Wagoner v. Gainer, 14827

Decision Date15 June 1981
Docket NumberNo. 14827,14827
Citation279 S.E.2d 636,167 W.Va. 139
CourtWest Virginia Supreme Court
PartiesF. Morton WAGONER, et al. v. Glen B. GAINER, Jr., et al.

Syllabus by the Court

1. The West Virginia Retirement System for Judges creates contractually vested property rights for retired and active participating plan members, and these rights are enforceable and cannot be impaired or diminished by the State.

2. W.Va. Code § 51-9-6c (1981 Replacement Vol.) is, by virtue of article I, section 10 of the United States Constitution, inapplicable to all retired and active members of the Retirement System for Judges who were participating in the system at the time of the Code provision's effective date.

3. While the Legislature has the right to make reasonable alterations to the judicial pension fund, such alterations cannot impair the benefit level where there are extant statutorily- created inequities and special unfunded benefit provisions that affect the equal application of the law or the financial integrity or cost of the pension fund.

Chauncey H. Browning, Atty. Gen., James B. Hoover, Sp. Asst. Atty. Gen., Marianne K. Hoover, Asst. Atty. Gen., Charleston, for appellants.

James K. Brown, Charleston, for appellees.

McGRAW, Justice:

Glen B. Gainer, Auditor of the State of West Virginia, and Larrie Bailey, Treasurer of the State of West Virginia, appeal from an order of the Circuit Court of Kanawha County commanding them in mandamus to issue and sign warrants on and after July 1, 1979, paying the appellees, all retired justices or judges of courts of record in West Virginia, increased retirement pay which properly reflects a pay increase given by the Legislature to active justices and judges. Pursuant to a provision of the reenactment of the Retirement System for Judges, W.Va. Code § 51-9-1, et seq. (1981 Replacement Vol.), participating retired members of the judiciary are no longer entitled to receive pension increases based upon salary increases granted to active members of the judiciary. The appellees contend, and the lower court found, that this provision violates article one, section ten of the United States Constitution in that it impairs the obligation of the State to maintain certain vested contractual rights. They also argue that inasmuch as the provision applies only to some of the retirement plan participants, it violates the equal protection clause of the Fourteenth Amendment to the United States Constitution. We think the lower court was correct in finding the provision unconstitutional, and we affirm the issuance of the writ of mandamus.

In 1949, the West Virginia Legislature established the judges retirement system. 1949 W.Va. Acts, ch. 34. The court below outlined the "general" terms of retirement under the system. "Upon assuming office each justice or judge has to elect to participate ... (and) must pay 6% of ... (his) ... total salary into the fund. Additional(ly), ... one must serve 16 full years in office and reach ... (age) 65, or serve 24 (full) years ... (regardless of age) ... before ... entitle(ment) ... to benefits ..." The Act became article 9 of chapter 51 of the West Virginia Code. Under the provisions of W.Va. Code § 51-9-6, a retired judge eligible for benefits under the system shall be paid "annual retirement benefits, so long as he shall live, in an amount equal to seventy-five per cent of the annual salary of the office from which he has retired ... as such salary may be changed from time to time during the period of his retirement." This, we note, is not the only escalator provision in our pension law. Under the Public Employees Retirement System, members of the Legislature who served prior to the effective date of W.Va.Const. art. VI, § 33, (Nov. 3, 1970), are, upon retirement, entitled to the benefit of the escalator provision in W.Va. Code § 5-10-22 (1979 Replacement Vol.). See, Campbell v. Kelly 157 W.Va. 453, 202 S.E.2d 369, 373 (1974); Bier v. McGehee, 148 U.S. 137, 13 S.Ct. 580, 37 L.Ed. 397 (1893); New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650, 6 S.Ct. 252, 29 L.Ed. 516 (1885); Railroad Co. v. McClure, 10 Wall. (77 U.S.) 511, 19 L.Ed. 997 (1871); Dodge v. Woolsey, 18 How. (59 U.S.) 331, 15 L.Ed. 401 (1856).

Senate Bill No. 170, enacted by the Legislature on March 10, 1979, and made effective July 1, 1979, provided for increases in the salaries of justices and judges. Operating under the escalator provisions of W.Va.Code § 51-9-6, these salary increases would have increased the annual retirement benefits for eligible retired justices and judges. In the course of subsequent legislative procedures, the original Senate Bill was amended by adding a new section, the effect of which was to freeze retirement benefits for retired justices and judges at levels and in amounts determined by the salaries of active justices and judges prior to January 1, 1979. 1979 W.Va. Acts, ch. 26. This amendment appears in the West Virginia Code as W.Va. Code § 51-9-6c (1981 Replacement Vol.). 1 It was pursuant to this provision that the Treasurer and the Auditor refused to issue warrants to the petitioners below which included an increase in pension payments based upon the salary increases for active members of the judiciary.

In their petition for a writ of mandamus, the petitioners below stated in part that "the amendment in question changing the participation was in violation of the equal protection provisions of the 14th amendment of the United States Constitution and it also impairs the obligations of a contract in violation of Article I, Section 10 of the Constitution of the United States."

The trial court, in a letter opinion made a part of the judgment order on which this appeal is based, refers briefly to the equal protection issue and invites attention to the ambiguous language in the added section of the statute. The brief of the appellees makes passing reference to the equal protection issue as well. However, the primary issue we are called upon to decide is whether the circuit court erred in concluding that W.Va.Code § 51-9-6c, which removes the escalator provision from the judges' retirement system, is unconstitutional as a law impairing the obligations of contract in violation of article I, section 10 of the Constitution of the United States. A related issue presented is the authority of the Legislature to alter the terms of the retirement plan in order to maintain the flexibility and fiscal integrity of the plan.

At the outset, our sensitivity to Canon 3(C) of the Judicial Code of Ethics is titillated by a question apparent on the record, the propriety of this Court ruling on the issue of the retirement benefits to be paid to justices and judges. Although the parties have not raised the issue, all members of this Court are currently participating in the retirement program, and, thus, it appears that we have a remote pecuniary interest in the outcome of this case and should be disqualified from deciding it under the tenets of the Judicial Code of Ethics. Even as our opinion today touches upon questions affecting our retirement, we note that the venerable common law "rule of necessity" commands that we hear this case.

The United States Supreme Court recently spoke to the rule of necessity in a case involving the salaries of members of the federal judiciary. United States v. Will, --- U.S. ----, 101 S.Ct. 471, 66 L.Ed.2d 392, (1980). The high court there noted that the first recorded invocation of the rule of necessity was in 1430, when it was held that in the absence of a provision for the appointment of another judge, a judge could act in a case in which he was a party. Y.B.Hil. 8 Hen. VI, case 6, fn. 19. As Pollack said, "although a judge had better not, if it can be avoided, take part in the decision of a case in which he has any personal interest, yet he not only may but must do so if the case cannot be heard otherwise." F. Pollack, A First Book of Jurisprudence, 253 (1896).

The rule of necessity is of ancient tenure and long honored. Atkins v. United States, 214 Ct.Cl. 186, 556 F.2d 1028 (1977); cert. denied, 434 U.S. 1009, 98 S.Ct. 718, 54 L.Ed.2d 751 (1978); Pilla v. American Bar Assn., 542 F.2d 56 (8th Cir. 1976); Brinkley v. Hassig, 83 F.2d 351 (10th Cir. 1936); Moulton v. Byrd, 224 Ala. 403, 140 So. 384 (1922); Olson v. Cory, 27 Cal.3d 532, 609 P.2d 991, 164 Cal.Rptr. 217 (1980); Dacey v. Connecticut Bar Ass'n, 170 Conn. 520, 368 A.2d 125 (1976); Nellius v. Stiftel, 402 A.2d 359 (Del.1978); Wheeler v. Board of Trustees of Fargo Consol. School Dist., 200 Ga. 323, 37 S.E.2d 322 (1946); Schwab v. Ariyoshi, 57 Haw. 348, 555 P.2d 1329 (1976); Higer v. Hansen, 67 Idaho 45, 170 P.2d 411 (1946); Gordy v. Dennis, 176 Md. 106, 5 A.2d 69 (1936); State ex rel. Gardner v. Holm, 241 Minn. 125, 62 N.W.2d 52 (1954); State ex rel. West Jersey Traction Co. v. Board of Public Works, 56 N.J.L. 431, 29 A. 163 (1894); Long v. Watts, 183 N.C. 99, 110 S.E. 765 (1922); First American Bank & Trust Co. v. Ellwein, 221 N.W.2d 509 (N.D.), cert. denied, 419 U.S. 1026, 95 S.Ct. 505, 42 L.Ed.2d 301 (1974); McCoy v. Handlin, 35 S.D. 487, 153 N.W. 361 (1915); Alamo Title Co. v. San Antonio Bar Ass'n, 360 S.W.2d 814 (Tex.Civ.App.), writ ref'd, no rev. error (Tex.1962); State ex rel. Bagley v. Blankenship, W.Va., 246 S.E.2d 99 (1978); State ex rel. City of Charleston v. Coghill, 156 W.Va. 877, 207 S.E.2d 113 (1973); Price v. Fitzpatrick, 85 W.Va. 76, 100 S.E. 872 (1919); Stafford v. County Court, 58 W.Va. 88, 51 S.E. 2 (1905); and City of Grafton v. Holt, 58 W.Va. 182, 52 S.E. 21 (1905). The rule of necessity applied in aid of article 3 section 17 of the West Virginia Constitution imposes a duty upon a judge to act in a proceeding wherein he is otherwise disqualified by the Judicial Code of Ethics if his jurisdiction is exclusive and if there is no provision for substitution. Where, however, the tenets or elements creating disqualification contaminate not only the...

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