Johnson v. Utah State Retirement Office

621 P.2d 1234, 1980 Utah LEXIS 1070
CourtUtah Supreme Court
DecidedNovember 25, 1980
Docket16728
StatusPublished
Cited by24 cases

This text of 621 P.2d 1234 (Johnson v. Utah State Retirement Office) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Utah State Retirement Office, 621 P.2d 1234, 1980 Utah LEXIS 1070 (Utah 1980).

Opinion

*1235 STEWART, Justice:

Plaintiffs appeal from the trial court’s order dismissing their complaint. They sought an award of the funds contributed to the state retirement system on their behalf by their employer, Payson City Hospital.

Plaintiffs had been employees of Payson City Hospital and had participated in the retirement plan established by the Utah State Retirement Act, §§ 49-10-1 et seq. 1 Both the hospital employees and the hospital had made contributions to the plan. The plan provided that the employees would receive benefits upon retirement, death, or disability.

On October 1, 1977, Payson City sold the hospital to a private entity. As a consequence, the hospital’s affiliation with the state retirement system was terminated. Although plaintiffs continued their employment with the hospital, they were deemed subject to the provisions of § 49-10-24, which is entitled “Options of terminating employee—Withdrawal of accumulated contributions—Inactive membership.” 2 Pursuant to that statute, plaintiffs were given the options of (1) withdrawing the accumulated contributions in their individual accounts paid by the employees or on behalf of the employees and forfeiting any matching funds paid by their employer, or (2) leaving their accounts in the fund intact and retaining inactive status as members of the retirement system, with benefits based on both employer and employee contributions during the period of covered service payable upon retirement, disability, or death. A critical issue in this case is whether the term “accumulated contributions” includes payments made by the employing units. 3

*1236 On September 29, 1978, plaintiffs filed a notice of claim with defendant in accordance with the requirement of § 63-30-12 of the Utah Governmental Immunity Act that a claim be filed with the attorney general and the agency concerned within one year after a cause of action arises. On the same date plaintiffs filed a complaint seeking the payment of benefits paid into the retirement system on plaintiffs’ behalf by the hospital. An amended complaint was filed July 30, 1979. In the complaint, plaintiffs sought (1) a declaratory judgment that defendant’s application of § 49-10-24 to plaintiffs was invalid, or if § 49-10-24 is applicable and deprives plaintiffs of the moneys contributed by their employer to their retirement fund, that it is unconstitutional; and (2) a finding of breach of contract based on defendant’s failure to provide benefits to which they are entitled. Plaintiffs asked for an award of $300,000, which represented the hospital’s payments to the retirement system.

Defendant moved to dismiss the complaint for failure to state a claim upon which relief could be granted and for failure to join indispensable parties. The trial court granted the motion without stating the basis for its order. The dismissal was stated to be without prejudice to the refiling of the complaint. 4

On appeal plaintiffs seek reversal of the district court’s order on the grounds that plaintiffs have complied with the Governmental Immunity Act to the extent that the Act applies and that Payson City and Pay-son City Hospital are not indispensable parties, but even if they are their joinder should be ordered rather than the claim dismissed.

Defendant’s memorandum of law in support of its motion states that the motion to dismiss for failure to state a cause of action is based on the failure of plaintiffs to comply with the Utah Governmental Immunity Act. We assume that the trial court granted the motion to dismiss in whole or in part on that ground.

We hold, however, that plaintiffs’ action is not barred by the Governmental Immunity Act. Plaintiffs complied with the requirements of the Act. The notice of claim was filed with the attorney general and the agency concerned within a year after the cause of action arose as provided by § 63-30-12. The filing of the original complaint on the same day as the notice of claim did not nullify the effect of the notice of claim. The amended complaint, filed as a matter of right pursuant to Rule 15(a), Utah Rules of Civil Procedure, indicated plaintiffs’ compliance with the Governmental Immunity Act and was filed within one year after denial of the claim or after the end of the 90-day period in which the claim is deemed to have been denied.

The other ground for dismissal asserted by defendant, failure to join indispensable parties, is based on the contention that any rights plaintiffs may have arose by reason of their employment with Payson City and the Payson City Hospital and that the matter cannot be properly adjudicated unless such entities are also made parties defendant in the action.

Rule 19(a), U.R.C.P., requires the joinder of “persons having a joint interest.” This Court, in Stone v. Salt Lake City, 11 Utah 2d 196, 356 P.2d 631 (1960), stated the rule that a necessary party is one whose presence is required for a full and fair determination of his rights, as well as of the rights of the other parties to the suit.

It has not been shown that either the hospital or the city has a joint interest in plaintiffs’ suit for recovery of employer *1237 contributions made to the retirement fund. A decision as to plaintiffs’ rights to the payments made to the fund on their behalf by the employer will not affect the legal rights of Payson City or Payson City Hospital. We therefore find that a full and fair determination can be made of plaintiffs’ rights without the joinder of Payson City and the hospital.

The question remains, however, whether this case was properly initiated in the district court. Section 49-10-49 of the Utah State Retirement Act empowers a “board of review” to review administrative rulings as to benefit claims. That section provides in pertinent part:

Any member who is dissatisfied by a ruling of the administrator in regards to a benefit claim may request a review of his claim by the board. If he is dissatisfied by such a review he shall have the right to demand a hearing before the board .... Any applicant may file an application for rehearing ... after ... the determination by the retirement board .. .
The determination of the retirement board . .. shall be final, except that a member if he so desires may appeal the decision of the board to a district court of the state of Utah.

Pursuant to this provision, an adverse determination by the administrator must be reviewed by the board of review before the right to judicial review attaches. The right of appeal afforded a dissatisfied member is statutory and dependent upon compliance with the terms of the statute authorizing such review. Ross v. Industrial Comm’n, 82 Ariz. 9, 307 P.2d 612 (1957). See Campbell Building Co. v. State Road Comm’n,

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Cite This Page — Counsel Stack

Bluebook (online)
621 P.2d 1234, 1980 Utah LEXIS 1070, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-utah-state-retirement-office-utah-1980.