Ahrens v. State Carolina
| Decision Date | 26 May 2011 |
| Docket Number | No. 26966.,26966. |
| Citation | 709 S.E.2d 54,392 S.C. 340 |
| Court | South Carolina Supreme Court |
| Parties | Nancy S. AHRENS, Ann Mercer, and Gary M. McCombs, on behalf of themselves and all others similarly situated, Respondents/Appellants,v.The STATE of South Carolina and the South Carolina Retirement System, Appellants/Respondents.andJames B. Arnold, Jr., Cynthia A. Thompkins–Hart, Nelson E. Brown, William M. Tisdale, Jr., Bobby Pack, Mitch Anderson, Lorenza Cobb, Ivan Holden, Phillip White, Jamie Harrelson, Dan Furr, Ann U. Mercer, Sharon C. Fulton, Johnnie R. Deas, Katie Daniels and Barbara Durfey, Panda J. Duncan, Janet Klee, John Locklair, Carol Ann Williamson and Leon Bellamy, Individually and as Class Representatives, Respondents/Appellants,v.The South Carolina Police Officers Retirement System, The South Carolina Retirement System, and the State of South Carolina, Appellants/Respondents. |
OPINION TEXT STARTS HERE
Robert E. Stepp, Roland M. Franklin, Jr., Amy L.B. Hill, and Tina Cundari, all of Sowell, Gray, Stepp & Laffitte, of Columbia, David K. Avant and Justin R. Werner, both of Columbia; for Appellants–Respondents.A. Camden Lewis, Keith M. Babcock and Ariail E. King, all of Lewis & Babcock, of Columbia; Brana J. Williams, of Conway; Gene McCain Connell, Jr., of Kelaher, Connell & Connor, of Surfside Beach and Richard A. Harpootlian, of Columbia, for Respondents–Appellants.Chief Justice TOAL.
In 2006, this Court decided Layman v. State, 368 S.C. 631, 630 S.E.2d 265 (2006), remanding to the circuit court the issue of whether a contract existed between the South Carolina Retirement System (SCRS) and certain retirees.1 This case is an appeal from the circuit court's decision on remand. In this case, the South Carolina Police Officers Retirement System (PORS), the SCRS, and the State of South Carolina (collectively, the State) appeal the circuit court's order that the State is estopped from collecting retirement contributions from the certified class of “ old working retirees” (Retirees), and that the State must return the contributions withheld from those Retirees since July 1, 2005. The State additionally appeals the circuit judge's certification of the class of Retirees. Finally, the State argues that Retirees failed to exhaust administrative remedies. The Retirees appeal the circuit court's holding that no contract existed between the State and the Retirees to prevent the State from changing the terms of sections 9–1–1790(A) and 9–11–90(4)(a) of the South Carolina Code (the Working Retirees statutes) after the employees' retirement. Retirees additionally appeal the circuit court's grant of summary judgment on the constitutional issues raised. This Court consolidated for review the cases brought against the PORS 2 and the SCRS 3 (together, the Retirement Systems), and is reviewing the circuit court order pursuant to Rule 204(b), SCACR.
Facts/Procedural Background
This case involves the State's working retiree program, and the propriety of its withholding retirement contributions from eligible Retirement Systems members who returned to covered employment with the State prior to July 1, 2005. Prior to this date, the old working retiree program allowed employees to retire and then, after a 60 day break for SCRS members, and a 15 day break for PORS members, those employees could be re-hired at an employer's discretion and receive both retirement benefits and a salary up to $50,000 per year, without being required to contribute to the Retirement Systems. S.C.Code Ann. §§ 9–1–1790(A) (Supp.2001) & 9–11–90(4)(a) (Supp.2002). In 2005, the State Retirement System Preservation and Investment Reform Act (Act 153) amended these statutes to require that retired members pay the employee contribution as if they were active members, but without accruing additional service credit. 2005 S.C. Acts 153. In filing these actions, the Retirees' chief contention is that it is unlawful for the State to change the terms of the old working retiree program after the Retirees irreversibly retired, and with the understanding that contributions to the Retirement Systems would not be required.
This Court first considered the issue in Layman v. State, 368 S.C. 631, 630 S.E.2d 265 (2006). In that case, participants in the Teacher and Employee Retention Incentive Program (TERI), along with the Ahrens plaintiffs,4 brought an action contesting the contribution requirement created by Act 153. As to the TERI program, this Court ruled in favor of the plaintiffs, finding that “the language in the old TERI statute demonstrates, in unambiguous terms, the intent of the legislature to bind itself to the terms in the statute,” and therefore, “[w]hen the State, through Act 153, sought to collect retirement contributions from the old TERI participants, it was in clear breach of the contract it created by the relevant statutes.” Id. at 639–40, 630 S.E.2d at 269. As to the old working retirees statute, this Court found the statute
does not use the same contractually significant language as utilized in the old TERI statute. As a result, we hold that the old working retiree statute does not create a binding contract between the State and the old working retirees prohibiting the State from altering the statute exempting old working retirees from further contributions to the retirement system.Id. at 643, 630 S.E.2d at 272.
Still, the Court found evidence in the record that some working retirees may have had written contracts detailing the terms of the program, while others who did not have signed documents may have relied on statements made by the State when deciding whether to retire and enter the working retiree program. Id. Therefore, this Court remanded that issue to the circuit court for a Id. at 643, 630 S.E.2d at 272–73.
On remand, the circuit court considered whether Election of Non–Membership forms signed by employees electing to enter the working retiree program created a contract between the State and Retirees. The circuit court found they did not. However, the court provided the Retirees equitable relief, ruling the State is estopped from changing the terms of the working retirees program for those employees who retired prior to July 1, 2005, and further ordering the State to return funds previously withheld.5 The circuit court also ordered that notice be given to the certified class of Ahrens and Arnold plaintiffs that a judgment has been made in favor of the class. 6 This appeal follows.
Issues
I. Did the circuit court err in holding that no contract exists between the Retirees and the State?
II. Did the circuit court err in ruling that the State is estopped from requiring Retirees to contribute to the Retirement Systems?
III. Did the circuit court err in certifying the class of Retirees?
IV. Did the circuit court err in granting summary judgment in favor of the State on the Retirees' causes of action for unconstitutional taking, violation of due process, impairment of contract, and quantum meruit?
V. Did the circuit court err in denying the State's motion to dismiss based on the State's claim that Retirees failed to exhaust their administrative remedies under the Claims Procedure Act before bringing the dispute to the circuit court?
Standard of Review
An action seeking damages for breach of contract is an action at law. Eldeco, Inc. v. Charleston County Sch. Dist., 372 S.C. 470, 476, 642 S.E.2d 726, 729 (2007). However, the doctrine of estoppel is equitable in nature. Knight v. Stroud, 212 S.C. 39, 42–43, 46 S.E.2d 169, 170 (1948). When legal and equitable actions are maintained in one suit, each retains its own identity as legal or equitable for purposes of the applicable standard of review on appeal. Corley v. Ott, 326 S.C. 89, 92, 485 S.E.2d 97, 99 (1997). In an action at equity, tried by a judge alone, an appellate court may find facts in accordance with its own view of the preponderance of the evidence. Inlet Harbour v. S.C. Dep't of Parks, Rec. & Tourism, 377 S.C. 86, 91, 659 S.E.2d 151, 154 (2008). However, the appellant is not relieved of its burden of convincing the appellate court the circuit judge committed error in his findings. Pinckney v. Warren, 344 S.C. 382, 387–88, 544 S.E.2d 620, 623 (2001). When an appellate court chooses to find facts in accordance with its own view of the evidence, the court must state distinctly its findings of fact and the reason for its decision. Dearybury v. Dearybury, 351 S.C. 278, 283, 569 S.E.2d 367, 369 (2002). In an action at law tried by a judge, an appellate court's scope of review extends merely to the correction of errors of law. Temple v. Tec–Fab, Inc., 381 S.C. 597, 599–600, 675 S.E.2d 414, 415 (2009).
Analysis
I. Whether a Contract Exists Between the State and Retirees
Retirees argue that where the statute did not create a contract, the Retirement Systems had the authority to “fill up the details” by requiring Retirees sign forms stating they would not be required to pay into the Retirement Systems, and in doing so, these forms created a contract between the State and Retirees, which was then breached when the State began requiring these contributions. We disagree.
This Court has often described a state agency's rulemaking power as its authority to “fill up the details” of the laws promulgated by the General Assembly. Heyward v. S.C. Tax Comm'n, 240 S.C. 347, 355, 126 S.E.2d 15, 19–20 (1962); S.C. Hwy. Dept. v. Harbin, 226 S.C. 585, 594, 86 S.E.2d 466, 470 (1955). While “[t]he Legislature has the right to vest in the administrative officers and bodies of the state a large measure of discretionary authority ... to make rules and regulations,” an agency may not make rules that “conflict with, or ... change in any way the statute conferring such authority.” Fisher v. J.H. Sheridan Co., Inc., 182 S.C....
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