Stipe v. State ex rel. Bd. of Trustees

• Decision Date: 27 May 2008
• Docket Number: No. 102511.,102511.
• Citation: 2008 OK 52,188 P.3d 120
• Parties: Gene STIPE, Petitioner/Appellee, v. STATE of Oklahoma, ex rel. BOARD OF TRUSTEES OF the OKLAHOMA PUBLIC EMPLOYEES RETIREMENT SYSTEM and the Oklahoma Public Employees Retirement System, Respondents/Appellants.
• Court: Oklahoma Supreme Court

188 P.3d 120

2008 OK 52

Gene STIPE, Petitioner/Appellee, v. STATE of Oklahoma, ex rel. BOARD OF TRUSTEES OF the OKLAHOMA PUBLIC EMPLOYEES RETIREMENT SYSTEM and the Oklahoma Public Employees Retirement System, Respondents/Appellants.

No. 102511.

Supreme Court of Oklahoma.

May 27, 2008.

Rehearing Denied July 9, 2008.

APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY, OKLAHOMA, HONORABLE BARBARA G. SWINTON, DISTRICT JUDGE

¶ 0 Gene Stipe applied for retirement benefits from the Oklahoma Employees Retirement System (OPERS) after 54 years of credit service. OPERS determined administratively, upon receipt of a plea agreement entered in the federal district court for the District of Columbia, that the offenses to which Stipe had pled guilty violated his oath of office and therefore forfeited a portion of Stipe's retirement benefits pursuant to 51 O.S.2001 § 24.1. Stipe requested an administrative hearing and the final order adopted by Board of Trustees of OPERS denied reinstatement of benefits. On appeal to district court of Oklahoma County, the district judge reversed and ordered benefits reinstated, finding that the federal crimes to which Stipe pled guilty had nothing to do with Stipe's service in office and did not violate his oath of office. OPERS appealed and this Court granted OPERS' motion to retain the case for disposition.

ORDER OF THE DISTRICT COURT IS AFFIRMED.

Murray E. Abowitz, Abowitz, Timberlake & Dahnke, P.C., Oklahoma City, OK, for Appellee.

Joseph A. Fox, General Counsel, Oklahoma Public Employees Retirement System, Oklahoma City, OK, for Appellant.

HARGRAVE, J.

¶ 1 Gene Stipe (Stipe) served as an elected member of the Oklahoma House of Representatives from November 18, 1948 to November 18, 1954. He served as an elected member of the Oklahoma State Senate from November 21, 1956 until he resigned that office effective March 11, 2003. On March 29, 2003 Gene Stipe filed his retirement notice and application with the Oklahoma Public Employees Retirement System (OPERS), selecting a retirement date of June 1, 2003. Gene Stipe had 54 years of service credit in OPERS and was eligible for a monthly benefit of $7,042.23 based on his final average compensation of $39,123.48.

¶ 2 On March 24, 2003, Gene Stipe signed a plea agreement in the United States District Court for the District of Columbia pleading guilty to three counts: one count of conspiracy to violate the Federal Election Campaign Act, 18 U.S.C. § 371, a misdemeanor; one count of Conspiracy to Obstruct a Federal Election Commission investigation, 18 U.S.C. § 371, a felony; and one county of perjury, 18 U.S.C. § 1621, a felony.

¶ 3 By letter dated June 17, 2003, a trial attorney for the U.S. Department of Justice mailed to OPERS, at OPERS' request, a copy of the plea agreement. By letter dated June 23, 2003, general counsel for OPERS notified Stipe that her office had determined that the crimes for which he pled guilty violated his oath of office as a state officer and that according to 51 O.S. § 24.1, all retirement benefits that were not vested on September 8, 1981, the effective date of the statute, were forfeited.¹ Stipe was advised that his exclusive administrative remedy was the right to an administrative hearing before the Board of Trustees of OPERS pursuant to the Oklahoma Administrative Procedures Act (OAPA), 75 O.S. §§ 250-323.

¶ 4 Stipe pursued his administrative remedy and a hearing was held before a hearing examiner for the Board of Trustees of OPERS on March 26, 2004. The attorneys representing Stipe and OPERS argued the case to the hearing examiner and introduced documentary evidence. No witnesses were called despite the parties being advised by the hearing examiner of the importance of making a record from which the final order would be entered. Counsel for OPERS stated that she was calling no witnesses: "I don't believe it's necessary. I don't believe that . . . they've met their burden of proof, so I don't think its necessary for us to introduce witnesses."

¶ 5 Both parties submitted proposed findings of fact and conclusions of law to the hearing examiner, who adopted the order proposed by OPERS. The final order entered by the Board of Trustees of OPERS on May 25, 2004 found that, upon consideration of the hearing examiner's proposed order containing findings of fact and conclusions of law, Stipe's request for reinstatement of retirement benefits was denied. Eight of the Board's thirteen members were present and voted on the matter.

¶ 6 Stipe appealed to the district court of Oklahoma County by filing a petition for judicial review of administrative final order pursuant to the Oklahoma Administrative Procedures Act, 75 O.S.2001 § 318(B)(2). Such review is limited to the record presented at the agency hearing. The district court shall, upon request, hear oral argument and receive written briefs. 75 O.S.2001 § 321. The district court entered an order filed August 8, 2005, which found that OPERS had misapplied the forfeiture statute in excess of its statutory authority because the federal offenses had nothing to do with Stipe's service in office and did not violate his oath of office. The district court further found that the final agency order was arbitrary and capricious because it did not give effect to its own prior administrative interpretation of the forfeiture statute in the case of In re: Matter of Forfeiture of Retirement Benefits of Paul Taliaferro, where Taliaferro was a state senator at the time of his conviction for five federal felonies. The district court reversed the final agency order and remanded with instructions to OPERS to immediately award Stipe his full retirement and Savings Incentive Plan Benefits and to immediately pay the benefits that should have been paid since his retirement date of June 1, 2003. OPERS appealed to this Court and we granted the motion to retain. Oral argument to the Court en banc was held February 26, 2008.

STANDARD OF REVIEW

¶ 7 The Oklahoma Administrative Procedures Act (OAPC), 75 O.S.2001 § 318 et seq., governs our review. In reviewing agency orders, the standard is the same for the district court and this Court. Section 322(1) provides that in any proceeding for review of an agency order the Supreme Court or the district court may set aside or modify the order, or reverse it and remand it to the agency for further proceedings if it determines that the substantial rights of the petitioner have been prejudiced because the agency's findings, inferences, conclusions or decisions violate the constitution, exceed statutory authority or jurisdiction of the agency, violate lawful procedure, err in applying the law, or are arbitrary or capricious. Our review is limited to the record made in the administrative hearing.

¶ 8 The facts are not in dispute, thus we are left with a question of law which we, like the district court, review de novo. State ex rel. Porter v. Ferrell, 1998 OK 41, 959 P.2d 576, 577. The question is whether the crimes to which Stipe pled guilty constitute a violation of his oath of office. If so, then Stipe will forfeit retirement benefits accruing after September 1, 1981, the effective date of the forfeiture statute, 51 O.S. § 24.1. We begin first with the forfeiture statute, 51 O.S.2001 § 24.1(A), which provides in pertinent part:

"In the event any elected or appointed state or county officer or employee who, during the term for which he or she was elected or appointed, pleads guilty or nolo contendere to a felony or any offense involving a violation of his or her official oath in a state or federal court of competent jurisdiction, he or she shall, immediately upon the entry of said plea, forfeit said office or employment. Any such officer or employee upon final conviction of, or pleading guilty or nolo contendere to a felony in a state or federal court of competent jurisdiction shall vacate such office or employment and if such felony or other offense violates his oath of office shall forfeit all benefits of said office or employment, including, but not limited to, retirement benefits provided by law . . ." (emphasis added).

¶ 9 Section 24.1 is a forfeiture statute and as such must be strictly construed. Hendrick v. Walters, 1993 OK 162, 865 P.2d 1232. This Court must be mindful of Oklahoma's strong statutory policy, as well as that of the surviving common law, which disfavors both private- and public-law forfeitures. Hendrick v. Walters, 1993 OK 162, 865 P.2d 1232, 1238-39. Forfeiture will not be decreed except when required by clear language contained in the statute. Pirkey v. State, 327 P.2d 463, 466-67 (Okla.1958). Courts abhor forfeitures and will not force upon a forfeiture statute a construction which amounts to a reading into the law provisions not inserted therein by the legislature. Id. Courts will neither search for a construction that will bring about a forfeiture, nor adopt a meaning which would produce that effect, unless the language of the statute or constitutional provision under consideration — giving due respect to its purpose and to extant circumstances — clearly demonstrates the legislature intended that a forfeiture take place. Hendrick v. Walters, 865 P.2d at 1238-39. Thus, where there is any doubt whether a forfeiture statute applies, the doubt must be resolved against forfeiture. See, State v. Prairie Oil & Gas, 64 Okla. 267, 167 P. 756, 759 (Okla.1917).

¶ 10 Section 24.1 makes a clear distinction between forfeiture of the office and forfeiture of benefits. Conviction of or plea of guilty to a felony forfeits the office, but forfeiture of benefits occurs only if the felony or other offense also violates the oath of office. Thus, pleading guilty to a felony is not enough-the offenses must violate Stipe's oath of office. Keeping in mind that forfeitures are looked on with disfavor, we must strictly construe § 24.1 to limit forfeiture of benefits of the office to offenses that by their very nature constitute a violation of...