Ricks v. Missouri Local Government Employees' Retirement System
| Decision Date | 29 September 1998 |
| Docket Number | No. WD,WD |
| Citation | 981 S.W.2d 585 |
| Parties | Shirley J. RICKS, Respondent, v. MISSOURI LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM, Appellant. 55175. |
| Court | Missouri Court of Appeals |
Thomas M. Schneider, Jones, Schneider and Bartlett, Columbia, for appellant.
Robert L. Hawkins, III, Susan Decker McNarie, Hawkins Law Office, Jefferson City, for respondent.
Before ULRICH, P.J., and HANNA and EDWIN H. SMITH, JJ.
Plaintiff, Shirley Ricks, widow of William Ricks, appeals the decision of the Defendant, Missouri Local Government Employees' Retirement System (LAGERS), denying her survivor's pension benefits. At the time of Mr. Ricks' retirement, Mr. and Mrs. Ricks elected to receive his retirement benefits in the form of a monthly retirement allowance payable to Mr. Ricks for his life. Mrs. Ricks, therefore, was precluded from receiving survivor's
benefits at his death. After a hearing before the LAGERS Board of Trustees, LAGERS found no grounds upon which relief could be granted to Mrs. Ricks because it concluded that sufficient information regarding the election of retirement benefits was provided to the Ricks prior to Mr. Ricks' election of a retirement option. The trial court, on appeal from the LAGERS' decision, reversed the Board's decision and entered judgment for Mrs. Ricks. On appeal to this court, Mrs. Ricks argues that the Board's denial of her claim was erroneous in that: 1) LAGERS breached its fiduciary duty to the Ricks by failing to provide sufficient information regarding the retirement options from which Mr. Ricks could determine that Mrs. Ricks was eligible to receive survivor's benefits, 2) a unilateral mistake on the part of the Ricks existed when they elected a retirement option that warrants recission, and 3) LAGERS negligently made misrepresentations to the Ricks regarding Mr. Ricks' retirement options. The judgment of the trial court is reversed, and the decision of LAGERS is affirmed.
Missouri Local Government Employees' Retirement System (LAGERS) is a nonprofit entity that provides retirement, survivor and disability benefits to employees of local governments. Both Shirley Ricks and her husband, William Ricks, were employees of the City of Columbia. Shirley and William Ricks were married on two separate occasions. The first marriage occurred in 1957 and was dissolved in 1982. The Ricks then remarried in 1993.
At the time of their second marriage, William Ricks was suffering from vascular disease that affected his heart and caused circulation problems. Due to his illness, William Ricks decided to retire in late 1993. In a letter to LAGERS dated October 22, 1993, Mr. Ricks requested information about his retirement benefits. On December 10, 1993, he completed a change of nomination of beneficiary form designating Shirley Ricks his primary beneficiary. Mr. Ricks then applied for retirement on December 29, 1993.
In January 1994, Mr. and Mrs. Ricks executed a retirement election form. The election form set forth four options available to retirees for a retirement payment plan and provided a description of each of the four options. Mr. Ricks, with the agreement of Mrs. Ricks, was to choose one of the four options. The options were described on the form as follows:
LIFE OPTION
A monthly allowance payable to me for my life.
A monthly allowance payable to me for my life--with the added provision that should I die before my primary beneficiary dies, upon my death my primary beneficiary will begin receiving a monthly allowance payable for the reminder of her (his) lifetime of any amount equal to 75% of the monthly allowance I receive. Should my primary beneficiary predecease me, upon notification to the system, my monthly allowance will revert to the Life Option allowance payable for the remainder of my lifetime.
A monthly allowance payable to me for my life--with the added provision that should I die before my primary beneficiary dies, upon my death my primary beneficiary will begin receiving a monthly allowance payable for the reminder of her (his) lifetime of any amount equal to 50% of the monthly allowance I receive. Should my primary beneficiary predecease me, upon notification to the system, my monthly allowance will revert to the Life Option allowance payable for the remainder of my lifetime.
A monthly allowance payable to me for my life--with the added provision that should I die before 120 monthly payments have been made, my beneficiary will begin receiving the same monthly payments for the remainder of the 120-month period--with the further added provision that should my beneficiary and I both die before a total of 120 monthly payments have been made, the equivalent value of the Options specifically available to Mr. Ricks listed at the bottom of the election form indicated he was eligible for the Life Option and Option C only. 1 The form required the signature of both the retiree member and his spouse. The form also contained a statement placed above the signature lines that read "I realize that this option cannot be changed after retirement." Both Mr. and Mrs. Ricks signed the election of allowance option form (Mrs. Ricks' signature appeared under the heading "spousal consent to member's election") indicating that Mr. Ricks elected the Life Option.
remainder of 120 monthly payments will be paid to my estate.
Prior to executing the election form, Mrs. Ricks called the LAGERS toll-free number and talked to two LAGERS staff members about the retirement options. These discussions focused on the statutory requirement that under Options A or B a beneficiary-spouse must be married for at least two-years immediately preceding the time the member-recipient retires to be eligible to receive benefits for the rest of the beneficiary's life--this two-year requirement is sometimes referred to as the death bed rule. See § 70.660 RSMo 1994. Mrs. Ricks contends that LAGERS' staff told her that she was not eligible for survivor's benefits under Option A or B as a spouse because she and Mr. Ricks had not been married for the two-years immediately preceding his retirement, and, therefore, that she could not be a named beneficiary.
Because Mrs. Ricks did not ask the staff members about Option C, which is not subject to the death bed rule, C was not discussed, and the LAGERS staff members did not indicate that another option existed under which she could receive benefits. Mrs. Ricks contends that because the staff members did not tell her that the death bed rule did not apply to Option C, she reasonably assumed the rule applied to all available options. Therefore, assuming that she could not be a beneficiary under Options A, B or C, Mrs. Ricks "didn't give any thought" to Option C. Only one of the two staff members, Sue Bielecki, remembered discussing the options with Mrs. Ricks. Ms. Bielecki stated that although she did not remember the details of the conversations with Mrs. Ricks, she would not have told Mrs. Ricks that she was not eligible to be a beneficiary under any of the four options.
Prior to his execution of the option election form, LAGERS provided Mr. Ricks a packet given to all retirees that included a booklet and a memorandum explaining the retirement benefit options. The booklet states the following regarding Option C:
OPTION C
This option, if selected, provides for a reduced monthly allowance for your lifetime, regardless of how long you live; with the added provision that should you die before being paid a total of 120 monthly payments, the same reduced monthly payment will be continued to your beneficiary, until the system has made a total of 120 monthly payments under your account.
The allowance payable under Option C is 90% of the life allowance ...
Unlike Options A and B, under Option C you can change your designation of a beneficiary at any time, including after retirement.
Should you elect Option C and should you and your beneficiary die within the guaranteed period, your estate will receive a lump sum settlement of the current value of the remaining monthly payments due....
Additionally, under the description of Options A and B, the memo explains the two-year spousal requirement as follows:
Under Option A or Option B you cannot change your designation of primary beneficiary either. You must designate your primary beneficiary--one person only--before the effective date of your retirement. If your primary beneficiary dies before you do after retirement, you cannot substitute another primary beneficiary. Your primary beneficiary must be either (1) your spouse who has been your spouse for at least the 2 years immediately preceding your retirement date, or (2) another person age 40 or older at your retirement date who has been receiving at least 1/2 support from you for at least the 2 years immediately preceding your retirement date (emphasis added).
The description of Option C in the memo contains no reference to the two-year spousal requirement.
Mrs. Ricks acknowledged that both she and Mr. Ricks reviewed the materials sent by LAGERS. However, she contends that they understood the death bed rule applied to all four options. In March of 1995, after electing the Life Option, Mr. Ricks sent a letter to LAGERS again indicating that he wanted to designate Mrs. Ricks as his beneficiary and asking for an exemption from the death bed rule on the basis that they had been married for 25 years in their first marriage. LAGERS informed Mr. Ricks that because he had received the first payment of his retirement allowance, his right to elect an option ended and no change could be made to his choice of retirement plans.
Mr. Ricks died in October of 1995. Shortly thereafter Mrs. Ricks discovered that she was an eligible beneficiary under Option C. Mrs. Ricks asserts that neither...
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