Curtis Hall v. Kentucky Teachers' Retirement System ( 2022 )

RENDERED: JULY 15, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0886-MR
CURTIS HALL APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
v. HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 17-CI-00349
KENTUCKY TEACHERS’
RETIREMENT SYSTEM APPELLEE
OPINION
AFFIRMING
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BEFORE: GOODWINE, JONES, AND MAZE, JUDGES.
MAZE, JUDGE: Curtis Hall appeals from a summary-judgment order of the
Franklin Circuit Court on his claims against the Kentucky Teachers’ Retirement
System (KTRS). Hall argues that the trial court misinterpreted the provisions of
KRS1 161.540(1)(d) regarding his entitlement to service credit for unused annual
leave. We conclude that Hall failed to preserve his current argument regarding the
application of the statute and that the trial court’s interpretation is consistent with
the plain language of the statute. Hence, we affirm.
The relevant facts of this action are not in dispute. The KTRS was
established “for the purpose of providing retirement allowances for teachers, their
beneficiaries, and survivors . . . .” KRS 161.230. Hall became a member of the
KTRS in 1986. On March 1, 2011, Hall and the Ludlow Board of Education
entered into an “Employment Separation Agreement and Mutual Release.” Under
section (3) of the Agreement, the Ludlow Board of Education was to “compensate
Hall for 100 days of unused and accrued vacation days from the previous years on
a pro rata basis for the 2010-2011 school year, but limited per KRS 161.540(1).”
On May 11, 2011, Hall began employment as Executive Director of
Northern Kentucky Cooperative for Educational Services. He remained an active,
contributing member of KTRS until his retirement in July 2015. Shortly before
that date, Hall submitted an application for Service Retirement. KTRS contacted
the Ludlow Board of Education to obtain a copy of its holiday and annual leave
policy. Upon receipt of that information, KTRS conducted an audit, which
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Kentucky Revised Statutes.
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concluded that the accrued vacation days for which Hall had already been
compensated could not be used in the calculation of his retirement benefits. The
KTRS reduced Hall’s retirement benefits accordingly. The KTRS also refunded
the retirement payments made in 2011 based on the payout for the accrued vacation
days.
Thereafter, Hall brought this action, alleging that KTRS erred in its
interpretation of KRS 161.540(1). Specifically, Hall argued that he was entitled to
service credit for the 100 days of accrued vacation days from previous years on a
pro rata basis for the 2010-2011 school year. He contends that the KTRS
misapplied KRS 161.540 as excluding the credit, resulting in a reduction of $500
per month in his retirement benefits.
Eventually, KTRS moved for summary judgment. After consideration
of the record and arguments of counsel, the trial court granted the motion. The
court concluded that KRS 161.540 only authorizes service credits for unused
annual leave to “retiring” members. Since Hall was not eligible for retirement
when he left the Ludlow Board of Education in 2011, the court determined that he
was not eligible for service credit under the statute. Hall now appeals.
Our “standard of review on appeal of a summary judgment is whether
the trial court correctly found that there were no genuine issues as to any material
fact and that the moving party was entitled to judgment as a matter of law.” Scifres
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v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). Summary judgment shall be
granted “if the pleadings, depositions, answers to interrogatories, stipulations, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” CR2 56.03. The trial court must view the record “in
a light most favorable to the party opposing the motion for summary judgment and
all doubts are to be resolved in his favor.” Steelvest v. Scansteel Serv. Ctr., Inc.,
807 S.W.2d 476, 480 (Ky. 1991). Summary judgment is proper only “where the
movant shows that the adverse party could not prevail under any circumstances.”
Id.The sole issue on appeal concerns the trial court’s interpretation of the
version of KRS 161.540(1)(d) which was in effect while Hall was an active
member of KTRS. Matters of statutory interpretation are issues of law, which we
review de novo. Jefferson Cty. Bd. of Educ. v. Fell, 391 S.W.3d 713, 718 (Ky.
2012). “When the words of the statute are clear and unambiguous and express the
legislative intent, there is no room for construction or interpretation and the statute
must be given its effect as written. Only if the statute is ambiguous . . . or
otherwise frustrates a plain reading, do we resort to the canons or rules of
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Kentucky Rules of Civil Procedure.
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construction[.]” Norton Hospitals, Inc. v. Peyton, 381 S.W.3d 286, 292 (Ky. 2012)
(citations omitted).
KRS 161.540(1)(a) sets forth the applicable contribution rates for each
individual who became a member of KTRS prior to July 1, 2008. The version of
KRS 161.540(1)(d) during the period at issue3 sets out a member’s entitlement to
service credit for unused annual leave as follows:
Payments authorized by statute that are made to retiring
members, who became members of the system before
July 1, 2008, for not more than sixty (60) days of unused
accrued annual leave shall be considered as part of the
member’s annual compensation, and shall be used only
for the member’s final year of active service. The
contribution of members shall not exceed these
applicable percentages on annual compensation. When a
member retires, if it is determined that he has made
contributions on a salary in excess of the amount to be
included for the purpose of calculating his final average
salary, any excess contribution shall be refunded to him
in a lump sum at the time of the payment of his first
retirement allowance. In the event a member is awarded
a court-ordered back salary payment the employer shall
deduct and remit the member contribution on the salary
payment, plus interest to be paid by the employer, to the
retirement system unless otherwise specified by the court
order.
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During its 2021 session, the General Assembly repealed, reenacted, and amended KRS
161.540. 2021 Ky. Acts ch. 157 § 7 (eff. Jan. 1, 2022). The provisions regarding compensation
for unused annual leave are currently codified in KRS 161.540(1)(f), with some changes. In
2018, the provisions of KRS 161.540(1)(d) regarding compensation for unused annual leave
were amended several times. See 2018 Ky. Acts ch. 107 § 57 (eff. Jul. 14, 2018); 2018 Ky. Acts
ch. 207 § 94 (eff. Apr. 27, 2018); and 2018 Ky. Acts ch. 171 § 94 (eff. Apr. 14, 2018). For
purposes of this appeal, we must apply the version of KRS 161.540(1)(d) enacted in 2010 Ky.
Acts ch. 59 § 6 (eff. Jul. 1, 2010).
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In the proceedings before the trial court, Hall argued that he retired
twice: once when he left his position as Superintendent of the Ludlow Independent
Schools and again when he left his position as Executive Director of Northern
Kentucky Cooperative for Educational Services. As a result, he took the position
that each “retirement” was a qualifying event under the statute, and he was entitled
to credit for the accrued annual leave paid out in 2011.
In rejecting this argument, the trial court noted that the terms “retire”
and “retiring member” are not defined under KRS Chapter 161. Consequently,
those terms must be given their ordinary meanings, and considered in light of the
statutory prerequisites for service retirement under KRS 161.600. The trial court
noted that Hall did not withdraw from his occupation or professional career when
he left the Ludlow Board of Education in 2011. Furthermore, he was not
statutorily eligible for retirement at that time. Since he did not “retire” within the
common or statutory meaning of the word, the trial court concluded that he was not
eligible for service credit based upon the unused annual leave which was paid out
in 2011.
On appeal, Hall concedes that he did not retire from the Ludlow
Board of Education in 2011, and he was not statutorily eligible for service
retirement at that time. However, he argues that KTRS may only apply a school
district’s policy for payment of accrued leave when that policy is in accordance
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with KRS 161.540(1)(d). Because the 2011 Separation Agreement was
inconsistent with the statute, Hall maintains that he should not have received the
payout from the Ludlow School District for the accrued leave days. But since this
payment was made in error, Hall asserts that he remains eligible for service credit
for those contributions.
KTRS points out that Hall did not raise this exact argument to the trial
court below. It is well-established that “a question not raised or adjudicated in the
court below cannot be considered when raised for the first time in this court.”
Fischer v. Fischer, 197 S.W.3d 98, 102 (Ky. 2006) (citing Combs v. Knott County
Fiscal Court, 283 Ky. 456, 459, 141 S.W.2d 859, 860 (1940)). See also Taylor v.
Kentucky Unemployment Ins. Comm’n, 382 S.W.3d 826, 835 (Ky. 2012), and Ten
Broeck Dupont, Inc. v. Brooks, 283 S.W.3d 705, 734 (Ky. 2009). Hall contends
that the proper interpretation of KRS 161.540(1)(d) was directly presented to the
trial court, and his current position remains within the scope of that inquiry. We
disagree.
As discussed above, Hall’s argument to the trial court concerned the
meaning of the word “retire” as used in KRS 161.540(1)(d). On appeal, he argues
that the terms of his Separation Agreement were not applied consistently with the
terms of the statute. Although both arguments concern the proper interpretation of
the statute, they address very distinct legal and factual questions. In the absence of
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proper preservation of the issue, we cannot address Hall’s current allegation of
error.
Furthermore, we cannot find that the trial court’s holding was plainly
at odds with the express wording of KRS 161.540(1)(d). As the trial court
concluded, KRS 161.540(1)(d) only authorized service credits for “[p]ayments
authorized by statute that are made to retiring members” and “shall be used only
for the member’s final year of active service.” In this case, Hall did not retire in
2011 and he was not eligible for retirement. He received the payments under the
Separation Agreement as part of his annual compensation. Thus, he was not
entitled to service credit for those days upon his retirement in 2015.
Accordingly, we affirm the summary judgment of the Franklin Circuit
Court.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
C. Ed Massey Tamela A. Biggs
Erlanger, Kentucky Frankfort, Kentucky
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