Elgee v. Ret. Bd. of the Pub. Emp. Ret. Sys. of Idaho
| Decision Date | 24 June 2021 |
| Docket Number | Docket No. 47846 |
| Citation | 490 P.3d 1142,169 Idaho 34 |
| Court | Idaho Supreme Court |
| Parties | Robert J. ELGEE, Petitioner-Appellant-Cross Respondent, v. The RETIREMENT BOARD OF the PUBLIC EMPLOYEE RETIREMENT SYSTEM OF IDAHO (PERSI), and its Board Members, Joy Fisher, Jeff Cilek, Celia R. Gould, and Park Price, Respondents-Cross Appellants. |
Robert J. Elgee, Hailey, appellant pro se argued.
Lawrence G. Wasden Idaho Attorney General, Boise, for respondents. W. Scott Zanzig argued.
This appeal stems from a years-long dispute between Robert Elgee and the Retirement Board of the Public Employee Retirement System of Idaho ("PERSI") regarding the payment of retirement benefits accrued during Elgee's service as a magistrate judge. The PERSI Board administers a statutorily-created retirement system for public employees in Idaho. It also adjudicates claims for benefits under those statutes. For clarity, we refer to the Retirement Board as "PERSI" when discussing the Board in its capacity as a litigant or administrator of the PERSI system, and as the "PERSI Board" when referring to the Board in its adjudicatory capacity over PERSI administrative claims.
Elgee became eligible for PERSI benefits in 2010, but operating under an erroneous interpretation of the statutes it administers, PERSI maintained Elgee was not then entitled to receive benefits. Eleven years, numerous administrative determinations, and two judicial review actions later, the parties continue to disagree on issues relating to the calculation of benefits, the interest due on benefits, and whether Elgee is entitled to damages for the tax consequences of receiving a lump sum payment of retroactive benefits. We address each issue below.
There are two retirement systems for judges in Idaho: PERSI and the Judges Retirement Fund ("JRF"). However, magistrate judges do not participate in the JRF; only district court judges, Court of Appeals judges, and Justices of the Idaho Supreme Court are eligible. When a magistrate judge assumes a JRF-eligible judgeship, he or she has an option to continue in the PERSI system or to transfer to the JRF. See I.C. § 1-2001. Elgee served as a magistrate judge from 1992 until 2004. During this time, Elgee paid into PERSI for retirement benefits; however, when Elgee became a district judge in 2004, he elected to transfer to the JRF.
In August 2010, Elgee turned 60, which is the age at which he reached service retirement age under PERSI. At the time, there was considerable uncertainty as to how PERSI would handle benefit payments for Elgee and others in his position, i.e. members who were eligible for benefits under PERSI's age and years of service requirement, but who had left PERSI for the JRF and were still working as judges. Over the years, it appears at least some former magistrate judges received PERSI benefits while working as district court judges, although PERSI maintained in 2010 that working district court judges could not receive retirement benefits from PERSI. Contributing to the uncertainty—at least for Elgee—were several inconsistent statements regarding Elgee's eligibility to receive benefits that were made by PERSI and repeated by staff members of the Administrative Office of the Courts. Among the statements by PERSI was an estimated benefits statement provided to Elgee in April 2010. Besides stating Elgee was ineligible for benefits, this statement suggested that Elgee's retirement benefits could not be deferred past retirement age, and, contradictorily, that PERSI benefits would be deferred until Elgee chose to leave state employment completely.
While Elgee believed he was eligible for benefits in 2010, he did not apply to receive them then, under the mistaken belief that his retirement benefits would increase if he waited. However, fearing a potential statute of limitations problem if he continued to delay, Elgee submitted an application for retirement benefits in June 2013. On his application, Elgee selected PERSI's "contingent annuitant option," which would provide benefits to Elgee's wife if he predeceases her, instead of PERSI's "regular retirement option," which would not provide spousal benefits after his death. PERSI denied this application, maintaining that it could not legally process Elgee's application as long as he continued to work as a public employee.
In late 2014, Elgee filed an administrative complaint to contest the denial of his application and the PERSI Board referred the matter to a hearing officer. After evidentiary hearings and briefing, the hearing officer issued a recommended order and proposed findings of fact and conclusions of law in late 2015. The hearing officer recommended that the PERSI Board determine Elgee became eligible for benefits in 2010, even though he was still employed as a district court judge.
Though Elgee prevailed before the hearing officer, he filed a motion for reconsideration, asking the hearing officer to make additional determinations. Of note, Elgee argued that the hearing officer should further determine: (1) that interest on payments was due at the general legal interest rate of 12 percent under Idaho Code section 28-22-104, rather than the "regular interest" rate defined in the PERSI statutes; and (2) that he be awarded damages for the tax consequences of receiving benefits in a lump sum payment, rather than having received them monthly since 2010. The hearing officer denied the motion for reconsideration, rejecting both arguments.
In late 2016, the Board rejected the hearing officer's recommendation that Elgee was eligible for benefits in 2010, and it affirmed the original denial of Elgee's 2013 application. Since the PERSI Board found that Elgee was not eligible for benefits, it did not address the additional issues Elgee raised in his motion for reconsideration.
Soon thereafter, Elgee filed his first petition for judicial review, which was heard by senior district judge Gerald Schroeder. There were only two issues before the district court in the first judicial review action: (1) "[w]hether a magistrate judge terminates PERSI employment when he quits working as a magistrate judge ..."; and (2) "[w]hether the State of Idaho is properly characterized as a ‘PERSI-employer’ with respect to employees who do not participate in the PERSI system ...." These issues related solely to the PERSI Board's reasons for maintaining Elgee was ineligible for benefits while still working as a district court judge. Judge Schroeder did not consider the validity of Elgee's 2013 application or the effect of his failure to apply for benefits in 2010.
While the first judicial review action was pending, Elgee retired as a district court judge, submitted a second application for benefits in May 2017, and began receiving monthly retirement benefits in June 2017.
In late 2017, Judge Schroeder ruled the PERSI Board had erred in its determination that Elgee was not eligible for benefits, set aside the PERSI Board's 2016 determination, and remanded the case for further proceedings. On remand, Elgee raised four issues that were not addressed by Judge Schroeder's decision: (1) whether PERSI correctly calculated the principal amount due using the rate under the contingent annuitant option, instead of the higher regular retirement option; (2) whether interest began to accrue in 2010, when Elgee first became eligible for benefits, or 2013 when he first submitted an application for benefits; (3) whether interest accrued on the unpaid benefits at the regular rate under the PERSI statutes, or the general legal interest rate; and (4) whether PERSI was "responsible for a tax loss caused Elgee by its refusal to pay Elgee his benefits" as they came due. Though the parties did not agree on these matters, PERSI paid Elgee $163,938.50 in April 2018, representing its calculation of the principal sum of benefits owed to Elgee based on the contingent annuitant option for the period between September 2010 and May 2017.
In May 2018, the PERSI Board decided three of the four issues on remand based on the record developed in the prior administrative proceedings, largely adopting the findings of the hearing officer in 2015. However, on the issue of when interest began to accrue, the PERSI Board held an additional evidentiary hearing. In December 2018, the PERSI Board issued its findings of fact and conclusions of law concerning the date of interest accrual issue.
Between its May and December 2018 decisions, the PERSI Board held on remand that: (1) it had properly calculated the principal amount due to Elgee using the contingent annuitant rate (2) interest began to accrue in 2013 when he first applied for benefits; (3) interest on unpaid benefits was due at the "regular" rate provided for in PERSI statutes; and (4) Elgee's tax loss claim was (a) not permissible under the PERSI statutes and (b) unsupported by evidence.
Elgee brought a second judicial review action challenging each of these determinations in December 2018, which was heard by district judge Peter Barton. However, Elgee filed a motion to dismiss the tax loss issue in May 2019. The motion itself is not in the record, but the parties presented argument on the motion during a district court hearing on June 28, 2019.
In January 2020, Judge Barton issued a decision on the second petition for judicial review. Judge Barton affirmed the determination of the PERSI Board on the first and second issues (applicable interest rate and the date of interest accrual), but reversed regarding the third issue (contingent annuitant versus regular retirement option), and dismissed Elgee's tax loss claim without prejudice. Elgee timely appealed the district court's decision on the issues related to interest. PERSI then cross-appealed the district court's decision on the matter of the contingent annuitant rate and the dismissal of Elgee's tax loss claim without prejudice.
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