Grimsley v. South Carolina Law Enforcement Division

THE STATE OF SOUTH CAROLINA
In The Supreme Court
Phillip D. Grimsley, Sr. and Roger M. Jowers, on Behalf
of Themselves and Others Similarly Situated,
Respondents,
v.
South Carolina Law Enforcement Division and the State
of South Carolina, Defendants,
of whom South Carolina Law Enforcement Division is
the Petitioner.
Appellate Case No. 2014-001059
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Richland County
J. Ernest Kinard, Jr., Circuit Court Judge
Opinion No. 27598
Heard September 23, 2015 – Filed December 23, 2015
REVERSED
William H. Davidson, II and Kenneth P. Woodington,
both of Davidson & Lindemann, P.A., of Columbia, for
Petitioner.
A. Camden Lewis and Ariail E. King, both of Lewis,
Babcock & Griffin, L.L.P., of Columbia; Richard A.
Harpootlian, of Richard A. Harpootlian, P.A., of
Columbia; John A. O'Leary, of O'Leary & Associates,
P.A., of Columbia; and James Walter Fayssoux, Jr., of
Fayssoux Law Firm, P.A., of Greenville, for
Respondents.
JUSTICE KITTREDGE: We granted a writ of certiorari to review the court of
appeals' opinion in Grimsley v. South Carolina Law Enforcement Division
(Grimsley II), 408 S.C. 38, 757 S.E.2d 542 (Ct. App. 2014), which reversed the
trial court's grant of summary judgment in favor of Petitioner South Carolina Law
Enforcement Division (SLED). We reverse.
Respondents are former SLED agents who retired and were rehired by then SLED
Chief Robert Stewart for a period of four years pursuant to a rehire program
formulated by Chief Stewart. At the conclusion of Respondents' service under the
rehire program, they filed suit against SLED and the State under various theories,
all premised on the allegation that SLED deducted from their salaries the amount
of the employer's contribution to the retirement system. The State was granted
dismissal of the Complaint pursuant to Rule 12(b)(6), SCRCP.1 On appeal, taking
the allegations of the Complaint as true, we reversed and remanded. Grimsley v.
S.C. Law Enforcement Div. (Grimsley I), 396 S.C. 276, 279, 283–86, 721 S.E.2d
423, 424, 427–28 (2012).
On remand and following discovery, the trial court granted SLED summary
judgment, which the court of appeals reversed. Having carefully reviewed the
record, we find the trial court properly granted summary judgment to SLED, for
the record makes clear that Respondents were rehired at reduced salaries and the
employer contributions to the retirement system were not deducted from those
salaries, but were paid by SLED. As a result, we reverse the court of appeals and
direct that judgment be entered for SLED.
1
SLED did not join in the State's motion to dismiss or participate in the appeal that
followed. Grimsley v. S.C. Law Enforcement Div. (Grimsley I), 396 S.C. 276, 280
n.2, 721 S.E.2d 423, 425 n.2 (2012).
I.
This case arises out of a dispute over a hiring program created by SLED involving
participants in the Police Officers Retirement System (PORS). We now have the
benefit of an extensive record following discovery, and the essential facts are not
in dispute. In 2002, the General Assembly eliminated salary caps for so-called
working retirees, that is, state employees who retired and then returned to work.
This allowed state employees, including members of the PORS like Respondents,
to retire, collect full retirement benefits, and then return to their former jobs at
salaries that could have been, but were not required to be, the same as their pre-
retirement salaries. Shortly after the salary cap was eliminated, Chief Stewart
developed the program in question, informally called the Retirement/Rehire
program (Program).
Chief Stewart created the Program, in part, because an existing program, the
Teacher and Employee Retention Incentive (TERI) program, was not available for
members of the PORS. Chief Stewart described the Program as benefiting all
involved—SLED, its employees, and the people of South Carolina. SLED
benefited because the Program allowed more experienced employees to remain in
service after becoming eligible to retire, working alongside agents with less
experience. To the extent employees were rehired at reduced salaries, SLED also
benefited by saving money, thereby allowing the agency to avoid layoffs while
maintaining services. The citizens and taxpayers of South Carolina benefited from
SLED's ability to maintain a high level of service at a reduced cost. Finally,
Program participants benefited by drawing retirement benefits while still working
and earning a salary, albeit a reduced salary.2
To participate in the Program, employees had to retire, submit a request to be
rehired, and if selected to be rehired, agree to a number of conditions. Chief
Stewart cautioned employees considering the Program that they should not
participate unless they were ready to immediately and permanently retire.
Respondents Phillip Grimsley and Roger Jowers were longtime SLED employees
who decided to apply to participate in the Program. Between April and August
2004, Respondents retired, requested to be rehired, and were rehired by SLED.
Respondents clearly understood the Program's conditions, which included a
reduction in their salaries and a term of employment not to exceed four years.
2
This was no minor benefit. For 2005, the first full year that Respondent Phillip
Grimsley participated in the Program, his rehire salary and retirement benefits
totaled $81,476.04. His annual pre-retirement salary was approximately $55,000.
Respondents signed multiple forms confirming the details of the arrangement were
just as SLED had asserted. One of those forms, a re-employment orientation form,
stated that Respondents' salaries were being reduced "to cover the amount it will
cost SLED to pay the employer portion of retirement." Chief Stewart said that he
decided to reduce the salaries of Program participants by the amount of the
employer retirement contribution to provide some degree of savings to taxpayers
from rehiring retired agents. He also stated that using that percentage established a
uniform reduction figure for working retirees' salaries. This uniform approach to
determining Program participants' rehire salaries lessened the potential for
complaints from the rehired agents and simplified the Program's administration.
After participating in the Program for the agreed-upon four years, Respondents
received letters in 2008 thanking them for their service and informing them that
their employment would be ending. During their service as rehired agents,
Respondents never complained about their salaries or the issue of the employer
retirement contribution.
A few months later, in December 2008, Respondents filed suit seeking recovery
for alleged statutory and constitutional violations. Respondents' statutory claims
were premised on alleged violations of section 9-11-90(4)(b) of the South Carolina
Code, which requires employers, such as SLED, to "pay to the [retirement] system
the employer contribution for active members prescribed by law with respect to
any retired member engaged to perform services for the employer, regardless of
whether the retired member is a full-time or part-time employee or a temporary or
permanent employee." S.C. Code Ann. § 9-11-90(4)(b) (Supp. 2014).
As noted, the trial court granted the State's motion to dismiss as to all of
Respondents' claims. On appeal, we reversed based on the standard of review;
accepting as true the allegation that SLED rehired Respondents at their former
salaries and then deducted the employer retirement contribution from those
salaries, Respondents had pled a viable claim. Grimsley I, 396 S.C. at 283–86, 721
S.E.2d at 427–28. After this Court issued its decision in Grimsley I and the parties
engaged in discovery, the parties filed cross-motions for summary judgment. It is
the trial court's ruling on those motions that led to the current appeal.3
In their motion, Respondents sought summary judgment on the ground that the
Program required Respondents to pay the employer's retirement contribution to the
3
By the time the trial court ruled on the cross-motions for summary judgment, the
State had been dismissed as a party, without objection.
state retirement system, in violation of section 9-11-90, the constitutional
prohibition against takings, and constitutional due process requirements.
Respondents argued that SLED violated the plain language of section 9-11-90,
which requires employers to pay retirement contributions for working retirees in
the same manner as non-retired employees, by deducting the employer contribution
from their salaries.4 Respondents' constitutional claims relied in part on this
Court's decision in Grimsley I, in which we held Respondents had a cognizable
property interest in their salaries, unreduced by any amount required to be paid by
their employer. See Grimsley I, 396 S.C. at 284–85, 721 S.E.2d at 427–28
(concluding that Respondents' Complaint alleged interference with a property
interest rooted in state law and was sufficient to maintain a takings claim).
In support of its motion for summary judgment, SLED relied on the facts as
revealed in discovery. More to the point, SLED contended it had conclusively
established that the required employer retirement contribution was never deducted
from Respondents' salaries but was, in fact, always paid by SLED. SLED further
noted that Respondents retired unconditionally and agreed to be rehired at a
reduced salary, and an employee who retires has no unconditional right to be
rehired at all, much less at a particular salary. The trial court agreed, granting
SLED's motion for summary judgment and denying Respondents' motion.
On appeal, the court of appeals reversed, finding there was a genuine issue of
material fact as to whether SLED rehired Respondents at their pre-retirement
salaries and whether SLED deducted the employer contribution to the retirement
system from those salaries. This Court granted SLED's petition for a writ of
certiorari to review the court of appeals' decision.
4
Respondents also claimed that SLED misappropriated funds that were earmarked
to pay employees' salaries. See S.C. Code Ann § 11-9-10 (2011) ("It shall be
unlawful for any monies to be expended for any purpose or activity except that for
which it is specifically appropriated . . . ."). Respondents argued that because the
General Assembly appropriated funds to SLED that would allow SLED to pay the
retired agents' pre-retirement salaries, SLED violated section 11-9-10 by paying
Respondents the lower, post-retirement salaries. Respondents misapprehend the
budgeting and appropriations process. The total amount appropriated to a state
agency for a class of employees' salaries in no manner determines an individual
employee's salary. Moreover, as is explained more fully below, the record
establishes that SLED paid the employer contribution to the retirement system as
required.
II.
SLED argues the court of appeals erred in reversing the trial court's grant of
summary judgment in its favor because the undisputed facts establish that
Respondents were rehired at new salaries and no employer retirement contribution
was deducted from those salaries; therefore, SLED contends, it is entitled to a
judgment as a matter of law. We agree.
A.
"An appellate court reviews the granting of summary judgment under the same
standard applied by the trial court . . . ." Quail Hill, L.L.C. v. Cnty. of Richland,
387 S.C. 223, 235, 692 S.E.2d 499, 505 (2010) (citing Brockbank v. Best Capital
Corp., 341 S.C. 372, 379, 534 S.E.2d 688, 692 (2000)). "[A] trial court may grant
a motion for summary judgment 'if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.'" Id. at 234, 692 S.E.2d at 505 (quoting
Rule 56(c), SCRCP). "'In determining whether any triable issue of fact exists, the
evidence and all inferences which can reasonably be drawn therefrom must be
viewed in the light most favorable to the nonmoving party.'" Id. at 235, 692 S.E.2d
at 505 (emphasis added) (quoting Pye v. Estate of Fox, 369 S.C. 555, 563, 633
S.E.2d 505, 509 (2006)). Even though courts are required to view the facts in the
light most favorable to the nonmoving party, to survive a motion for summary
judgment, "it is not sufficient for a party to create an inference that is not
reasonable or an issue of fact that is not genuine." Town of Hollywood v. Floyd,
403 S.C. 466, 477, 744 S.E.2d 161, 166 (2013) (citing Evans v. Stewart, 370 S.C.
522, 526, 636 S.E.2d 632, 635 (Ct. App. 2006)).
B.
Following remand from this Court in Grimsley I, the parties engaged in discovery
which revealed Respondents were rehired with new, reduced salaries and were
never responsible for paying the employer retirement contribution. To the
contrary, the evidence showed SLED paid the required employer retirement
contribution at all times.
On May 20, 2004, Respondent Grimsley sent a letter to Chief Stewart expressing
his intention to retire on June 30 of that year and acknowledging that he would
have to request to be rehired. That June, Grimsley formally requested to be
rehired, agreeing to a salary "13.6% less than [his] previous base salary." In July,
SLED agreed to rehire Grimsley based on Grimsley's written acceptance of a
salary equal to his "previous base salary less 13.6%." Respondent Jowers signed
forms that, while containing different dates and amounts, were identical in all
relevant respects.
Deposition testimony and affidavits from SLED employees confirm that
Respondents received exactly what they bargained for. Lynn Hutto, the director of
human resources at SLED at the time, testified that Respondents and other
Program participants were "rehired . . . at a new salary." Chief Stewart avowed
that, although "[Respondents'] new salaries upon rehire were in fact 13.6% lower
than their pre-retirement salaries, . . . the employer contribution has never been
deducted from their paychecks." He further explained that "there is no such thing
as a payroll deduction for the employer contribution to the PORS, because the
employer contribution is paid from the amount appropriated to the agency for
benefits funding, and not from the amount appropriated and used for employees'
salaries." The record fully confirms this assertion. Teresa Kitchens, Director of
Human Resources at SLED, stated that each employee's pay stub has a block to
show the employee's retirement contribution, but does not have a block to show the
employer's retirement contribution "because the employer contribution is never
deducted from the gross salary of the employee[]." In fact, Jowers's first pay stub
after being rehired showed that no funds were deducted under the "retirement"
category, indicating that, at the time, not even an employee retirement contribution
was deducted from the salaries of working retirees like Respondents. Finally,
Donald Royal, Director of Administration at SLED, confirmed that the employer's
retirement contribution "is not included within the salary of the employee, and
therefore is not deducted from the salary of the employee." The contribution is
"completely separate from, and in addition to, the amount of the employee's
salary." Again, the record bears out SLED's contention that it paid the employer's
contribution to the retirement system, as the evidence demonstrates that SLED
transferred the employer's retirement contribution periodically, out of funds
appropriated to pay for employees' fringe benefits, "in an amount equal to the
appropriate percentage . . . of the total salary amount actually paid."
C.
Citing an isolated phrase in one of many forms signed by Respondents—"[y]ou
will have a reduction of 13.6% in your salary to cover the amount it will cost
SLED to pay the employer portion of retirement"—the court of appeals concluded
that "a reasonable jury could find SLED agreed to pay each rehired employee the
same salary it paid before retirement, and the percentage reduction represents an
illegal requirement that the employee pay the retirement contribution the employer
is required to pay under subsection 9-11-90(4)(b)." Grimsley II, 408 S.C. at 39–40,
757 S.E.2d at 543. Instead of viewing the entirety of the record, the court of
appeals cherry-picked a single sentence from a single form, and did so out of
context. The court of appeals elevated what is, at best, a metaphysical doubt into a
genuine issue of material fact. See Russell v. Wachovia Bank, N.A., 353 S.C. 208,
220, 578 S.E.2d 329, 335 (2003) ("When opposing a summary judgment motion,
the nonmoving party must do more than 'simply show that there is a metaphysical
doubt as to the material facts but must come forward with specific facts showing
that there is a genuine issue for trial.'" (quoting Baughman v. Am. Tel. & Tel. Co.,
306 S.C. 101, 115, 410 S.E.2d 537, 545 (1991)) (internal quotation marks
omitted)). When properly viewed in the context of the parties' discussion and
agreement about what Respondents' salaries were to be upon returning to
employment, the form is consistent with the other evidence showing that
Respondents retired unconditionally and were rehired at new salaries.
The trial court therefore correctly found Respondents' claims had no basis in fact as
Respondents were unable to produce any evidence that they were rehired at their
previous salaries or that the employer retirement contribution was ever deducted
from their pay. As the evidence leaves no doubt that SLED paid the employer
retirement contribution at all times, Respondents' claims fail.
III.
We reverse the court of appeals and reinstate the trial court's entry of judgment for
SLED.
REVERSED.
TOAL, C.J., BEATTY, HEARN, JJ., and Acting Justice James E. Moore,
concur.