Alverson v. Employees' Retirement System

• Decision Date: 23 March 2005
• Docket Number: No. A05A0216.,A05A0216.
• Citation: 613 S.E.2d 119,272 Ga. App. 389
• Parties: ALVERSON et al. v. The EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA.
• Court: Georgia Court of Appeals

272 Ga. App. 389

Page 119

613 S.E.2d 119

ALVERSON et al. v. The EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA.

No. A05A0216.

Court of Appeals of Georgia.

March 4, 2005.

Reconsideration Denied March 23, 2005.

Albert Pearson, Moraitakis, Kushel & Pearson, Atlanta, Robert M. Margeson, III, J. Yearout, for appellants.

Thurbert Baker, Susan Rutherford, Gray, Hedrick, Edenfield, L.L., Atlanta, Annette Cowart, for appellee.

PHIPPS, Judge.

Plaintiffs are former State of Georgia employees who retired on or before July 1, 1998, after reaching the age of 60 but with less than 30 years of creditable service.¹ They receive state pensions which were reduced by the Employees' Retirement System of Georgia (ERS) by varying percentages based on each employee's age.

Aggrieved by this reduction of their pensions, plaintiffs brought this suit charging the ERS with, among other things, breach and impairment of contract. Plaintiffs' central claim is that under OCGA §§ 47-2-110(a) and 47-2-120(a), they had a right to retire and receive a pension upon reaching the age of sixty with at least ten years of creditable service without any diminution in benefits as a result of their age. OCGA § 47-2-120(e), which became effective on July 1, 1998, requires the ERS to apply an age reduction factor in calculating pensions for members who retire before reaching the age of 60 with less than 30 years creditable service. The ERS's central argument is that OCGA § 47-2-28 gives it the implied, discretionary authority to apply an age reduction factor in calculating the pensions of members who retire between the ages of 60 and 65 even with 30 years of creditable service. The ERS also argues that plaintiffs' claims are barred by the Georgia Tort Claims Act (GTCA).² In agreement with these arguments, the trial court awarded summary judgment to the ERS. Under the "right for any reason" rule, we affirm.

1. Plaintiffs' claims are not barred by the GTCA.

A 1991 amendment to the Georgia Constitution³ authorized the General Assembly to enact the GTCA to waive the sovereign immunity of the state for the torts of its officers and employees.⁴ The GTCA declares it to be the public policy of this state that the state shall be liable in tort actions and for tort claims only within the limitations of the GTCA.⁵ The exceptions to state liability are set forth in OCGA § 50-21-24. The GTCA defines a "claim" as "any demand against the State of Georgia for money only on account of loss caused by the tort of any state officer or employee committed while acting within the scope of his or her official duties or employment."⁶ "A tort is the unlawful violation of a private legal right other than a mere breach of contract, express or implied."⁷

(a) Even though a tort action is thus distinguished from an action for breach of contract based on the nature of the duty breached, the trial court held that under cases such as Youngblood v. Gwinnett Rockdale Newton Community Svc. Bd.,⁸ "[t]he focus ... is not on the duty allegedly breached by the State but on the act causing the underlying loss.... [Cits.]"⁹ Because plaintiffs' claims are based on actions of the members of the Board of Trustees of the ERS in executing state retirement statutes, the trial court concluded that the state is exempt from liability under OCGA § 50-21-24(1) (exempting the state from liability for losses resulting from "[a]n act or omission by a state officer or employee exercising due care in the execution of a statute, regulation, rule, or ordinance, whether or not such statute, regulation, rule, or ordinance is valid"). We find that the trial court's reliance on Youngblood is misplaced and that its reasoning is thus flawed.

In Youngblood, the Supreme Court considered the exception to state liability set forth in OCGA § 50-21-24(7) (providing that the state shall have no liability for losses resulting from "assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, or interference with contractual rights"). As recognized in Youngblood, "[u]nlike other subsections within OCGA § 50-21-24, subsection (7) is not limited in application to acts taken by a State officer or employee but covers all losses resulting from the torts enumerated therein."¹⁰ The plaintiff in Youngblood placed her daughter in a home for the mentally disabled operated by private individuals under a contract with a government agency. Plaintiff sued the government agency, complaining that the operators of the home had assaulted and battered her daughter. Conceding that the state had not waived immunity from liability for damages caused by assault and battery, plaintiff argued that the state agency could be held liable for negligent performance of a ministerial duty (under subparagraph (d) of the 1991 constitutional amendment).¹¹ Youngblood held that because subsection (1) of § 50-21-24 applies to specified torts regardless of whether a state officer or employee is the tortfeasor, the focus in determining the applicability of that subsection is the act causing the loss and not the duty breached. In determining whether an action sounds in tort or contract, the focus must be on the duty breached. Youngblood does not hold otherwise.

(b) In reliance on Burton v. DeKalb County¹² and Merk v. DeKalb County,¹³ the trial court also concluded that although plaintiffs have sought to bring this action under a breach of contract theory, it actually sounds in tort. We cannot agree. Under the line of decisions represented by Parrish v. Employees' Retirement System of Ga.,¹⁴ this case sounds in contract. Burton and Merk are distinguishable.

The plaintiff in Burton was a state employee who slipped and fell in water that had accumulated in a building owned and maintained by DeKalb County under contract with the state. The plaintiff sued the county for injuries sustained. She sought to avoid the bar of sovereign immunity by arguing that she was suing the county for breach of its maintenance contract with the state. We rejected the argument that plaintiff had standing to sue as a third party beneficiary of the contract, holding that the action sounded in tort and was barred by sovereign immunity.

The plaintiff in Merk was a DeKalb County homeowner whose house was flooded by sewage. She also sued the county on a breach of contract theory, claiming that she and the county were parties to a written contract for water and sewer services established by the county code. Concluding that the county code did not contain all the necessary terms of a contract, we held that plaintiff's action, though couched in contract, actually sounded in tort and, like Burton, was barred by sovereign immunity.

Parrish recognized:

"(A) statute or ordinance establishing a retirement plan for government employees becomes a part of an employee's contract of employment if the employee contributes at any time any amount toward the benefits he is to receive, and if the employee performs services while the law is in effect and ... the impairment clause of our constitution ... precludes the application of an amendatory statute or ordinance in the calculation of the employees' retirement benefits if the effect of the amendment is to reduce rather than increase the benefits payable.... (I)f the employee performs services during the effective dates of the legislation, the benefits are constitutionally vested...."¹⁵

In this case, therefore, unlike Merk or Burton, the plaintiffs are parties to a written contract established by the Code provisions in effect when they performed services and contributed toward their retirement benefits.¹⁶ This case is thus aptly characterized as an action for breach of a written contract. The 1991 state constitutional amendment that authorized the General Assembly to waive the state's sovereign immunity by enacting the GTCA also waived the state's defense of sovereign immunity "as to any action ex contractu for the breach of any written contract ... entered into by the state or its departments and agencies."¹⁷ And through the enactment of OCGA § 50-21-1, the General Assembly also provided for a waiver of sovereign immunity as to actions ex contractu for the breach of written contracts. OCGA § 50-21-1 is not part of the GTCA. This case thus falls within an exception to state sovereign immunity separate and apart from the GTCA. Consequently, the trial court erred in ruling that plaintiffs' claims are barred by the GTCA.

2. The trial court did not, however, err in awarding summary judgment to the ERS on the merits of plaintiffs' claim.

The ERS was established by a 1949 Act of the General Assembly.¹⁸ The ERS Act is currently codified at OCGA § 47-2-1 et seq. Various parts of OCGA §§ 47-2-20, 47-2-21, 47-2-26, 47-2-28, 47-2-110, and 47-2-120 are at issue here.

(a) Section 2 of the 1949 Act,¹⁹ now codified at OCGA § 47-2-20, places management of the ERS under a Board of Trustees (the Board). Under OCGA § 47-2-21(a), which was part of § 6 of the 1949 Act,²⁰ the Board is vested with responsibility for administration and operation of the ERS and for effectuating the provisions of the ERS Act.

(b) OCGA § 47-2-110(a) was enacted as part of § 5 of the 1949 Act.²¹ As originally enacted, it provided that upon written application to the Board, any member in service who had reached 60 years of age or who had 35 years of creditable service could retire on a "service retirement allowance."²² OCGA § 47-2-110(a) now provides that upon written application to the Board, any member in service who has thirty years of creditable service, or who has reached sixty years of age with at least five or ten years of creditable service (depending upon whether he became a member before or after July 1, 1968), may retire on a "service retirement allowance."

OCGA § 47-2-110(a) thus establishes the minimum age a state employee must reach, or the minimum number of years of service he must accrue, before being eligible to retire...