State ex rel. Mallory v. Pub. Emp. Retirement Bd.

• Decision Date: 24 June 1998
• Docket Number: No. 97-231,97-231
• Citation: 694 N.E.2d 1356,82 Ohio St.3d 235
• Parties: The STATE ex rel. MALLORY, Appellant, v. PUBLIC EMPLOYEES RETIREMENT BOARD et al., Appellees.
• Court: Ohio Supreme Court

Page 235

82 Ohio St.3d 235

694 N.E.2d 1356

The STATE ex rel. MALLORY, Appellant, v. PUBLIC EMPLOYEES RETIREMENT BOARD et al., Appellees.

No. 97-231.

Supreme Court of Ohio.

Submitted Jan. 13, 1998.

Decided June 24, 1998.

In 1976, the General Assembly enacted R.C. Chapter 120, the Public Defender Act. The Act established the Ohio Public Defender Commission and authorized counties to create county and joint county public defender commissions. 136 Ohio Laws, Part I, 1868. In accordance with R.C. 120.13, the Franklin County Commissioners established the Franklin County Public Defender Commission ("commission") to provide legal representation to indigent persons as required by law. Pursuant to R.C. 120.14, the commission appointed the Franklin County Public Defender. Attorney James Kura was appointed to the position. Kura then hired attorneys and support personnel to form the Franklin County Public Defender's Office ("FCPDO"). The FCPDO employed many of the same attorneys and staff who were formerly employed by the Franklin County Legal Aid and Defender Society, a nonprofit corporation that ceased its work in the criminal defense area in 1976. The FCPDO, thereafter, provided public defender services to indigent criminal defendants in Franklin County, and pursuant to R.C. 120.18, Franklin County received reimbursement from the state for the cost of operating the FCPDO. Once established, the FCPDO operated as if it were a non-public, unincorporated association and both the FCPDO, as an employer, and its employees paid Social Security taxes on their wages. The commission and Kura considered the FCPDO to be a non-county agency and thus FCPDO employees were not treated as "public employees" for purposes of the Public Employees Retirement System ("PERS").

Under the 1976 Public Defender Act, in addition to Franklin County, twenty-four other counties established county public defender commissions that appointed county public defenders. Twenty-three of these counties treated employees of their public defender offices as county employees and members of PERS. Summit County was the only other county, besides Franklin, that considered employees of the public defender's office to be private employees.

In 1979, the Ohio Attorney General issued an opinion determining that county public defenders and members of county public defender commissions were public officers instead of public employees, and thus concluded that a board of county commissioners had no statutory authority to provide personal liability insurance for the benefit of the officers. The Attorney General also advised, however, that malpractice and personal liability insurance could be procured for staff attorneys and other employees of county public defenders because those employees were public employees.

In 1980, the State Auditor informed Summit County officials that the county's public defender office was operating illegally and was not entitled to state reimbursement under R.C. 120.18. Summit County permitted the office to continue to operate, but without state reimbursement. The State Auditor's action evidently resulted from an informal 1980 opinion issued by the Administrative Agencies Section Chief of the Attorney General's Office, wherein the section chief had concluded that employees of county public defender offices were county employees for purposes of PERS.

Minutes from the commission's 1980 meetings clearly indicate that Kura and members of the commission were keenly aware of the Attorney General's opinions and, consequently, decided that an amendment to R.C. Chapter 120 was necessary to "legalize the way [the FCPDO] operates." In addition, the Ohio Public Defender informed Kura as early as 1980 that the FCPDO was not legally constituted and that it was a county agency. During one of the commission's 1982 meetings, Kura conceded that if R.C. Chapter 120 were not amended the State Auditor would advise the FCPDO that it needed to treat its employees as county employees. Further, Kura advised one commission member that the commission did not have to worry about the possibility of FCPDO employees raising the issue of entitlements to PERS membership because the new amendment to R.C. Chapter 120 would include a provision retroactively legalizing the FCPDO's operation as a private entity.

In 1984, the General Assembly enacted R.C. 120.14(F) to specifically permit county and joint county public defender commissions to contract with non-profit organizations to provide representation to indigent criminal defendants. 140 Ohio Laws, Part I, 949, 956-957. However, R.C. 120.14(F) did not contain a provision giving it retroactive effect. Following the enactment, the FCPDO was incorporated as a non-profit corporation. Thereafter, the commission (Franklin County Public Defender Commission) contracted with the county commissioners and the city of Columbus to provide legal representation for indigent criminal defendants in Franklin County, and the commission subcontracted with the newly incorporated FCPDO to provide the contracted-for services.

Appellant, Diane Mallory, was employed at the FCPDO as a law clerk from June 1978 to September 1980 and as an attorney from February 1982 to January 1994. During appellant's employment with the FCPDO, no contributions to PERS were made on her behalf. Instead, appellant and the FCPDO paid Social Security taxes. According to appellant, on at least one occasion prior to 1984, she had advised Kura that she wanted to participate in PERS. Notably, appellant never requested to have her earnings exempted from PERS contributions. Since 1994, appellant has been a state employee and a contributing member of PERS.

In September 1994, appellant filed a request seeking service credit in PERS for her fourteen years of employment with the FCPDO. PERS denied appellant's request because it found that the FCPDO had been a private, non-profit organization throughout appellant's employment with the office. In denying appellant's claim, PERS noted the following:

"The crux of your position that you were a 'public employee' rests not on the facts, but rather on the legal argument that the commission operations as conducted were unlawful under Chapter 120, Ohio Revised Code. Consequently, individuals acting as public defenders only could be employees of the county. The legal authority which you have cited does not address this legal argument. In addition, and more significantly, PERS cannot make a legal determination that something is unlawful under statutes which it neither administers nor enforces. The retirement system can only make a factual determination on whether someone is a public employee employed by a public employer. The facts under review support the determination that you were not a public employee. Whether as a matter of law the commission acted properly under Chapter 120 is something that must be resolved, if necessary by litigation, between you and the commission." (Emphasis added.)

Appellant appealed the staff determination to appellee Public Employees Retirement Board ("board") pursuant to Ohio Adm.Code 145-21-03. The board affirmed the staff decision denying appellant's request for PERS service credit. The board determined, in part, that appellant raised a legal issue that was beyond its authority to address.

In May 1996, appellant filed a complaint for writ of mandamus in the Court of Appeals for Franklin County, naming, as respondents, the board and the Franklin County Commissioners. Appellant requested the issuance of a writ to compel the board to credit her with fourteen years of service as a public employee with the FCPDO and to order the Franklin County Commissioners to remit employer and employee contributions to PERS for those years on behalf of appellant. The court of appeals granted the Franklin County Public Defender permission to intervene as a respondent. The parties filed evidence and briefs in support of their respective positions. The court of appeals denied appellant's request for a writ of mandamus, stating:

"After the passage of R.C. 120.14(F) [in 1984], the FCPDO changed the structure of its organization to a non-profit organization and filed articles of incorporation. Immediately thereafter, the FCPDO, as an unincorporated association, assigned all its rights, title and interest, to the tangible and intangible property held by it to the FCPDO, as an Ohio not-for-profit corporation. However, because R.C. 120.04(C)(3) had already authorized the Franklin County Public Defender to contract with a private organization for providing legal services to the indigent, relator's argument fails. In 1984, the FCPDO changed its status as an unincorporated association to a not-for-profit corporation for whatever reasons. However, that does not change the fact that, pursuant to the statute in effect in 1976, the right to contract with a private organization to supply legal services for the indigent already existed."

This cause is now before this court upon an appeal as of right.

Jones, Day, Reavis & Pogue, Richard A. Chesley, Chicago, IL, and Jonathan K. Stock, Columbus, for appellant.

Betty D. Montgomery, Attorney General, and James M. Harrison, Assistant Attorney General, for appellee Public Employees Retirement Board.

Ron O'Brien, Franklin County Prosecuting Attorney, Anne E. Thomson and Bonnie L. Maxton, Assistant Prosecuting Attorneys, for appellees Franklin County Commissioners.

Carlile Patchen & Murphy, L.L.P., Denis J. Murphy and Charles L. Bluestone, Columbus, for appellee Franklin County Public Defender.

DOUGLAS, Justice.

The parties present a number of arguments for our consideration. We have carefully reviewed these arguments and have conducted a thorough review of the record. For the reasons that follow, we reverse the judgment of the court of appeals and grant appellant's requested writ of mandamus.

I

Appellees concede that an action in mandamus is the appropriate remedy to determine app...