Retirement Benefits of Yetka, Matter of, C8-96-486

Decision Date10 September 1996
Docket NumberNo. C8-96-486,C8-96-486
Citation554 N.W.2d 85
PartiesIn the Matter of the RETIREMENT BENEFITS OF the Honorable Lawrence R. YETKA.
CourtMinnesota Court of Appeals

Syllabus by the Court

1. The term of office of an associate justice of the Minnesota Supreme Court expires at the time a successor takes the oath of office.

2. The compensation allotted to the office of associate justice on January 4, 1993, for purposes of Minn.Stat. § 490.025, subd. 2 (Supp.1973), includes salary increases that became effective on January 4, 1993, by operation of 1991 Minn.Laws ch. 345, art. I, § 28.

Thomas L. Fabel, Christopher H. Yetka, Lindquist & Vennum, P.L.L.P., Minneapolis, for Relator the Honorable Lawrence R. Yetka.

Hubert H. Humphrey, III, Minnesota State Attorney General, Jon K. Murphy, Julie A. Leppink, Assistant Attorneys General, St. Paul, for Respondent Minnesota State Retirement System Board of Directors.

Considered and decided by SCHUMACHER, P.J., and CRIPPEN and HOLTAN, JJ.


HOLTAN, Judge. *

Justice Yetka appeals the decision of the Minnesota State Retirement System Board denying him benefits based on the increased salary for justices that took effect January 4, 1993. We reverse.


Relator, the Honorable Lawrence R. Yetka (Justice Yetka), became an associate justice of the Minnesota Supreme Court on July 3, 1973, and served continually until his retirement. His last term of office was scheduled to expire in January 1993. He did not seek re-election. Instead, on July 6, 1992, Governor Arne H. Carlson granted Justice Yetka an extension of his term to October 31, 1994, his mandatory retirement date. 1 The Minnesota Supreme Court vacated the executive order granting this extension because it conflicted with the Minnesota Constitution. Page v. Carlson, 488 N.W.2d 274, 282 (Minn.1992). The election for Justice Yetka's office was held in the fall of 1992 and won by Justice Alan C. Page, who was sworn into office at 8:30 a.m. on January 4, 1993.

In 1973, the Minnesota Legislature adopted the Uniform Retirement and Survivors' Annuities for Judges Act (the uniform plan), which became effective on January 1, 1974. 1973 Minn.Laws ch. 744. Judges who were in office before January 1, 1974, and who attained the normal retirement age of 65, were given the option of receiving retirement benefits computed under the statutory formula in effect on December 31, 1973 (the old plan), in lieu of the benefits computed under the uniform plan. Minn.Stat. §§ 490.124, subd. 8, 490.025, subd. 3 (1992).

In 1989, based on the recommendation of the Minnesota State Compensation Council, the Minnesota Legislature voted to increase by six percent the salaries of certain state officers, including associate justices. 1989 Minn.Laws ch. 335, art. I, § 42. In 1991, however, the implementation of this salary increase was delayed:

The salaries of legislators, judges, and constitutional officers are frozen at current levels. The salary increases recommended in 1989 by the compensation council to take effect January 6, 1992, must not take effect until January 4, 1993.

1991 Minn.Laws ch. 345, art. I, § 28.

On October 22, 1992, Justice Yetka formally applied for a retirement annuity with respondent, the Minnesota State Retirement System (the MSRS). He exercised his option to have his benefits calculated under the old plan formula. Because he served as an associate justice for 19 years, the old plan entitled him to 67.5 percent of the "compensation allotted to his office at the time of his retirement." See Minn.Stat. § 409.025, subd. 2 (Supp.1973). On the notarized forms concerning application for annuity and distribution of deferred compensation, Justice Yetka listed January 2, 1993, as his last day of service or termination of employment.

On December 18, 1992, under the mistaken impression that the salary increase for justices would become effective on January 1, 1993, Justice Yetka contacted the MSRS, inquiring whether his pension would reflect the increase, inasmuch as his term of office would not expire "until January 3, 1993." On December 29, 1992, the MSRS informed Justice Yetka that his pension would be calculated on $89,052, an amount that did not reflect the salary increase. On January 28, 1993, the MSRS sent Justice Yetka a letter detailing his retirement benefits and again stating that his pension would be based on $89,052.

By letter on April 24, 1995, Justice Yetka asked the MSRS to recalculate his benefits based on the increase, contending his term of office did not formally end until Justice Page took the oath of office on January 4, 1993. On June 7, 1995, the executive director of the MSRS denied Justice Yetka's request. On August 3, 1995, Justice Yetka petitioned for review of this decision by the MSRS Board of Directors as provided by Minn.Stat. § 352.031, subd. 3 (1994). On November 1, 1995, a hearing was held before an administrative law judge (ALJ) to determine the correct benefit amount payable to Justice Yetka.

On November 21, 1995, the ALJ issued findings of fact, conclusions of law, and a recommendation that the MSRS Board of Directors affirm the decision of the executive director and deny Justice Yetka's petition for review. Among its conclusions of law, the ALJ determined that Justice Yetka "did not affirmatively abandon his office prior to January 4, 199," that his "final day in office was January 3, 1993, which was the date of his retirement." The ALJ found that Justice Yetka was willing and able to serve as a justice at any time prior to the qualification of his successor. This finding implies that Justice Yetka's retirement was involuntary, that is, mandated by the expiration of his term. The ALJ concluded Justice Yetka's final day in office was January 3, 1993. (The retirement date and expiration of term are not the same in all cases.) This finding of retirement date was prompted by information from the supreme court administrator's office.

On February 2, 1996, the MSRS Board issued its final order, adopting the ALJ's recommendation and report in its entirety and incorporating the ALJ's findings of fact and conclusions of law as its own. On March 4, 1996, Justice Yetka petitioned this court for a writ of certiorari, pursuant to Minn.Stat. § 352.031, subd. 9 (1994) and Minn.R.Civ.App.P. 115.01.


Did the MSRS Board err in calculating Justice Yetka's benefits without regard to the salary increase effective January 4, 1993?


We review a decision of the MSRS Board as we would any administrative agency decision. The MSRS appeal procedure allows a person whose request has been denied by the MSRS executive director to petition for review of that decision by the MSRS Board. Minn.Stat. § 352.031, subd. 3 (1994). The MSRS Board

in its sole discretion may refer a petition brought under this section to the office of administrative hearings for a contested case hearing under sections 14.57 to 14.69.

Minn.Stat. § 352.031, subd. 10 (1994). Section 14.69 provides:

In a judicial review under section 14.63 to 14.68, the court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative finding, inferences, conclusions, or decisions are:

(a) In violation of constitutional provisions; or

(b) In excess of the statutory authority or jurisdiction of the agency; or

(c) Made upon unlawful procedure; or

(d) Affected by other error of law; or

(e) Unsupported by substantial evidence in view of the entire record as submitted; or

(f) Arbitrary or capricious.

Minn.Stat. § 14.69 (1994). Furthermore, a public retirement fund board is analogous to an administrative agency. Axelson v. Minneapolis Teachers' Retirement Fund Ass'n, 544 N.W.2d 297, 299 (Minn.1996). The applicant for relief or benefits carries the burden of proof. In re City of White Bear Lake, 311 Minn. 146, 150, 247 N.W.2d 901, 904 (1976).

We, therefore, use the section 14.69 standard of review because the MSRS Board referred the matter to the office of administrative hearings under Minn.Stat. § 352.031, subd. 10, which incorporates by reference the statutory standard. Although the substantial evidence test is applicable to the MSRS Board's factual findings, we "may conduct an independent examination" of the board's record and decision in order to draw our own conclusion as to the propriety of that decision. See In re Signal Delivery Serv., 288 N.W.2d 707, 710 (Minn.1980); Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 825 (Minn.1977) (applying the statutory standard to a public service commission decision). Furthermore, because we conclude the determination that Justice Yetka retired on January 3, 1993, is a legal and not a factual question, we must decide whether it is arbitrary and capricious in light of the constitution and applicable statutes. 2 We review questions of law de novo. Western Insulation Servs. v. Central Nat'l Ins. Co., 460 N.W.2d 355, 357 (Minn.App.1990).

Justice Yetka elected to have his retirement benefits calculated using the old plan formula. Under this formula, a justice who has served for at least two full terms is entitled to a lifetime pension of

one half of the compensation allotted to his office at the time of his retirement plus two and one half percent of the compensation allotted to his office at the time of his retirement for each year, not exceeding 10, which he served in his office in excess of two full terms * * *.

Minn.Stat. § 490.025, subd. 2 (Supp.1973) (emphasis added).

The MSRS Board contends that because article VI, section 7, of the Minnesota Constitution specifically gives the legislature authority to provide for the retirement of judges, the statute alone should control. Because the MSRS Board argues that the date of Justice Yetka's retirement is a fact question, it contends that he failed to prove that he did not retire until January 4,...

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