Wood v. State Educ. Ret. Bd.

• Decision Date: 10 November 2010
• Docket Number: No. 29,680.,29,680.
• Citation: 250 P.3d 881,149 N.M. 455,266 Ed. Law Rep. 975,2011 -NMCA- 020
• Parties: Diane WOOD, Petitioner–Appellee,v.STATE OF NEW MEXICO EDUCATIONAL RETIREMENT BOARD, Respondent–Appellant.
• Court: Court of Appeals of New Mexico

149 N.M. 455

250 P.3d 881

266 Ed. Law Rep. 975

2011 -NMCA- 020

Diane WOOD, Petitioner–Appellee,

v.STATE OF NEW MEXICO EDUCATIONAL RETIREMENT BOARD, Respondent–Appellant.

No. 29,680.

Court of Appeals of New Mexico.

Nov. 10, 2010.

Thomas C. Montoya, Atkinson & Kelsey, P.A., Albuquerque, NM, for Appellee.Gary K. King, Attorney General, Andrea R. Buzzard, Assistant Attorney General, Santa Fe, NM, for Appellant.

OPINION

VANZI, Judge.

{¶ 1} The State of New Mexico Educational Retirement Board (ERB) appeals from an order of the district court directing the ERB to pay Petitioner the unpaid accumulated interest in her deceased husband's account under the Educational Retirement Act (the Act), NMSA 1978, Sections 22–11–1 to –53 (1967, as amended through 2010) at the time of his retirement. The district court concluded that the ERB erred when it denied Petitioner the interest in the account and reversed the ERB's administrative order. The sole issue on appeal is whether the 1999 amendment to Section 22–11–29(E) of the Act should be applied retroactively because it was simply a “clarification” of the statute. We hold that the amendment to the statute applies prospectively and reverse the district court.

BACKGROUND

{¶ 2} The following facts are undisputed. Petitioner Diane Wood is the widow of Howard N. Rabinowitz. Mr. Rabinowitz was an employee under the Act and made regular contributions to his retirement plan. In January 1998, Mr. Rabinowitz retired. When an employee under the Act retires, he can choose to receive retirement benefits under one of three provisions of the Act. Under Options B and C of Section 22–11–29(A), a retiree receives a reduced annuity that continues upon death to the retiree's designated beneficiary. Mr. Rabinowitz did not select either Option B or C but instead elected to receive his benefits under Section 22–11–30 of the Act. Section 22–11–30 is a single life annuity, which pays a higher monthly amount and which terminates upon a retiree's death.

{¶ 3} Mr. Rabinowitz received pension payments for seven months until his death on July 11, 1998. Because he died before receiving benefits equaling the total amount of his contributions plus interest, Mr. Rabinowitz's designated refund beneficiary was entitled to the balance of his accumulated contributions pursuant to the Act. Section 22–11–29(E). The ERB paid Petitioner the principal amount of retirement contributions left in Mr. Rabinowitz's account to which she was entitled, not including interest.

{¶ 4} On September 23, 1998, Petitioner wrote a letter to the ERB requesting that the ERB pay the interest amount to her to which she claimed she was entitled. The deputy director of the ERB responded that, based on ERB policy, which mirrored the applicable provision of the Act in effect at the time, § 22–11–29(E), Petitioner was not entitled to the interest accumulated in Mr. Rabinowitz's account.

{¶ 5} Subsequently, in June 1999, the Legislature amended Section 22–11–29(E) to require the payment of accumulated interest to designated beneficiaries at the average rate earned by the fund during the preceding five fiscal years. The statute was amended again in 2003 and still requires the payment of accumulated interest but at a rate set by the ERB rather than at the previous average rate earned by the fund.

{¶ 6} Petitioner wrote to the ERB in September 2000 requesting that the ERB apply the 1999 amendment to Section 22–11–29(E) to pay her the claimed share of the interest in Mr. Rabinowitz's account at the time of his retirement. Petitioner asserted that, because the 1999 amendment was merely a clarification of the predecessor law, it should operate retroactively to require that the ERB pay interest to her. The ERB disagreed and responded that its interpretation of the statute was that it applied prospectively only and that the Legislature did not intend that someone in Petitioner's shoes should receive interest on accumulated contributions. Petitioner filed suit against the ERB in the district court.

{¶ 7} In Wood v. State of New Mexico Educational Retirement Board, No. 29,699, slip op. at 2 (N.M.Sup.Ct. Apr. 10, 2007), the New Mexico Supreme Court in a decision noted that a question of statutory construction exists as to whether the legislative amendment applies to Petitioner. However, the Court determined that the ERB should first decide the question by way of an administrative appeal instead of through the district court because the issue involves “matters of fact and policy that are peculiarly within the scope of the ERB's statutory function.” Pursuant to the decision, Petitioner requested an appeals hearing.

{¶ 8} At the administrative hearing, Petitioner again argued that amendment of the statute was for “clarification” purposes and should be given retroactive effect. The hearing officer disagreed, and in his recommended decision filed November 12, 2007, concluded that “the plain language of the original statute does not require interest and the plain language of the amended statute does not expressly provide for retroactive application to [Petitioner] and those similarly situated, and there is no requirement to go beyond the plain language of the statute in resolving the administrative appeal.” The hearing officer also noted that the fiscal impact of retroactive application was never presented to the Legislature, and concluded that this was because of the prospective interpretation of the statute. The hearing officer's decision was approved by the ERB in an order dated February 26, 2008.

{¶ 9} Pursuant to Rule 1–075 NMRA and the decision of the Supreme Court, Petitioner filed a petition for writ of certiorari in the First Judicial District Court seeking review of the ERB's decision and order. The district court reversed the ERB's decision, finding that the right to interest implicitly existed in the original version of the statute. As a result, the district court found that the 1999 amendment was “merely a clarification of the predecessor law and that the provision should therefore have been applied retroactively.” This appeal timely followed.

STANDARD OF REVIEW

{¶ 10} We granted the ERB's petition for writ of certiorari to review the district court's decision pursuant to Rule 12–505(J) NMRA. It is well settled that on certiorari in an administrative appeal of this type, “[w]e ‘conduct the same review of an administrative order as the district court sitting in its appellate capacity, while at the same time determining whether the district court erred in the first appeal.’ ” Gallup Westside Dev., LLC v. City of Gallup, 2004–NMCA–010, ¶ 10, 135 N.M. 30, 84 P.3d 78 (quoting Rio Grande Chapter of the Sierra Club v. N.M. Mining Comm'n, 2003–NMSC–005, ¶ 16, 133 N.M. 97, 61 P.3d 806). Under this standard, “we independently review the entire record of the administrative hearing to determine whether the [ERB's] decision was arbitrary and capricious, not supported by substantial evidence, or otherwise not in accordance with law.” Martinez v. N.M. State Eng'r Office, 2000–NMCA–074, ¶ 31, 129 N.M. 413, 9 P.3d 657; see Rule 1–075(R). Finally, we review any legal interpretations of the district court de novo. Gallup Westside, 2004–NMCA–010, ¶ 11, 135 N.M. 30, 84 P.3d 78.

DISCUSSION

{¶ 11} The ERB argues that the district court erred in ruling that the 1999 amendment to Section 22–11–29(E) was merely a clarification of the law and that the statute should be given retroactive application. We begin with a discussion of the statute as it existed at the time of Mr. Rabinowitz's retirement and death. We then turn to the 1999 amendment to determine whether it has prospective or retroactive application.

The Pre–1999 Version of Section 22–11–29(E) Did Not Provide for Interest

{¶ 12} Interpreting a statute is a question of law; therefore, our review is de novo. Meyers v. W. Auto, 2002–NMCA–089, ¶ 13, 132 N.M. 675, 54 P.3d 79. Our goal is to give primary effect to the intent of the Legislature. Id. Our courts have repeatedly stated that the guiding principle in statutory construction requires that we look to the wording of the statute and attempt to apply “the plain meaning rule, recognizing that when a statute contains language which is clear and unambiguous, we must give effect to that language and refrain from further statutory interpretation.” Truong v. Allstate Ins. Co., 2010–NMSC–009, ¶ 37, 147 N.M. 583, 227 P.3d 73 (alteration omitted) (internal quotation marks and citation omitted); State v. Johnson, 2009–NMSC–049, ¶ 10, 147 N.M. 177, 218 P.3d 863 (“The primary indicator of legislative intent is the plain language of the statute.”). Moreover, unless the Legislature expresses a contrary intent, we are to give statutory words “their ordinary meaning,” and this Court is prohibited from reading “into a statute ... language which is not there, particularly if it makes sense as written.” Johnson v. N.M. Oil Conservation Comm'n, 1999–NMSC–021, ¶ 27, 127 N.M. 120, 978 P.2d 327 (internal quotation marks and citation omitted). The Legislature itself has codified the plain meaning rule in the Uniform Statute and Rule Construction Act: “The text of a statute or rule is the primary, essential source of its meaning.” NMSA 1978, § 12–2A–19 (1997).

{¶ 13} As we have noted, when Mr. Rabinowitz passed away in July 1998, he had not received retirement benefits in an amount equal to the amount of contributions that he had paid into the fund. Consequently, and consistent with its long-standing policy and interpretation of Section 22–1–29(E), the ERB determined that Mr. Rabinowitz's designated refund beneficiary was entitled to the difference between the amount of his contributions to the fund and the amount of benefits paid to him, less interest. At the time, Section 22–11–29(E) (1993) provided:

In the case of death of a retired member who did not elect either Option B or C and before the benefits paid to him have equaled the amount of his accumulated contributions to...