Employee's Retirement System, Etc. v. McKinnon

349 So. 2d 569, 1977 Ala. LEXIS 1824
CourtSupreme Court of Alabama
DecidedAugust 26, 1977
DocketDiv. SC 2343
StatusPublished
Cited by5 cases

This text of 349 So. 2d 569 (Employee's Retirement System, Etc. v. McKinnon) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Employee's Retirement System, Etc. v. McKinnon, 349 So. 2d 569, 1977 Ala. LEXIS 1824 (Ala. 1977).

Opinion

MADDOX, Justice.

The Teachers’ Retirement System of Alabama (TRS) appeals from a summary judgment granted to plaintiffs Helen C. McKin-non and William R. McKinnon, Jr., widow and son of William R. McKinnon, Sr., deceased, who was a member of TRS. The trial court, finding the retirement system statutes discriminatory as between retired employees and active employees, ordered TRS to pay plaintiffs a “lump sum” benefit equal to the deceased teacher’s contributions and interest in the fund.

The facts were stipulated. William R. McKinnon, Sr., was a school teacher for some twenty-five years. In April, 1975, he filed an application for service retirement with TRS. (See Appendix A.)

TRS sent McKinnon a form containing retirement allowance estimates and a place for him to indicate which retirement benefit he elected. (See Appendix B.)

The effective date of McKinnon’s retirement was June 1, 1975. On June 18, 1975, the secretary-treasurer of TRS sent McKin-non a letter which contained certain tax information and other data regarding his benefits. (See Appendix C.)

On June 30, 1975, McKinnon died. TRS considered McKinnon’s election of the “Maximum Retirement Benefit” as final and binding, and claimed it was bound to pay to McKinnon’s son, the designated beneficiary, only a prorata amount for the number of days in the month in which McKinnon survived after his effective date of retirement. Since McKinnon retired effective June 1, 1975, and died on June 30, 1975, TRS claimed his beneficiary was entitled to be paid the retirement allowance for one month, or $503.94.

In October, 1975, Helen Chapman McKin-non and William R. McKinnon, Jr., surviving spouse and son, filed an action in the Circuit Court for Jefferson County. They alleged that, pursuant to Title 52, § 366(4), Code, 1940, as amended, they were entitled to a retirement allowance under Option 3. Alternatively, they alleged that McKinnon, Sr., was under the mistaken belief that the maximum retirement benefit would be paid [571]*571to his son in the event of his death. Finally, they alleged that the construction placed on the statute by TRS was violative of the equal protection and due process clauses of the Constitution of the United States and of Article 1, Section 6 of the Alabama Constitution.

In February, 1976, the action was transferred to the Circuit Court for Montgomery County. The McKinnons filed a motion for summary judgment in November, 1976, and after a hearing was held on the motion, the court below granted the motion. The court concluded, in part:

“The Court concludes from the review of the evidence and the law applicable to the evidence that the construction relied upon by the State, if adopted and enforced, would be an arbitrary and capricious exercise of power and would accomplish an unlawful and unconstitutional discrimination between classes of employees without just basis. The statute applicable to the Teacher’s Retirement System does not provide for any of the retirement benefits of a retired teacher to cease at death. Two provisions in the statute do allow for an employee, upon cessation of employment, and an employee’s spouse before the employee’s retirement, upon death, to receive his or her contributions upon cessation of employment or death. To hold that an employee (or his spouse) who had reached retirement and who died before receiving his benefits was not entitled to any benefits, and that a teacher with only one year of tenure or one who had not reached retirement, was entitled to all contributions is an arbitrary, unjust and invidious discrimination in favor of one class against the other. Equal protection of the laws would be denied and the earned property right of the retired employee, or his spouse financed in large part by the employee’s contributions, would be taken without due process of law.

“The construction for which the defendant contends would disregard the beneficial spirit and purpose for which retirement benefits and pension plans are adopted. This Court would be loathe to conclude that the legislature intended to do what the defendant contends was its intentions to do, and fortunately this Court is clearly of the opinion that the legislature did not so intend. The Teacher’s Retirement System of Alabama and pension plans in general, are not designed as business ventures or moneymaking syndicates, but rather to provide for the security of faithful servants to the education of our young; to improve their moral (sic) and to give them peace of mind in their dedication to public service. The Courts generally recognize this objective and provide that such laws shall be liberally construed with a view of promoting the object for which they were adopted. A narrow, arbitrary or literal interpretation will not be permitted to defeat the objective for which such legislation is adopted. Collins v. City of Knoxville, [180 Tenn. 483], 176 S.W.2d 809 [808] (Tenn., 1944); Fulton County v. Hollin [Holland, 71 Ga.App. 455], 31 S.E.2d 202 (Ga., 1944).

“In the interpretation of a statute, the Courts will be strongly influenced by its spirit and intention. Bell v. Pritchard, 273 Ala. 289, 139 So.2d 596 (1962).

“The Court is clearly of the opinion that the intention of the statute was not to allow the system to benefit in such a situation and cannot be contended that plaintiffs are not entitled to the contributions. It is, therefore,

“ORDERED, ADJUDGED and DECREED by the Court as follows:

“1. Title 52, § 362 et seq., Code of Alabama as last amended, should be and is construed to mean that the benefits available to a retired member shall not cease at death, and like any other active member of the retirement system, shall have the right to the total amount of contributions.

“2. Consistent with the above interpretation, and the intention of the retired member, the plaintiffs are entitled to receive the retirement benefits in a lump sum.

“3. That the Teacher’s Retirement System of Alabama be and hereby is directed to process and approve the claim of the plaintiffs and to pay to the plaintiffs the [572]*572lump-sum benefits, including the contributions, including interest at 6% thereon from the date of the claim.”

It is from the order granting the plaintiffs’ motion for summary judgment that this appeal is taken.

We reverse and remand.

As we construe the trial judge’s order, he concluded that benefits available to a retired member who has selected the “retirement allowance” do not cease at death, but continue at least until the retired member, his estate or his beneficiaries, have received his accumulated contributions. This interpretation does not comport with the statutory scheme and is erroneous.

The legislature has conveniently set out in Title 52, § 362, Code, definitions of statutory words we will be considering on this appeal. Section 362, in part, provides:

“ * * * ‘Member’ shall mean any teacher included in the membership of the system as provided in section 364 of this title. ‘Board of control’ shall mean the board provided for in section 367 of this title to administer the retirement system. * * * ‘Trustees’ shall mean the members of the board of control, to administer the trust funds. * * * ‘Beneficiary’ shall mean any person in receipt of a pension, an annuity, a retirement allowance, or other benefit as provided by this chapter.

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