Rachel F. Shoenthal v. Dekalb County Employees Retirement System Pension Board

FOURTH DIVISION
DILLARD, C. J.,
RAY, P. J., and SELF, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
September 28, 2017
In the Court of Appeals of Georgia
A17A1065. SHOENTHAL et al. v. DEKALB COUNTY SE-040
EMPLOYEES RETIREMENT SYSTEM PENSION BOARD
et al.
SELF, Judge.
In the third appearance of this case before this Court,1 Rachel and Rebecca
Shoenthal (collectively “Plaintiffs”), daughters of the late Judge Elliott Shoenthal,
contend that the trial court erred in awarding attorney fees to the DeKalb County
Employees Retirement System Pension Board (“the Board”) pursuant to OCGA § 9-
15-14. We agree and reverse.
The underlying facts as set out in Shoenthal v. Shoenthal, 337 Ga. App. 515
(788 SE2d 116) (2016) (hereinafter “Shoenthal II”) are:
1
See Shoenthal v. Shoenthal, 337 Ga. App. 515 (788 SE2d 116) (2016);
Shoenthal v. Shoenthal, 333 Ga. App. 729 (776 SE2d 663) (2015) (appeal dismissed
because not based on final order).
On October 25, 2013, about a month before his scheduled surgery,
Judge Shoenthal changed the beneficiaries on employer-provided life
insurance policies by reducing [his wife Fran’s] share of the benefit
from 100 percent to 50 percent and designating that each of the
Plaintiffs receive 25 percent of the benefit. On the morning of November
18, 2013, Judge Shoenthal e-mailed the clerk of the Board, inquiring
about changing the beneficiaries on his pension plan. Specifically, Judge
Shoenthal asked, “[w]hat happens to my pension if I die – does it go to
my wife? Can I split it between my wife and my children? Second, if I’m
able to split it, what do I need to do to modify the beneficiary?” The
clerk responded on November 20, 2013, informing Judge Shoenthal that
he could change designated beneficiaries by completing a form available
on a county website. Judge Shoenthal replied that he would complete a
new beneficiary form.
That same month, Judge Shoenthal told his sister that he had revised his
will to reflect his “intention to leave everything to [Plaintiffs] and little
to nothing to Fran.” At a November 23 lunch, Judge Shoenthal told his
sister that he was in the process of changing the beneficiary designation
for his pension. On November 25, 2013, Judge Shoenthal completed and
signed the change-of-beneficiary form, designating the Plaintiffs as the
sole beneficiaries. Judge Shoenthal also handwrote, “I want each of my
children to receive 50% of my pension.” Attached to the change-of-
beneficiary form was a Post-It note containing the Board’s address.
Judge Shoenthal placed the form on or in his desk. Over the next two
days, Judge Shoenthal worked in his office and handled repairs to his
car.
2
Judge Shoenthal had surgery on November 27, was released from the
hospital the next day, and died from an embolism on December 1, 2013.
Judge Shoenthal never mailed or delivered the change-of-beneficiary
form.
Around the time Judge Shoenthal was released from the hospital, Fran
discovered that he had changed or intended to change the beneficiaries
on his pension plan. About a week after Judge Shoenthal’s death, Fran
submitted an application to receive Judge Shoenthal’s pension benefits.
Later that month, the change-of-beneficiary form was found on or in
Judge Shoenthal’s desk, and Fran was told about it. On January 1, 2014,
the Board began sending monthly pension payments to Fran. A few days
later, one of the Plaintiffs hand-delivered the signed change-of-
beneficiary form to the Board and requested that it be honored. The
Board informed Plaintiffs that it would not recognize the change-of-
beneficiary form, but did not provide a reason.
Id. at 516-517. Plaintiffs subsequently sued the Board and their mother, Fran,
alleging that the Board wrongfully disbursed and Fran improperly
claimed their deceased father’s entire pension benefits when their father
had designated that benefits be paid to them. The trial court granted the
Board’s and Fran’s motions for judgment on the pleadings on the ground
that Judge Shoenthal did not provide notice to the Board of a change in
beneficiaries.
3
Id. at 516.
We affirmed the trial court, finding that “Judge Shoenthal did not provide
written notice to the Board as required by [Section 908 of the] Pension Code,2 and
thus did not effectuate the change in beneficiaries upon which Plaintiffs’ claims rest.”
Id. at 516. The trial court then granted the Board’s motion for attorney fees under
OCGA § 9-15-14 (a) and (b), on the ground that Plaintiffs’ claims against the Board
“suffer from a complete absence of any justiciable issue of law or fact” and that
“Plaintiffs lacked substantial justification for bringing this action against [the Board],
2
Section 908 of the Pension Code provides in relevant part:
All participants shall, on a form provided for that purpose, designate a
person or persons to receive the benefits payable in the event of the
death of the participant. Such person or persons shall be the beneficiary
of the participant. The participant may from time to time change the
beneficiary by written notice to the pension board, and upon the receipt
by the pension board of such change, the rights of all previously
designated beneficiaries to receive any benefit under this plan shall
cease.
Shoenthal II, supra, 337 Ga. App. at 519, citing Pension Code § 908 (b) (9) (A).
4
in that their positions and claims against [the Board] are substantially frivolous and
substantially groundless.” In awarding $71,318.71 in fees,3 the trial court noted that
[t]here is simply no reasonable interpretation of Section 908 of the
Pension Code that could conceivably support Plaintiff’s contention that
the Pension Board received the requisite written notice that they, and not
Defendant Fran Shoenthal, are Judge Shoenthal’s beneficiaries under the
Pension Plan.
We granted Plaintiffs’ application for discretionary review of the award of attorney
fees.
Pursuant to OCGA § 9-15-14 (a), the trial court shall award
attorney fees when a party asserted a claim, defense or other position
with “such a complete absence of any justiciable issue of law or fact”
that the party could not reasonably have believed that the court would
accept it. We affirm an award under subsection (a) if there is any
evidence to support it. Pursuant to OCGA § 9-15-14 (b), the court may
award attorney fees if a party brought or defended an action that “lacked
substantial justification” or “was interposed for delay or harassment, or
if the court finds that an attorney or party unnecessarily expanded the
proceeding by other improper conduct.” We review a subsection (b) fee
award for abuse of discretion.
3
Plaintiffs did not challenge below the sufficiency of the evidence submitted
in support of the amount of fees requested by the Board or the reasonableness of
those fees.
5
(Citations and punctuation omitted.) Reynolds v. Clark, 322 Ga. App. 788, 789-90 (1)
(746 SE2d 266) (2013). “[T]o the extent that the evidence relevant to the question of
attorney fees consists of the state of the law, we make our own assessment of that
evidence and decide for ourselves whether the claim asserted below presented a
justiciable issue of law.” (Citations, punctuation and footnote omitted.) Gibson
Constr. Co. v. GAA Acquisitions I, 314 Ga. App. 674, 676-677 (725 SE2d 806) (2012)
(“Generally speaking, an award of attorney fees cannot be sustained if it is based on
an argument about the meaning of a statute, where the statute does not speak
explicitly to the issue at hand, where the statute has not previously been interpreted
with respect to that issue, and where some support for the argument can be gleaned
from the text or purpose of the statute.”). Moreover, the mere fact that the Board
prevailed on its motion for judgment on the pleadings, does not mandate an award of
attorney fees. See Brown v. Kinser, 218 Ga. App. 385, 387 (1) (461 SE2d 564) (1995)
(“applicant is not entitled to attorney fees merely because summary judgment was
granted in his favor”). “[F]or purposes of OCGA § 9-15-14, the relevant question is
whether some authority arguably supported [Plaintiffs’] position.” Russell v. Sparmer,
339 Ga. App. 207, 210 (1) (793 SE2d 501) (2016) (physical precedent only), citing
Hall v. Hall, 241 Ga. App. 690, 692 (1) (527 SE2d 288) (1999) (“where a party
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asserts an arguably meritorious position, there was not a complete absence of any
justiciable issue of law or fact such that an award of attorney fees is appropriate”)
(punctuation omitted).
The Board contends that the award was warranted because Plaintiffs’ claim that
the language of the Pension Code was subject to more than one interpretation was
unreasonable. In support of this contention, the Board maintains that there is no
caselaw addressing the meaning of Section 908 of the Pension Code because “no
previous potential claimant has been willing to pursue a claim predicated on a
position that is so clearly foreclosed by the plain language of the Pension Code.” The
Board’s argument illustrates one of the classic logical fallacies: appeal to ignorance
or an argument from ignorance.4 An argument from ignorance is “the mistake that is
committed whenever it is argued that a proposition is true simply on the basis that it
has not been proved false, or that it is false because it has not been proved true.”
Alabama-Tombigbee Rivers Coalition v. Kempthorne, 477 F3d 1250, 1257 (II) (A)
(1) (11th Cir. 2007), citing Irving M. Copi & Carl Cohen, Introduction to Logic 93
(8th ed. 1990). The Board mistakenly assumes that the absence of caselaw
4
“[A] fancier, and hence less denigrating, way of describing ‘an argument from
ignorance’” is the Latin phrase “argumentum ad ignorantiam.” Alabama-Tombigbee
Rivers Coalition v. Kempthorne, 477 F3d 1250, 1257 (II) (A) (1) (11th Cir. 2007).
7
interpreting Section 908 of the Pension Code proves that Plaintiffs’ claim “suffered
a complete absence of any justifiable issue of law or fact.” This contention ignores
that the converse assumption is equally true: The absence of caselaw means that the
issue was one of first impression. And, given our analysis in Shoenthal II of Section
908 and Judge Shoenthal’s conduct in relation to the change-of-beneficiary form, we
believe the latter assumption to be more applicable in this case.
Although we affirmed the trial court’s decision in Shoenthal II, our ruling
required us to construe Section 908 of the Pension Code. The Board has not cited to,
and we are not aware of, another case where we have interpreted this section of the
DeKalb County Pension Code or addressed a similar factual scenario. See, e.g., Fox
v. City of Cumming, 298 Ga. App. 134, 134-136 (679 SE2d 365) (2009) (reversing
award of attorney fees where party relied on statute that had not been interpreted by
any court and the language of the statute arguably supported the contention). We
ultimately concluded that Judge Shoenthal’s failure to personally send the change-of-
beneficiary form to the Board meant that he did not comply with the relevant section
of the Code. However, given the language in the section of the Pension Code that we
were called upon to interpret, it was not unreasonable for Plaintiffs to argue that the
change-in-beneficiary form was effective when it was received by the Board. That
8
nothing explicitly precluded Plaintiffs’ interpretation of the statute as applied to the
facts at issue is further supported by our acknowledgment in Shoenthal II that Section
908 did not specify how the form must be delivered to the Board. 337 Ga. App. at
519-520 (1). Compare Brunswick Floors, Inc. v. Carter, 199 Ga. App. 110, 111 (3)
(403 SE2d 855) (1991) (“Inasmuch as we find no ambiguity as to the meaning of this
‘Proposal’ which could result in a verdict for appellant, and under the other facts of
the case, the trial court did not abuse its discretion in finding the suit lacked
‘substantial justification,’ that is, that it was ‘substantially groundless’”; thus, award
under OCGA § 9-15-14 (b) proper).
In sum, it was not far-fetched for Plaintiffs to argue that the completed form
found in Judge Shoenthal’s desk constituted “written notice” and that the Board was
in “receipt” of the form when it was hand-delivered by Plaintiffs after their father’s
death.
[W]e must keep in mind that OCGA § 9-15-14 (a) is intended to
discourage the bringing of frivolous claims, not the presentation of
questions of first impression about which reasonable minds might
disagree or the assertion of novel legal theories that find arguable, albeit
limited, support in the existing case law and statutes.
9
Renton v. Watson, 319 Ga. App. 896, 905 (4) (739 SE2d 19) (2013). “Although we
ultimately were not persuaded by the argument that [appellant] made below[,] . . . we
cannot say that this argument was nonsensical, illogical, foreclosed by existing
precedent, or without some arguable support in the case law and statutes.” Gibson,
314 Ga. App. at 677.
Further, Plaintiffs cited authority that arguably supported their claim,
specifically Westmoreland v. Westmoreland, 280 Ga. 33 (622 SE2d 328) (2005),
which at the very least supported Plaintiffs’ claim that factual questions existed as to
whether Judge Shoenthal intended to change his beneficiary and whether he did all
that was substantially required of him to effectuate that change. In that case, a
deceased city employee had executed three documents prior to his death in order to
change the beneficiary for three of his benefits, but was not given a fourth document
which would have changed the beneficiary of his retirement plan. Our Supreme Court
reiterated that where “the insured has done substantially all that is required of him,
or all that he is able to do, to effect a change of beneficiary, and all that remains to be
done is a ministerial action of the association, the change will take effect though the
details are not completed before the death of the insured.” Id. at 34-35. The Court
affirmed the trial court’s ruling that the employee had effectuated a change, ruling
10
that “[b]ut for the mistake of the human resources employee . . . [the employee] would
have been in complete compliance with the requirements to change the beneficiary.”
Id. at 35. That we ultimately rejected Plaintiff’s reliance on Westmoreland does not
render Plaintiffs’ claim frivolous or lacking any justiciable issue of law or fact.
The Board argues that Westmoreland failed to create a justiciable issue of law
or fact because it was an interpleader action. The Board specifically argues that,
“[a]nother circumstance required for application of the ‘substantial compliance’
exception recognized by the Westmoreland court is a showing that the pension plan
. . . or other entity controlling the benefits at issue ‘stand[s] indifferently’ as to the
conflicting claims of the parties asserting entitlement to the benefits, as would be the
case in an interpleader action.” Because Plaintiffs in this case elected to sue the Board
after it paid benefits to Fran, thus giving it a significant stake in the outcome of the
case, the Board was forced to pick a side and support Fran’s entitlement to benefits;
thus, strict compliance was required and Plaintiffs’ reliance on Westmoreland’s
“substantial compliance” exception suffered from a complete absence of any
justiciable issue of law or fact. We disagree. Until our decision in Shoenthal II, it was
not clear that a benefit association must “stand indifferently” before a trial court can
exercise its equitable powers to determine whether the insured did substantially all
11
that he was able to do to effect a change of condition. In Westmoreland, Justice
Carley took this position in a special concurrence, but a special concurrence is not
binding precedent. See Green v. Green, 263 Ga. 551, 553 (1) (437 SE2d 457) (1993).
If the Georgia Supreme Court’s opinion had been clear in Westmoreland, then there
would have been no need for Justice Carley to write his special concurrence. And
again, our clarification of Westmoreland in Shoenthal II, did not render the Plaintiffs’
arguments without some arguable support. Gibson, supra.
For all of the above reasons, we conclude that Plaintiffs’ claims were not
frivolous under OCGA § 9-15-14; Plaintiffs did not lack substantial justification for
bringing their claims and those claims did not suffer from a complete absence of any
justiciable issue of law or fact. Accordingly, we reverse the trial court’s fee award
under OCGA § 9-15-14.
Judgment reversed. Dillard, C. J., and Ray, P. J., concur.
12