Mclemore ex rel. State Police Ret. Sys. v. Weiss
| Decision Date | 18 April 2013 |
| Docket Number | No. 12–958.,12–958. |
| Citation | 427 S.W.3d 56,2013 Ark. 161 |
| Parties | Roger McLEMORE, Charles McLemore, and Mike Hall, individually and on behalf of a class consisting of members of the Arkansas State Police Retirement System, Appellants v. Richard WEISS, Director, Arkansas Department of Finance and Administration; J.R. Howard, Director, Department of Arkansas State Police; Gail H. Stone, Executive Secretary, Arkansas State Police Retirement System; John W. Allison, Kirk Bradshaw, Joe Miles, Brant Tosh, Donnie Underwood, Blake Wilson and John Shelnutt, Trustees, Arkansas State Police Retirement System, Appellees. |
| Court | Arkansas Supreme Court |
OPINION TEXT STARTS HERE
C. Burt Newell, Hot Springs, for appellants.
Dustin McDaniel, Att'y Gen., by: Patricia Vanausdall Bell, Ass't Att'y Gen., for appellees.
Appellants Roger McLemore, Charles McLemore, and Mike Hall, individually and on behalf of a class consisting of members of the Arkansas State Police Retirement System (ASPRS), appeal an order of the Pulaski County Circuit Court granting summary judgment in favor of Appellees, Richard Weiss, director of the Arkansas Department of Finance & Administration; J.R. Howard, director of the Department of Arkansas State Police (ASP); Gail H. Stone, executive secretary of the ASPRS; and John W. Allison, Kirk Bradshaw, Joe Miles, Brant Tosh, Donnie Underwood, Blake Wilson, and John Shelnutt, as trustees of the ASPRS. On appeal, Appellants assert that the circuit court erred in finding that a uniform and travel-expense allowance provided for in Ark.Code Ann. § 12–8–209 (Repl.1999) 1was not reportable to the ASPRS as a portion of payroll pursuant to Ark.Code Ann. § 24–6–209(a). As this is a second appeal of this suit, our jurisdiction is pursuant to Ark. Sup.Ct. R. 1–2(a)(7) (2012). We find no error and affirm the grant of summary judgment.
The underlying facts of this case were set forth in Weiss v. McLemore, 371 Ark. 538, 268 S.W.3d 897 (2007), wherein this court decided the limited issue of the applicability of the doctrine of sovereign immunity.
For many years, State Police officers received allowances for their uniforms and travel. These allowances came in the form of additional payments, received at the same time as every other paycheck, of $125.00 for “expenses” and $166.66 for a “clothing allowance.” The total of these additional payments was $3,500 per year. Until 1992, this additional $3,500 per year for “expenses” and “clothing allowances” was not included on the W–2 forms issued by the Department of Finance & Administration. Beginning in 1992, apparently upon inquiry from the Internal Revenue Service, this additional sum was included on the officers' W–2 forms. However, even after the $3,500 began being reported as taxable income, that sum was not included when calculating each officer's contributions to the ASPRS.
Pursuant to Act 1071 of 1997, the Department of State Police's contributions to the Retirement System was a sum equal to 22% of “active member payroll,” although that term was not defined by the Act. Between 1997 and 2003, the Retirement System was funded based on the 22% formula, but those calculations did not take into account the $3,500 per year that the officers were receiving for expenses and clothing allowances.
Act 1609 of 2003 provided for a one-time annual salary adjustment of $3,500 for commissioned officers. Following passage of Act 1609, the State began to include the additional $3,500 as “active member payroll” for purposes of funding the Retirement System. In addition, the $3,500 began to be included in calculating retiring officers' final average compensation. It was apparently this change in the funding calculations that constituted the impetus for the instant lawsuit.
In November of 2005, the officers filed a class-action lawsuit, contending that the various state defendants had violated the law by failing to properly fund the ASPRS between 1992 and 2003. The officers also alleged that the improper funding of the retirement system constituted an illegal exaction and an impairment of contractual obligations in violation of Ark. Const. art. 2, § 17. Their complaint sought a writ of mandamus directing the State to “immediately correct the records of all class members individually and the ASPRS as a system[.]” In addition, the officers' complaint asked for a declaratory judgment to the effect that “the current method of calculation of [the plaintiffs'] retirement benefits by [the State] is in violation of statutory intent and is in breach of plaintiffs' contract with [the State].”
The State filed a motion to dismiss on December 27, 2005, in which it asserted that the officers' claims were barred by sovereign immunity. In addition, the State asserted that the officers had failed to state claims for an illegal exaction or a breach of contract.
On January 5, 2006, the officers responded to the State by filing an amended complaint in which they asserted a new cause of action based on 42 U.S.C. § 1983. In essence, the officers contendedthat, by failing to properly fund the ASPRS, the State had deprived them of their property without just compensation.
The trial court considered the matter solely on the pleadings and entered an order on September 5, 2006. In that order, the court found that the officers had failed to state a claim for an illegal exaction; however, the court did find that the complaint adequately set out a claim for breach of contract. Regarding the State's sovereign immunity argument, the trial court found that § 24–6–205 provided “a limited waiver of sovereign immunity.” Finally, the court agreed with the State that the plaintiffs had failed to state a claim pursuant to 42 U.S.C. § 1983, and it dismissed that claim. The State filed a timely notice of appeal on October 3, 2006, and now raises three arguments for reversal in this interlocutory appeal.
Weiss, 371 Ark. at 539–41, 268 S.W.3d at 898–99 (footnote omitted). We affirmed the circuit court's finding that Ark.Code Ann. § 24–6–205 provided a limited waiver of sovereign immunity, thereby allowing the ASPRS to correct the retirement record of a state police officer. The case was then remanded to circuit court.
Following our remand, the parties engaged in discovery and litigated the issue of class-action certification and notice to the class members. Thereafter, on September 8, 2011, Appellants filed a motion for summary judgment, arguing that, from 1987 until 2003, the payments denominated for uniform and travel-expense allowance should have been calculated as salary for purposes of retirement contributions. In this regard, Appellants asserted that the State failed to take into account the $3,500 per year that each trooper received between 1987 and 2003 when calculating the active member payroll or covered salary in its contribution to ASPRS; that each officer who received retirement benefits or who will receive retirement benefits and whose compensation had been calculated before 2003 had been receiving an improper amount of retirement benefits; and that appellees must correct all the records to the ASPRS to cure these alleged errors.
Appellees responded and filed a cross-motion for summary judgment, alleging that they were entitled to judgment as a matter of law because Appellants could not establish that they miscalculated Appellants' retirement contributions or benefits.
On September 4, 2012, the circuit court entered an order granting summary judgment in favor of Appellees. In its order, the circuit court stated as follows:
The Court believes that the [appellees'] position is correct. The argument that [appellants] advance requires the Court to find that the General Assembly, which establishes the salary of members of the Arkansas State Police and created the ASPRS program, intended that the uniform and travel expense payments be considered as “salary” and “payroll,” but did not appropriate funds for retirement contributions based on those amounts. The Court simply cannot do so. The only way the Court can construe the appropriation and retirement contribution statutes consistently, as it is obligated to do, Glaze v. State, 2011 Ark. 464, 385 S.W.3d 203 (2011), is to accept the construction of them advanced by the [appellees]. Therefore, the Court grants their motion for summary judgment.
From that order, comes the instant appeal.
Appellants sole point on appeal is that the circuit court erred in finding that the uniform and travel-expense allowance, originally codified at section 12–8–209, was not reportable to the ASPRS as a portion of payroll, as required by section 24–6–209(a). In support of their argument, Appellants assert that (1) the $3,500 allowance was never a reimbursement figure, (2) the $3,500 allowance was payroll when considered in light of the definition of payroll throughout the Arkansas Code, (3) subsequent legislative action evidences an intent that the money was considered to be salary all along, (4) legislative intent is not controlling where it is clear that the sum was salary, and (5) the $3,500 allowance was considered taxable income and was thus properly payable to ASPRS.
Appellees argue to the contrary that the circuit court correctly granted their motion for summary judgment as the $3,500 allowance was not “salary” or “payroll” and thus was properly excluded from calculating Appellants' retirement contribution and benefits. Appellees admit that the terms “covered salary” and “active member payroll” were not included in the definition section of the ASP retirement law, but they point out that the term “salary” was defined and expressly precluded any reimbursements for travel expenses. Thus, according to Appellees, the circuit court correctly found that construing the applicable statutes, together with the ASP's appropriations, that the legislature did not intend the $3,500 to qualify as either salary or payroll for purposes of computing retirement contributions or benefits.
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