Kaser v. PERS ( 2022 )

498
Argued and submitted June 12, 2020, affirmed February 9, 2022
Nancy Johnston KASER,
Plaintiff-Appellant,
v.
PUBLIC EMPLOYEES RETIREMENT SYSTEM,
State of Oregon,
Defendant-Respondent.
Marion County Circuit Court
18CV07592; A170559
506 P3d 1134
In this appeal arising out of a challenge to a final order in an other than con-
tested case, petitioner asserts that the trial court erred in affirming the determi-
nation by the Public Employees Retirement System (PERS) regarding the amount
of petitioner’s creditable service for purposes of her retirement benefits calcu-
lations. Petitioner argues that PERS erroneously interpreted ORS 238.450(4),
which provides, in part, that PERS shall “determine the accuracy of the disputed
information” provided to it by petitioner’s employer. Petitioner contends that the
statute requires PERS to take greater investigative measures than it took in this
case. PERS responds that it did not err in interpreting the statute. Held: The
text, context, and legislative history of ORS 238.450(4) contradict petitioner’s
view that the statute requires a more robust investigation than PERS undertook.
Accordingly, PERS did not erroneously interpret ORS 238.450(4) and therefore
the trial court did not err in upholding the agency’s final order.
Affirmed.
Sean E. Armstrong, Judge.
Jon Weiner argued the cause for appellant. On the briefs
was Sharia Mayfield.
Robert M. Wilsey argued the cause for respondent. On the
brief were Ellen F. Rosenblum, Attorney General, Benjamin
Gutman, Solicitor General, and Judy C. Lucas, Assistant
Attorney General.
Before Ortega, Presiding Judge, and Shorr, Judge, and
Powers, Judge.
POWERS, J.
Affirmed.
Cite as 317 Or App 498 (2022) 499
POWERS, J.
In this appeal arising out of a challenge to a final
order in an other than contested case, petitioner asserts,
among other arguments, that the trial court erred in affirm-
ing the determination by the Public Employees Retirement
System (PERS) that petitioner’s creditable service for pur-
poses of her retirement benefits calculations was 29 years
and 10 months. As explained below, we conclude that the
trial court did not err in concluding that PERS complied
with the requirement in ORS 238.450(4) to “determine the
accuracy of the disputed information” provided to PERS
by petitioner’s employer and we reject petitioner’s remain-
ing arguments without written discussion. Accordingly, we
affirm.
Petitioner appeals from the trial court’s judgment as
provided by ORS 183.500.1 Our function under ORS 183.500
“is to determine whether the circuit court correctly applied
the standard of review under ORS 183.484.” Hoekstre v.
DLCD, 249 Or App 626, 634, 278 P3d 123, rev den, 352
Or 377 (2012). Under ORS 183.484(5)(a), the circuit court
reviews an order to determine if “the agency has erroneously
interpreted a provision of law,” and under ORS 183.484(5)(c),
the court reviews for whether the agency order is “supported
by substantial evidence in the record.” Thus, as a practical
matter, we review—as the circuit court did—to determine
whether PERS erred in construing ORS 238.450(4). See
G.A.S.P. v. Environmental Quality Commission, 198 Or App
182, 187, 108 P3d 95, rev den, 339 Or 230 (2005) (explain-
ing our standard of review). In reviewing an order for sub-
stantial evidence, we review “the record created in the cir-
cuit court, and do not hold another trial-type hearing” like
the one held in the circuit court. See Querbach v. Dept. of
Human Services, 308 Or App 131, 134, 480 P3d 1030 (2020),
rev allowed, 368 Or 138 (2021) (describing the difference
between our role and the circuit court’s role when reviewing
a challenge to an agency order).
1
ORS 183.500 provides:
“Any party to the proceedings before the circuit court may appeal from
the judgment of that court to the Court of Appeals. Such appeal shall be
taken in the manner provided by law for appeals from the circuit court in
suits in equity.”
500 Kaser v. PERS
The facts relevant to our discussion are undisputed.
Petitioner worked at the Oregon State Hospital, a division of
the Oregon Health Authority (OHA), and, in early 2015, took
several leaves of absence. In mid-2016, petitioner retired
from OHA. After petitioner retired, PERS adjusted peti-
tioner’s creditable service by removing four months based
on information provided by OHA that showed that she was
not entitled to creditable service during her 2015 leaves of
absence. In a letter dated July 20, 2016, PERS notified peti-
tioner of that adjustment via an eligibility review, which
petitioner was entitled to challenge in an administrative
appeal. The next day on July 21, PERS notified petitioner
that she had 29 years and 8 months of creditable service
via a Notice of Entitlement, which petitioner was entitled to
dispute within 240 days. Petitioner first challenged PERS’s
eligibility-review determination, asserting that OHA had
failed to apportion her paid time off in the manner that she
had requested, which would have allowed her to earn cred-
itable service while on leave. PERS reviewed the matter by
comparing paystubs that petitioner provided with OHA’s
reports and by confirming with OHA that petitioner was in
an unpaid status during her leaves of absence. Based on that
information, PERS adhered to its earlier determination that
petitioner did not qualify for creditable service during her
2015 leave periods. Petitioner did not request a contested
case hearing in response to that determination.
Meanwhile, unrelated to petitioner’s challenge, PERS
added two additional months of creditable service from a
period unrelated to the 2015 leave. In February 2017, PERS
notified petitioner that she had 29 years and 10 months of
creditable service.
In March 2017, petitioner timely disputed the Notice
of Entitlement dated July 21, 2016, and the determination
that she had 29 years and 10 months of creditable service.
PERS reviewed the matter and ultimately issued a final
order, confirming its determination related to petitioner’s
2015 leave and concluding that petitioner’s creditable ser-
vice was 29 years and 10 months.
Petitioner then sought judicial review of the final
order pursuant to ORS 183.484, asserting that PERS erred
Cite as 317 Or App 498 (2022) 501
in removing four months of service credit, thereby reducing
her creditable service to 29 years and 10 months. Before the
circuit court, petitioner argued that PERS had a statutory
duty under ORS 238.450 to investigate and resolve the dis-
pute between petitioner and OHA as to how her 2015 leave
was recorded. PERS responded by analogizing its function
to that of a third-party administrator and argued that ORS
238.450 allows it to communicate with PERS-participating
employers to either affirm the accuracy of the information
provided by the employer or have the employer provide cor-
rected information for PERS to recalculate the retirement
benefits. The trial court agreed with PERS’s position and
affirmed the agency’s final order. This timely appeal followed.
Before this court, the parties renew their arguments.
Petitioner argues that the phrase “the system shall deter-
mine the accuracy of the disputed information” in ORS
238.450(4) means that PERS must take greater investi-
gative measures than it took in this case, and that PERS
cannot determine the accuracy of disputed information by
merely relying on an employer’s assurance that it had trans-
mitted full and correct information. Emphasizing the inves-
tigative aspect of the word “determine,” petitioner argues
that, if PERS found information provided by the employee to
be more credible than information provided by the employer,
then PERS could rely on the employee’s information to allow
PERS to make corrections to the benefit calculation. PERS
responds that the trial court correctly ruled that ORS
238.450 does not authorize PERS to resolve substantive
disputes between employers and employees and that PERS
lacks authority to alter employer-provided information.
PERS argues that, although ORS 238.450(4) requires it to
“determine the accuracy of the disputed information,” the
statute does not direct PERS on how to make that determi-
nation. According to PERS, ORS 238.450(4) does not require
it to investigate the accuracy of payroll records whenever
an employee raises a dispute over how the employer coded
the payroll information; rather, PERS reiterates that it is
permitted to communicate with the employer to affirm the
accuracy of the information provided or to have the employer
provide correct information that PERS then uses to recalcu-
late the retirement benefits.
502 Kaser v. PERS
Thus, as framed by the parties’ arguments, we must
determine whether PERS erroneously interpreted ORS
238.450(4), which provides, in part, that PERS shall “deter-
mine the accuracy of the disputed information” provided to it
by petitioner’s employer. When a disputed statutory term is
part of a regulatory framework administered by an agency,
we first determine whether the term is an “exact” term, an
“inexact” term, or a “delegative” term. See Blachana, LLC v.
Bureau of Labor & Industries, 354 Or 676, 687, 318 P3d 735
(2014) (so stating). The parties implicitly assume, and we
agree, that the relevant phrase in ORS 238.450(4)—“deter-
mine the accuracy of the disputed information”—is an “inex-
act term.” As the Supreme Court has explained, “inexact”
terms “communicate a complete policy statement, but the
words used may be imprecise, requiring further interpre-
tation.” Blachana, LLC, 354 Or at 687; see also Springfield
Education Assn. v. School Dist., 290 Or 217, 224-28, 621
P2d 547 (1980) (summarizing the “inexact term” category of
statutory terms). As an “inexact term,” the interpretation by
PERS is not entitled to deference on review, Blachana, LLC,
354 Or at 687, and we turn to the familiar method of stat-
utory interpretation set out in State v. Gaines, 346 Or 160,
171-72, 206 P3d 1042 (2009), to ascertain the legislature’s
intent.
We begin with the statute’s text to analyze the
meaning of the disputed term, “pay[ing] careful attention to
the exact wording of the statute.” DCBS v. Muliro, 359 Or 736,
745, 380 P3d 270 (2016) (internal quotation marks omitted).
If the statute does not define the disputed term, we apply
the ordinary tools of statutory construction to determine the
term’s intended meaning. Id. If the legislature has not defined
a term, and nothing suggests that the legislature intended the
term to have a specialized definition, we look to the ordinary
meaning of the term for guidance regarding what “the legis-
lature would naturally have intended.” Id. at 746. We often
consult dictionary definitions of the term, on the assumption
that, if the legislature did not give the term a specialized
definition, the dictionary definition reflects the meaning that
the legislature would have intended. Id. We do not, however,
interpret statutes solely on the basis of dictionary definitions;
instead, we examine word usage in context to determine
Cite as 317 Or App 498 (2022) 503
which among competing definitions is the one that the legis-
lature more likely intended. Id. If the immediate context does
not clarify the meaning of a word or term, we consider how the
term is used in other related statutes because, “in the absence
of evidence to the contrary, we ordinarily assume that the
legislature uses terms in related statutes consistently.” State
v. Cloutier, 351 Or 68, 99, 261 P3d 1234 (2011).
Here, we examine the meaning of the word “deter-
mine,” as used in ORS 238.450(4), beginning with the perti-
nent text. ORS 238.450 provides, in part:
“(2) A member of the system may dispute the accuracy
of the information used by the system in making the com-
putation only by filing a written notice of dispute with the
system[.]
“* * * * *
“(4) Upon receiving a notice of dispute under subsec-
tion (2) of this section, the system shall determine the
accuracy of the disputed information and make a written
decision either affirming the accuracy of the information
and computation based thereon or changing the computa-
tion using corrected information. The system shall provide
to the member a copy of the decision and a written expla-
nation of any applicable statutes and rules. The member
is entitled to judicial review of the decision as provided in
ORS 183.484 and rules of the board consistent with appli-
cable statutes.”
The legislature has not defined the term “determine,” and
nothing in the text or context of ORS 238.450 suggests that
the legislature intended the term “determine” to have a spe-
cialized definition. We therefore look to the ordinary mean-
ing of the term.
The term “determine” commonly means:
“1 a : to fix conclusively or authoritatively * * * b : to set-
tle a question or controversy about : decide by judicial sen-
tence * * * c : to come to a decision concerning as the result
of investigation or reasoning * * * d : to settle or decide by
choice of alternatives or possibilities[.]”
Webster’s Third New Int’l Dictionary 616 (unabridged ed
2002) (emphasis omitted). Alone, those definitions do not
504 Kaser v. PERS
clarify the legislature’s intended meaning, as some of the
definitions relate to a decision from an investigation while
others connote decision-making, without reference to an
investigation.
To assess which among those competing definitions
the legislature intended, we consider the term “determine”
in context. As used within the phrase “the system shall
determine the accuracy of the disputed information,” any
of the four dictionary definitions could apply. Because the
immediate context does not clarify the meaning of “deter-
mine,” we consider how the term is used in other related
statutes.
As context for ORS 238.450, the neighboring stat-
utes—ORS 238.445 to 238.480—use “determine” in a man-
ner that is incompatible with petitioner’s proposed inter-
pretation. That is, as used in the neighboring statutes,
“determine” is not synonymous with a robust investigation.
For example, the statute governing court judgments and
payment of benefits to alternate payees provides that the
Public Employees Retirement Board (PERB) “shall adopt
rules that provide for: * * * [t]he establishing of criteria to
determine whether domestic relations judgments, orders
and agreements comply with this section[.]” ORS 238.465
(3)(b). The estimated benefit payments statute provides that
PERB “shall continue to mail estimated payments * * * until
such time as the correct amount of the monthly payment is
determined.” ORS 238.455(2). The manner in which these
neighboring statutes use the term “determine” is inconsis-
tent with petitioner’s interpretation that “determine” nec-
essarily entails a robust investigation. As used in those
statutes, “determine” is better understood, as PERS’s inter-
pretation suggests, to denote decision-making, in which
investigation may be incidental but does not play a primary
role. As was the case here, PERS made a decision regarding
petitioner’s creditable service after PERS confirmed with
OHA that OHA had sent complete information and that
OHA sent the information that it intended to transmit.
The use of “determine” in other statutes within
ORS chapter 238 also contradicts petitioner’s view that
ORS 238.450(4) necessitates a more robust investigation
Cite as 317 Or App 498 (2022) 505
than PERS undertook. See, e.g., ORS 238.618 (“[PERB] may
deny or terminate participation by an employer in [PERS],
and may deny or terminate membership in the system for
any employee, if [PERB] determines that allowing partici-
pation * * * would cause the system or the Public Employees
Retirement Fund to lose qualification[.]”); ORS 238.378(1)
(“The Department of Revenue shall provide to [PERB]
such information on Oregon personal income tax returns
as [PERB] deems necessary to determine whether the pay-
ments made to the person * * * are subject to Oregon personal
income tax[.]”); ORS 238.608 (“If [PERB] determines that
members in the categories * * * have a life expectancy that
is substantially shorter than the life expectancy of members
of the system generally, [PERB] shall adopt and use sepa-
rate actuarial equivalency factor tables * * * for the purpose
of computing the payments[.]”). As those statutes illustrate,
“determine” is better understood to denote decision-making,
to which investigation may be incidental. Finally, we have
reviewed the legislative history and conclude that it con-
tains no insight into the interpretative issue. Accordingly,
because PERS did not erroneously interpret the statute, the
trial court did not err in upholding the agency’s final order.
Affirmed.