OF JUDGMENT: 06/21/2013
FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT. TRIAL JUDGE:
HON. WINSTON L. KIDD. TRIAL COURT DISPOSITION: AFFIRMED THE
DECISION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM TO
PAY THE ACTUARIAL EQUIVALENT OF GUARANTEED PAYMENTS TO THE
RETIREE'S STATUTORY SUCCESSORS.
APPELLANT: JIM WARREN III, JACOB THOMAS EVANS STUTZMAN,
JOSHUA REID DANIEL.
APPELLEE: JANE L. MAPP.
C.J., BARNES, ROBERTS, CARLTON, FAIR AND JAMES, JJ., CONCUR.
IRVING, P.J., CONCURS IN PART AND IN THE RESULT WITHOUT
SEPARATE WRITTEN OPINION. GRIFFIS, P.J., DISSENTS WITH
SEPARATE WRITTEN OPINION, JOINED BY ISHEE, J.
When a member of Mississippi's Public Employees'
Retirement System (PERS) chooses to receive reduced monthly
retirement payments throughout her life in exchange for
guaranteed payments to her beneficiary for twenty years, who
gets the remaining guaranteed payments if both the retiree
and the beneficiary die before the twenty-year period runs
out? According to PERS, the retiree 's surviving
family members do. But appellant Kayla Vaughn says PERS is
wrong. Instead, Kayla argues PERS is directed by statute to
pay her, the beneficiary 's surviving family
member, even though she is not related to the retiree.
PERS's payment to the retiree's surviving family
members complied with both the language of the relevant
statute and the retiree's chosen payment option before
the statute existed. Yet Kayla asks us to invert the statute
and instead declare that an exception to the statute is
really the rule. But the clear rule is that, when both the
retiree and her designated beneficiary die, the actuarial
equivalent of any future guaranteed payments goes to the
retiree's surviving family members. And the limited
exception is that any uncashed checks PERS had issued to the
beneficiary and any cost-of-living adjustment based on past
payments to the beneficiary go to the beneficiary's
surviving family members.
[¶3] After review, we find PERS followed
this rule and its limited exception and, in doing so, gave
effect to the retiree's intent when selecting her payment
We therefore affirm.
Facts and Procedural History
Marjorie Kahn was a state employee and consequent member of
PERS. In October 1999, she applied for disability retirement.
Like other applicants, she was given a choice of payment
options. She chose " Option 4-B." See
Miss. Code Ann. § 25-11-115(1) (Rev. 1999). Under this
option, Marjorie would receive " [a] reduced retirement
allowance" throughout her life in exchange for "
the further guarantee of payment to the named beneficiary,
beneficiaries, or to the estate, for a specified number of
years certain." Id. And if she or her last
designated beneficiary died " prior to receiving all
guaranteed payments due," then " the actuarial
equivalent of the remaining payments would be paid to the
estate of the retired as intestate property."
Majorie named her daughter, Heather Vaughn, as her
beneficiary. Marjorie named no other contingent beneficiary.
Soon after making these elections, Marjorie died. So under
Option 4-B, PERS began making monthly payments to Heather in
the amount of $922.63, guaranteeing these monthly payments
for twenty years, through October 2019.
Six months after Marjorie's death, the Legislature
amended section 25-11-115(1). The revised Option 4-B directed
PERS, in the event " the retired member or the last
designated beneficiary both die before receiving all
guaranteed payments due," to pay " the actuarial
equivalent of the remaining payments . . . under [the newly
created] Section 25-11-117.1(1)[.]" Miss. Code Ann.
§ 25-11-115(1) (Rev. 2010) (citing Miss. Code Ann.
§ 25-11-117.1(1) (Rev. 2010), enacted by 2000
Miss. Laws, Ch. 628, § 2 (H.B. 1281)).
In August 2011, Heather also died. Traveling under revised
Option 4-B, PERS calculated the actuarial equivalent of the
more than eight years of remaining guaranteed payments to be
$110,163. PERS then looked to section 25-11-117.1(1), which,
according to PERS, directed it to pay the remaining money to
Marjorie's statutory successors. So PERS contacted
Marjorie's family to determine which of Marjorie's
surviving family members were entitled to this payment.
PERS also contacted Heather's family, informing them
that, based on subsection (2) of section 25-11-117.1, they
were entitled to a prorated cost-of-living adjustment for the
portion of the 2011-2012 fiscal year when Heather was still
alive and received monthly payments. See Miss. Code
Ann. § 25-11-117.1(2).
[¶10] At this point, Heather's
half-sister, Kayla Vaughn, objected to PERS distributing the
actuarial equivalent of the remaining payments to
Marjorie's statutory successors. Instead, Kayla insisted
that even though she is not related to
Marjorie, PERS should give her the remainder of
Marjorie's retirement benefits.
As Kayla saw it, the $110,163 should have been paid to
Heather's statutory successors under section
25-11-117.1(2), not retiree Marjorie's statutory
successors under section 25-11-117.1(1). When PERS rejected
her position, Kayla asked for and was granted an
administrative hearing before the Claims Committee for the
PERS Board of Trustees. See Miss. Code Ann. §
25-11-120(1) (Rev. 2010). The Committee confirmed the
$110,163 was to be paid to Marjorie 's
successors under subsection (1), not Heather's successors
under subsection (2). And the Board of Trustees adopted the
Kayla then appealed to the Hinds County Circuit Court.
See Miss. Code Ann. § 25-11-120(2). The circuit
court affirmed PERS's decision. But the court did grant
Kayla's request to enjoin PERS from disbursing the
$110,163 to Marjorie's successors until Kayla's
appeal before this court is finally resolved.
While PERS and Kayla hotly dispute the significance of the
language in both revised Option 4-B and section 25-11-117.1,
neither has disputed that this language controls, despite the
fact that section 25-11-117.1 was not even part of the PERS
retirement statutes when Marjorie selected Option 4-B. Still,
our law is clear that these statutes cannot be applied in a
way that defeats the clear intention of the deceased retired
member. In re Estate of Dillon, 632 So.2d 1298,
1303-04 (Miss. 1994); see also Pub. Emps'
Ret. Sys. v. Porter, 763 So.2d 845, 849-50 (¶
¶ 14-16) (Miss. 2000).
By selecting Option 4-B--as that option existed in
1999--Marjorie's intent was obvious. She chose the
particular option that ensured her that if she and Heather
both die before all guaranteed payments were made,
Majorie's intestate estate--i.e., Marjorie's
statutory heirs--would receive the actuarial equivalent of
the remaining payments. This much is crystal clear. And it is
inconceivable from the PERS statutes in effect at the time of
Majorie's retirement application and soon-after death
that Marjorie intended any remaining retirement benefits
would go to Heather's heirs, should Heather die before
all payments were made.
So even if we were to agree with the dissent that Kayla's
interpretation of sections 25-11-115(1) and 25-11-117.1 was
correct--which we do not--we would still have to reject this
interpretation as applied to Marjorie's
retirement benefits. See Porter, 763 So.2d
at 849-50 (¶ ¶ 14-16). Had PERS done what Kayla and
the dissent suggest and paid Heather's heirs, instead of
Marjorie's, it would have unconstitutionally
impaired Marjorie's contractual right to have
her heirs receive the remainder of her retirement if
both she and Heather died before all guaranteed payments were
made. Id. (citing U.S. Const. art. I, § 10;
Miss. Const. art. 3, § 16).
Unlike Kayla's and the dissent's personal
interpretations, PERS's interpretation of section
25-11-117.1 has the advantage of actually effecting
Majorie's intent. And because Kayla's interpretation
directly conflicts with Majorie's clear intent--that
her next of kin, not Heather's, would receive
any remaining guaranteed payments if both she and Heather
died before 2019--we must reject it.
Furthermore, PERS's interpretation has the additional
advantage of being supported by the statute's language.
Standard of Review
Because this appeal raises a question of statutory
interpretation, Kayla asserts we must review PERS's
decision de novo. While it is true that " [a]n
agency's interpretation of its governing statutes is
reviewed de novo," our supreme court has said we must
conduct this review " with deference to the agency's
interpretation." Miss. State & Sch. Emps' Life &
Health Plan v. KCC, Inc., 108 So.3d 932, 939 (¶ 20)
(Miss. 2013). " [W]hen determining the most reasonable
and appropriate interpretation of a statute, the agency's
interpretation is an important factor that usually warrants
strong consideration." Diamond Grove Ctr., LLC v.
Miss. State Dep't of Health, 98 So.3d 1068, 1071
(¶ 9) (Miss. 2012). So " unless an agency's
interpretation of a governing statute is repugnant to the
plain meaning thereof, the courts are to defer to the
agency's interpretation." Id.
Stated differently, we only " give no weight to an
agency interpretation" when it " is so plainly
erroneous or so inconsistent with either the underlying
regulation or statute as to be arbitrary, capricious, or
contrary to the unambiguous language or best reading of a
statute." KCC, 108 So.3d at 939 (¶ 20).
This means we cannot take the dissent's approach and
substitute PERS's interpretation of section 25-11-117.1
with our personal preference of how to read the statute. We
must instead uphold PERS's decision to pay Majorie's
heirs, not Heather's, so long as its statutory
interpretation was not so inconsistent with the relevant
statutes as to be arbitrary and capricious. Because we find
PERS's decision was based on a reasonable interpretation
of sections 25-11-115(1) and 25-11-117.1(1), consistent with
the " best reading" of these statutes, and
certainly not arbitrary and capricious, we must affirm.
" Monthly Benefits Payable"
Revised Option 4-B directs that, when both the retiree and
her named beneficiary have died, " the actuarial
equivalent of the remaining payments shall be paid under
Section 25-11-117.1(1)." Miss. Code Ann. §
25-11-115(1) (Rev. 2010). Section 25-11-117.1(1) begins by
noting there is an exception--" Except as otherwise
provided in subsection (2) . . . ." Kayla argues this
" prefatory phrase" is there to steer PERS
immediately to subsection (2) and first determine if its
provisions apply. If they do, then according to Kayla the
rest of subsection (1) " is negated" and has no
As one would imagine, Kayla argues subsection (2) applies
here. Under this subsection, " Any monthly benefits
payable to a beneficiary who dies prior to cashing his or her
final check(s) and/or any additional benefits payable
Section 25-11-112 still payable at the death of a beneficiary
receiving monthly benefits shall be paid . . . [to] brothers
and sisters of the beneficiary" when the beneficiary has
no surviving spouse or descendants. Miss. Code Ann. §
25-11-117.1(2). Kayla claims, since Option 4-B guaranteed
Heather monthly payments for twenty years, the remaining
eight years of payments were " monthly benefits payable
to a beneficiary who dies prior to cashing his or her final
check(s)[.]" Miss. Code Ann. § 25-11-117.1(2).
In other words, Kayla is arguing that all twenty years worth
of checks were " monthly benefits payable" to
Heather the moment Marjorie died. She claims they belonged to
the beneficiary, Heather, not the retiree, Marjorie. Thus,
they should have passed to Heather's statutory
successors. Kayla suggests that, if Marjorie had wanted one
of her ...