State ex rel. Terra State Cmty. Coll. v. Sch. Emps. Ret. Sys. of Ohio Bd.

• Decision Date: 12 October 2021
• Docket Number: No. 20AP-288,20AP-288
• Parties: STATE EX REL. TERRA STATE COMMUNITY COLLEGE, Relator, v. SCHOOL EMPLOYEES RETIREMENT SYSTEM OF OHIO BOARD, Respondent.
• Court: Ohio Court of Appeals

179 N.E.3d 709

STATE EX REL. TERRA STATE COMMUNITY COLLEGE, Relator,

v.SCHOOL EMPLOYEES RETIREMENT SYSTEM OF OHIO BOARD, Respondent.

No. 20AP-288

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered on October 12, 2021

On brief: Dave Yost, Attorney General, and Rory P. Callahan, Columbus, for relator.

On brief: Dave Yost, Attorney General, Samuel A. Peppers, III, and Mary Therese J. Bridge, Columbus, for respondent.

DECISION

BEATTY BLUNT, J.

{¶ 1} Relator, Terra State Community College, seeks a writ of mandamus ordering respondent, School Employees Retirement System of Ohio Board ("SERS"), to vacate a determination by the board awarding SERS service credit to an individual and ordering Terra State to assume the cost of unpaid contributions for the pertinent period.

{¶ 2} Terra State asserts that SERS abused its discretion by retroactively applying language in an Ohio Administrative Code section adopted in 2009 when it determined that the employment of Donna Eickholt ("Eickholt"), employed with an independent contractor which provided dining services at Terra State from 1991 to 2003, should be granted non-contributing service for that period for which Terra State would owe a contribution obligation in excess of $300,000, comprising both the employer and employee contributions for the relevant time frame.

{¶ 3} Pursuant to Civ.R. 53 and Loc. R. 13(M) of the Tenth District Court of Appeals, this matter was referred to a magistrate who issued a decision, including findings of fact and conclusions of law, which is appended hereto. The magistrate found that SERS properly applied R.C. 3309.01(B)(2) to the evidence in this case when it determined that Eickholt was a public employee for purposes of membership in the SERS retirement plan for the relevant time frame; that she was entitled to service credit for those years; and thus, that Terra State was obligated to remit both the employer's and the employee's shares of contributions into SERS for those years. Accordingly, the magistrate recommends this court deny Terra State's request for a writ of mandamus.

{¶ 4} Terra State has filed the following two objections to the magistrate's decision:

[I.] The Magistrate's Decision erroneously concluded that the Respondent had not retroactively applied its 2009 regulations, O.A.C. § 3309-1-11, to define SERS membership, when the Respondent's own communications and staff determinations had cited that 2009 standard in imposing an obligation of over $300,000.00 in employee and employer obligations for the period from 1991 to 2003.

[II.] The Magistrate's decision did not cite to any evidence that the internal policy statement from 1985 and the Appendix from [ ] 1988 were ever communicated or otherwise shared with the College at any time from 1991 to 2003.

{¶ 5} Because Terra State has filed objections, we must independently review the record and the magistrate's decision to ascertain whether "the magistrate has properly determined the factual issues and appropriately applied the law." Civ.R. 53(D)(4)(d). Terra State has not objected to the magistrate's findings of fact. Having reviewed the record and the magistrate's decision pertaining to same and finding no error on the part of the magistrate in his determinations of the facts, we hereby adopt the magistrate's findings of fact in their entirety as our own.

{¶ 6} Turning to the magistrate's conclusions of law and Terra State's objections to them, we begin by observing that in order for this court to issue a writ of mandamus, a relator must meet three requirements: (1) relator has a clear legal right to the relief prayed for; (2) respondent is under a clear legal duty to perform the act requested; and (3) relator has no plain and adequate remedy in the ordinary course of law. State ex rel. Berger v. McMonagle , 6 Ohio St.3d 28, 29, 451 N.E.2d 225 (1983). The burden is on relator to establish all three elements by clear and convincing evidence. State ex rel. Mars Urban Solutions, LLC v. Cuyahoga Cty. Fiscal Officer , 155 Ohio St.3d 316, 2018-Ohio-4668, 121 N.E.3d 311, ¶ 6.

{¶ 7} Mandamus is an appropriate remedy when no statutory right of appeal is available to correct an abuse of discretion by an administrative body. State ex rel. Pipoly v. State Teachers Retirement Sys. , 95 Ohio St.3d 327, 2002-Ohio-2219, 767 N.E.2d 719, ¶ 14. Because there is no statutory right to appeal a decision of the SERS board, mandamus is available to correct an abuse of discretion in determining benefits eligibility. See , e.g. , State ex rel. Cydrus v. Ohio Pub. Emps. Retirement Sys. , 127 Ohio St.3d 257, 2010-Ohio-5770, 938 N.E.2d 1028, ¶ 13 ; State ex rel. Hughes v. Pub. Emps. Retirement Sys. , 36 Ohio St.3d 11, 13, 520 N.E.2d 577 (1988).

{¶ 8} An abuse of discretion exists when a decision is unreasonable, arbitrary, or unconscionable.

State ex rel. Shisler v. Ohio Pub. Emps. Retirement Sys. , 122 Ohio St.3d 148, 2009-Ohio-2522, 909 N.E.2d 610, ¶ 11. A retirement board abuses its discretion if it enters an order that is not supported by some evidence or authorized by its enabling statutes. State ex rel. Nese v. State Teachers Retirement Bd. of Ohio , 136 Ohio St.3d 103, 2013-Ohio-1777, 991 N.E.2d 218, ¶ 26, citing State ex rel. Schaengold v. Ohio Pub. Emps. Retirement Sys. , 114 Ohio St.3d 147, 2007-Ohio-3760, 870 N.E.2d 719, ¶ 19 ; State ex rel. Sales v. Ohio Pub. Emps. Retirement Bd. , 156 Ohio St.3d 433, 2019-Ohio-1568, 128 N.E.3d 216, ¶ 14-15.

{¶ 9} In this case, the evidence is not at issue; rather, at issue is the board's construction and application of the relevant regulations governing membership in the SERS retirement plan. R.C. 3309.01 defines employee membership in SERS, in pertinent part, as follows:

(B) "Employee" means all of the following:

* * *

(2) Any person who performs a service common to the normal daily operation of an educational unit even though the person is employed and paid by one who has contracted with an employer to perform the service , and the contracting board or educational unit shall be the employer for the purposes of administering the provisions of this chapter.

(Emphasis added.)

{¶ 10} In turn, Ohio Adm.Code 3309-1-11, which amplifies R.C. 3309.01, provides:

(A) A request for a determination as to whether an individual or a group of individuals are required to be members of the school employees retirement system may be initiated by an employer, an affected individual, or the retirement system.

(1) An employer or individual who has a question as to membership requirements shall request in writing a determination by the retirement system. Such determination shall be made as provided in rule 3309-1-03 of the Administrative Code.

(2) When a membership determination has been initiated, the employer and any affected individual or individuals shall furnish such documents and information requested by the retirement system.

(B) If contributions have not been remitted and the retirement system determines the individual is covered by this system, the employer shall be liable for employee and employer compulsory contributions pursuant to rule 3309-1-13 of the Administrative Code. If no membership record and/or contributions are received by the system within thirty days of the determination, a charge, based on an estimated salary for such individual's position, against the employer shall be made for collection through the state school foundation program if available or by direct billing.

(C) If contributions have been remitted and the retirement system determines the individual is not covered by this system, any contributions received shall be unauthorized and shall be refunded.

(D)(1) The definition of "employee" in division (B)(2) of section 3309.01 of the Revised Code does not include a person who holds a position for which the person is required to have a certificate or license issued pursuant to sections 3319.22 to 3319.31 of the Revised Code.

(2) The retirement board has determined that the phrase "service common to the normal daily operation of an educational unit" as used in division (B)(2) of section 3309.01 of the Revised Code means:

(a) Any service required to be provided by an educational unit or the provision of which is governed by law, statute, or rule; or

(b) Any service necessary on a regular continuous basis to the efficient operation of an educational unit; or

(c) Any service which, through custom and usage, has become a service commonly provided or procured by an educational unit on a regular continuous basis.

(Emphasis added.) Prior to 2009, subsection "D" was not part of the regulation. Subsection "D" was added that year as an amendment to refine the definition of "employee" contained in R.C. 3309.01(B)(2). Specifically, the amendment was intended to expound upon the meaning of the phrase "service common to the normal daily operation of an educational unit."

{¶ 11} In aid in construing the foregoing regulations, we first observe that courts "apply the rules of statutory construction to administrative rules as well." McFee v. Nursing Care Mgt. of Am., Inc. , 126 Ohio St.3d 183, 2010-Ohio-2744, 931 N.E.2d 1069, ¶ 27, citing State ex rel. Brilliant Elec. Sign Co. v. Indus. Comm. , 57 Ohio St.2d 51, 54, 386 N.E.2d 1107 (1979) (finding the "ordinary meaning rule" of statutory construction applies equally to administrative rules). Thus, " ‘[t]he interpretation of statutes and administrative rules should follow the principle that neither is to be construed in any way other than as the words demand.’ We must read undefined words and phrases in context and construe them in accordance with rules of grammar and common usage." State ex rel. Turner v. Eberlin , 117 Ohio St.3d 381, 2008-Ohio-1117, 884 N.E.2d 39, ¶ 14, quoting Morning View Care Ctr.-Fulton v. Dept. of Human Servs. , 148 Ohio App.3d 518, 2002-Ohio-2878, 774 N.E.2d 300, ¶ 36 (10th Dist.).

{¶ 12} Courts lack authority to ignore the plain and unambiguous language of a statute under the guise of statutory...