Opinion
NO. 2012-CA-001518-MR
01-10-2014
BRENDA COLEMAN APPELLANT v. KENTUCKY RETIREMENT SYSTEMS APPELLEE
BRIEF FOR APPELLANT: Preston C. Worley Daniel Luke Morgan Lexington, Kentucky BRIEF FOR APPELLEE: Katherine Rupinen Frankfort, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 11-CI-01042
OPINION
AFFIRMING
BEFORE: ACREE, CHIEF JUDGE; CLAYTON AND MOORE, JUDGES. CLAYTON, JUDGE: Brenda Coleman appeals the Franklin Circuit Court's opinion and order that affirmed the Board of Trustees of the Kentucky Retirement Systems' decision to deny Coleman's request to purchase omitted service credit. After careful consideration, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On August 7, 2008, Brenda Coleman filed an application to purchase service credit for the period of time between January 1, 1990, and January 27, 2006, during which she worked for Constance Revlett, a private attorney. At the time she filed the application to purchase service credit, she was working as a child support caseworker for the McLean County Attorney.
Coleman originally became a member of the County Employees Retirement Systems (hereinafter "CERS") on August 3, 1987, when she was employed by Revlett, the elected McLean County Attorney. Coleman, however, resigned from that position on June 29, 1989, and ceased being a contributing member of CERS.
In 1989, Revlett also lost her election to continue as McLean County Attorney. Her last day as County Attorney was December 31, 1989. Revlett then entered private practice as a self-employed attorney. Shortly thereafter, she was offered a contract by the Commonwealth of Kentucky to provide child support enforcement services in Muhlenberg and Ohio Counties through her private law practice. Revlett agreed to the contract, and as a result, served as a Special Prosecutor for child support in Muhlenberg and Ohio Counties.
Revlett then hired Coleman as an employee in her private law office. Coleman worked for Revlett from January 1, 1990, through January 27, 2006. Coleman is seeking to purchase service credit for this time period. But the Kentucky Retirement Systems (hereinafter "Retirement Systems") denied Coleman's application to purchase omitted service credit for this time period. The Retirement Systems determined that because Revlett was not a participating employer with them, Coleman was not eligible to purchase service credit since she was employed in a non-State job.
Following the denial of her request, Coleman appealed the decision and requested an administrative hearing. After the hearing, the hearing officer issued a recommended order on April 15, 2011, wherein the hearing officer affirmed the decision of the Retirement Systems. Coleman filed exceptions to the recommended order, but the Board of Trustees of the Kentucky Retirement Systems (hereinafter "the Board") adopted the hearing officer's recommended order in its June 13, 2011 final order. Coleman appealed this decision to the Franklin Circuit Court, which on August 3, 2012, affirmed the Board. She now appeals the order of the circuit court.
STANDARD OF REVIEW
On appeal from a ruling by an administrative agency, courts generally apply the substantial evidence standard of review. But, in the case at hand, the facts are not disputed. As Coleman states in her brief on page 3, "[t]he facts in this matter are undisputed." When findings are undisputed, the review is as follows:
If the findings of fact are supported by substantial evidence of probative value, than they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found.Kentucky Unemployment Ins. Com'n v. Landmark Community Newspapers of Kentucky, Inc., 91 S.W.3d 575, 578 (Ky. 2002)(citations omitted).
The genesis of the conflict is not the sufficiency of the evidence but rather interpretation of the pertinent statutes and the facts of this case. In essence, Coleman argues that statutorily she should be able to purchase service credit for this time because she was employed in the same position as the one she had when she originally worked for the McLean County Attorney. And the Retirement Systems counters that for a person to purchase omitted service credit, they must have worked for an employer participating in the Commonwealth's retirement system.
Thus, the issues raised are questions of law and mixed questions of fact and law. An issue of statutory construction is legal, and the review is de novo. E.g., Liquor Outlet, LLC v. Alcoholic Beverage Control Board, 141 S.W.3d 378, 381 (Ky. App. 2004). When an issue presents a mixed question of law and fact, our review is also de novo. Epsilon Trading Co., Inc. v. Revenue Cabinet, 775 S.W.2d 937 (Ky. App. 1989). With this standard in mind, we turn to this particular case.
ANALYSIS
Before resolving this issue, some general observations about the tenets of statutory construction are necessary. The interpretation of a statute is a matter of law. Halls Hardwood Floor Co. v. Stapleton, 16 S.W.3d 327, 330 (Ky. App. 2000). The primary purpose of judicial construction is to carry out the intent of the legislature. Monumental Life Ins. Co. v. Department of Revenue, 294 S.W.3d 10, 19 (Ky. App. 2008). Further, "[a] court may not interpret a statute at variance with its stated language." SmithKline Beecham Corp. v. Revenue Cabinet, 40 S.W.3d 883, 885 (Ky. App. 2001).
Some principles of statutory constructions are, first, to use the plain meaning of the words used in the statute. See Revenue Cabinet v. O'Daniel, 153 S.W.3d 815 (Ky. 2005); Kentucky Revised Statutes (KRS) 446.080(4). "[S]tatutes must be given a literal interpretation unless they are ambiguous and if the words are not ambiguous, no statutory construction is required." Monumental Life Ins. Co., 294 S.W.3d at 19. The words of the statute are based on their normal, ordinary, everyday meaning. Commonwealth v. Plowman, 86 S.W.3d 47, 49 (Ky. 2002). "We are not at liberty to add or subtract from the legislative enactment or discover meanings not reasonably ascertainable from the language used." Commonwealth v. Harrelson, 14 S.W.3d 541, 546 (Ky. 2000). The courts should reject a construction that is "unreasonable and absurd, in preference for one that is 'reasonable, rational, sensible and intelligent[.]'" Commonwealth v. Kerr, 136 S.W.3d 783, 785 (Ky. App. 2004).
With these guidelines for statutory interpretation, we now examine whether Coleman is eligible to purchase omitted service credit for the period that she was employed in Revlett's private law practice. The purchase of service credit is governed by KRS 61.552(2):
Any employee participating in one (1) of the retirement systems administered by Kentucky Retirement Systems, who has at least forty-eight (48) months of service if age sixty-five (65) or at least sixty (60) months of service if under age sixty-five (65) in the systems administered by the Kentucky Retirement Systems, and who did not elect membership in the County Employees Retirement System, as provided in KRS 78.540(2), may obtain credit in the County Employees Retirement System for prior service and for current service by paying to the County Employees Retirement System a delayed contribution payment for the service he would have received had he elected membership. The delayed contribution payment shall not be picked up, as described in KRS 61.560(4), by the employer. Payment may be by lump sum or the employee may pay by increments.Based on this provision, Coleman now seeks to purchase service credit for the years that she was employed as a child support caseworker in Revlett's private law practice.
Examining the statutes related to the CERS, we note that "employee" is defined as a "regular full-time appointed or elective officer or employee of a participating county . . . The term shall not include persons engaged as independent contractors, seasonal, emergency, temporary, and part-time workers." KRS 78.510(6). Thus, based on the plain meaning of the statutory words, a person may only participate in CERS if they are an employee of a "participating County."
The next inquiry is the definition of "employer," which is contained in the subsequent section of the statute:
"Employer" means a county, as defined in subsection (3) of this section, the elected officials of a county, or any authority of the county having the power to appoint or elect an employee to office or employment in the county.KRS 78.510(7). Hence, "county" qualifies as an "employer" and includes "the elected officials and their employees. The evidence is uncontradicted that Revlett did not participate in the CERS while under contract with the Commonwealth and self-employed in a private law practice. Moreover, she provided her employees with a private retirement fund.
Continuing with our assessment of the statutory language, we observe the definition of "county" in KRS 78.510(3):
"County" means any county, or nonprofit organization created and governed by a county, counties, or elected county officers, sheriff and his employees, county clerk and his employees, circuit clerk and his deputies, former circuit clerks or former circuit clerk deputies, or political subdivision or instrumentality, including school boards, charter county government, or urban-county government participating in the system by order appropriate to its governmental structure . . .KRS 78.510(3). Therefore, the plain language of the statute and its unambiguous meaning dictate that Revlett was not an employer or a county and, logically then, Coleman was not an employee of a participating county. In addition, the fact that the funds for Revlett's private practice emanated from federal and state grants does not change this calculus. Coleman worked for Revlett who paid her from the funds of the private practice. The source of Revlett's funds is not relevant for this determination. Accordingly, the circuit court appropriately affirmed the decision of the Board that Coleman was not eligible to purchase service credit for the time she was employed in Revlett's private law practice.
In conclusion, participation in the state or county retirement system requires that one be an employee of the state or county that is a participating employer. In fact, a county attorney must participate as an employer in the CERS. KRS 78.5302(1).
When Coleman worked for the McLean County Attorney's Office from 1987 - 1989, she was a member of the CERS. As a matter of fact, she filed an "application for refund of member contributions" on January 2, 1990. Coleman only had the authority to do so when she was no longer employed by an employer participating in CERS. Further, under KRS 61.625, she could only do so "if the member's employment has been terminated and the member is not participating in the same system." KRS 61.625(1)(a).
Once Coleman left her employment with the McLean County Attorney's Office, six months before she started working for Revlett's private practice, she was no longer a participant in CERS. In conclusion, based on the plain meaning of the statutes, Coleman ceased being an employee of the Commonwealth, and was not employed by a participating employer. Thus, she was not eligible for participation in CERS and cannot purchase any service credit for this time period.
Primarily, Coleman argues that pursuant to KRS 61.520(4), eligibility to participate in the Retirement Systems is determined by the employee's position, not by the employer's designation as a participating employer. Although overlap exists between the statutes of the various retirement systems, KRS Chapter 61 governs the Kentucky Retirement Systems. More explicit statutory guidance for CERS is found in KRS Chapter 78.
The particular section in KRS 61.520 relied on by Coleman states:
Once a department participates it shall continue to participate as long as it remains qualified. Any position initially required to participate in the Kentucky Employees Retirement System shall continue to participate as long as the position exists.KRS 61.520(4). First, the statute refers to the requirement that a department, once qualified, continues to participate in the Kentucky Retirement Systems. "Department" is defined in KRS 61.510(3) as "any state department or board or agency participating in the system in accordance with appropriate executive order, as provided in KRS 61.520." Statutory authority for participation in CERS is based on KRS 78.520, that is, a participating employer of a county. As previously decided, Coleman was not a county employee or working for a participating County employer during the time she desires to purchase service credit.
Notwithstanding that she did not work for a qualified employer, the language of KRS 61.520(4) is not relevant because it refers to a "position" that qualifies for retirement benefits under a "department." Revlett's private practice is not such a "department." Further, the fact that Coleman worked for the McLean County Attorney as a child support caseworker for 18 months does not signify that a similarly titled job for a private party is analogous to "position" in the statute or qualifies for participation in CERS. Coleman's contention that because her "position" was public service, that, too, made it eligible for participation in CERS. For example, if someone teaches in a public school and qualifies for participation in the Retirement Systems, and then switches to the private sector and teaches, the person will not qualify for participation in the retirement systems because of the similarity of the job "position," that is, a "teacher." Additionally, its public service character will not allow the teacher in the private sector authority to participate in the Retirement Systems.
Coleman also maintains that Kentucky Employees Retirement Systems v. Foster, 272 S.W.3d 198 (Ky. App. 2007), supports her case based on its discussion of KRS 61.552. Foster, however, is distinguishable from the situation herein. Foster addressed the meaning of the emphasized statutory language:
Any employee participating in one (1) of the retirement systems administered by Kentucky Retirement Systems who has at least forty-eight (48) months' service if age sixty-five (65) or at least sixty (60) months' service if under age sixty-five (65) in the retirement systems administered by the Kentucky Retirement Systems, who formerly worked for a state university in a position which would have qualified as a regular full-time position had the university been a participating department, and who did not participate in a defined benefit retirement program at the university may obtain credit in the employee's account in the County Employees Retirement System, . . .KRS 61.552(8). The emphasized language itself indicates that Foster is not relevant. Coleman did not work for a state university. This statute specifically addresses this situation and no other. The mere fact of its existence also bolsters the legitimacy of the Retirement Systems' position. If the General Assembly wanted to make parties working as caseworkers for Special Prosecutors able to participate in the Retirement Systems, it could have created such a statute.
Moreover, Coleman's argument that the statutes and regulation of the Commonwealth's retirement programs are based on a policy of inclusion is also not persuasive. CERS is based on a statutory platform that, in essence, is exclusive. It was created by the General Assembly for the employees of the various counties of the Commonwealth and not employees of Kentucky's private sector.
CONCLUSION
For these reasons, we affirm the Franklin Circuit Court's decision that affirmed the decision of the Board of the Kentucky Retirement Systems, which held Coleman was not eligible to purchase service credit in CERS for the time period of January 1990 to January 2006.
ALL CONCUR. BRIEF FOR APPELLANT: Preston C. Worley
Daniel Luke Morgan
Lexington, Kentucky
BRIEF FOR APPELLEE: Katherine Rupinen
Frankfort, Kentucky