Wood v. State of New Mexico Educational Retirement Board , 149 N.M. 455 ( 2010 )

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New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 13:09:20 2011.04.27
Certiorari Denied, January 27, 2011, No. 32,792
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2011-NMCA-020Filing Date: November 10, 2010
Docket No. 29,680
DIANE WOOD,
Petitioner-Appellee,
v.
STATE OF NEW MEXICO
EDUCATIONAL RETIREMENT
BOARD,
Respondent-Appellant.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Daniel A. Sanchez, District Judge
Atkinson & Kelsey, P.A.
Thomas C. Montoya
Albuquerque, NM
for Appellee
Gary K. King, Attorney General
Andrea R. Buzzard, Assistant Attorney General
Santa Fe, NM
for Appellant
OPINION
VANZI, Judge.
{1} The State of New Mexico Educational Retirement Board (ERB) appeals from an
order of the district court directing the ERB to pay Petitioner the unpaid accumulated interest
in her deceased husband’s account under the Educational Retirement Act (the Act), NMSA
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1978, Sections 22-11-1 to -53 (1967, as amended through 2010) at the time of his retirement.
The district court concluded that the ERB erred when it denied Petitioner the interest in the
account and reversed the ERB’s administrative order. The sole issue on appeal is whether
the 1999 amendment to Section 22-11-29(E) of the Act should be applied retroactively
because it was simply a “clarification” of the statute. We hold that the amendment to the
statute applies prospectively and reverse the district court.
BACKGROUND
{2} The following facts are undisputed. Petitioner Diane Wood is the widow of Howard
N. Rabinowitz. Mr. Rabinowitz was an employee under the Act and made regular
contributions to his retirement plan. In January 1998, Mr. Rabinowitz retired. When an
employee under the Act retires, he can choose to receive retirement benefits under one of
three provisions of the Act. Under Options B and C of Section 22-11-29(A), a retiree
receives a reduced annuity that continues upon death to the retiree’s designated beneficiary.
Mr. Rabinowitz did not select either Option B or C but instead elected to receive his benefits
under Section 22-11-30 of the Act. Section 22-11-30 is a single life annuity, which pays a
higher monthly amount and which terminates upon a retiree’s death.
{3} Mr. Rabinowitz received pension payments for seven months until his death on July
11, 1998. Because he died before receiving benefits equaling the total amount of his
contributions plus interest, Mr. Rabinowitz’s designated refund beneficiary was entitled to
the balance of his accumulated contributions pursuant to the Act. Section 22-11-29(E). The
ERB paid Petitioner the principal amount of retirement contributions left in Mr.
Rabinowitz’s account to which she was entitled, not including interest.
{4} On September 23, 1998, Petitioner wrote a letter to the ERB requesting that the ERB
pay the interest amount to her to which she claimed she was entitled. The deputy director
of the ERB responded that, based on ERB policy, which mirrored the applicable provision
of the Act in effect at the time, § 22-11-29(E), Petitioner was not entitled to the interest
accumulated in Mr. Rabinowitz’s account.
{5} Subsequently, in June 1999, the Legislature amended Section 22-11-29(E) to require
the payment of accumulated interest to designated beneficiaries at the average rate earned
by the fund during the preceding five fiscal years. The statute was amended again in 2003
and still requires the payment of accumulated interest but at a rate set by the ERB rather than
at the previous average rate earned by the fund.
{6} Petitioner wrote to the ERB in September 2000 requesting that the ERB apply the
1999 amendment to Section 22-11-29(E) to pay her the claimed share of the interest in Mr.
Rabinowitz’s account at the time of his retirement. Petitioner asserted that, because the 1999
amendment was merely a clarification of the predecessor law, it should operate retroactively
to require that the ERB pay interest to her. The ERB disagreed and responded that its
interpretation of the statute was that it applied prospectively only and that the Legislature
did not intend that someone in Petitioner’s shoes should receive interest on accumulated
contributions. Petitioner filed suit against the ERB in the district court.
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{7} In Wood v. State of New Mexico Educational Retirement Board, No. 29,699, slip op.
at 2 (N.M. Sup. Ct. Apr. 10, 2007), the New Mexico Supreme Court in a decision noted that
a question of statutory construction exists as to whether the legislative amendment applies
to Petitioner. However, the Court determined that the ERB should first decide the question
by way of an administrative appeal instead of through the district court because the issue
involves “matters of fact and policy that are peculiarly within the scope of the ERB’s
statutory function.” Pursuant to the decision, Petitioner requested an appeals hearing.
{8} At the administrative hearing, Petitioner again argued that amendment of the statute
was for “clarification” purposes and should be given retroactive effect. The hearing officer
disagreed, and in his recommended decision filed November 12, 2007, concluded that “the
plain language of the original statute does not require interest and the plain language of the
amended statute does not expressly provide for retroactive application to [Petitioner] and
those similarly situated, and there is no requirement to go beyond the plain language of the
statute in resolving the administrative appeal.” The hearing officer also noted that the fiscal
impact of retroactive application was never presented to the Legislature, and concluded that
this was because of the prospective interpretation of the statute. The hearing officer’s
decision was approved by the ERB in an order dated February 26, 2008.
{9} Pursuant to Rule 1-075 NMRA and the decision of the Supreme Court, Petitioner
filed a petition for writ of certiorari in the First Judicial District Court seeking review of the
ERB’s decision and order. The district court reversed the ERB’s decision, finding that the
right to interest implicitly existed in the original version of the statute. As a result, the
district court found that the 1999 amendment was “merely a clarification of the predecessor
law and that the provision should therefore have been applied retroactively.” This appeal
timely followed.
STANDARD OF REVIEW
{10} We granted the ERB’s petition for writ of certiorari to review the district court’s
decision pursuant to Rule 12-505(J) NMRA. It is well settled that on certiorari in an
administrative appeal of this type, “[w]e ‘conduct the same review of an administrative order
as the district court sitting in its appellate capacity, while at the same time determining
whether the district court erred in the first appeal.’” Gallup Westside Dev., LLC v. City of
Gallup, 2004-NMCA-010, ¶ 10, 135 N.M. 30, 84 P.3d 78 (quoting Rio Grande Chapter of
the Sierra Club v. N.M. Mining Comm’n, 2003-NMSC-005, ¶ 16, 133 N.M. 97, 61 P.3d
806). Under this standard, “we independently review the entire record of the administrative
hearing to determine whether the [ERB’s] decision was arbitrary and capricious, not
supported by substantial evidence, or otherwise not in accordance with law.” Martinez v.
N.M. State Eng’r Office, 2000-NMCA-074, ¶ 31, 129 N.M. 413, 9 P.3d 657; see Rule 1-
075(R). Finally, we review any legal interpretations of the district court de novo. Gallup
Westside, 2004-NMCA-010, ¶ 11.
DISCUSSION
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{11} The ERB argues that the district court erred in ruling that the 1999 amendment to
Section 22-11-29(E) was merely a clarification of the law and that the statute should be
given retroactive application. We begin with a discussion of the statute as it existed at the
time of Mr. Rabinowitz’s retirement and death. We then turn to the 1999 amendment to
determine whether it has prospective or retroactive application.
The Pre-1999 Version of Section 22-11-29(E) Did Not Provide for Interest
{12} Interpreting a statute is a question of law; therefore, our review is de novo. Meyers
v. W. Auto, 2002-NMCA-089, ¶ 13, 132 N.M. 675, 54 P.3d 79. Our goal is to give primary
effect to the intent of the Legislature. Id. Our courts have repeatedly stated that the guiding
principle in statutory construction requires that we look to the wording of the statute and
attempt to apply “the plain meaning rule, recognizing that when a statute contains language
which is clear and unambiguous, we must give effect to that language and refrain from
further statutory interpretation.” Truong v. Allstate Ins. Co., 2010-NMSC-009, ¶ 37, 147
N.M. 583, 227 P.3d 73 (alteration omitted) (internal quotation marks and citation omitted);
State v. Johnson, 2009-NMSC-049, ¶ 10, 147 N.M. 177, 218 P.3d 863 (“The primary
indicator of legislative intent is the plain language of the statute.”). Moreover, unless the
Legislature expresses a contrary intent, we are to give statutory words “their ordinary
meaning,” and this Court is prohibited from reading “into a statute . . . language which is not
there, particularly if it makes sense as written.” Johnson v. N.M. Oil Conservation Comm’n,
1999-NMSC-021, ¶ 27, 127 N.M. 120, 978 P.2d 327 (internal quotation marks and citation
omitted). The Legislature itself has codified the plain meaning rule in the Uniform Statute
and Rule Construction Act: “The text of a statute or rule is the primary, essential source of
its meaning.” NMSA 1978, § 12-2A-19 (1997).
{13} As we have noted, when Mr. Rabinowitz passed away in July 1998, he had not
received retirement benefits in an amount equal to the amount of contributions that he had
paid into the fund. Consequently, and consistent with its long-standing policy and
interpretation of Section 22-1-29(E), the ERB determined that Mr. Rabinowitz’s designated
refund beneficiary was entitled to the difference between the amount of his contributions to
the fund and the amount of benefits paid to him, less interest. At the time, Section 22-11-
29(E) (1993) provided:
In the case of death of a retired member who did not elect either Option B or
C and before the benefits paid to him have equaled the amount of his
accumulated contributions to the fund, the balance shall be paid to the
beneficiary designated in writing to the director by the member or, if no
beneficiary was designated, to the estate of the member.
{14} We begin with the plain language of Section 22-11-29(E) to ascertain the legislative
intent. We first observe that nowhere in the plain language of Section 22-11-29(E) does it
explicitly state that interest is to be paid to a retiree’s designated beneficiary. Indeed, neither
the parties nor the district court dispute this fact.
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{15} Although the district court acknowledged that the plain language in Section 22-11-
29(E) as it existed in 1998 did not provide for the payment of interest, it nevertheless found
that such payment is implicitly required in the statute. Specifically, the district court
concluded that “interrelated legislative histories indicate that a right to interest implicitly
existed before Subsection E of Section 22-11-29 was amended in 1999.” The court first
compared the Educational Retirement Act, Sections 22-11-1 to -53, the Public Employees
Retirement Act (PERA), NMSA 1978, Sections 10-11-1 to -142 (1987, as amended through
2010), the Judicial Retirement Act (JRA), NMSA 1978, Section 10-12B-2(M) (2003)
(defining member contribution to include interest), and the Magistrate Retirement Act
(MRA), NMSA 1978, Section 10-12C-2(J) (2003) (also defining member contribution to
include interest) (collectively, PERA and PERA-related statutes). It then reasoned that,
because some ERA statutes and all of the PERA and PERA-related statutes have express
provisions for paying the balances of accumulated member contributions, including interest,
the Legislature must have intended—but presumably forgot—to allow the payment of
interest under Section 22-11-29(E) as well. We are not persuaded by the district court’s
analysis.
{16} As our precedents dictate, only where a plain language analysis does not provide a
clear interpretation can we “look to other statutes in pari materia in order to determine
legislative intent.” United Rentals Nw., Inc. v. Yearout Mech., Inc., 2010-NMSC-030, ¶ 22,
148 N.M. 426, 237 P.3d 728 (internal quotation marks and citation omitted). This approach
“has the greatest probative force in the case of statutes relating to the same subject matter
passed at the same session of the Legislature.” State v. Davis, 2003-NMSC-022, ¶ 12, 134
N.M. 172, 74 P.3d 1064.
{17} Our reading of Section 22-11-29(E) leads to the inexorable conclusion that although
the statute does not expressly prohibit the payment of interest, the plain language is clear and
unambiguous about whether the balance of accumulated contributions includes the payment
of interest. It does not. Further, the ERB’s long-standing method of calculating benefits
under Section 22-11-29(E)—i.e., subtracting the amount in pension benefits paid by the ERB
to a member before his death, from the member’s total contributions to the fund—is a
reasonable and common sense construction of the statute as it is written. There is no
indication that the payment of interest is part of the statutory requirement, and we cannot
read into the statute any meaning other than what is stated in the plain language.
{18} Moreover, we note that the Legislature has expressly included the right to interest
payment in other statutory provisions of the Act. See, e.g., § 22-11-15(A) (stating that a
member is entitled to a refund of contributions plus interest); § 22-11-29(D) (stating that a
surviving beneficiary of deceased member who has not retired may elect to receive
contributions plus interest); § 22-11-29(G) (stating that a surviving beneficiary, or if there
is none, the estate of deceased member with less than five years service credit is entitled to
contributions plus interest). This Court assumes that the Legislature was fully aware of the
language in all of the Act’s statutory provisions when it enacted Section 22-11-29(E) and
that it specifically chose not to require the payment of accumulated interest under the
provision at issue. See Jicarilla Apache Nation v. Rodarte, 2004-NMSC-035, ¶ 15, 136
N.M. 630, 103 P.3d 554 (“We presume that the Legislature acts with full knowledge of, and
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consistent with, existing legislation.”). Importantly, we are mindful that we should not read
language into the statute simply because we believe the Legislature would have wanted the
language there but for some reason forgot to add it.
{19} We conclude that there was no ambiguity in Section 22-11-29(E) prior to the 1999
amendment. Consistent with our rules of statutory construction and case law, therefore, we
refrain from any further statutory interpretation and apply the language in the statute as
written.
The 1999 and 2003 Amendments to Section 22-11-29(E) Have Prospective Application
Only
{20} Having concluded that the pre-1999 version of Section 29-11-29(E) plainly did not
provide for payment of interest, we now turn to the 1999 amendment to the Act. The ERB
contends that the district court erred in finding that the amendment is a clarification of the
original statute. Instead, the ERB argues that the amendment is a change of law requiring
prospective application only. We agree.
{21} As we have noted, interpretation of a statute is a question of law that we review de
novo. Meyers, 2002-NMCA-089, ¶ 13. “[T]he general rule is that statutes apply
prospectively unless the Legislature manifests clear intent to the contrary.” Gallegos v.
Pueblo of Tesuque, 2002-NMSC-012, ¶ 33, 132 N.M. 207, 46 P.3d 668; see also NMSA
1978, § 12-2A-8 (1997) (“A statute or rule operates prospectively only unless the statute or
rule expressly provides otherwise or its context requires that it operate retrospectively.”).
Our Supreme Court has further provided that the adoption of a statutory amendment “is
presumptive evidence of a legislative intention to change existing law.” Rutherford v.
Chaves County, 2003-NMSC-010, ¶ 21, 133 N.M. 756, 69 P.3d 1199. On the other hand,
a statute or regulation is considered retroactive if it impairs vested rights acquired under
prior law or requires new obligations, imposes new duties, or affixes new disabilities to past
transactions. See Coleman v. United Eng’rs & Constructors, Inc., 118 N.M. 47, 52, 878 P.2d
996, 1001 (1994).
{22} Section 22-11-29(E) was amended in 1999 by House Bill 353. The amended statute
provided:
In the case of death of a retired member who did not elect either Option B or
C and before the benefits paid to him have equaled the sum of his
accumulated contributions to the fund plus accumulated interest at the
average rate earned by the fund during the preceding five fiscal years, the
balance shall be paid to the beneficiary designated in writing to the director
by the member or, if no beneficiary was designated, to the estate of the
member.
(Emphasis added.)
{23} The statute was subsequently amended again in 2003 and now reads:
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In the case of death of a retired member who did not elect either Option B or
C of Subsection A of this section and before the benefits paid to him have
equaled the sum of his accumulated contributions to the fund plus
accumulated interest at the rate set by the board, the balance shall be paid to
the beneficiary designated in writing to the director by the member or, if no
beneficiary was designated, to the estate of the member.
Section 22-11-29(E) (emphasis added).
{24} The 2003 amendment is not at issue in this case. However, we include both
amendments here to highlight the fact that the Legislature did not expressly provide in either
amendment that the newly enacted right to interest payment was to have retroactive
application. Again, neither the parties nor the district court dispute this fact.
{25} Nevertheless, relying on Swink v. Fingado, 115 N.M. 275, 284, 850 P.2d 978, 987
(1993), the district court found that the 1999 amendment to Section 22-11-29(E) merely
clarified existing law and, therefore, should have retroactive application. See Swink, 115
N.M. at 284-85, 850 P.2d at 987-88 (stating that “a statute which clarifies existing law may
properly be regarded as having retroactive effect”). This Court has explained that a
clarification occurs when, rather than amending an existing law to provide a change, a
statutory provision is amended to clarify what was previously implicit in the law. See Piña
v. Gruy Petroleum Mgmt. Co., 2006-NMCA-063, ¶ 22, 139 N.M. 619, 136 P.3d 1029.
{26} As we have discussed in the previous section, the district court looked to other
statutorily-created retirement provisions to find that the right to interest in Section 22-11-
29(E) implicitly existed prior to the 1999 amendment. Based on that implicit right, the
district court stated that it could not “read an unwritten intention into the statutory scheme,”
but that in this case, “the intent to clarify an existing right by enacting the 1999 amendment
is unavoidable when the amendment to Section 22-11-29[(E)] is read together with sister
provisions that preceded the 1999 amendment.” Therefore, the district court concluded, this
“clarification” must be given retroactive effect. For the reasons we have discussed above,
we do not agree with the district court’s characterization of the pre-1999 version of the
statute. Rather, we determine that the 1999 amendment added a new requirement to the
statute—the payment of accumulated interest. This new requirement and the explanation of
how interest was to be calculated was plainly not inherent in the pre-amendment statute.
{27} Again, we presume that the Legislature, when it enacted the 1999 and 2003
amendments, was aware that other provisions of the ERA provided for payment of interest.
Had the Legislature intended to simply correct an existing oversight in the law, or clarify
what the law was always meant to say, it should have expressly provided for retroactive
application in the amendment’s text. Herrera v. Quality Imps., 1999-NMCA-140, ¶ 8, 128
N.M. 300, 992 P.2d 313 (stating that the “Legislature is presumed to know of existing law
when it enacts legislation” (internal quotation marks and citation omitted)).
{28} Given the Legislature’s presumed knowledge of our canons of statutory
interpretation, its silence on the question of retroactivity with regard to the 1999 amendment,
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and our determination that no implicit right to interest exists in the pre-1999 version of
Section 22-11-29(E), we conclude that the amendment must apply prospectively only.
CONCLUSION
{29} We hold that the 1999 amendment to Section 22-11-29(E) cannot be applied
retroactively. We reverse the decision of the district court.
{30} IT IS SO ORDERED.
______________________________________
LINDA M. VANZI, Judge
WE CONCUR:
______________________________________
JAMES J. WECHSLER, Judge
______________________________________
MICHAEL D. BUSTAMANTE, Judge
Topic index for Wood v. N.M. Educ. Ret. Bd., Docket No. 29,680
AE APPEAL AND ERROR
AE-SR Standard of Review
EL EMPLOYMENT LAW
EL-HB Health, Pension, and Retirement Benefits
ST STATUTES
ST-RE Retroactivity
ST-RC Rules of Construction
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