Booth v. Sims, No. 22464

CourtSupreme Court of West Virginia
Writing for the CourtNEELY; BROTHERTON; MILLER; MILLER
Citation193 W.Va. 323,456 S.E.2d 167
PartiesStanley W. BOOTH, William D. Totten, Charles R. Martin and Gordon L. Clark, individually, Petitioners, v. James L. SIMS, as the Executive Secretary of the State of West Virginia Consolidated Public Retirement Board, Loretta K. Elder, David A. Haney, David A. Wyant, Toney Lautar, Jr., James H. Morton, Elizabeth Poundstone, S.S. Satterfield, Janet F. Wilson, all as Members of the West Virginia Consolidated Public Retirement Board, Chuck Polan, as Chairman of the West Virginia Consolidated Public Retirement Board, Glen Gainer, III, as Vice Chairman of the West Virginia Consolidated Public Retirement Board, and Governor Gaston Caperton and State Treasurer Larrie Bailey, both as Ex Officio Members of the West Virginia Consolidated Public Retirement Board, Respondents.
Decision Date24 March 1995
Docket NumberNo. 22464

Page 167

456 S.E.2d 167
193 W.Va. 323
Stanley W. BOOTH, William D. Totten, Charles R. Martin and
Gordon L. Clark, individually, Petitioners,
v.
James L. SIMS, as the Executive Secretary of the State of
West Virginia Consolidated Public Retirement Board, Loretta
K. Elder, David A. Haney, David A. Wyant, Toney Lautar, Jr.,
James H. Morton, Elizabeth Poundstone, S.S. Satterfield,
Janet F. Wilson, all as Members of the West Virginia
Consolidated Public Retirement Board, Chuck Polan, as
Chairman of the West Virginia Consolidated Public Retirement
Board, Glen Gainer, III, as Vice Chairman of the West
Virginia Consolidated Public Retirement Board, and Governor
Gaston Caperton and State Treasurer Larrie Bailey, both as
Ex Officio Members of the West Virginia Consolidated Public
Retirement Board, Respondents.
No. 22464.
Supreme Court of Appeals of
West Virginia.
Submitted Oct. 12, 1994.
Decided Dec. 15, 1994.
Concurring and Dissenting Opinion
of Justice Miller Dec. 20, 1994.
Filed As Modified March 24, 1995.

Page 170

[193 W.Va. 326] Syllabus by the Court

1. Because money is expected to be put away as a condition precedent to fund the

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[193 W.Va. 327] state pension systems, pensions are legitimate debts of the State.

2. To the extent that anything in Mullett v. City of Huntington Police Pension Board, 186 W.Va. 488, 413 S.E.2d 143 (1991) or State ex rel. Fox v. Board of Trustees of Policemen's Pension, 148 W.Va. 369, 135 S.E.2d 262 (1964), is inconsistent with this opinion, they are overruled.

3. When considering the constitutionality of legislative amendments to pension plans, an employee's eligibility for a pension does not determine whether he or she has vested contract rights. The determination of an employee's vested contract rights concerns whether the employee has sufficient years of service in the system that he or she can be considered to have relied substantially to his or her detriment on the existing pension benefits and contribution schedules.

4. Considerations of detrimental reliance do not alter the applicable statutes controlling a state employee's eligibility for a pension, itself. Until a public employee meets the relevant age and service requirements for collection of a pension, he or she may not receive a pension, and the existence of constitutionally protected reliance interests in pension benefit and contribution schedules do not in any way alter the existing procedure for reimbursing pension contributions into the plan upon a public employee's voluntary or involuntary separation from state employment.

5. In public employee pension cases, what often concerns the court is not the technical concept of "vesting," but rather the conditions under which public employees have a property right protected under the contract clauses because of substantial detrimental reliance on the existing pension system.

6. In pension cases, then, there are two distinct issues of contract: (1) an employee's contract right to collect a pension after statutory eligibility requirements have been met; and (2) an employee's legitimate expectations, also contractual in nature, that the government will not detrimentally alter the pension scheme once the employee has spent sufficient time in the system to have relied to his or her detriment. The first issue involves whether the employee has remained in government service for such a length of time that he or she can collect benefits; the second issue involves the employee's reliance on promised government benefits after years of government service but before actual retirement age. Pension eligibility and reasonable expectations about the system's benefits are entirely separate issues.

7. By meeting certain eligibility requirements, a public employee acquires a right to payment under a pension plan. For any employee not yet eligible for payment, this is a mere expectancy; if the public employee does not meet the age and service requirements for benefits, his or her participation in a state pension plan does not allow receipt of a pension. But substantial employee participation in the system does create an employee's reliance interest in pension benefits. An employee's membership in a pension system and his or her forbearance in seeking other employment prevents the legislature from impairing the obligations of the pension contract once the employee has performed a substantial part of his or her end of the bargain and relied to his or her detriment.

8. Although participation in a government pension system and forbearance in seeking other employment create an employee's contract right to pension benefits under art. III, § 4 of our Constitution, such participation does not create contract rights to government employment. The entitlement to continued government employment continues to be controlled by civil service statutes, applicable regulations, the due process and equal protection clauses, the first amendment and other employment-related law.

9. If an employee engages in misconduct during his or her public service, he or she may forfeit rights to collect a pension later. Insofar as West Virginia Public Employees Retirement System v. Dodd, 183 W.Va. 544, 396 S.E.2d 725 (1990) holds that an employee's misconduct results in a forfeiture of the entire pension, it is still good law because the requirement of honorable service has been established in advance and has been made an explicit part of the entire bargain. Otherwise, if misconduct is not at issue,

Page 172

[193 W.Va. 328] Dodd (and all other similar cases) no longer state the law with regard to legislative amendments to a government pension plan; thus, to the extent Dodd and other cases are inconsistent with this opinion, they are overruled.

10. When the legislature structured the state trooper's pension system to allow for retirement before age fifty, the State encouraged state troopers to forego potential employment opportunities today for real pension benefits tomorrow. By promising pension benefits, the State entices employees to remain in the government's employ, and it is the enticement that is at the heart of employees' constitutionally protected contract right after substantial reliance not to have their own pension plan detrimentally altered.

11. If the State (or its political subdivisions) promise to defer salary until a person's retirement from state or local employment and to pay that deferred salary in the form of a pension, the State (or its political subdivisions) cannot eliminate this expectancy without just compensation once an employee has substantially relied to his or her detriment.

12. The cynosure of an employee's W.Va. Const. art. III, § 4 contract right to a pension is not the employee's or even the government's contribution to the fund; rather, it is the government's promise to pay.

13. In Dadisman v. Moore, 181 W.Va. 779, 384 S.E.2d 816 (1989), this Court emphasized the legislature's obligation to fund pension systems on a sound actuarial basis. We are not administrators, however, and we can only articulate what the law is. It is for the governor and the legislature to enforce the law.

14. Because pensions are a lawful debt of the State, the proper remedy for any failure to pay a pension is a mandamus action against the state treasurer and auditor. The funding of any pension program is the legislature's problem--not the state employees' problem--and once the legislature establishes a pension program, it must find a way to pay the pensions to all employees who have substantial reliance interests.

15. Changes may be made in pension systems with regard to new employees who have not yet joined the system and who have not yet relied to their detriment on government promises of future benefits. Furthermore, changes can be made with regard to employees with so few years of service that they cannot be said to have relied to their detriment. Line drawing in this latter regard must be made on a case-by-case basis, but after ten years of state service detrimental reliance is presumed.

16. Our constitutional provision against the State's impairment of obligations of contract, W.Va. Const. art. III, § 4, means only that the government must keep its promises; art. III, § 4 does not mean or even imply that the government must make promises in the first place.

17. To the extent that the government wishes to apportion future wage increases between immediate cash payments to existing workers and improved funding of pension systems, it may do so: No state or local employee has a right to a wage increase, and the State may ask workers to help make pension funds solvent by contributing to the funds new money given to them by the State for this purpose.

18. Because all employees who contribute to a state pension fund and who have substantially relied to their detriment on specific contribution and benefits schedules have immediate legitimate expectations that rise to the level of constitutionally protected contract property rights, we overrule Mullett v. City of Huntington Police Pension Board, 186 W.Va. 488, 413 S.E.2d 143 (1991) and its test of reasonableness for determining the constitutionality of legislative amendments to a pension plan.

19. The pension rights of all current state pension plan members who have substantially relied to their detriment cannot be detrimentally altered at all, and any alterations to keep the trust fund solvent must be directed to the infusion of additional money. "Detrimentally alter" means the legislature cannot reduce the existing benefits (including such things as medical coverage) of the pension plan or raise the contribution level without giving the employee sufficient money to pay the higher contribution. Should the legislature

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[193 W.Va. 329] seek to reduce certain advantages of a pension plan, it must offer equal benefits in their place as just compensation.

20. Until an employee becomes eligible to draw a pension, his or her...

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60 practice notes
  • Verba v. Ghaphery, No. 27464.
    • United States
    • Supreme Court of West Virginia
    • June 19, 2001
    ...declaration, in absence of palpable mistake or error, is itself evidence of the law until changed by competent authority. Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 (1995) (citation omitted). Finding no palpable mistake or error in Robinson, we affirm that In additio......
  • State v. McCraine, No. 30592.
    • United States
    • Supreme Court of West Virginia
    • May 16, 2003
    ...reasons." Bradshaw v. Soulsby, 210 W.Va. 682, 690, 558 S.E.2d 681, 689 (2001) (Maynard, J., dissenting), quoting Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 No compelling reason existed to overrule Nichols. The majority opinion did not provide any legitimate justifica......
  • Martin v. Workers Compensation Div., No. 28516.
    • United States
    • Supreme Court of West Virginia
    • November 30, 2001
    ...declaration, in absence of palpable mistake or error, is itself evidence of the law until changed by competent authority. Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 (1995) (citation omitted). Wingrove is well reasoned, devoid of 557 S.E.2d 339 palpable mistake or err......
  • Marcus v. Holley, No. 31872.
    • United States
    • Supreme Court of West Virginia
    • May 11, 2005
    ...Virginia Public Employees Retirement System v. Dodd, 183 W.Va. 544, 396 S.E.2d 725 (1990), overruled on other grounds by Booth v. Sims, 193 W.Va. 323, 456 S.E.2d 167 "In considering the constitutionality of a legislative enactment, courts must exercise due restraint, in recognition of the p......
  • Request a trial to view additional results
60 cases
  • Verba v. Ghaphery, No. 27464.
    • United States
    • Supreme Court of West Virginia
    • June 19, 2001
    ...declaration, in absence of palpable mistake or error, is itself evidence of the law until changed by competent authority. Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 (1995) (citation omitted). Finding no palpable mistake or error in Robinson, we affirm that In additio......
  • State v. McCraine, No. 30592.
    • United States
    • Supreme Court of West Virginia
    • May 16, 2003
    ...reasons." Bradshaw v. Soulsby, 210 W.Va. 682, 690, 558 S.E.2d 681, 689 (2001) (Maynard, J., dissenting), quoting Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 No compelling reason existed to overrule Nichols. The majority opinion did not provide any legitimate justifica......
  • Martin v. Workers Compensation Div., No. 28516.
    • United States
    • Supreme Court of West Virginia
    • November 30, 2001
    ...declaration, in absence of palpable mistake or error, is itself evidence of the law until changed by competent authority. Booth v. Sims, 193 W.Va. 323, 350 n. 14, 456 S.E.2d 167, 194 n. 14 (1995) (citation omitted). Wingrove is well reasoned, devoid of 557 S.E.2d 339 palpable mistake or err......
  • Marcus v. Holley, No. 31872.
    • United States
    • Supreme Court of West Virginia
    • May 11, 2005
    ...Virginia Public Employees Retirement System v. Dodd, 183 W.Va. 544, 396 S.E.2d 725 (1990), overruled on other grounds by Booth v. Sims, 193 W.Va. 323, 456 S.E.2d 167 "In considering the constitutionality of a legislative enactment, courts must exercise due restraint, in recognition of the p......
  • Request a trial to view additional results

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