Ahern v. Mackey

• Decision Date: 18 April 2007
• Docket Number: No. 05-461.,05-461.
• Citation: 925 A.2d 1011,2007 VT 27
• Court: Vermont Supreme Court
• Parties: Shirley AHERN, Bonnie Bollman, Mary Booth-Benton, Edward Cooke, Joan Cotter, Susan Jacobs, Howard Lovering, Judith Lovering, et al. v. Joe MACKEY, Jon Harris, Jay Kaplan, John Crowley, Jeb Spaulding and Richard Cate, Trustees of The State Teachers' Retirement System of Vermont.

925 A.2d 1011

2007 VT 27

Shirley AHERN, Bonnie Bollman, Mary Booth-Benton, Edward Cooke, Joan Cotter, Susan Jacobs, Howard Lovering, Judith Lovering, et al. v. Joe MACKEY, Jon Harris, Jay Kaplan, John Crowley, Jeb Spaulding and Richard Cate, Trustees of The State Teachers' Retirement System of Vermont.

No. 05-461.

Supreme Court of Vermont.

April 18, 2007.

Present: REIBER, C.J., and DOOLEY, JOHNSON, SKOGLUND, JJ., and MORSE, Associate Justice (Ret.), Specially Assigned.

ENTRY ORDER

¶ 1. Plaintiffs are fifteen members of the State Teachers' Retirement System who petitioned the Retirement Board for compensation and other related relief stemming from the purchase of out-of-state service credit when plaintiffs transferred retirement plans in 1981. The Board denied their request, and plaintiffs challenged the decision pursuant to a Vermont Rule of Civil Procedure 75 complaint against the System and its individual trustees in superior court. The court dismissed plaintiffs' tort and civil rights claims, and subsequently entered summary judgment for defendants, ruling that the Board had not abused its discretion or acted unlawfully in denying the request for relief. On appeal, plaintiffs contend the court erred in: (1) dismissing their claims and (2) ruling that plaintiffs were not entitled to extraordinary relief under Rule 75. We affirm.

¶ 2. This is the second appeal related to this dispute. The material facts are set forth in full in Jacobs v. State Teachers' Retirement System, 174 Vt. 404, 816 A.2d 517 (2002), and need only be summarized here. Plaintiffs claim that when they elected to switch from a contributory retirement plan known as Group A to a noncontributory plan known as Group B which became available in 1981, they were unaware that the refund of their Group A contributions would include any funds they elected to expend to purchase service credit for military service or out-of-state teaching experience. In 1990, the Group B plan was dissolved, and members were automatically transferred to Group C, which included the purchase option for out-of-state teaching experience without the refund benefit.

¶ 3. In Jacobs, one of the fifteen named plaintiffs herein claimed that, between 1998 and 1999, she became interested in buying service credit for her seven years teaching experience in New York for purposes of taking early retirement, and only then learned that the amount would have been refunded had she elected to make the purchase in 1981. Plaintiff paid approximately $70,000 for the service credit, and thereafter filed a class action suit against the System to recover the money. Plaintiff alleged that the System had breached statutory and fiduciary duties to accurately inform her and those similarly situated of the consequences of switching from Plan A to Plan B. The trial court denied the motion to certify the class, and subsequently entered summary judgment in favor of the System, ruling that it was protected from suit under the sovereign immunity doctrine. Id. at 407, 816 A.2d at 520.

¶ 4. We affirmed the judgment on appeal, rejecting plaintiff's assertions that the System was not an arm of the state covered by sovereign immunity, and that sovereign immunity did not apply because the action was based on breach of contract and tort claims covered by the Vermont Tort Claims Act. As to the contract claim, we held that any obligation to provide proper information created by 16 V.S.A. § 1950(b) went to contract formation rather than performance, and was covered by tort rather than contract theory.¹ Id. at 414, 816 A.2d at 526. We noted as well that, because state-created contract rights may be entitled to constitutional protection, they must be expressed in "clear and unmistakable language," id. at 414-15, 816 A.2d at 526 (quotation omitted), and we concluded that there was "no such unmistakable intent here." Id. at 415, 816 A.2d at 526. As to plaintiff's tort claim "based on a violation of the statutory mandate alone," id., we held that an implied waiver of sovereign immunity was appropriate only when strictly necessary to provide a remedy, and that plaintiff had "alternative remedies which she did not pursue." Id. at 415, 816 A.2d at 527. These included, we observed, an administrative claim before the Board to "correct any benefit mistakes and errors" under 16 V.S.A. § 1948, and an appeal from the Board's ruling under Rule 75.² Id. ¶ 5. Following our decision, plaintiffs here petitioned the Board under § 1948 for relief from their failure to purchase out-of-state service credit when switching from Plan A to Plan B in 1981. Some of the plaintiffs who had subsequently purchased credit sought a refund. Others requested that the Board award them additional years of service without cost, while still others who did not require additional service asked that the Board compensate them for the value of their unpurchased credit. Following the submission of evidence and a hearing, the Board denied plaintiffs' petition. Plaintiffs then filed this Rule 75 class-action complaint on behalf of themselves and others similarly situated against the System and the individual trustees. The complaint essentially renewed the claims from Jacobs that defendants had breached fiduciary and statutory duties under 16 V.S.A. § 1950(b) to provide them with complete and accurate information concerning the refundable nature of purchasing service credit in connection with transferring to Group B. Plaintiffs also purported to state a civil rights claim under 42 U.S.C. § 1983, alleging that defendants' actions had deprived them of a constitutionally protected right to receive a refund of the purchase price.

¶ 6. The trial court granted the System's motion to dismiss the breach of duty claims, observing that they had been "rejected in Jacobs and therefor necessarily must be rejected here," and dismissed the § 1983 claim on the ground that plaintiffs had failed to identify a constitutionally protected property interest. The court subsequently granted the System's motion for summary judgment as to the Rule 75 complaint proper, ruling that plaintiffs had failed to demonstrate the Board's denial of administrative relief constituted an arbitrary or unlawful abuse of discretion. This appeal by plaintiffs followed.

¶ 7. Plaintiffs initially contend the court erred in dismissing their breach of duty claims, citing our reference in Jacobs to the availability of a Rule 75 action. It is self-evident, however, that our purpose in referring to Rule 75 was not to revive the very claims that we had moments earlier rejected. Rather, we observed that plaintiff had "alternative remedies" to her statutory breach of duty claim which she could have pursued had she "acted in a timely fashion." Jacobs, 174 Vt. at 415, 816 A.2d at 527. As earlier noted, we explained that these included an administrative claim before the Board "to remedy the alleged error caused by [the] inadequate disclosure" under 16 V.S.A. § 1948, followed—if necessary—by "an action under V.R.C.P. 75(a) to review the refusal of the System to provide the relief she sought." As we observed, sovereign immunity does not bar a citizen from "seek[ing] extraordinary relief" in this fashion. Id. Thus, it was the "extraordinary relief" available under Rule 75—with its narrow and exacting standards—to which we explicitly referred in Jacobs and to which plaintiffs were here entitled, and nothing more. The trial court correctly dismissed plaintiffs' claims for breach of statutory and fiduciary duties.

¶ 8. Plaintiffs additionally contend the trial court erred in upholding the Board's rejection of their request for administrative relief under § 1948. Our review in this regard is limited. As we have explained, the relief available under Rule 75 represents "the modern equivalent of extraordinary relief by mandamus or certiorari." In re Town of Bennington, 161 Vt. 573, 573-74, 641 A.2d 1331, 1332 (1993) (mem.). The purpose of mandamus is generally to require a public official or body to perform a simple ministerial duty imposed by law, although it may be available to enforce even discretionary duties "[w]here there appears, in some form, an arbitrary abuse of the power vested by law in an administrative officer . . . which amounts to a virtual refusal to act or to perform a duty imposed by law." Sagar v. Warren Selectboard, 170 Vt. 167, 171, 744 A.2d 422, 425 (1999) (quotation omitted). The purpose of certiorari is to review judicial or quasi-judicial action of a lower court or tribunal in regard "to substantial questions of law affecting the merits of the case." Richards v. Town of Norwich, 169 Vt. 44, 48, 726 A.2d 81, 84 (1999). Under either writ, the standard of review is "necessarily narrow." In re Town of Bennington, 161 Vt. at 574, 641 A.2d at 1332. Furthermore, we are "reluctant to substitute our judgment for the experience and expertise" of an administrative agency. Lemieux v. Tri-State Lotto Comm'n, 164 Vt. 110, 112, 666 A.2d 1170, 1172 (1995). Therefore, absent a compelling indication of error, "we will defer to the agency's judgment." Id. at 112-13, 666 A.2d at 1172.

¶ 9. In denying plaintiffs' request, the Board here explained that it had exercised its discretion to "decline[] to reconsider the actions taken by the System's trustees and staff and by the petitioning members more than twenty years ago." The Board rested its decision on two basic grounds. First, it concluded that "the passage of time makes it impractical if not impossible to reconstruct the circumstances that prompted the petitioning members to transfer from Group A to Group B in 1981, to purchase credits or not, and to retire sooner or later." While the Board acknowledged that some of the written materials distributed to plaintiffs in 1981 had been located, it noted that there was no record showing—nor any...