Tepley v. Public Employees Retirement Ass'n

955 P.2d 573, 1997 Colo. J. C.A.R. 1480, 1997 Colo. App. LEXIS 187, 1997 WL 453719
CourtColorado Court of Appeals
DecidedAugust 7, 1997
Docket96CA1305
StatusPublished
Cited by13 cases

This text of 955 P.2d 573 (Tepley v. Public Employees Retirement Ass'n) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tepley v. Public Employees Retirement Ass'n, 955 P.2d 573, 1997 Colo. J. C.A.R. 1480, 1997 Colo. App. LEXIS 187, 1997 WL 453719 (Colo. Ct. App. 1997).

Opinion

*576 Opinion by

Judge TAUBMAN.

In this action involving a claim for disability retirement benefits, plaintiff, Brian Tep-ley, appeals from a judgment dismissing his claims under 42 U.S.C. § 1983 (1994) and 42 U.S.C. § 12132 (1995), the Americans with Disabilities Act (ADA), against defendant, Public Employees’ Retirement Association (PERA). He also appeals from the trial court’s summary judgment in favor of PERA on his claim seeking a declaratory holding that certain rules of the PERA’s Board of Trustees (Board) concerning administrative review are ultra vires, and for an injunction requiring the Board to review his application for disability benefits pursuant to a procedurally proper process. Further, he appeals the trial court’s determination, upon review pursuant to C.R.C.P. 106(a)(4), that the Board had not abused its discretion in finding that he was not permanently disabled on the date of his employment termination. We affirm in part, reverse in part, and remand for further proceedings.

Tepley was a teacher in Jefferson County schools from 1972 to 1994. In 1994, he terminated his employment, complaining of chronic depression which prevented him from performing his duties, and applied for PERA disability benefits.

During the spring and summer of 1994, Tepley was examined by his own psychiatrist and two PERA psychiatrists. Tepley’s psychiatrist did not determine initially whether he was permanently disabled. However, in August 1995, she opined that Tepley had been disabled in August 1994, the date of his employment termination, and that his disability was permanent. The Board determined this 1995 diagnosis to be untimely, however, and did not consider it.

Of the two PERA psychiatrists who evaluated Tepley in 1994, one was unsure whether he was permanently disabled. The other PERA psychiatrist concluded that, although Tepley was not permanently disabled as a result of depression, he might have been disabled by gastrointestinal disorders that were a side effect of his anti-depressant medications.

Tepley was examined by his own gastroen-terologist and a PERA gastroenterologist in the fall of 1994. They both determined that he was not permanently disabled from his gastrointestinal disorders. However, in the summer of 1995 a third PERA psychiatrist determined that Tepley was permanently disabled from his depression.

The Board initially denied Tepley’s application on the ground that he was not permanently disabled on the date of his termination of employment. Upon his appeal, a hearing was held before a panel consisting of three Board members, and the panel recommended to the Board that his application be denied. The Board followed the panel’s recommendation and again denied Tepley’s application for benefits.

Although the instant action was filed as a class action, a review of the record reveals that Tepley did not file a motion to certify a class and the district court did not take any action in that regard.

I. Administrative Review Under C.R.C.P. 106(a)(4)

Tepley first contends that the trial court erred in reviewing the Board’s decision pursuant to C.R.C.P. 106(a)(4), rather than affording him de novo review. He asserts that a PERA rule requiring such review is ultra vires because the trustees have the authority to act only as fiduciaries and, therefore, cannot exercise the quasi-judicial functions required to trigger such review. We are not persuaded.

The Board is expressly required by statute to adopt and promulgate rules for the administration of PERA. Section 24-51-204(5), C.R.S. (1988 Repl.Vol. 10B). Pursuant to Public Employees’ Retirement Board Rule 2.20(F)(1), 8 Code Colo. Reg. 1502-1 (Rule 2.20(F)(1)), the Board’s decision following a panel’s recommendation constitutes final Board action appealable under C.R.C.P. 106(a)(4).

C.R.C.P. 106(a)(4) provides in pertinent part that relief may be obtained in a district court when any governmental body or officer exercising quasi-judicial functions has ex- *577 eeeded its jurisdiction or abused its discretion.

The trustees of the Board are held to the standard of conduct of a fiduciary in the discharge of their functions. Section 24-51-207(1), C.R.S. (1988 Repl.Vol. 10B). However, they must act in the interest of all PERA members, not just disability benefit applicants. Section 24-51-207(2)(a), C.R.S. (1996 Cum.Supp.).

A fiduciary is a person having a duty, created by his or her undertaking, to act primarily for the benefit of another in matters connected with the undertaking. A fiduciary’s obligations include a duty of loyalty, a duty to exercise reasonable care and skill, and a duty to deal impartially with beneficiaries. Winkler v. Rocky Mountain Conference of United Methodist Church, 923 P.2d 152 (Colo.App.1995).

Pursuant to § 24-51-205(1), C.R.S. (1988 Repl.Vol. 10B), the Board must determine eligibility of PERA members to receive disability benefits. In this regard, the Board has the authority to require medical or psychological examinations of any member applying for disability retirement benefits. Section 24-51-702, C.R.S. (1988 Repl.Vol. 10B).

Thus, the Board is explicitly authorized by statute to require examinations of members who apply for disability benefits, to determine members’ eligibility to receive such benefits, and to act in the interest of all PERA members including disability benefit applicants.

Therefore, under these circumstances, the trustees’ fiduciary duty to deal impartially with its beneficiaries, i.e., all PERA members, outweighs its duty of loyalty to any particular member. Otherwise, the Board could never oppose a member’s application for benefits. See Caruso v. New York City Police Department Pension Funds, 72 N.Y.2d 568, 535 N.Y.S.2d 349, 531 N.E.2d 1281 (1988) (while each member of pension fund’s board of trustees acts in fiduciary capacity in administration of fund, authority of each member is determined by statutory scheme establishing the fund).

Accordingly, we reject Tepley’s assertion that the trustees’ fiduciary duties to PERA members prevent them from performing quasi-judicial functions in determining a member’s eligibility for disability benefits. We conclude that Rule 2.20(F)(1) is not ultra vires and that the district court did not err in reviewing the Board’s decision pursuant to C.R.C.P. 106(a)(4).

II. Challenge to PERA Board’s Procedures

Tepley next contends that, even if the Board may act in a quasi-judicial capacity, it used fundamentally flawed procedures which violated his right to due process when it reviewed his application for disability benefits.

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Bluebook (online)
955 P.2d 573, 1997 Colo. J. C.A.R. 1480, 1997 Colo. App. LEXIS 187, 1997 WL 453719, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tepley-v-public-employees-retirement-assn-coloctapp-1997.