W.Va. Consol. Pub. Ret. Bd. v. Clark, No. 20-0350

CourtSupreme Court of West Virginia
Writing for the CourtJUSTICE WALKER delivered the Opinion of the Court.
Decision Date14 June 2021
PartiesWEST VIRGINIA CONSOLIDATED PUBLIC RETIREMENT BOARD, Respondent Below, Petitioner v. ROBERT CLARK, ET AL., Petitioners Below, Respondents
Docket NumberNo. 20-0350

WEST VIRGINIA CONSOLIDATED PUBLIC RETIREMENT BOARD, Respondent Below, Petitioner
v.
ROBERT CLARK, ET AL., Petitioners Below, Respondents

No. 20-0350

SUPREME COURT OF APPEALS OF WEST VIRGINIA

January 2021 Term
Submitted: April 13, 2021
June 14, 2021


Appeal from the Circuit Court of Kanawha County
The Honorable Jennifer Bailey, Judge
Civil Action No. 18-AA-9

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

Ronda L. Harvey, Esq.
Bowles Rice LLP
Charleston, West Virginia
Counsel for Petitioner

Lonnie C. Simmons, Esq.
DiPiero Simmons McGinley & Bastress, PLLC
Charleston, West Virginia
Counsel for Respondents

JUSTICE WALKER delivered the Opinion of the Court.
JUSTICE WOOTON concurs in part and dissents in part and reserves the right to file a separate opinion.

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SYLLABUS BY THE COURT

1. "On appeal of an administrative order from a circuit court, this Court is bound by the statutory standards contained in W.Va. Code § 29A-5-4(a) and reviews questions of law presented de novo; findings of fact by the administrative officer are accorded deference unless the reviewing court believes the findings to be clearly wrong." Syllabus Point 1, Muscatell v. Cline, 196 W. Va. 588, 474 S.E.2d 518 (1996).

2. "In cases where the circuit court has amended the result before the administrative agency, this Court reviews the final order of the circuit court and the ultimate disposition by it of an administrative law case under an abuse of discretion standard and reviews questions of law de novo." Syllabus Point 2, Muscatell v. Cline, 196 W. Va. 588, 474 S.E.2d 518 (1996).

3. "'In the absence of any specific indication to the contrary, words used in a statute will be given their common, ordinary and accepted meanings.' Syl. pt. 1, Tug Valley Recovery Center v. Mingo County Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979)." Syllabus Point 1, Thomas v. Firestone Tire & Rubber Co., 164 W. Va. 763, 266 S.E.2d 905 (1980).

4. "The 'body corporate' of the public employees retirement system constitutes a trust. The terms of the trust contract are spelled out in the PERS statute. W.Va. Code § 5-10-1 et seq." Syllabus Point 3, Dadisman v. Moore, 181 W. Va. 779, 384 S.E.2d 816 (1988).

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5. "The PERS Trustees have the highest fiduciary duty to maintain the terms of the trust, as spelled out in the statute." Syllabus Point 5, Dadisman v. Moore, 181 W. Va. 779, 384 S.E.2d 816 (1988).

6. "The PERS Board, as trustee of retirement funds, must dispose of them according to the law. The board has a fiduciary duty to protect the fund and the interests of all beneficiaries thereof, and it must exercise due care, diligence, and skill in administering the trust." Syllabus Point 14, Dadisman v. Moore, 181 W. Va. 779, 384 S.E.2d 816 (1988).

7. "A statute that diminishes substantive rights or augments substantive liabilities should not be applied retroactively to events completed before the effective date of the statute (or the date of enactment if no separate effective date is stated) unless the statute provides explicitly for retroactive application." Syllabus Point 2, Public Citizen, Inc. v. First National Bank in Fairmont, 198 W. Va. 329, 480 S.E.2d 538 (1996).

8. "'A law is not retroactive merely because part of the factual situation to which it is applied occurred prior to its enactment; only when it operates upon transactions which have been completed or upon rights which have been acquired or upon obligations which have existed prior to its passage can it be considered to be retroactive in application.' Syl. pt. 3, Sizemore v. State Workmen's Comp. Comm'r, 159 W.Va. 100, 219 S.E.2d 912 (1975)." Syllabus Point 3, Re: Petition for Attorney Fees and Costs: Cassella v. Mylan Pharmaceuticals, Inc., 234 W. Va. 485, 766 S.E.2d 432 (2014).

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9. West Virginia Code § 5-10-44 (eff. July 1, 2015) is a remedial statute that may be applied to correct an error in the Public Employees Retirement System, found at West Virginia Code §§ 5-10-1 to 55, that occurred before July 1, 2015.

10. Under West Virginia Code § 5-10-44(e) (eff. July 1, 2015), the Consolidated Public Retirement Board shall correct in a timely manner any error that results in any member, retirant, beneficiary, entity or other individual receiving from the Public Employees Retirement System, found at West Virginia Code §§ 5-10-1 to 55, more than he or she would have been entitled to receive had the error not occurred.

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WALKER, Justice:

Since 1996, the West Virginia Division of Natural Resources (DNR) has paid Natural Resources Police Officers a "subsistence allowance" to cover their phone service, dry cleaning, and meals. Beginning in 1997, DNR reported those payments to the Consolidated Public Retirement Board (the Board) as part of the officers' "compensation," a key component in the calculation of their retirement annuities under the Public Employees Retirement System (PERS). In 2014, the Board determined that the subsistence allowance is not "compensation," for purposes of PERS, and that the error had impacted the calculation of officers' and DNR's contributions to PERS as well as the amount of benefits paid to retired officers. The Board selected several means to correct the error, including recapturing benefit overpayments made to retired officers.

Respondents—current and retired officers and their widowers and widows—unsuccessfully challenged the benefit determination to the Board. But they prevailed before the circuit court, which reversed the Board's ruling. Now, we reverse in part and affirm in part the circuit court's order. We find, contrary to the circuit court, that the subsistence allowance is not "compensation," under PERS. But, like the circuit court, we find that the Board may not recover the excess retirement benefits already paid due to the erroneous treatment of the subsistence allowance as PERS compensation.

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I. FACTUAL AND PROCEDURAL HISTORY

Respondents are active or retired law enforcement officers employed by DNR.1 West Virginia Code § 20-7-1c (2017) sets officers' minimum annual salary (base pay), keyed to years of service and rank. Under § 20-7-1(i) (2015),2 officers receive a "subsistence allowance" of $130 each month, in addition to their base pay. The subsistence allowance is for officers' "required telephone service, dry cleaning or required uniforms, and meal expenses while performing their regular duties in their area of primary assignment[.]"3 DNR also pays an officer's actual expenses incurred working outside that area.4 The amount of the subsistence allowance does not vary, and it is paid to an officer when he is working or on paid annual, military, or sick leave. Officers on unpaid leave do not receive the allowance.5

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The Legislature enacted the subsistence allowance in its near-current form in 1996.6 Beginning in March 1997, DNR treated the subsistence allowance as part of officers' "compensation" under PERS.7 Section 5-10-2(8) of PERS defines "compensation" as:

the remuneration paid a member by a participating public employer for personal services rendered by the member to the participating public employer. . . . Any lump sum or other payments paid to members that do not constitute regular salary or wage payments are not considered compensation for the purpose of withholding contributions for the system or for the purpose of calculating a member's final average salary. These payments include, but are not limited to, attendance or performance bonuses, one-time flat fee or lump sum payments, payments paid as a result of excess budget, or employee recognition payments. The board shall have final power to decide whether the payments shall be considered compensation for purposes of this article[.]8

For clarity, we refer to such remuneration as "pensionable compensation."

DNR reports employees' gross salary to the Board, along with its own and its employees' corresponding contributions to PERS. For officers, that gross salary amount

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included the subsistence allowance.9 By including the allowance as part of officers' gross salary reported to the Board, DNR increased the officers' pensionable compensation. Increased pensionable compensation means increased inputs to, and outputs from, PERS. As for inputs, the amount of an employee's total, annual pensionable compensation dictates the amount of money the officers and DNR must contribute to PERS.10 And as for outputs, PERS retirement annuities are calculated based on, in part, an employee's "final average salary," a figure derived from an employee's annual, pensionable compensation.11 The Board offers training to employers on what is and what is not pensionable compensation, and will advise an employer whether a particular payment is subject to PERS upon request.12 DNR did not ask the Board whether the allowance was pensionable compensation.

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In 2014, officer Jon Cogar asked the Board to estimate his PERS retirement benefits. The Board audited Mr. Cogar's file and noticed "atypical" salary payments. The Board contacted DNR in March 2014 and asked for a report of any special payments made to Mr. Cogar since June 2006, from which retirement contributions had been withheld. DNR sent the requested report, in which it broke down those special payments by DNR payment code, including "135 Subsistence." The report showed that Mr. Cogar had received a $65.00 subsistence allowance, bimonthly, from June 2006 until March 2014. At the Board's request, DNR prepared a "PERS Inflated Salary Classification Form," to permit the Board to determine whether the allowance met the criteria for "compensation" under PERS.

On April 23, 2014, the Board notified DNR that because the subsistence allowance had not been paid for personal services rendered, it was not "compensation" under PERS. The Board directed DNR to stop withholding retirement contributions from the subsistence allowance. Then, on April 29, 2014, the Board notified Mr. Cogar of its determination. In July 2014, DNR advised the Board that it disagreed...

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