Lane v. Non-Teacher School Emp. Retir. Sys.

• Decision Date: 30 August 2005
• Docket Number: No. WD 64121.,WD 64121.
• Parties: Margaret LANE, Nina Smith, Dixie Lee Morgan and Virginia Nettles, Appellants, v. NON-TEACHER SCHOOL EMPLOYEE RETIREMENT SYSTEM OF MISSOURI and Potosi R-III School District, Respondents.
• Court: Missouri Supreme Court

174 S.W.3d 626

Margaret LANE, Nina Smith, Dixie Lee Morgan and Virginia Nettles, Appellants, v. NON-TEACHER SCHOOL EMPLOYEE RETIREMENT SYSTEM OF MISSOURI and Potosi R-III School District, Respondents.

No. WD 64121.

Missouri Court of Appeals, Western District.

August 30, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied October 4, 2005.

Application for Transfer Denied November 22, 2005.

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Ronald C. Gladney and James R. Kimmey, III, St. Louis, MO, for appellants.

Allen D. Allred, Jeffrey R. Fink and Kevin J. Rejent, St. Louis, MO, for Respondent NTRS.

Melanie G. Keeney and John M. Reynolds, St. Louis, MO, for Respondent Potosi R-III.

Before EDWIN H. SMITH, C.J., and HOWARD and HOLLIGER, JJ.

EDWIN H. SMITH, Chief Judge.

Margaret Lane, Nina Smith, Dixie Lee Morgan and Virginia Nettles, retired bus drivers for the Potosi R-III School District (District), appeal the summary judgment of the Circuit Court of Cole County for the respondents, the District and the Non-Teacher School Employee Retirement System (NTRS), on the appellants' equitable suit for an accounting against the respondents, seeking an accounting for claimed creditable service toward the accrual of NTRS retirement benefits for service to the District prior to 1990 and a judgment for any balance found to be due in accordance with the accounting. The trial court granted the respondents' joint motion for summary judgment¹ on the basis that the appellants' suit for an accounting was barred by the five-year statute of limitations of § 516.120(2)² and/or laches.

The appellants raise two points on appeal. In Point I, they claim that the trial court erred in granting the respondents' motion for summary judgment, on the basis that the appellants' suit for an accounting was barred by the running of the applicable five-year statute of limitations of § 516.120(2) in 1995, which was prior to suit being brought, because, as a matter of law, the five-year period did not begin to run until the appellants retired and were denied retirement benefits for their pre-1990 service, either in 2000 or 2001, depending on the appellant. In Point II, they claim that the trial court erred in granting the respondents' joint motion for summary judgment, on the basis that the appellants' suit for an accounting was barred by laches, because, under the facts alleged in the motion, the doctrine of laches did not apply, as a matter of law, in that the applicable statute of limitations had not yet run.

We reverse and remand.

Facts

The NTRS is a statutorily created retirement benefits system covering non-teacher employees who work at least twenty hours a week for Missouri school districts with a population of less than 300,000 and is established in §§ 169.600-169.715. Qualifying non-teacher employees become members of the NTRS by virtue of their employment with a qualifying district. § 169.650. A NTRS-qualifying school district is mandated, pursuant to § 169.620, to remit to the NTRS the contributions required to be withheld from a member's paychecks and the matching contributions required of the employer-district, both of which are based on a percentage of the member's earnings. Upon retirement, a member receives NTRS retirement benefits according to his years of creditable service and average salary. § 169.670.

Appellant Margaret Lane began working as a bus driver for the District in 1968 and remained employed in that capacity until the 1999-2000 school year. Appellant Nina Smith began working as a bus driver for the District in 1966 and remained employed in that capacity until 2000. Appellant Virginia Nettles began working as a bus driver for the District in 1976 and still works for the District as a part-time bus driver, although she "retired," for the purposes of NTRS, in 2001.³ Appellant Dixie Lee Morgan began working as a bus driver for the District in 1969, and, like Nettles, still works for the District as a part-time bus driver, although she "retired" for the purposes of NTRS.

In 1990, the appellants were informed by a NTRS representative that the District had not made the required contributions to the NTRS on their behalf for their pre-1990 employment with the District and that the NTRS had not given them creditable service for that employment. Having been so advised, the appellants completed the necessary NTRS enrollment forms, after which the District began remitting to the NTRS the contributions required by § 169.620. Approximately nine years later, on July 26, 1999, thirteen school bus drivers, including the four appellants, filed a petition against the respondents in the Circuit Court of Cole County, which is not included in the record on appeal, seeking a determination that they had accrued creditable service, for purposes of accruing NTRS retirement benefits, for pre-1990 service to the District and a judgment for payment of any benefits found due from such determination.

In November of 1999, the District filed a motion to dismiss based on the running of the applicable statute of limitations and laches. In December of 1999, the NTRS filed a motion, pursuant to Rule 55.27(b), for a judgment on the pleadings, alleging that the plaintiffs' claims were barred by the applicable statute of limitations, § 516.120. On May 9, 2000, the trial court granted both motions for "the reason that the statute of limitations had run." The plaintiffs appealed to this court in Bettis v. Potosi R-III School. District, 51 S.W.3d 183, 186 (Mo.App.2001) (Potosi I), claiming that the trial court erred because their cause of action against the respondents was not barred by the applicable five-year period of limitation of § 516.120(2)⁴ since their cause of action did not "accrue," triggering the statute of limitations, until they had retired, such that their lawsuit was timely filed. In that regard, the respondents contended, in accordance with § 516.100, that the plaintiffs' cause of action accrued, triggering the statute of limitations, when their damages were sustained and were capable of ascertainment, which they alleged occurred in 1990, when the plaintiffs received paychecks that did not reflect any deductions for contributions to the NTRS. Bettis, 51 S.W.3d at 186. They argued that the plaintiffs were presumed to know the law such that they knew or should have known, from the lack of any deductions for NTRS contributions from their pre-1990 checks, that they had been damaged by the District and the NTRS. Id. at 188. This court expressly rejected that argument and adopted an accrual rule in pension cases that accrual occurs, for purposes of the statute of limitations, when there has been an application and a formal denial of benefits. Id. at 188-89.

On June 27, 2003, the trial court, on remand, granted the appellants leave to file a third amended petition, which is included in the record on appeal. The third amended petition, in which the appellants were the only named plaintiffs, alleged an equitable suit for an accounting, seeking an accounting for creditable service toward the accrual of NTRS retirement benefits for pre-1990 service to the District and a judgment for any balance found to be due them in accordance with the accounting. The petition alleged, inter alia, that Lane and Smith were retired from the District and were receiving benefits from the NTRS. As to Morgan and Nettles, the petition alleged that they had retired, in accordance with § 169.660.2, which permits employees to retire and receive retirement benefits while working part time, without accruing further creditable service. On August 1, 2003, the NTRS filed a cross-claim against the District. The cross-claim alleged that, to the extent that the NTRS was found liable to the appellants for additional NTRS retirement benefits for their pre-1990 service, the District was liable to the NTRS for failure to make the required NTRS contributions mandated by § 169.620.

On December 17, 2003, the District filed a motion for summary judgment on the appellants' third amended petition. The motion alleged that the District was entitled to judgment as a matter of law because the appellants' suit for an accounting was barred by the statute of limitations and the doctrine of laches. With respect to the running of the statute of limitations, as a basis for its motion, the District alleged, inter alia:

During the 1990 NTRS Meeting, [the NTRS representative] allegedly told Plaintiffs that they were entitled to NTRS retirement benefits for their pre-1990 employment with the District, and that Plaintiffs should tell the District to begin making contributions to the NTRS on their behalf.

Following the 1990 NTRS Meeting, Plaintiffs filled out enrollment forms with the NTRS to begin accumulating creditable service with the NTRS.

Perhaps as early as 1989, but certainly no later than the 1990 NTRS meeting, plaintiffs were aware, or became aware, that the District had not made contributions to the NTRS on behalf of Plaintiffs for Plaintiffs' pre-1990 employment.

Perhaps as early as 1989, but certainly no later than the 1990 NTRS meeting, Plaintiffs also were aware, or became aware, that the NTRS had not granted Plaintiffs creditable service for Plaintiffs' pre-1990 employment.

Despite being aware no later than 1990 that (1) the District had not made contributions to the NTRS for Plaintiffs' pre-1990 employment, and (2) that the NTRS was not granting Plaintiffs' creditable service for their pre-1990 employment, Plaintiffs waited until July 26, 1999 to bring this suit.

From these facts, the District argued in support of the motion that, in accordance with § 516.100, the appellants' cause of action against it accrued in 1990, triggering the statute of limitations, because, based on their being advised at the NTRS meeting that the District had not made contributions to the NTRS for the appellants' pre-1990 employment and that the NTRS had not credited the...