Hutchinson v. Pennsylvania State Employes' Retirement Board

738 A.2d 7, 1999 Pa. Commw. LEXIS 619
CourtCommonwealth Court of Pennsylvania
DecidedAugust 6, 1999
StatusPublished
Cited by8 cases

This text of 738 A.2d 7 (Hutchinson v. Pennsylvania State Employes' Retirement Board) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hutchinson v. Pennsylvania State Employes' Retirement Board, 738 A.2d 7, 1999 Pa. Commw. LEXIS 619 (Pa. Ct. App. 1999).

Opinions

KELLEY, Judge.

Louise Hutchinson (Claimant) appeals from the order of the Pennsylvania State Employes’ Retirement Board (SERB) granting in part her request for interest on the death benefit payable from her husband’s retirement account, but denying her request for attorney’s fees. We affirm.

The Honorable William D. Hutchinson became a member of the State Employes’ Retirement System (SERS) on December 1, 1972 by virtue of his election to the Pennsylvania General Assembly. Effective January 4, 1982, Representative Hutchinson became an employee of the Administrative Office of Pennsylvania Courts (AOPC) by virtue of his election to the Pennsylvania Supreme Court. On October 17,1987, Mr. Justice Hutchinson terminated his service with the AOPC when he was appointed as Judge to the United States Court of Appeals for the Third Circuit.

On November 12, 1987, Judge Hutchinson completed a SERS Nomination of Beneficiaries form naming Claimant, his wife, as his principal beneficiary. On November 23, 1987, Judge Hutchinson completed an Application for Retirement Allowance, electing to withdraw his accumulated deductions in a lump sum and to receive a monthly annuity. On October 8, 1995, Judge Hutchinson died.

On October 31, 1995, Claimant contacted SERS to inquire regarding the death benefit that was payable to her due to her status as Judge Hutchinson’s principal beneficiary. An employee in the SERS Benefits Administration Division informed Claimant that the payment of the death benefit would be delayed due to problems with the SERS computer system.1

[9]*9By letter dated November 7, 1995, SERS acknowledged Judge Hutchinson’s death and requested that Claimant provide SERS with certain information so that it could begin processing the death benefit payable from her husband’s retirement account. However, SERS continued to experience problems with its computer system and was unable to proceed further toward the payment of benefits to Claimant. On November 17, 1995, SERS received the requested information from Claimant.

Under normal circumstances, SERS would have mailed Claimant an Act 500 letter informing her of her payment options within three weeks. However, SERS did not mail Claimant the Act 500 letter until February 6,1996 because of the computer problems. In that letter, SERS informed Claimant that she was entitled to a total death benefit of $644,976.57 and requested that she select a payment plan. The letter also required her to sign a release which conditioned the payment of her benefit on her release of all future claims against SERS.

On May 10, 1996, Claimant, through her attorney, requested payment of the death benefit including the interest that had accrued during SERS’ delay in making payment. Claimant’s attorney noted that she refused to sign that portion of the release that conditioned the payment of the death benefit on the relinquishment of her right to interest.

On May 13, 1996, SERS received the completed death benefit information from Claimant. Claimant elected to receive a single, lump sum payment of the death benefit. She also submitted the release; however, she modified the release to exclude release of her claim for interest on the death benefit. On May 31, 1996, SERS mailed the death benefit payment to Claimant in the amount of $644,976.57, which included no interest.

On December 2,1996, Claimant, through her attorney, sent a letter to SERS seeking the payment of legal interest2 on the death benefit for the period of delay by SERS in processing her claim. By letter dated January 10, 1997, SERS denied her request for legal interest. On January 31, 1997, Claimant filed an appeal of SERS’ refusal to pay interest with the SERS Appeals Committee. On April 11, 1997, the Appeals Committee again denied Claimant’s request for legal interest on the death benefits. By letter dated May 6, 1997, Claimant appealed this decision to SERB.

Pursuant to the regulations regarding the General Rules of Administrative Practice and Procedure, 1 Pa.Code § 35.1553, SERS and Claimant agreed to submit the appeal to SERB on stipulated facts and exhibits. On September 16, 1997, the parties submitted the stipulated facts and exhibits to a hearing examiner.

On February 12,1998, following the submission of briefs by the parties, the hearing examiner issued an opinion with a recommendation regarding the disposition of the appeal. In the opinion the hearing examiner found that there was a delay of 81 days, from November 17, 1995 to February 6, 1996, in the mailing of the Act 500 [10]*10letter to Claimant due to SERS’ computer problems. Once Claimant responded to the Act 500 letter and supplied the necessary information concerning her selection of a payment plan, SERS took an additional 18 days, from May 13, 1996 to May 31, 1996, to mail the death benefit to Claimant. Thus, the hearing examiner determined that it took SERS 99 days to process the payment of Claimant’s death benefits.4

The hearing examiner noted that neither the State Employees’ Retirement Code (Retirement Code)5 nor the associated regulations6 imposes a time limit under which SERS must pay death benefits to the beneficiary of an annuitant in the retirement system. The hearing examiner determined that because no specific time limit could be found, the law would impose a requirement that SERS make payment within a reasonable amount of time. The hearing examiner noted that, pursuant to section 5905(g) of the Retirement Code7, SERS is required to pay the first death benefit to the beneficiary of an active member within 60 days of receipt of certification of his death and other necessary data. Although the instant case did not involve the death of an active member, as that term is defined in the Retirement Code, the hearing examiner determined that it would be reasonable to impose the same duty on SERS to make the first payment of death benefits to beneficiaries of non-active members within 60 days of receipt of certification of death and other necessary data.

Based on the foregoing, the hearing examiner reduced the 99-day delay attributable to SERS by the 60 days provided for in the Retirement Code. As a result, the hearing examiner recommended that Claimant be awarded interest at the legal rate for the 39-day delay attributable to SERS, and that Claimant’s request for attorney’s fees be denied.

Both Claimant and SERS filed exceptions to the hearing officer’s recommendations with SERB. On October 20, 1998, SERB issued an order and opinion accepting and adopting the opinion and recommendation of the hearing examiner.8 Claimant then filed the instant appeal in this Court.

In this appeal, Claimant contends: (1) SERB erred in affirming the award of interest at the legal rate for a period of 39 days rather than for a period of 235 days; and (2) SERB erred in failing to award her attorney’s fees pursuant to the Act of December 13, 1982, P.L. 1127, as amended, 71 P.S. §§ 2031-2035 (Costs Act).

We initially note that our scope of review is limited to a determination of whether constitutional rights have been violated, an error of law has been committed, or whether the necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704; Roche v. State Employes’ Retirement Board,

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Hutchinson v. Pennsylvania State Employes' Retirement Board
738 A.2d 7 (Commonwealth Court of Pennsylvania, 1999)

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Bluebook (online)
738 A.2d 7, 1999 Pa. Commw. LEXIS 619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hutchinson-v-pennsylvania-state-employes-retirement-board-pacommwct-1999.