Davis v. State Employees' Retirement Board

• Decision Date: 24 August 2006
• Docket Number: Docket No. 259559.
• Parties: Leonard DAVIS, Petitioner-Appellee, v. STATE EMPLOYEES' RETIREMENT BOARD, Respondent-Appellant.
• Court: Court of Appeal of Michigan — District of US

725 N.W.2d 56

272 Mich. App. 151

Leonard DAVIS, Petitioner-Appellee, v. STATE EMPLOYEES' RETIREMENT BOARD, Respondent-Appellant.

Docket No. 259559.

Court of Appeals of Michigan.

Submitted July 12, 2006, at Detroit.

Decided August 24, 2006, at 9:10 a.m.

Released for Publication November 22, 2006.

COPYRIGHT MATERIAL OMITTED

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Larry F. Brya, Assistant Attorney General, for the respondent.

Before: JANSEN, P.J., and MURPHY and FORT HOOD, JJ.

MURPHY, J.

Respondent appeals by leave granted the circuit court's order reversing its denial of petitioner's application for nonduty disability retirement benefits under MCL 38.24. Respondent had denied the application for benefits on the basis of amended statutory language requiring the filing of an application within one year of termination from state employment, which requirement the petitioner had not satisfied. The circuit court, however, found that the amendment was prospective only and not applicable to petitioner. We conclude that the amendment of MCL 38.24 in 2002, pursuant to 2002 PA 93, applies prospectively only. Because the one-year application deadline set forth in MCL 38.24, as amended, operates in a manner comparable to a statute of limitations, and because statutes of limitations enacted by the Legislature operate prospectively only unless the legislation clearly manifests an intent to the contrary, which is not the case with MCL 38.24, the amended statute should not be applied retroactively. We also find support for our position, outside the context of the statute of limitations analogy, in Pohutski v. City of Allen Park, 465 Mich. 675, 641 N.W.2d 219 (2002), and Tarnow v. R. Express Agency, 331 Mich. 558, 50 N.W.2d 318 (1951). Accordingly, the circuit court properly reversed respondent's denial of petitioner's application for nonduty disability retirement benefits relative to the issue of failure to comply with the one-year application deadline. We affirm.

This Court reviews a circuit court's ruling on an administrative appeal to determine whether the circuit court "`applied the correct legal principles and whether it misapprehended or grossly misapplied the substantial evidence test to the agency's factual findings.'" Hinky Dinky Supermarket, Inc. v. Dep't of Community Health, 261 Mich.App. 604, 605, 683 N.W.2d 759 (2004), quoting Boyd v. Civil Service Comm., 220 Mich.App. 226, 234, 559 N.W.2d 342 (1996). We review the circuit court's legal conclusions de novo and the court's findings of fact for clear error. Hinky Dinky, supra at 605, 683 N.W.2d 759. Questions regarding statutory construction and whether a statute or amended statute should be applied retroactively or prospectively only are reviewed de novo. Frank W. Lynch & Co. v. Flex Technologies, Inc., 463 Mich. 578, 583, 624 N.W.2d 180 (2001); Bloomfield Charter Twp. v. Oakland Co. Clerk, 253 Mich.App. 1, 9-10, 654 N.W.2d 610 (2002).

It is important to recognize the time line of events that occurred in this action as viewed in relation to MCL 38.24 and the amendment of the statute. Petitioner, a state employee for approximately 25 years, was terminated from state employment in October 2000, after earlier going on medical leave in the fall of 1997. At the time of the termination, MCL 38.24 provided:

Subject to the provisions of sections 33 and 34, upon application of a member [of the state employee retirement system], or his department head, or the state personnel director, a member who has been a state employee at least 10 years becomes totally and permanently incapacitated for duty as the result of causes occurring not in the performance of duty to the state, may be retired by the retirement board: Provided, The medical advisor after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the further performance of duty, and such incapacity is likely to be permanent and that such member should be retired.

This language does not contain any time limits or deadlines within which a state employee or member must submit the application for benefits; petitioner was not precluded from applying for benefits more than one year after his termination. And without consideration of the amendment, petitioner's application in August 2002 would have been deemed timely. The 2002 amendment of the statute, made effective March 27, 2002, incorporated a one-year deadline, requiring the filing of an application for benefits no later than one year from the date of a member's termination from state employment. An applicant can also seek benefits within two years from the date of termination where there exists good cause for the delay in not filing within the first year following termination. Specifically, MCL 38.24 now provides:

(1) Except as may otherwise be provided in sections 33 and 34, a member who becomes totally incapacitated for duty because of a personal injury or disease that is not the natural and proximate result of the member's performance of duty may be retired if all of the following apply:

(a) The member, the member's personal representative or guardian, the member's department head, or the state personnel director files an application on behalf of the member with the retirement board no later than 1 year after termination of the member's state employment.

(b) A medical advisor conducts a medical examination of the member and certifies in writing that the member is mentally or physically totally incapacitated for further performance of duty, that the incapacitation is likely to be permanent, and that the member should be retired.

(c) The member has been a state employee for at least 10 years.

(2) Upon appeal to the retirement board, the retirement board, for good cause, may accept an application for a disability retirement allowance not later than 2 years after termination of the member's state employment.

At the time the amendment of MCL 38.24 became effective, March 27, 2002, more than one year had elapsed since petitioner's termination; therefore, even had petitioner filed an application the day the legislation became effective, he still would have failed to comply with the one-year deadline relative to applications. Compliance by petitioner with the amended statute on or after its effective date was impossible. As indicated above, petitioner actually filed an application in August 2002, outside the one-year application deadline, but within the two-year alternative period, necessitating the establishment of good cause, assuming application of the amended statute.

The change from a nonexistent deadline to apply for benefits to a one-year deadline following termination is analogous to the Legislature enacting a statute of limitations where one did not previously exist with regard to a cause of action, or where one did exist but was of longer duration than the amended version. Just as failure to file an application within one year of termination now precludes a state employee from recovering benefits, the failure by a plaintiff to commence a lawsuit within the applicable limitations period also precludes recovery. Through use of this sound analogy, we find that the amendment of MCL 38.24 cannot be made retroactive. We begin with the general principles that guide the analysis in determining whether a statute or amended statute should be applied retroactively or prospectively only.

Statutes and statutory amendments are presumed to operate prospectively. Pohutski, supra at 698, 641 N.W.2d 219; Selk v. Detroit Plastic Products, 419 Mich. 1, 9, 345 N.W.2d 184 (1984); Brooks v. Mammo, 254 Mich.App. 486, 493, 657 N.W.2d 793 (2002); Tobin v. Providence Hosp., 244 Mich.App. 626, 661, 624 N.W.2d 548 (2001); Thompson v. Merritt, 192 Mich.App. 412, 417, 481 N.W.2d 735 (1991). Indeed, statutes and amended statutes are to be applied prospectively unless the Legislature manifests an intent to the contrary. Selk, supra at 9, 345 N.W.2d 184; Schumacher v. Dep't of Natural Resources, 256 Mich.App. 103, 108-109, 663 N.W.2d 921 (2003); Rossow v. Brentwood Farms Dev., Inc., 251 Mich. App. 652, 662, 651 N.W.2d 458 (2002); Tobin, supra at 661, 624 N.W.2d 548. The Legislature's expression of an intent to have a statute apply retroactively must be clear, direct, and unequivocal as appears from the context of the statute itself. Chesapeake & O. R. Co. v. Pub. Service Comm., 382 Mich. 8, 23, 167 N.W.2d 438 (1969) (Adams, J.); Briggs v. Campbell, Wyant & Cannon Foundry Co., 379 Mich. 160, 164-165, 150 N.W.2d 752 (1967); In re Davis' Estate, 330 Mich. 647, 651-652, 48 N.W.2d 151 (1951); Rossow, supra at 662, 651 N.W.2d 458; Olkowski v. Aetna Cas. & Surety Co., 53 Mich.App. 497, 503, 220 N.W.2d 97 (1974), aff'd 393 Mich. 758, 223 N.W.2d 296.¹ The rule that legislative intent governs the determination regarding statutory retroactivity controls the analysis, and "`[a]ll other rules of construction and operation are subservient to this principle.'" Lynch, supra at 583, 624 N.W.2d 180, quoting Franks v. White Pine Copper Div., 422 Mich. 636, 670, 375 N.W.2d 715 (1985). Our Supreme Court in Lynch, id. at 583-584, 624 N.W.2d 180, stated:

We agree with defendants that there is nothing in the language of the [statute] suggesting a legislative intent that this statute be applied retroactively. . . . Most instructive is the fact that the Legislature included no express language regarding retroactivity. See, e.g., Chesapeake & O. R. Co. v. Public Service Comm., 382 Mich. 8, 22-23, 167 N.W.2d 438 (1969) (Adams, J.). We note that the Legislature has shown on several occasions that it knows how to make clear its intention that a statute apply retroactively. See, e.g., MCL 141.1157; MSA 5.3188(257) ("This act shall be applied retroactively . . ."); MCL 324.21301a; MSA 13A.21301a ("The changes in liability that are provided for in the amendatory act that added this subsection shall be given retroactive...