Arizona Bd. of Regents for and on Behalf of University of Arizona v. State ex rel. State of Ariz. Public Safety Retirement Fund Manager Adm'r, 1
| Decision Date | 16 March 1989 |
| Docket Number | CA-CV,No. 1,1 |
| Parties | , 53 Ed. Law Rep. 260 ARIZONA BOARD OF REGENTS for and on Behalf of the UNIVERSITY OF ARIZONA and University of Arizona Public Safety Personnel Retirement Local Board, Plaintiffs-Appellants, v. STATE of Arizona, ex rel. The STATE OF ARIZONA PUBLIC SAFETY RETIREMENT FUND MANAGER ADMINISTRATOR or his successor in office, Defendants-Appellees. 88-007. |
| Court | Arizona Court of Appeals |
This case involves a dispute between the Fund Manager of the Public Safety Personnel Retirement System (Fund Manager) and the University of Arizona (University) and its Local Board (Local Board), the entity responsible for administering the Public Safety Personnel Retirement System (System) as it applies to the University's members in the System. A.R.S. § 38-842(17). This dispute concerns whether campus security guards employed by the University should be accepted for participation in the System. The Arizona Board of Regents (Regents), on behalf of the University and its Local Board, filed a special action complaint in the Superior Court 1 seeking to order the Fund Manager and its Administrator to accept for participation in the System the University's campus security guards which the Local Board had determined to be eligible and to reinstate those security guards which the Administrator had purported to exclude. The Regents appeal from summary judgment for the defendants.
The Public Safety Personnel Retirement System was created by the Arizona Legislature in 1968, "[i]n order to provide a uniform, consistent and equitable statewide program for public safety personnel who are regularly assigned hazardous duty in the employ of the State of Arizona or a political subdivision thereof...." A.R.S. § 38-841(B). The System was established to take the place of certain existing retirement programs for public safety personnel, and the legislature provided that the groups of employees covered by these prior systems automatically would become members of the System. A.R.S. § 38-841(A) and (B). The legislature provided for additional eligible groups of public safety personnel to participate in the System "pursuant to election by their employer for such coverage under an appropriate joinder agreement." A.R.S. § 38-841(D).
The Fund Manager is a five-member body that is charged by A.R.S. § 38-848 with managing the monies accumulated under the System. That statute enumerates the powers expressly granted to the Fund Manager, including the power to appear in legal proceedings to protect these monies. A.R.S. § 38-848(G)(7). Subsection (G)(9) of the statute contains a catch-all phrase providing that the Fund Manager may "[d]o all acts, whether or not expressly authorized, which may be deemed necessary or proper for the protection of the investments held in the fund." The Fund Manager is authorized to employ an Administrator who may take action on behalf of the Fund Manager under its direction. A.R.S. § 38-848(G)(8) and (J)(6).
On June 20, 1974, the University of Arizona entered into a joinder agreement with the Fund Manager. The agreement specified that "University Security Personnel" are to participate in the System. A letter dated June 28, 1974, written by the Regents and approved by the Fund Manager, supplemented the agreement in various respects. The letter stated that the Regents had entered into the joinder agreement on behalf of "eligible University of Arizona security personnel." At the regular meeting of the Fund Manager held on July 12, 1974, the joinder agreement was approved, the minutes of the meeting reflecting that the University's "college campus policemen" were being brought into the System. On December 4, 1974, the Fund Manager's Administrator received a letter and check from the Arizona State Retirement System transferring "University of Arizona Campus Security" from that retirement system into the Public Safety Personnel Retirement System. The letter also stated that listings of the "campus policemen" being transferred were enclosed.
The University security personnel who actually were transferred into the System included not only personnel designated by the University as "campus police officers" but also personnel designated as "security guards." Security guards differed from campus police officers in certain respects. Most significantly, the security guards had no authority to carry guns or to make arrests and were paid less than the campus police officers who had such authority.
According to G. Lowell Sutton, who had been the Administrator of the System since its inception, his office had not known that any University personnel other than campus police officers had been transferred into the System until he discovered nine years later that campus security guards were among the personnel transferred. On November 10, 1983, the Administrator's office notified the University that it had not known the security guards had been enrolled in the System, that it was taking the position that the guards were not now and had never been eligible for membership, and that it was transferring the guards' credited service, member contributions and equivalent employer contributions to the Arizona State Retirement System. The Administrator then made these transfers and notified each of the security guards of the transfer of their memberships to the Arizona State Retirement System.
In the months following the Administrator's actions in transferring the security guards out of the System, apparently no legal action was taken against the Fund Manager or its Administrator. However, on July 18, 1984, the University's Local Board met for the purpose of determining whether Max May, one of the security guards whose retirement system membership had been transferred by the Administrator, was eligible to be included in the System because of his performance of hazardous duties within the meaning of the statute. The Local Board reviewed a transcript of an interview with May in which he had been questioned concerning whether his job was hazardous and whether it differed significantly from that of a police officer. May had applied for benefits from the Arizona State Retirement System because his membership had been transferred to that system and because he had planned to retire on May 1, 1984, but he sought to have the Local Board find that his benefits should instead come from the Public Safety Personnel Retirement System.
On July 24, 1984, the Local Board wrote a letter to the Administrator directing him to reinstate Max May into the System. The letter explained that the Local Board had determined at its hearing on July 18, 1984, that Max May had been assigned hazardous duty from the time he was hired in 1967 until he retired in 1984, and therefore that he was eligible for inclusion in the System. On August 8, 1984, the Administrator's office informed the Local Board that it would not reinstate May in the System and explained that it felt that the Local Board had no authority to order it to do so. The letter specified that it should be considered merely an explanation of why the Administrator would not reinstate May and was not a request for rehearing of the matter by the Local Board.
On November 15, 1984, the University wrote a second letter to the Administrator, this time instructing the Administrator to reinstate ten of the security guards that the Local Board found were regularly assigned to hazardous duty. The Administrator's office responded by letter of December 19, 1984, again refusing to comply with the Local Board's request and emphasizing that it was not requesting rehearing by the Local Board but merely explaining why it would not reinstate the employees as instructed.
The parties dispute whether the Administrator's office knew or should have known from the time University security personnel joined the System that security guards were included among the personnel being transferred into the System. The University takes the position that the Administrator was then provided with a list indicating the particular job of each University employee being transferred into the System, from which it should have known that security guards were included. The Administrator, though, denies that his office ever saw the list of personnel which the University claims to have sent.
A year later the Regents filed the instant complaint in special action seeking to compel the Fund Manager and its Administrator to reinstate the security guards which the Local Board had determined to be eligible for membership in the System. 2 The case proceeded before the superior court on cross-motions for summary judgment. The Regents argued in their motion for summary judgment that the Local Board had determined that the security guards were eligible pursuant to statutory authority given to the Local Board to decide questions of eligibility. It argued that the Fund Manager was precluded from challenging the decision of the Local Board because it had failed to seek timely review of the Local Board's decision.
The position taken by the Fund Manager in its cross-motion for summary judgment was that the Local Board had no authority to determine that security guards should be included in the System, and that a proper interpretation of the governing statutes would exclude security guards from membership in the system. Additionally, the Fund Manager maintained that the court had no jurisdiction to entertain the action due to the Local Board's failure to seek timely review of the Fund Manager's previous decision and due to its failure to join the security guards, who the Fund Manager contended were indispensable parties...
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