SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter comes before the South Carolina Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. § 9-21-60 (Supp. 2007) upon request for a contested case hearing filed by Polly Jacobs (Petitioner). Petitioner contests the Final Agency Determination issued by Respondent South Carolina Budget and Control Board, South Carolina Retirement Systems (Respondent or Retirement Systems), which found Petitioner’s disability retirement application was not timely because Petitioner was not “in service” at the time she filed her application. The Respondent thereafter filed a Motion for Summary Judgment. After notice to the parties, a hearing on the motion was held January 8, 2009

STANDARD OF REVIEW

Rule 68 of the Rules of Procedure for the Administrative Law Court provides that “[t]he South Carolina Rules of Civil Procedure may, where practicable, be applied in proceedings before the Court to resolve questions not addressed by these rules.” Rule 56(c), SCRCP, provides that summary judgment shall be granted if it is shown “that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” See also Gadson v. Hembree, 364 S.C. 316, 613 S.E.2d 533 (2005); Cisson Constr., Inc. v. Reynolds & Assoc., Inc., 311 S.C. 499, 429 S.E.2d 847 (Ct. App. 1993). In determining whether summary judgment is proper, the court must construe all ambiguities, conclusions, and inferences arising from the evidence against the moving party. Byers v. Westinghouse Elec. Corp., 310 S.C. 5, 425 S.E.2d 23 (1992).

Because it is a drastic remedy, summary judgment should be cautiously invoked to ensure that a litigant is not improperly deprived of a trial on disputed factual issues. Helena Chem. Co. v. Allianz Underwriters Ins. Co., 357 S.C. 631, 594 S.E.2d 455 (2004). Summary judgment is also not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law. Wogan v. Kunze, 366 S.C. 583, 623 S.E.2d 107 (2005). On the other hand, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but a response by affidavit or otherwise as provided in the rules must set forth specific facts creating a genuine issue for trial. Rule 56(e), SCRCP; Moody v. McLellan, 295 S.C. 157, 163, 367 S.E.2d 449, 452-53 (Ct. App. 1988). Furthermore, summary judgment should be granted “when plain, palpable and undisputed facts exist on which reasonable minds cannot differ.” Bayle v. S.C. Dep’t of Transp., 344 S.C. 115, 120, 542 S.E.2d 736, 738 (Ct. App. 2001).

FINDINGS OF FACT

1. Petitioner’s last job in state service was as a cook and cafeteria cashier for Richland School District 1. She was employed in this position from September 27, 1994 through September 19, 2007, when she was terminated after exhausting all of her leave.

2. On January 4, 2008, some three and a half months after her employment with the School District had been terminated, Petitioner submitted an application for disability retirement benefits to the Retirement Systems. Petitioner was notified on January 22, 2008 that she was ineligible for disability retirement benefits because she was not a member “in service” with a participating employer at the time she filed her disability application.

3. On January 31, 2008, Petitioner appealed the denial of her application to the Director of the Retirement Systems. The Director issued the Final Agency Determination on June 13, 2008, affirming the decision to deny Petitioners disability benefits.

4. Petitioner argued at the hearing into this Motion that she did not know that she had been terminated from the School District until she applied for disability. However, she presented no evidence in support of that contention. Moreover, even if she did not receive notice of her termination and even if her argument was legally valid, by her own admission she had not been receiving wages from the School District for over three months. It is simply unreasonable to conclude that someone would not be on notice that their employment had ended after not being paid for even a portion of that time.

CONCLUSIONS OF LAW

Based on the foregoing Findings of Fact, I conclude the following as a matter of law:

1. The Court has jurisdiction to decide the issues in this case pursuant to S.C. Code Ann. § 9-21-60 (Supp. 2007) of the South Carolina Retirement Systems Claims Procedures Act.

2. The Retirement Systems contends that this case should be summarily dismissed because there is no genuine issue as to any material fact and the Retirement Systems is entitled to a judgment as a matter of law on the sole issue of whether Petitioner met the statutory requirements of eligibility to file an application for disability retirement benefits. The statute at issue provides in pertinent part that:

Upon the application of a member in service or of his employer, a member in service on or after July 1, 1970, who has had five or more years of earned service or a contributing member who is disabled as a result of an injury arising out of and in the course of the performance of his duties regardless of length of membership on or after July 1, 1985, may be retired by the board not less than thirty days and not more than nine months next following the date of filing the application on a disability retirement allowance if the system, after a medical examination of the member, certifies that the member is mentally or physically incapacitated for the further performance of duty, that the incapacity is likely to be permanent, and that the member should be retired.

S.C. Code Ann. § 9-1-1540 (Supp. 2007) (emphasis added). The central issue in this case is whether Petitioner was a “member in service” at the time she filed her application for disability retirement benefits. The Court addressed this issue en banc in the decision of Anderson v. S.C. Budget and Control Bd., S.C. Retirement Sys., 06-ALJ-30-0008-CC. In Anderson, the Court concluded the words “member in service” as applied to an employee seeking disability retirement benefits, plainly mean “a person having the status of an employee by virtue of a contract of employment that is in effect at the time the application for disability benefits is filed, specifically including those on accrued annual leave or sick leave.” This conclusion is equally applicable in the case sub judice.

Pursuant to ALC Rule 70(F), “[t]he issue(s) addressed in en banc decisions by the administrative law judges are binding upon all individual administrative law judges in all subsequent cases, unless a majority of the judges determine otherwise.” Thus, not only has the central issue of this case been determined in the Anderson decision, the Court’s conclusion in that decision is binding on the facts of this case. More importantly, after the Anderson decision, the Supreme Court held that the disability retirement statutes mandate that the application be filed “while the person is still employed.” Lazicki-Thomas v. South Carolina Budget and Control Bd. 378 S.C. 72, 75, 661 S.E.2d 374, 375 (2008).

Here, there is no genuine issue of material fact in this case. Petitioner’s employment terminated on September 19, 2007, but she did not file an application for disability retirement benefits until January 4, 2008, 107 days after her termination. Petitioner, therefore, was not an employee of Richland School District 1 and thus was not a “member in service” at the time she filed her application for disability retirement benefits. Furthermore, as mentioned by the court in Anderson, the Retirement Systems allows a ninety-day grace period for filing for disability retirement benefits. Petitioner, however, did not apply for benefits even within that grace period. Therefore, based on the undisputed facts, the Retirement Systems is entitled to judgment as a matter of law.

3. Petitioner nevertheless argued it would be inequitable to bar her claim because she had no knowledge that she had been terminated from her job until she applied for benefits. However, the disability statute clearly requires an application be filed by a “member in service.” The general rule is where a statute creating a right of action also includes a time limitation, the limitation is part of the right, and the failure to exercise such right within the time limitation extinguishes the right.   Hemingway v. Shull, 286 F. Supp. 243 (1968). That requirement also acts as a statute of limitations for filing an application for disability retirement benefits. “A statute of limitations has been defined as the action of the state in determining that after the lapse of a specified time a claim shall not be enforceable in a judicial proceeding. Thus, any law which creates a condition of the enforcement of a right to be performed within a fixed time may be defined as a statute of limitations.” 51 Am. Jur. 2d Limitation of Actions § 2 (2000). Furthermore, “[t]here is universal acceptance of the logic of Statutes of Limitations that litigation must be brought within a reasonable time in order that evidence be reasonably available and there be some end to litigation.” City of N. Myrtle Beach v. Lewis-Davis, 360 S.C. 225, 231, 599 S.E.2d 462, 464 (Ct. App. 2004) quoting Webb v. Greenwood County, 229 S.C. 267, 92 S.E.2d 688 (1956). Therefore, “[s]tatutes of limitations are not simply technicalities. On the contrary, they have long been respected as fundamental to a well-ordered judicial system.” City of N. Myrtle Beach, 599 S.E.2d at 465.

Additionally, the South Carolina Supreme Court addressed a similar argument in the case of Merchants Mut. Ins. Co. v. S.C. Second Injury Fund, 277 S.C. 604, 291 S.E.2d 667 (1982). The main issue in that case was whether the insurance company was barred from reimbursement due to its failure to comply with statutory requirements. The insurance company asserted the discovery rule should apply to allow the claim for reimbursement because the company had no knowledge before the limitations period had run. The Supreme Court held, “[t]here must be some finality with a limitations period, and unless the legislature extends the period by including the discovery rule, we believe the better view is not to read it into a statute of this nature.” Id. at 607, 291 S.E.2d at 668.

In the case of disability retirement benefits, the requirement that the member be “in service” (or apply within 90 days of that termination) provides a certainty for the Retirement Systems when assessing its potential liabilities to determine the actuarial soundness of its retirement plans. It is necessary for the Retirement Systems to be able to rely on a deadline provided by statute in order to actuarially project the number of disability retirement applications that may be filed and to determine its potential liabilities therefrom. Moreover, Section 9-1-1540 does not provide for an exception when a person is not aware of their termination. Petitioner’s argument, therefore, that she was not aware that she was terminated until she applied for benefits is not a defense to her failure to timely file an application. Disability retirement benefits are provided by statute, and the same statutes granting those benefits provide a timeframe for seeking those benefits. Moreover, ignorance of the law is no excuse. Gregory v. Gregory, 292 S.C. 587, 358 S.E.2d 144 (Ct. App. 1987).

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that Respondent’s Motion for Summary Judgment is GRANTED.

AND IT IS SO ORDERED.

___________________________________

Ralph King Anderson, III

Administrative Law Judge

January 23, 2009

Columbia, South Carolina