Public Employees Retirement System v. Brenda Langham ( 2001 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2000-CA-01707-SCT
PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND MISSISSIPPI HIGHWAY SAFETY
PATROL
v.
BRENDA LANGHAM
DATE OF JUDGMENT: 7/2/2001
TRIAL JUDGE: HON. J. LARRY BUFFINGTON
COURT FROM WHICH COVINGTON COUNTY CHANCERY COURT
APPEALED:
ATTORNEY FOR OFFICE OF THE ATTORNEY GENERAL
APPELLANTS:
BY: RICKEY T. MOORE
ATTORNEY FOR DEMPSEY LADNER
APPELLEE:
NATURE OF THE CASE: CIVIL -OTHER
DISPOSITION: ON DIRECT APPEAL: AFFIRMED. ON
CROSS-APPEAL: AFFIRMED IN PART AND REVERSED AND
REMANDED IN PART- 04/04/2002
MOTION FOR
REHEARING FILED:
MANDATE ISSUED: 4/25/2002
BEFORE McRAE, P.J., DIAZ AND CARLSON, JJ.
McRAE, PRESIDING JUSTICE, FOR THE COURT:
¶1. Brenda Langham, widow of a highway patrolman killed in the line of duty in 1981, sued the Mississippi
Highway Safety Patrol Retirement System ("Patrol") and the Public Employees' Retirement System
("PERS"), which only administered the Patrol's retirement system, in chancery court for increased survivor
benefits based on a 1989 change in the law. The Patrol, in accordance with the 1989 law, eventually paid a
portion of the increased benefits to Langham, but did not give her children any benefits. The chancellor held
that Langham and her children (her deceased husband's stepchildren) were entitled to certain benefits. The
Patrol and PERS (1) appeal the chancery court's decision. Langham cross-appeals regarding the amount of
interest to which she is entitled. We find that the chancellor's decision should be upheld as to the issues of
failure to exhaust administrative remedies, res judicata, collateral estoppel, statute of limitations, the granting
of the benefits per Senate Bill 2694, and children benefits, and interest. However, we reverse his decision
on the cross-appeal regarding the amount of interest on the unpaid benefits as per Miss. Code Ann. § 75-
17-1 (2000).
FACTS
¶2. Billy Langham, a Mississippi highway patrolman, was killed in the line of duty on December 31, 1981.
Brenda Langham, his widow, and her two children from a previous marriage lived with Billy Langham. The
deceased was in the process of adopting Langham's children at the time of his death. In February 1982,
Mrs. Langham filled-out an application for survivor benefits. Her children were not listed as dependents
because they were not natural children of her husband. Langham's application was approved by PERS, and
she began receiving benefits of $151.07 per month in April of 1982. By 1990, Langham's benefits had
increased to about $250.00 per month.
¶3. In 1997, Langham became aware of Senate Bill 2694, which amended Miss. Code Ann. § 25-13-13
and increased the benefits available to widows of highway patrolmen killed in the line of duty, and she
submitted an application for said increased benefits. As the result of an Attorney General's opinion issued
on August 1, 1997, PERS recalculated Langham's spousal benefits from July 1, 1989, forward. Langham
received a check in the amount of $54,684.79. The parties disagree as to whether this amount covers
through July 1997 or July 1998. In September 1997, Langham wrote to PERS asking for benefits for her
children (the stepchildren of the deceased), interest on unpaid benefits and a recalculation based on the four
highest years versus the five highest years of salary. PERS denied these requests for and on behalf of the
Patrol. The Chancery Court of Covington County granted Langham's requests in a Judgment dated
September 11, 2000. The Patrol appealed this decision, and Langham filed a cross-appeal.
STATEMENT OF THE ISSUES
I. Whether the trial court erred by failing to dismiss this case as being barred by failure to
exhaust administrative remedies, res judicata or collateral estoppel.
II. Whether the trial court erred by failing to dismiss Langham's claims as being barred by
the applicable statute of limitations.
III. Whether the trial court erred by holding that Senate Bill 2694 has retroactive
application.
IV. Whether the trial court erred by holding that unadopted stepchildren are contemplated
beneficiaries under the statutes at issue.
V. Whether the trial court erred by holding that Langham was entitled to interest on unpaid
benefits.
VI. Whether the trial court erred by not declaring that Langham was entitled to the income
or earnings on unpaid benefits that the retirement system actually received from the time of
accrual of each benefit until the time of its payment.
DISCUSSION
I. Whether the trial court erred by failing to dismiss this case as being barred by failure to
exhaust administrative remedies, res judicata or collateral estoppel.
¶4. The Patrol alleges that the trial court was wrong in holding that the statutes governing PERS, specifically
Miss. Code Ann. § 25-11-120 (1999), were inapplicable in this case. As a result Langham was not
required to utilize the prescribed statutory plan for administrative review and judicial appeal regarding her
grievances. The Patrol maintains that had Langham been required to abide by the statutes pertaining to
PERS, this action would have been barred by failure to exhaust administrative remedies, collateral estoppel
or res judicata.
¶5. The Patrol and PERS are completely separate retirement systems, each with their own administrative
board. The Public Employees' Retirement System (PERS) was set up under Miss. Code Ann. § 25-11-
120. The Patrol was specifically set up to provide a separate retirement system for the highway safety
patrol and its administration board is the decision making body. 1958 Miss. Laws ch. 543. The Patrol has
PERS carry out its decisions and administer the plan. It is very clear from this that, there being no statutory
scheme for an administrative appeal, Miss. Code Ann. § 25-11-120 would not apply in this situation and
the trial court's decision was correct in this regard.
¶6. The Patrol argues that it is an inferior tribunal within the meaning of Miss. Code Ann. § 11-51-95
(Supp. 2001), whose judgment may be reviewed by certiorari. See Gill v. Miss. Dep't of Wildlife
Conservation, 574 So. 2d 586 (Miss. 1990). However, we have previously held that when there is not a
statutory plan for appeal from a state board or agency's decision and the aggrieved party does not have an
adequate remedy at law, jurisdiction to review of the board or agency's decision lies with the chancery
court. Priscock v. Perkins, 735 So. 2d 440, 443 (Miss. 1999); Charter Med. Corp. v. Miss. Health
Planning & Dev. Agency, 362 So. 2d 180, 181 (Miss. 1978).
¶7. In submitting a writ of certiorari under § 11-51-95, a record of the proceedings and decision of the
inferior tribunal must be included for review by the circuit court. There was no record, judgment or decision
in this case. The Patrol does not even require that the aggrieved be allowed to meet with its administrative
board to create a record which can be reviewed. After meeting with the administrative board of the Patrol
at least twice and meeting with and/or corresponding with other people connected to the board, no final
administrative decision was communicated to Langham. Given the facts presented here, Langham gave the
Patrol the opportunity to render a decision, but as such decision was never made, she properly chose to file
suit in chancery court. The issues of failure to exhaust administrative remedies, collateral estoppel or res
judicata are moot since the PERS statutes do not apply in this case, and Langham duly brought suit to
resolve her grievances. The finding of the trial court regarding this issue is affirmed.
II. Whether the trial court erred by failing to dismiss Langham's claims as being barred by
the applicable statute of limitations.
¶8. The Patrol contends that in a situation such as this where there is no set statute of limitations, Miss.
Code Ann. § 15-1-49 (1995) establishes a three-year "catch-all" statute of limitations. Miss. Code Ann. §
15-1-51 (1995) states that the statute starts to run "in favor of the state, . . . when the plaintiff first had the
right to demand payment . . ." Following this logic, it is apparent that Langham's claims would be barred
since she first could have demanded payment in 1989.
¶9. However, there are a couple of theories which lend credence to Langham's belief in a ten-year statute
of limitations. Langham's first argument is that Patrol's retirement system is a trust as per 26 U.S.C. §
401(a) of the federal tax laws, and as such is subject to a ten-year statute of limitations under Miss. Code
Ann. § 15-1-39 (1995). Langham also cites Monroe County Bd. of Educ. v. Rye, 521 So. 2d 900, 908
(Miss. 1988) which held that the state and its political subdivisions, under the proper circumstances, may be
equitably estopped.
¶10. The second theory is the strongest. In 1990, the Patrol automatically increased Langham's benefits
pursuant to a previous statutory amendment. She did not have to submit a supplemental application or
otherwise lift a finger to obtain the increase in benefits. Langham avers that Patrol, having greater knowledge
about its retirement system and having formerly aided her in obtaining benefits and increases under the
system, had a duty to inform her of the July 1989 increase in survivor benefits. Having not been told
otherwise, Langham could reasonably believe that the Patrol would always inform her of any change in her
benefits. Indeed, it seems that the Patrol had made it its duty at one point to give any increase in benefits to
survivors and it certainly would have notified survivors of any decrease in their benefits. If it is true that the
Patrol has undertaken a duty, equitable estoppel would prevent the running of the statute of limitations from
hindering Langham in her attempt to receive the statutory benefits increases.
¶11. The decision of the trial court is affirmed as to the statute of limitations.
III. Whether the trial court erred by holding that Senate Bill 2694 has retroactive
application.
¶12. The purpose of Senate Bill 2694 was to increase survivor benefits to the spouse and/or dependent
children of an active member of the highway patrol who was killed in the line of duty. This bill was adopted
in 1989 and is codified at Miss. Code Ann. § 25-13-13. Subsection (4) of the statute states that the widow
and children of any highway patrolman killed in the line of duty "shall be entitled to the retirement benefits
provided for herein, which benefits shall accrue from and after May 5, 1976, and upon application of the
widow." As the result of an Attorney General's opinion issued on August 1, 1997, PERS was directed to
recalculate Langham's spousal benefits from July 1, 1989, forward. The trial court's opinion went even
further and held that Langham was entitled to this increase in benefits from the date of her initial application
in February 1982, until such time as she may become disqualified by law. The Patrol avers that the trial
court erred as this statute was not intended to be retroactively applied.
¶13. In the absence of a clear and positive statement by the Legislature manifesting the intent to apply
Senate Bill 2694 retrospectively, we are required to interpret Miss. Code Ann. § 25-13-13 prospectively.
Cole v. Nat'l Life Ins. Co., 549 So. 2d 1301, 1305 (Miss. 1989). When taking the subject statute as a
whole, it is clear that Langham would be entitled to the increased benefits as of July 1989, even without
including the language of subsection (4). Therefore, it follows that subsection (4) was only included by the
Legislature in order to clearly and positively provide for increased benefits to relate back to May 5, 1976.
This Court affirms the trial court's ruling allowing Langham's increased benefits to retroactive to the date of
her initial application in February 1982.
IV. Whether the trial court erred by holding that unadopted stepchildren are contemplated
beneficiaries under the statutes at issue.
¶14. It is undisputed that, when Officer Langham was killed, he had two natural children and two
stepchildren (Mrs. Langham's children), all of whom lived with the Langhams. Though the deceased had
taken steps to legally adopt Langham's children, no adoption had been completed at the time of his death.
Senate Bill 2694 (codified in Miss. Code Ann. § 25-13-13) limits payment of benefits to "dependent
children" of an officer killed in the line of duty. However, "children" is undefined as per the highway patrol
retirement system.
¶15. Miss. Code Ann. § 25-13-1 states that the Patrol was "designed to provide more liberal benefits for
the highway safety patrolmen" than those set out in the statutes relating to PERS. Miss. Code Ann. § 25-
11-103(j), applying to PERS, defines "child" as a natural child of the member, a child that has been adopted
by the member prior to his death, or a child under the permanent care of the member at the time of
his death. Langham's children were inarguably under the care of the deceased. Accordingly, Langham
asks for the meaning of "dependent children" to be liberally construed in order to allow her children to
collect said benefits.
¶16. We find that at the very least, in keeping with the liberal policies for which the Patrol was instituted, its
definition of "children" should encompass the above definition. The trial court was correct in finding that the
stepchildren of the deceased were "children" under Miss. Code Ann. § 25-13-13, thereby allowing them to
receive benefits.
V. Whether the trial court erred by holding that Langham was entitled to interest on unpaid
benefits.
VI. Whether the trial court erred by not declaring that Langham was entitled to the income
or earnings on unpaid benefits that the retirement system actually received from the time of
accrual of each benefit until the time of its payment.
¶17. The Patrol appealed the trial court's order giving interest on the unpaid benefits to Langham. Langham
cross-appealed and asserted that she was entitled to the income or earnings on unpaid benefits that the
retirement system earned by failing to pay her benefits in a timely manner, or in the alternative that she
should have been awarded interest on the unpaid benefits at a rate of 8% per annum rather than 6% as held
by the trial court judge. We decline to award her any income or earnings on the unpaid benefits as there is
no authority, law or precedent of any type in Mississippi requiring or allowing for the payment of such
income or earnings.
¶18. Regarding the payment of interest, the Patrol first states that there is nothing authorizing it to pay
interest on late payments. Later, it contradicts itself by saying that had the Legislature intended for earnings
on unpaid benefits to be awarded, it would not have enacted Miss. Code Ann. § 75-17-7 (2000).
Regardless of the Patrol's argument against interest payments, the trial court found interest to be appropriate
in this case, and we agree.
¶19. There is also a question regarding when the interest should begin to accrue. Miss. Code Ann. § 75-
17-7 sets out the limited instances in which a claimant has a right to prejudgment interest. The relevant
section reads as follows:
All judgments or decrees on any sale or contract shall bear interest at the same rate as the contract
evidencing the debt on which the judgment or decree was rendered. All other judgments or decrees
shall bear interest at the per annum rate set by the judge hearing the complaint from a date determined
by such judge to be fair, but in no event prior to the filing of the complaint.
Id. Langham believes that interest should accrue as of the date of the filing of the complaint. The Patrol
submits that any award of interest should not accrue prior to the date of judgment in the trial court.
¶20. The Patrol argues that Langham's eight-year wait to apply for the increased benefits after she became
eligible for them constitutes laches and would defeat any claim for interest. Regarding the doctrine of laches,
we have held that where a claim has not yet been barred by the applicable statute of limitations, laches does
not apply. Clanton v. Hathorn, 600 So. 2d 963, 966 (Miss. 1992); West End Corp. v. Royals, 450
So. 2d 420, 425 (Miss. 1984). We agree with the trial court's decision, and it follows that the defense of
laches is not applicable in this situation.
¶21. The Patrol also contends that the trial court erred in awarding interest because the retrospective
application of Senate Bill 2694 is invalid as an ex post facto law. The constitutional prohibition against ex
post facto laws was not raised at the trial level, and this Court can only look at what is in the record-
meaning, no new arguments can be brought up on appeal. Therefore, we are not required to address this
issue.
¶22. The parties' arguments notwithstanding, § 75-17-7 states that it is up to the judge to fairly determine
the date from which interest shall accrue.
¶23. As for the rate at which interest should be paid, § 75-17-1 states that the "legal rate of interest on all
notes, accounts and contracts shall be eight percent (8%) per annum[.]" The trial court judge's order of six
percent is clearly at odds with the statutorily prescribed amount and thus should be reversed and remanded
so that the judge can reform his order to comply with the statute.
¶24. We therefore affirm the trial court's award of interest, but we reverse as to the interest rate.
CONCLUSION
¶25. This case was properly brought within the applicable statute of limitations and should not have been
barred for any reason. Langham is entitled to increased benefits relating back to the submission of her first
application for benefits. For the purposes of the statutes at issue, Langham's children qualify for benefits
even though they are not the natural or adopted children of the deceased. The judgment of the chancery
court is hereby affirmed as to all issues except the interest rate, but the judgment is reversed as to the
interest rate and this case is remanded for further interest calculations and reformation of the judgment using
an annual interest rate of 8% as per Miss. Code Ann. § 75-17-1.
¶26. ON DIRECT APPEAL: AFFIRMED. ON CROSS-APPEAL: AFFIRMED IN PART AND
REVERSED AND REMANDED IN PART.
DIAZ, EASLEY, CARLSON AND GRAVES, JJ., CONCUR. PITTMAN, C.J., CONCURS
IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED
BY SMITH, P.J., WALLER, COBB, JJ.
PITTMAN, CHIEF JUSTICE, CONCURRING IN PART AND DISSENTING IN PART:
¶27. While I disagree with only one issue the majority addresses, the issue is dispositive of the claim of Mrs.
Langham's children. The chancellor and the majority read the statute governing compensation to children
too broadly under these facts, and I disagree with the conclusion they reach. The majority notes that Miss.
Code Ann. § 25-13-13 limits the payments of benefits to "dependent children" but then proceeds to say
that, since the term "children" is not defined in the statute, it should be interpreted broadly to include Brenda
Langham's children from her prior marriage.
¶28. While "children" may not be fully defined, "dependent children" in and of itself is at least a partial
definition. The majority notes that the children have not been adopted, even though Officer Langham had
taken steps to do so. The record indicates the children's natural father was paying $150.00 per month
($75.00 per child) in child support when Officer Langham was killed. Although the children lived under the
same roof as Langham, that alone does not make them "dependent" upon him for support. The majority's
attempt to draw an analogy between the PERS system of retirement to the Highway Patrol system, even
after taking such large steps to distinguish the two, holds no water because the two are indeed separate
with their own limitations on who can receive benefits. I do not see how, under the circumstances,
Langham's children are considered "dependent." It is a reasonable assumption that they were not listed as
beneficiaries on the original application for benefits not only because they are not the natural children of
Officer Langham, but also because they were not his "dependent" children. I concur in the majority's
judgment as to Mrs. Langham, but I would reverse the judgment below as to the children of Mrs. Langham
and render judgment for the Patrol and PERS on their claim. Therefore, I respectfully concur in part and
dissent in part.
SMITH, P.J., WALLER AND COBB, JJ., JOIN THIS OPINION.
1. PERS was dismissed from the case since it agreed to pay Langham whatever amount the Patrol decided
she was entitled. The only appellant is the Mississippi Highway Safety Patrol System ("Patrol").