State ex rel. Dicks v. Employe Trust Funds Bd., 10

• Decision Date: 06 June 1996
• Docket Number: No. 95-1661,No. 10,R,10,95-1661
• Citation: 551 N.W.2d 845,202 Wis.2d 703
• Parties: , 111 Ed. Law Rep. 967 STATE of Wisconsin ex rel. Kenneth W. DICKS, Petitioner-Respondent, v. EMPLOYE TRUST FUNDS BOARD, Respondent-Appellant, d Cooperative Education Service Agencyespondent.
• Court: Wisconsin Court of Appeals

Page 845

551 N.W.2d 845

202 Wis.2d 703, 111 Ed. Law Rep. 967

STATE of Wisconsin ex rel. Kenneth W. DICKS, Petitioner-Respondent, v. EMPLOYE TRUST FUNDS BOARD, Respondent-Appellant,^d Cooperative Education Service Agency No. 10, Respondent.

No. 95-1661.

Court of Appeals of Wisconsin.

Submitted on Briefs Dec. 12, 1995.

Opinion Released June 6, 1996.

Opinion Filed June 6, 1996.

For the respondent-appellant the cause was submitted on the brief of James E. Doyle, Attorney General, with Warren M. Schmidt, Assistant Attorney General.

For the petitioner-respondent the cause was submitted on the brief of John C. Talis of Lawton & Cates, S.C. of Madison.

Before GARTZKE, P.J., and DYKMAN and VERGERONT, JJ.

GARTZKE, Presiding Judge.

The Employee Trust Funds Board (Board) appeals from a circuit court order reversing the determination by the Department of Employe Trust Funds (Department) that Kenneth W. Dicks did not participate in the Wisconsin Retirement System (WRS) until January 1979. The court directed the Board to award Dicks participating employee status from an earlier date. The dispositive issue is whether, as the Board held, Dicks's claim to participation status before January 1979 is time-barred. We conclude it is not barred, and we therefore affirm.

Dicks is a participating employee in WRS. He has not retired. He is employed by Cooperative Education Service Agency (CESA # 10). In April 1976 Dicks began employment at CESA # 6 (now part of CESA # 10) as a non-teacher employee. CESA # 6 non-teaching employees could participate in the Wisconsin Retirement Fund, a predecessor of the Wisconsin Retirement System. However, CESA # 6 did not report Dicks to the Department as a participating employee for the period April 1976 to January 1979. CESA # 6 first reported him as a participating employee in January 1979.

On December 14, 1990, Dicks appealed to the Department concerning his April 1976 to January 1979 employment. The Department determined that his appeal was time-barred under § 40.06(1)(e)1, STATS., because Dicks had filed it more than seven years after the services he rendered. The Department also concluded that Dicks's eligibility to participate in WRS during that period was not subject to correction under § 40.08(10), STATS. Dicks then appealed to the Board. ¹

Section 40.06(1)(d), STATS., provides in material part:

Each participating employer ... shall notify the department in the manner and at the time prescribed by the department, of the names of all participating employes classified as protective occupation participants ... or classified as teacher participants ... or other classification as specified by the department.

Section 40.06(1)(e)1, STATS., provides in material part:

An employe may appeal a determination under par. (d), including a determination that the employe is not a participating employe, to the board by filing a written appeal with the board. An appeal under this paragraph does not apply to any service rendered more than 7 years prior to the date on which the appeal is received by the board....

Section 40.08(10), STATS., provides in material part:

Service credits granted and contribution, premium and benefit payments made under this chapter are not subject to correction unless correction is requested or made prior to the end of 7 full calendar years after the date of the alleged error or January 1, 1987, whichever is later, unless the alleged error is the result of fraud or unless another limitation is specifically provided by statute. This subsection does not prohibit correction of purely clerical errors in reporting or recording contributions, service and earnings.

Following an evidentiary hearing, the Board found that in December 1976 Dicks understood that CESA # 6 did not regard him as a participating employee in the Wisconsin Retirement Fund. He was told, incorrectly, that there was a one-year waiting period, and he was told, again incorrectly, that he had to "complete paperwork" to qualify. On May 3, 1991, the CESA administrator advised the Department that Dicks had not been reported as a participating employee because he did not "enroll" in the retirement system in May 1976. The CESA accounting clerk advised the Department that in April 1976 "retirement was a deduction not a benefit" and "employees who did not initially choose retirement were then given the option to enroll." The Board found, "Both of these reasons for not reporting the appellant as a participating employee were invalid. The information given to the appellant by the officials of CESA # 6 regarding the waiting period and completing paperwork was also manifestly incorrect."

The Board found that "since CESA # 6 was a participating employer, the appellant was an employe as defined in Section 41.02(7), [STATS.] (1975-1976)." ² The Board nevertheless ruled that because his appeal was time-barred by § 40.06(1)(e)1, STATS., the Department's determination that Dicks was not a participating employee for the period April 1976 to January 1979 was final. The Board also ruled that no correction could be made for that period under § 40.08(10), STATS. The Board reasoned that before service credits may be granted, the person must be a participating employee in the WRS. Since a final determination was made for the period in issue that Dicks was not a participating employee, the Board could not make the correction.

Dicks brought certiorari in the circuit court for Dane County as authorized by § 40.08(12), STATS., to review the Board's decision. The court held that Dicks's time to appeal to the Board had not run under § 40.06(1)(e)1, STATS., and therefore reversed the Board's decision. The Board appeals.

Certiorari review of an agency's decision is limited to whether the agency kept within its jurisdiction, acted according to law, its action was arbitrary or unreasonable, and it might reasonably make the decision on the evidence before it. Schmidt v. Employe Trust Funds Board, 153 Wis.2d 35, 40, 449 N.W.2d 268, 270 (1990). We review the agency's decision de novo and without deference to the view of the certiorari court.

When, as here, the only question is one of law--whether the agency has properly interpreted and applied the statute to the undisputed facts--the agency's interpretation does not bind us. Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 659-60, 539 N.W.2d 98, 102 (1995). We should defer in varying degrees to the agency's interpretation of an ambiguous statute. Id.

However, an agency's entitlement to judicial deference to its statutory interpretation cannot prevail against a decision by the court of appeals contrary to the agency's interpretation. When the court of appeals construes a statute in a published opinion, that opinion binds every agency and every court until it is reversed or modified. This is the meaning of § 752.41(2), STATS., which provides, "Officially published opinions of the court of appeals shall have statewide precedential effect."

The Board decided Dicks's appeal shortly before we released our opinion in Benson v. Gates, 188 Wis.2d 389, 525 N.W.2d 278 (Ct.App.1994). In Benson we held "that the period of limitation under § 40.08(10) [, STATS.,] within which errors in computing teachers' service credits may be corrected begins to run when the Department determines a participant's benefits upon retirement." 188 Wis.2d at 391-92, 525 N.W.2d at 280.

Our reasoning in Benson is of more significance to the appeal before us than is our holding in that case regarding § 40.08(10), STATS. We said:

Pension rights are contractual and are protected by Article I, Section 12 of the Wisconsin Constitution prohibiting the passage of any law impairing the obligation of contracts. State ex rel. O'Neil v. Blied, 188 Wis. 442, 446, 206 N.W. 213, 214 (1925); see § 40.19(1), STATS. Thus, when the legislature merged the teachers' retirement systems with the Wisconsin Retirement Fund to create the Wisconsin Retirement System, it could not divest plan participants of their right to creditable service vested in them by § 42.245(1)(a), STATS., 1965. The legislature could, however, establish a period of limitation after which a plan participant could not maintain an action against the Department and Board to correct an error in calculating and paying retirement benefits. See Shaurette v. Capitol Erecting Co., 23 Wis.2d 538, 547, 128 N.W.2d 34, 39 (1964) (statute shortening an existing limitation valid if grace period granted to begin action) (citing Swanke v. Oneida County, 265 Wis. 92, 102-04, 60 N.W.2d 756, 761-62 (1953)). The legislature could not, however, enact a period of limitation which would have the effect of extinguishing a participant's claim without fair notice of change in the period of limitation and a fair opportunity to preserve that claim. See id., at 544-48, 128 N.W.2d at 37-39. We, therefore, conclude that the "discovery" date under § 40.08(10), STATS., is the date on which the Department calculates and pays retirement benefits to a plan participant.

Id. at 404-5, 525 N.W.2d at 285-86 (emphasis added; footnote omitted).

When we said in Benson that the legislature merged the teachers' retirement systems with the Wisconsin Retirement Fund to create the Wisconsin Retirement System, we referred to the Laws of 1981, ch. 96. That law created the period of limitation in § 40.08(10), STATS., by which errors in computing service credits may be corrected, and it created § 40.06(1)(d) and (1)(e), STATS. Laws of 1981, ch. 96, §...