals erred by reversing the trial court‘s finding that sovereign immunity precluded plaintiffs’ constitutional claim against the State Highway Patrol in an incident where a state trooper shot and killed an individual during a traffic stop, because: (1) the claim was filed after the expiration of the applicable statute of limitations when the complaint was filed more than five years after the decedent was stopped and killed, more than two years after the statute of limitations expired on any constitutional claims, and over three years after the statute of limitations had passed for wrongful death actions; (2) the addition of the State Highway Patrol in the amended state complaint does not relate back to the original state complaint; and (3) timely fil-