Waterfall v. Ret. Bd. & Utah Ret. Sys. , 443 P.3d 1274 ( 2019 )

2019 UT App 88THE UTAH COURT OF APPEALS
REED SCOTT WATERFALL,
Petitioner,
v.
RETIREMENT BOARD AND
UTAH RETIREMENT SYSTEMS,
Respondents.
Opinion
No. 20180192-CA
Filed May 23, 2019
Original Proceeding in this Court
Michael V. Houtz and Keith M. Backman, Attorneys
for Petitioner
David B. Hansen and Erin G. Christensen, Attorneys
for Respondents
JUDGE KATE APPLEBY authored this Opinion, in which
JUDGES RYAN M. HARRIS and DIANA HAGEN concurred.
APPLEBY, Judge:
¶1 Reed Scott Waterfall seeks judicial review of Utah
Retirement Systems’ (URS) calculation of his benefits as a justice
court judge for South Ogden City (City) from 1992 to 2012. We
approve Utah State Retirement Board’s (Board) determination
that Waterfall was a part-time employee during the relevant
period.
Waterfall v. Retirement Board
BACKGROUND
¶2 Waterfall was employed as a justice court judge in the
City from 1992 to 2012.1 In April 2012, the city director of finance
reported to URS that “Judge Waterfall has always been
part-time” while working for the City (2012 Report). Based on
this representation, URS planned on calculating Waterfall’s
retirement benefits based on his part-time employment status
with the City.
¶3 Waterfall disputed the calculation of his benefits by filing
a request for board action in 2013. He argued that the part-time
determination was incorrect and he should have been
considered a full-time employee for the City. A hearing on the
issue was held in 2015. At the hearing, the hearing officer
considered the 2012 Report indicating Waterfall was part-time,
as well as a subsequent letter dated March 2015 (2015 Letter)
from the city manager (City Manager) indicating that Waterfall
actually worked full-time for the City. The hearing officer also
heard testimony from Waterfall on the issue. Based on the
evidence presented, the hearing officer issued findings of fact
and conclusions of law denying Waterfall’s request to be
considered a full-time employee for the City. The Board
approved the findings of fact and conclusions of law entered by
the hearing officer and denied Waterfall’s petition for
reconsideration.
¶4 In November 2016, Waterfall notified URS that he
retired. 2 Throughout 2016 and the beginning of 2017, Waterfall
communicated with URS regarding the calculation of his
retirement benefits. In 2017, Waterfall filed his retirement
1. During his career, Waterfall was also employed as a justice
court judge in Roy City and other jurisdictions.
2. Waterfall stopped working for the City in 2012. The record is
unclear from where Waterfall retired in 2016.
20180192-CA 2 2019 UT App 88Waterfall v. Retirement Board
application and attached the 2015 Letter, which stated he was a
full-time employee for the City. In response URS told Waterfall
that his benefit would be calculated based on the Board’s
determination that he was a part-time employee. Waterfall then
provided URS with a second letter dated January 2017 (2017
Letter), again signed by City Manager, “reaffirming” Waterfall
was a full-time employee for the City during the relevant period.
¶5 URS was unsure how to interpret the conflicting
information regarding Waterfall’s employment status and asked
the city attorney (City Attorney) for a response. City Attorney
notified URS that the City’s position was that the 2015 and 2017
letters from City Manager “should be withdrawn” and the 2012
Report should “be deemed the official response as to Mr.
Waterfall’s employment status.” Based on City Attorney’s
response and its own previous determination after a hearing that
Waterfall worked part-time for the City, URS calculated
Waterfall’s retirement benefits based on part-time employment.
¶6 In October 2017, Waterfall filed a second request for board
action challenging URS’s calculation of his benefits based on this
part-time employment certification. URS filed a motion to
dismiss arguing that res judicata barred Waterfall’s claim and
that he failed to establish he was a full-time employee. URS
argued Waterfall could not be considered full-time because City
Attorney’s letter indicated he was part-time and withdrew prior
letters indicating he was full-time. The hearing officer granted
the motion to dismiss. The Board affirmed the dismissal of
Waterfall’s petition.
¶7 Waterfall seeks judicial review of the Board’s dismissal of
his petition.
ISSUE AND STANDARD OF REVIEW
¶8 The issue under review is whether the Board properly
granted URS’s motion to dismiss on the ground that Waterfall
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did not meet the statutory requirements to be considered a
full-time employee of the City during the relevant period. 3 On
“review of an agency’s formal adjudicative proceedings, we treat
the Board’s dismissal of [Waterfall’s] petition as analogous to a
court’s dismissal of a complaint pursuant to a . . . motion for
failure to state a claim” under rule 12(b)(6) of the Utah Rules of
Civil Procedure. Adkins v. Board of Oil, Gas & Mining, 926 P.2d
880, 882 (Utah 1996) (quotation simplified). “Therefore, we grant
no particular deference to the Board’s legal conclusions.” Id.(quotation simplified). “[W]e accept all facts alleged as true, and
indulge all reasonable inferences in favor of the non-moving
party.” O’Hearon v. Hansen, 2017 UT App 214, ¶ 10, 409 P.3d 85(quotation simplified).
¶9 This case requires us to review the Board’s application of
relevant statutes in the Utah State Retirement and Insurance
Benefit Act. See Utah Code Ann. §§ 49-11-101 to -23-601
(LexisNexis 2015). “We review the Board’s application or
interpretation of a statute as a question of law under the
correction-of-error standard.” Whitaker v. Utah State Ret. Board,
2008 UT App 282, ¶ 10, 191 P.3d 814 (quotation simplified).
ANALYSIS
¶10 Waterfall argues his petition should not have been
dismissed because the City considered him a full-time employee
at the time of his retirement and URS had no authority to change
the certification. He contends URS was required to accept the
2015 Letter as the final certification from the City regarding his
employment status.
3. Waterfall also argues his petition should not have been
dismissed under res judicata. We do not reach this issue because
we approve the Board’s decision to dismiss Waterfall’s petition
on the alternative ground that he did not meet the statutory
requirements to be considered a full-time employee.
20180192-CA 4 2019 UT App 88Waterfall v. Retirement Board
¶11 Utah Code section 49-13-406 provides, “A justice court
judge who has service with more than one participating
employer shall be considered full-time by the office for a period
of service in which the judge is certified as full-time by: (i) a
participating employer; or (ii) the Administrative Office of the
Courts . . . .” Utah Code Ann. § 49-13-406(3)(a) (LexisNexis
2015). 4 Waterfall argues that the word “shall” in the statute binds
URS to accept the 2015 Letter as the certification of his
employment status for the City. He contends the 2017 Letter
from City Attorney is irrelevant because URS received the letter
after his retirement date. URS argues Waterfall lacks proper
certification of full-time employment because City Attorney
withdrew City Manager’s letters indicating he was a full-time
employee.
¶12 Utah Code section 49-11-607 addresses the problem that
arises when there are errors or disputes in an employee’s
records. After an employee retires, alterations, additions, and
cancellations of benefits are not allowed except under the
following circumstances: (1) if there are “[e]rrors in the records
or in the calculations of the office which result in an incorrect
benefit to any member,” (2) if there are “[e]rrors in the records or
calculation of a participating employer which result in an
incorrect benefit to a member,” or (3) “[i]f a dispute exists
between a participating employer and a member at the time of
the member’s retirement.” Id. § 49-11-607(1)–(4).
¶13 In this case, URS was presented with conflicting reports
about Waterfall’s employment status. Under section 49-11-607,
4. The statute does not make clear who is authorized to speak for
the judge’s “employer.” It also does not articulate guidelines for
what constitutes full-time and part-time employment. It may be
advisable for the legislature to specify exactly who is authorized
to speak for a justice court judge’s municipal employer in this
context, and to set out clear guidelines for what constitutes
full-time and part-time employment.
20180192-CA 5 2019 UT App 88Waterfall v. Retirement Board
URS may fix errors in, and resolve disputes about, the
calculation of benefits even after an employee retires. That is
what happened here. After URS contacted the City regarding the
conflicting reports, City Attorney responded and said the City’s
official response was that Waterfall was a part-time employee.
URS was thus able to correct the error and resolve the dispute
over whether Waterfall was a part-time or full-time employee.
¶14 Waterfall relies on Gottfredson v. Utah State Retirement
Board to support his position that benefits are fixed at retirement
and cannot be changed after that date. 808 P.2d 153 (Utah Ct.
App. 1991). In Gottfredson, the petitioner filed a retirement
application, then after his established retirement date had
passed, he learned about pending legislation that would increase
his benefit and tried to rescind his application. Id. at 154. This
court determined the Board properly refused his request
because, after the established retirement date had passed, “no
alteration, addition, or cancellation of [his] benefits could be
made.” Id. at 155 (citing the relevant provisions of the Utah
Code). But our decision in Gottfredson does not support
Waterfall’s position in this case. Again, while it is generally true
that an employee’s benefits become fixed at the time of
retirement, URS retains the ability to ensure the benefit is correct
under the exceptions listed in Utah Code section 49-11-607. We
approve the Board’s dismissal of Waterfall’s second request for
board action.
CONCLUSION
¶15 The Board properly dismissed Waterfall’s petition
because URS had the ability to correct City Manger’s error and
resolve the dispute regarding whether he was a part-time or
full-time employee. We therefore decline to disturb URS’s
calculation of his benefits, or its decision to treat Waterfall as a
part-time employee.
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