Jeri Good v. Indiana Teachers Retirement Fund ( 2015 )

Jan 20 2015, 9:27 am
FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
MARK LEEMAN GREGORY F. ZOELLER
Leeman Law Offices Attorney General of Indiana
Logansport, Indiana
KATHY BRADLEY
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JERI GOOD, )
)
Appellant-Plaintiff, )
)
vs. ) No. 25A03-1408-MI-278
)
INDIANA TEACHERS RETIREMENT FUND, )
)
Appellee-Defendant. )
APPEAL FROM THE FULTON SUPERIOR COURT
The Honorable Wayne E. Steele, Judge
Cause No. 25D01-1402-MI-97
January 20, 2015
OPINION - FOR PUBLICATION
CRONE, Judge
Case Summary
Jeri Good was a member of the Indiana Teachers Retirement Fund (now a part of the
Indiana Public Retirement System (“INPRS”)) for twenty-nine and a half years and left her
INPRS-covered job. Five months later, she purchased a half-year of additional service credit
from INPRS, which made her eligible to receive retirement benefits starting at age fifty-five
based on thirty years of service. Shortly before she turned fifty-five, Good contacted INPRS
to ask about the consequences of delaying her application for retirement benefits. An INPRS
employee told Good that her benefits would be paid retroactively but failed to inform her
that, pursuant to statute, they could be paid retroactively only up to six months before her
application date. Based on the information provided by the INPRS employee, Good delayed
filing her application for one year and requested benefits retroactive to her fifty-fifth
birthday. INPRS determined that she was entitled to only six months of retroactive benefits.
Good filed an administrative appeal, which was decided in INPRS’s favor. She then
petitioned for judicial review of that decision, which the trial court affirmed.
On appeal, Good does not dispute that Indiana law limits an INPRS member to six
months of retroactive retirement benefits. Instead, she contends that she is entitled to
additional retroactive benefits based on the theories of equitable estoppel, unjust enrichment,
and breach of fiduciary duty. We conclude as follows: (1) equitable estoppel is inapplicable
because the facts regarding Good’s retirement were equally available to both parties and she
is charged with knowledge of the law regarding retroactive benefits; (2) unjust enrichment is
also inapplicable in light of that imputed knowledge; and (3) her fiduciary duty claim fails
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because there is no indication that the INPRS employee was a fiduciary. Therefore, we
affirm.
Facts and Procedural History
The relevant facts are undisputed. Good was born in June 1956 and became a member
of INPRS in August 1977. She left INPRS-covered employment in December 2006. In May
2007, Good purchased a half-year of additional service credit from INPRS for $3722.23,
which made her eligible to receive INPRS retirement benefits starting in June 2011 when she
turned fifty-five based on thirty years of service. See Ind. Code § 5-10.2-4-1(b)(3) (“A
member [of INPRS] is eligible for normal retirement if … the member’s age in years plus the
member’s years of service is at least eighty-five (85) and the member is at least fifty-five (55)
years of age.”). Without this credit, Good would not have been eligible to receive benefits
until December 2011, and those benefits would have been based on only twenty-nine and a
half years of service.1
In June 2011, Good contacted an INPRS employee to inquire about the consequences
of delaying her application for retirement benefits. Good told the INPRS employee that she
would be unable to complete her application in the near future because she was “very busy”
as a funeral director. Appellant’s App. at 82. The INPRS employee told Good that her
benefits would be paid retroactively but failed to mention that, pursuant to statute, they could
be paid retroactively only up to six months before her application date. See Ind. Code § 5-
1
According to INPRS, the additional half-year of service entitles Good to an additional $314.64 in
gross pension benefits annually. Appellant’s App. at 105-06.
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10.2-4-1(d) (“A member who is eligible for normal … retirement is entitled to choose a
retirement date on which the member’s benefit begins if the following conditions are met:
(1) The application for retirement benefits and the choice of the date is filed on a form
provided by the board. (2) The date must be after the cessation of the member’s service and
be the first day of a month. (3) The retirement date is not more than six (6) months before
the date the application is received by the board.”).2 Based on the information provided by
the INPRS employee, Good delayed applying for benefits until June 2012 and put a
retirement date of June 23, 2011, on her application. INPRS determined that her earliest
possible retirement date was six months before her application date, or January 1, 2012.
Good would not have waited to apply for benefits if she had known that they were retroactive
for only six months.
Good filed an administrative claim appealing INPRS’s determination. The parties
filed cross-motions for summary judgment. The administrative law judge (“ALJ”) issued a
decision and recommended order in INPRS’s favor, which was adopted by INPRS’s board of
trustees (“the Board”). Good petitioned for judicial review of the Board’s order. After
2
Indiana Code Section 5-10.2-4-1(d) also states, “However, if the board determines that a member is
incompetent to file for benefits and choose a retirement date, the retirement date may be any date that is the
first of the month after the time the member became incompetent.” For the first time in these proceedings,
Good argues that she was incompetent to file for benefits “due to the misrepresentations of INPRS staff.”
Appellant’s Br. at 14. “Generally, issues that were not raised before the [administrative law judge] are waived
for judicial review.” P’Pool v. Ind. Horse Racing Comm’n, 916 N.E.2d 668, 676 (Ind. Ct. App. 2009) (citing
Ind. Code § 4-21.5-5-10). Because Good did not raise the issue before the administrative law judge, the Board,
or the trial court, we find it waived for purposes of this appeal. In any event, INPRS points out that, pursuant
to the statute, the Board must determine whether a member is incompetent, and Good has not asked the Board
to make that determination.
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remanding with instructions to amend the order to conform to the evidence before the ALJ,
the trial court affirmed the Board’s amended order. This appeal followed.
Discussion and Decision
“The Administrative Orders and Procedures Act provides the standard for judicial
review of an administrative decision.” P’Pool v. Ind. Horse Racing Comm’n, 916 N.E.2d
668, 674 (Ind. Ct. App. 2009). This Court will reverse an administrative decision only if it
is:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law; (2) contrary to constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or short of
statutory right; (4) without observance of procedure required by law; or (5)
unsupported by substantial evidence.
Ind. Code § 4-21.5-5-14(d)). “An administrative decision is arbitrary and capricious only
when it is willful and unreasonable, without consideration or in disregard of the facts and
circumstances of the case, or without some basis which could lead a reasonable person to the
same conclusion.” P’Pool, 916 N.E.2d at 674. “The party challenging an agency decision
bears the burden of demonstrating its invalidity.” Id. (citing Ind. Code § 4-21.5-5-14(a)).
“Summary judgment may be granted in favor of either party in an administrative
adjudication.” Ind. Dep’t of Envtl. Mgmt. v. Schnippel Constr., Inc., 778 N.E.2d 407, 412
(Ind. Ct. App. 2002) (citing Ind. Code § 4-21.5-3-23(a)), trans. denied (2003). “Summary
judgment is appropriate where ‘a genuine issue as to any material fact does not exist and the
moving party is entitled to a judgment as a matter of law.’” Id. (quoting Ind. Code § 4-21.5-
3-23(b)). Where, as here, the material facts are not in dispute, our review is limited to
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determining whether the law was correctly applied to the undisputed facts. C.M.B. ex rel.
Brabant v. Repub. Servs., Inc., 800 N.E.2d 200, 202 (Ind. Ct. App. 2003), trans. denied
(2004).
Good does not dispute that Indiana law limits an INPRS member to six months of
retroactive retirement benefits. Instead, she contends that she is entitled to additional
retroactive benefits based on the following theories: (1) equitable estoppel; (2) unjust
enrichment; and (3) breach of fiduciary duty. We address them in turn.
Section 1 – Equitable Estoppel
Good asserts that “INPRS is equitably estopped from using the misleading acts of its
employees to enrich itself.” Appellant’s Br. at 10. A party invoking the doctrine of equitable
estoppel must show “(1) a lack of knowledge as to the facts in question and of the means of
acquiring that knowledge; (2) reliance upon the conduct of the party estopped; and (3) a
prejudicial change in position based upon the conduct of the party estopped.” Barnette v.
U.S. Architects, LLP, 15 N.E.3d 1, 10 (Ind. Ct. App. 2014) (quoting LaGrange Cnty. Reg’l
Util. Dist. v. Bubb, 914 N.E.2d 807, 811 (Ind. Ct. App. 2009)). “‘Estoppel cannot be applied
if the facts are equally known by or accessible to both parties.’” Id. (quoting City of Crown
Point v. Lake Cnty., 510 N.E.2d 684, 687 (Ind. 1987)). And “[a]ll persons are charged with
the knowledge of the rights and remedies prescribed by statute.” Middleton Motors, Inc. v.
Ind. Dep’t of State Revenue, 269 Ind. 282, 285, 380 N.E.2d 79, 81 (1978).
Good’s knowledge of the facts regarding her retirement situation was at least equal, if
not superior, to that of INPRS, and she is charged with knowing her rights under the statute
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regarding retroactive retirement benefits, Indiana Code Section 5-10.2-4-1. Therefore, we
conclude as a matter of law that equitable estoppel is inapplicable here.3
Section 2 – Unjust Enrichment
“A claim for unjust enrichment is a legal fiction invented by the common-law courts
in order to permit a recovery where the circumstances are such that under the law of natural
and immutable justice there should be a recovery.” Kohl’s Ind., LP v. Owens, 979 N.E.2d
159, 167 (Ind. Ct. App. 2012). “To prevail on a claim of unjust enrichment, a plaintiff must
establish that a measurable benefit has been conferred on the defendant under such
circumstances that the defendant’s retention of the benefit without payment would be unjust.”
Id. “Indiana courts articulate three elements for this claim: (1) a benefit conferred upon
another at the express or implied consent of such other party; (2) allowing the other party to
retain the benefit without restitution would be unjust; and (3) the plaintiff expected
payment.” Id. at 167-68.
Good states that she
purchased an additional half (½) year of service credit with the expectation that
she would be able to retire and receive a monthly pension benefit on her fifty-
fifth birthday. Good delayed in applying for that benefit when an INPRS
employee misled her to believe benefits could be paid retroactively for more
than six months. Good expected payment of her retirement benefits
3
“‘Estoppel is not generally applicable against government entities for the actions of public
officials.’” Barnette, 15 N.E.3d at 10 (quoting Biddle v. BAA Indianapolis, LLC, 860 N.E.2d 570, 581 (Ind.
2007)). Indiana Code Section 5-10.5-2-3 provides that INPRS “is an independent body corporate and politic”
and “is not a department or agency of the state but is an independent instrumentality exercising essential
government functions.” The parties debate whether INPRS is a government entity for estoppel purposes;
because we conclude that estoppel is inapplicable on other grounds, we need not answer that question. Also,
Good argues that Section 5-10.2-4-1 is ambiguous based on its “incompetence” provision; that argument is
waived for the reasons given in footnote 2 supra.
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retroactively to her fifty-fifth birthday even if she delayed in applying for
benefits.
Appellant’s Br. at 14.
Good cites no authority, however, for the proposition that unjust enrichment may be
used to defeat the application of a statute that she is charged with knowing. Under these
circumstances, we conclude as a matter of law that unjust enrichment is also inapplicable.4
Section 3 – Breach of Fiduciary Duty
“A claim for breach of fiduciary duty requires proof of three elements: (1) the
existence of a fiduciary relationship; (2) a breach of the duty owed by the fiduciary to the
beneficiary; and (3) harm to the beneficiary.” York v. Fredrick, 947 N.E.2d 969, 978 (Ind.
Ct. App. 2011), trans. denied. Good asserts, and INPRS does not dispute, that she has a
fiduciary relationship with INPRS because it holds her retirement funds in trust pursuant to
statute. See Ind. Code § 5-10.5-2-5 (stating that public retirement system “shall be managed
and administered by a board of trustees”).5 Good states that she “contacted INPRS regarding
her retirement funds and whether her benefits would be retroactive. INPRS misled her
regarding the terms of the plan. As such Good delayed in filing for retirement and lost
4
INPRS observes that “[t]he purchase of service credit does not provide for benefits for a specific date
range” and that Good did receive “a benefit from her purchase of additional years” in the form of higher
monthly pension payments. Appellee’s Br. at 20, 21.
5
In alleging a breach of fiduciary duty, Good cites a section of Indiana Code Article 30-4, i.e., the
Trust Code. But Indiana Code Section 30-4-1-1(c)(8) provides that the rules of law contained in the Trust
Code do not apply to “trusts created or authorized by statute other than this article,” and Good has not
established that INPRS was created or authorized by the Trust Code.
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benefits. INPRS breached its fiduciary duty to [G]ood and there is no evidence to the
contrary.” Appellant’s Br. at 10.
But there is no indication that Good’s contact at INPRS was a fiduciary, as opposed to
a mere ministerial employee who failed to give her complete information about retroactive
benefits. Cf. Schmidt v. Sheet Metal Workers’ Nat’l Pension Fund, 128 F.3d 541, 547-48
(7th Cir. 1997) (distinguishing between ERISA pension fund trustees and ministerial
employee, who sent wrong paperwork to pension plan participant and intended beneficiary,
in rejecting latter’s breach of fiduciary duty claim; “[T]he Trustees did not make the
misstatement on which [the plaintiff’s] fiduciary duty claim is based—[the employee] did.
Significantly, no evidence suggests that the Trustees either authorized, participated in, or had
knowledge of [the employee’s] misstatement, or that the Trustees deliberately withheld
information from [the employee] about the proper means of making a beneficiary
designation.”), cert. denied (1998). And, as already mentioned, Good is charged with
knowledge of the statute regarding the payment of retroactive benefits. In sum, Good has
failed to establish that the Board erred in granting summary judgment on her fiduciary duty
claim. Therefore, we affirm.
Affirmed.
FRIEDLANDER, J., and KIRSCH, J., concur.
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