State ex rel. Gill v. School Emps. Retirement Sys. of Ohio , 121 Ohio St. 3d 567 ( 2009 )

[Cite as State ex rel. Gill v. School Emps. Retirement Sys. of Ohio, 121 Ohio St.3d 567, 2009-
Ohio-1358.]
THE STATE EX REL. GILL, APPELLEE, v. SCHOOL EMPLOYEES
RETIREMENT SYSTEM OF OHIO, APPELLANT, ET AL.
[Cite as State ex rel. Gill v. School Emps. Retirement Sys. of Ohio,
121 Ohio St.3d 567, 2009-Ohio-1358.]
Public employees — Disability-retirement benefits — R.C. 145.35(E) — Grant of
disability-retirement benefit by Public Employees Retirement System is
final — Member of two separate public-employee retirement systems who
applies for and receives disability-retirement benefits solely from PERS
may not later apply for combined disability-retirement benefits from PERS
and second retirement system.
(No. 2008-1211 ─ Submitted February 3, 2009 ─ Decided March 31, 2009.)
APPEAL from the Court of Appeals for Franklin County,
No. 07AP-286, 2008-Ohio-2302.
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Per Curiam.
{¶ 1} This is an appeal from a judgment granting a writ of mandamus to
compel appellant, the School Employees Retirement System (“SERS”), to render
a final decision on the merits of an appeal by appellee, William J. Gill Jr., from
the retirement system’s initial denial of his application for combined disability-
retirement benefits. We reverse the judgment of the court of appeals and deny the
writ because SERS did not abuse its discretion in declining to decide the merits of
an applicant’s appeal when the applicant has applied for and is receiving
independent disability-retirement benefits from another retirement system.
Gill’s Initial Application for Combined Disability-Retirement Benefits
{¶ 2} Gill is a member of both the Public Employees Retirement System
(“PERS”) and SERS. His membership in PERS began in 1988 when he was
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employed by the city of Cleveland and later by Cuyahoga County; his
membership in SERS began when he was employed as a high school coach in
1999.
{¶ 3} In March 2003, Gill was injured when he lifted a heavy condenser
pump while in the course of his employment with Cuyahoga County. He
experienced excruciating pain in his low back and right leg and has not worked
since.
{¶ 4} In July 2004, Gill applied for combined disability-retirement
benefits with PERS. He specified in his application that he wanted to combine his
PERS account with his SERS account. The county’s fiscal officer certified April
4, 2003, as the final day for which he was paid by the county. PERS then notified
Gill that because his most recent public employment was covered by SERS, he
was required to file his application for combined benefits with SERS rather than
PERS.
Filing and Initial Denial of Second Application
{¶ 5} Gill followed PERS’s instructions and filed a disability-retirement
application with SERS. He listed May 31, 2003, as his last day of paid service for
his job as a high school coach. The school district’s treasurer also certified May
2003 as Gill’s last date of SERS service.
{¶ 6} In January 2005, the SERS retirement board denied Gill’s
application for combined disability-retirement benefits. Gill appealed.
Application for PERS Disability-Retirement Benefits
{¶ 7} A month after SERS’s denial of his application, Gill informed
PERS that it was mistaken in concluding that his last date of service was with
SERS and that he was therefore entitled to have his 2004 PERS application
processed immediately. PERS again informed Gill that his most recent service
was with SERS, and his PERS application for combined disability-retirement
benefits could be processed only if SERS first approved his application. PERS
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also notified Gill that in lieu of applying for combined benefits, he could apply for
disability-retirement benefits on an independent basis, i.e., solely for his 21.105
years of PERS service credit, without regard to his four years of SERS credit.
{¶ 8} Gill filed a third application, this time for independent disability-
retirement benefits with PERS, while his appeal from the initial denial of his
application for combined disability-retirement benefits was still pending before
SERS. This application contained the following preprinted language:
{¶ 9} “If you have membership with SERS and/or STRS, this credit may
be used in the calculation of your OPERS benefit or you may elect to retire on an
independent basis using only OPERS service and salary. Make your choice
below.”
{¶ 10} Gill checked the box below this language next to the sentence
“NO, DO NOT combine my SERS and/or STRS account with my OPERS
account.” (Boldface sic.)
{¶ 11} In June 2005, PERS approved Gill’s independent application for
disability-retirement benefits.
Appeal of SERS’s Denial of Combined Disability-Retirement Benefits
{¶ 12} Gill appeared with his attorney before the SERS retirement board
and informed it that PERS had approved his application for independent
disability-retirement benefits without regard to his SERS service. Later he
notified SERS that he disputed the earlier determinations that his last covered
service was with SERS rather than with PERS. Gill claimed that his last date of
service was actually with the county, so that PERS should determine his
application for combined disability-retirement benefits.
{¶ 13} PERS declined Gill’s request for recalculation of his disability-
retirement benefits based upon his combined service with PERS and SERS,
stating again that any new determination was dependent upon SERS’s action.
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{¶ 14} Gill then requested that SERS decide his appeal from its denial of
his application for combined benefits and that SERS recertify Gill’s final date of
service so that PERS could assume control over his application. SERS rejected
Gill’s requests. It reasoned that when Gill was granted independent disability
from PERS, he was no longer eligible to seek combined disability-retirement
benefits. Moreover, SERS’s determination of the last date of service was
supported by the treasurer’s certification and Gill’s own application for benefits.
Mandamus Case
{¶ 15} Gill subsequently filed a complaint in the Court of Appeals for
Franklin County for a writ of mandamus to compel SERS to grant his application
for combined disability-retirement benefits, recertify the last date of covered
SERS service as March 31, 2003, transmit the recertification to PERS, and
transfer all of his SERS funds to PERS. Gill also sought to compel PERS to
accept the SERS recertification and transfer of funds and to administer his
combined PERS/SERS disability-retirement benefits.
{¶ 16} In May 2008, the court of appeals, in a two-to-one decision,
granted a writ of mandamus to compel SERS to render a final decision on Gill’s
appeal.
{¶ 17} This cause is now before us upon SERS’s appeal as of right.
Mandamus - General Standard
{¶ 18} The court of appeals granted a writ of mandamus to compel SERS
to decide Gill’s appeal of its initial denial of his application for combined
disability-retirement benefits. To be entitled to the writ, Gill was required to
establish a clear legal right to a decision on the merits of his appeal, a
corresponding clear legal duty on the part of SERS to issue a merits decision, and
the lack of an adequate remedy in the ordinary course of the law.
{¶ 19} For the requirements of clear legal duty and clear legal right, “
‘mandamus is available to correct any abuse of discretion by SERS.’ ” State ex
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rel. VanCleave v. School Emps. Retirement Sys., 120 Ohio St.3d 261, 2008-Ohio-
5377, 898 N.E.2d 33, ¶ 22, quoting State ex rel. Stiles v. School Emps. Retirement
Sys., 102 Ohio St.3d 156, 2004-Ohio-2140, 807 N.E.2d 353, ¶ 13. “An abuse of
discretion occurs when a decision is unreasonable, arbitrary, or unconscionable.”
Id. Therefore, we must determine whether the SERS decision not to address the
merits of Gill’s appeal from the denial of his application for combined disability-
retirement benefits under SERS and PERS was unreasonable, arbitrary, or
unconscionable.
The Pertinent Statutes
{¶ 20} “The Public School Employees Retirement System was established
for the purpose of providing retirement allowances and other benefits to public
school employees other than teachers.” State ex rel. McMaster v. School Emps.
Retirement Sys. (1994), 69 Ohio St.3d 130, 133, 630 N.E.2d 701, citing 1 Baker &
Carey, Ohio School Law (1993) 399, Section 8.25. Similarly, PERS was created
to provide retirement allowances and other benefits to certain state and local
public employees. See R.C. Chapter 145.
{¶ 21} Under the pertinent statutes, SERS and PERS provide independent
disability coverage to each member who has at least five years of total service
credit. See R.C. 3309.39(A) (“The school employees retirement system shall
provide disability coverage to each member who has at least five years of total
service credit”) and 145.35(B) (“The public employees retirement system shall
provide disability coverage to each member who has at least five years of total
service credit”).
{¶ 22} In lieu of seeking independent disability-retirement benefits solely
from SERS, PERS, or the State Teachers Retirement System (“STRS”), members
of more than one of these public-employee retirement systems may choose a
combined disability-retirement benefit. “At the option of a member, or of a
beneficiary, total contributions and service credit in the public employees
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retirement system and the school employees retirement system and STRS must be
used in determining the eligibility and total allowance for the purpose of service
retirement and a disability benefit.” Hastings, Manoloff, Sheeran, Stype & Jaffe,
Ohio School Law (2007) 283, Section 11:20. Thus, service credit earned in these
retirement systems “may be combined in order to determine eligibility for
retirement and to compute benefits.” Id. at 362, Section 14:15. See R.C.
145.37(B) (PERS), R.C. 3307.57(B) (STRS), and 3309.35(B) (SERS), which
contain comparable provisions concerning combining disability-retirement
benefits under two or more of these three retirement systems.
Election of Independent or Combined Disability-Retirement Benefits
{¶ 23} SERS determined that once Gill began receiving disability-
retirement benefits based solely on his PERS membership, SERS lacked authority
to act on the merits of his pending appeal from the initial denial of the combined-
benefits application based on his service in both PERS and SERS.
{¶ 24} Neither R.C. 145.37 nor 3309.35 specifies when a member of more
than one of the specified retirement systems must choose between independent
and combined benefits. Nor do the statutes expressly authorize a member who is
already receiving benefits under one system to rescind that benefit choice and
receive a combined benefit in its place.
{¶ 25} For the following reasons, SERS did not abuse its discretion in
determining that once PERS approved and began disbursing an independent
PERS benefit to Gill without regard to his SERS service, SERS lacked authority
to modify the retirement award by acting on Gill’s application for combined
benefits under both systems.
{¶ 26} First, as statutorily created entities, SERS, which was established
by R.C. 3309.03, and PERS, which was established by R.C. 145.03(A), can pay
benefits only as expressly authorized by statute. See, e.g., Cosby v. Cosby, 96
Ohio St.3d 228, 2002-Ohio-4170, 773 N.E.2d 516, ¶ 15, 19; Dreger v. Pub. Emps.
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Retirement Sys. (1987), 34 Ohio St.3d 17, 20-21, 516 N.E.2d 214; Hansford v.
Pub. Emps. Retirement Sys., 170 Ohio App.3d 603, 2007-Ohio-1242, 868 N.E.2d
708, ¶ 12; Ohio Pub. Emps. Retirement Sys. v. Coursen, 156 Ohio App.3d 403,
2004-Ohio-1229, 806 N.E.2d 197, ¶ 7. Neither of the pertinent statutes expressly
authorizes SERS or PERS to consider the merits of an application for combined
disability-retirement benefits when a member has already repudiated the
combined-benefits option by requesting and receiving independent benefits from
one of the retirement systems.
{¶ 27} Second, R.C. 145.35(E) provides that the action by PERS granting
Gill a disability-retirement benefit “shall be final.” By Gill’s own request, that
benefit was not combined with his SERS service time. The General Assembly
has not provided any mechanism for either PERS or SERS to modify a final
decision by later considering an application for combined disability-retirement
benefits. When the General Assembly has intended to permit a modification of
benefits after they have been approved and received, it has so provided. See, e.g.,
R.C. 145.37(B)(2) and 3309.35(C) (subjecting former PERS and SERS members
receiving combined disability-retirement benefits to recovery by the state of any
overpayments if the member is reemployed in a state retirement system that
participated in the combined benefit), 3309.46(C) (SERS member can change
election of service-retirement benefit plan until first payment of retirement
allowance), 3309.46(E) (specifying circumstances under which retirement plan
may be changed after payments have been received), and 4123.52 (conferring
continuing jurisdiction on Industrial Commission to make certain modifications or
changes in findings and orders regarding benefits). The General Assembly has
not done so here.
{¶ 28} Third, insofar as the statutes are silent on this issue, we must
accord SERS the deference to which it is entitled in interpreting the pertinent
legislation. State ex rel. Schaengold v. Ohio Pub. Emps. Retirement Sys., 114
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Ohio St.3d 147, 2007-Ohio-3760, 870 N.E.2d 719, ¶ 23. “A court must give due
deference to the agency’s reasonable interpretation of the legislative scheme.”
Northwestern Ohio Bldg. & Constr. Trades Council v. Conrad (2001), 92 Ohio
St.3d 282, 287, 750 N.E.2d 130.
{¶ 29} SERS reasonably interpreted the relevant statutes as precluding it
from acting on Gill’s application for combined disability-retirement benefits after
he had applied for and received independent disability-retirement benefits from
PERS. The court of appeals erred in determining that PERS had agreed to
administer Gill’s combined benefits if SERS first approved, notwithstanding his
receipt of independent PERS benefits. In fact, a thorough reading of the PERS
letter relied on by Gill and cited by the court of appeals reveals the contrary.
PERS had rejected Gill’s requests and stated it would defer to SERS to make the
transfer and certification of funds to PERS. PERS stated that this determination
was “subject to SERS processing, review and determination of eligibility” and
that “contact with SERS indicates that statutory limitations may prohibit * * * the
transfer of [Gill’s] account funds” from SERS to PERS. Furthermore, in its merit
brief in the court of appeals, PERS noted that Gill himself caused the problems by
filing another disability-retirement application with PERS in which he explicitly
rejected the receipt of combined benefits even while his combined-disability
application with SERS was still unresolved.
{¶ 30} Finally, Gill effectively waived his right to pursue combined
disability-retirement benefits under both PERS and SERS when he opted to seek
disability-retirement benefits solely from PERS without regard to his SERS
service time. “Waiver is a voluntary relinquishment of a known right and is
generally applicable to all personal rights and privileges, whether contractual,
statutory, or constitutional.” Glidden Co. v. Lumbermens Mut. Cas. Co., 112
Ohio St.3d 470, 2006-Ohio-6553, 861 N.E.2d 109, ¶ 49. PERS had notified Gill
that if he applied for disability-retirement benefits from PERS on an independent
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basis, his SERS credit would not be included, and Gill specifically applied for
independent benefits from PERS with that knowledge. By seeking and obtaining
PERS approval of his independent application and ultimately receiving those
benefits, Gill waived his statutory right to pursue a merits determination on his
combined disability-retirement application.
{¶ 31} SERS did not act in an unreasonable, arbitrary, or unconscionable
manner by refusing to address the merits of Gill’s application for combined
disability-retirement benefits. SERS correctly concluded that it lacked authority
to proceed on Gill’s application for combined benefits after Gill had effectively
abandoned that application by requesting and receiving independent benefits
based solely on his PERS service. Moreover, Gill did not meet the five-year
service requirement to request independent benefits from SERS.
Remaining Claim
{¶ 32} SERS next claims that the court of appeals erred in determining
which of Gill’s employment positions is to be the focus of a disability
determination in a combined-benefits case. The remaining claim is moot,
however, because of our disposition of SERS’s first claim. This result is
consistent with our well-settled precedent that we will not indulge in advisory
opinions. State ex rel. Davis v. Pub. Emps. Retirement Bd., 120 Ohio St.3d 386,
2008-Ohio-6254, 899 N.E.2d 975, ¶ 43.
Conclusion
{¶ 33} Therefore, because SERS did not abuse its discretion by refusing
to make a merits determination on Gill’s appeal from the initial denial of his
combined disability-retirement application when the retirement system lacked
authority to do so, the court of appeals erred in granting the writ of mandamus.
Accordingly, we reverse the judgment of the court of appeals and deny the writ.
Judgment reversed
and writ denied.
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MOYER, C.J., and O’CONNOR, LANZINGER, and CUPP, JJ., concur.
PFEIFER, LUNDBERG STRATTON, and O’DONNELL, JJ., dissent.
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LUNDBERG STRATTON, J., dissenting.
{¶ 34} Ohio Adm.Code 3309-1-41(A)(1) requires the School Employees
Retirement System (“SERS”) to notify the applicant or benefit recipient by letter
of the retirement board’s decision whether to grant an appeal. Nearly three and a
half years after Gill’s SERS disability-retirement appeal was heard by the SERS
retirement board, Gill still has not received the written notice of SERS’s decision
on his appeal.
{¶ 35} The majority argues that because the statutes are silent on this
issue, we must accord SERS deference in interpreting the pertinent legislation.
Yet, as a statutory entity, SERS can only act as expressly authorized by statute.
Cosby v. Cosby, 96 Ohio St.3d 228, 2002-Ohio-4170, 773 N.E.2d 516. As both
the magistrate and the court of appeals found, there is no statutory authority
supporting SERS’s claim that Gill’s application for combined disability-
retirement benefits with SERS was automatically “voided” after PERS approved
his independent disability-retirement benefit. Neither is there any case law
supporting this position.
{¶ 36} Further, the majority contends that Gill has waived his right to
pursue combined disability-retirement benefits under both PERS and SERS when
he opted to seek disability-retirement benefits solely from PERS without regard to
his SERS service time. I disagree. Gill attempted to follow the instructions given
to him by both PERS and SERS in filing his application for combined disability-
retirement benefits. After hearing nothing for several months from SERS, Gill
had little choice but to pursue his retirement-disability benefits under PERS.
{¶ 37} If SERS’s position denying disability-retirement benefits is
reversed (a strong probability given that PERS found disability on the same set of
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facts), the original application for combined disability-retirement benefits would
be reinstated, and PERS has indicated that it is willing to combine and administer
the benefits pursuant to statute.
{¶ 38} More important, PERS did not file any objections to the
magistrate’s decision, nor did PERS join in the appeal to this court. Rather, PERS
stated in a December 9, 2005 letter that it was willing to administer Gill’s
combined benefits should SERS find Gill disabled. In my view, SERS has no
standing to assert any position on behalf of PERS.
{¶ 39} Today’s decision is, in my opinion, unsupported by the governing
statutes and contrary to the public policy allowing combining disability-retirement
benefits under two or more of the three retirement systems. R.C. 145.37(B)
(PERS), 3307.57(B) (State Teachers Retirement System) and 3309.35(B) (SERS).
The majority robs Gill of an option I believe he was intended to have. Nor is this
decision supported by any legal authority. By this ruling, we have created a new
trap for disabled employees. Accordingly, I respectfully dissent and would affirm
the judgment of the court of appeals and grant the writ of mandamus.
PFEIFER and O’DONNELL, JJ., concur in the foregoing opinion.
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Thomas P. O’Donnell & Associates and Thomas P. O’Donnell, for
appellee.
Richard Cordray, Attorney General, and Todd A. Nist, Assistant Attorney
General, for appellant.
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