Opinion
No. 824SC1028
Filed 20 September 1983
1. Associations 2 — action to recover association benefits — statute of limitations A claim for breach of contract by the Highway Patrol Voluntary Pledge Fund Committee to pay disability benefits accrued on 18 December 1978 when the Fund Committee denied benefits to plaintiff, not when a Patrol Lieutenant earlier told plaintiff he was not eligible for benefits, and not at the end of the 30 days within which the benefits were payable after plaintiffs retirement. Therefore, the three-year statute of limitations of G.S. 1-52(1) was met by plaintiffs filing of an action on 18 December 1981.
2. Associations 2 — Highway Patrol Voluntary Pledge Fund — entitlement to disability benefits Under a Highway Patrol Voluntary Pledge Fund contract providing that benefits would be paid to any member who retires on disability provided he "is receiving disability benefits under the Federal Social Security Law," the reference to Social Security was not intended to mean only permanent benefits, and the relevant date for receipt of Social Security benefits was plaintiffs retirement date, not the date when the Fund Committee made its final decision on plaintiffs benefits.
APPEAL by defendants from Stevens, Judge. Judgment entered 13 August 1982 in Superior Court, SAMPSON County. Heard in the Court of Appeals 25 August 1983.
Warrick, Johnson Parsons, by Dale P. Johnson, for plaintiff-appellee.
Attorney General Edmisten, by Special Deputy Isaac T. Avery, III, for defendant-appellants.
Judge BRASWELL dissenting.
The plaintiff seeks benefits from the Highway Patrol Voluntary Pledge Fund Committee in this action.
On 23 February 1973, the plaintiff became a member of the Fund. Under the contract that he signed, he agreed to pay $10 to each uniformed member of the Patrol who becomes eligible for benefits. In consideration of signing the contract, the plaintiff became eligible for the same benefits.
Paragraph six of the Fund contract signed by the plaintiff provided that benefits were "[t]o be paid to any member that retires on disability provided; he has qualified and is receiving disability payments under the Federal Social Security Law."
While on duty as a member of the Patrol, the plaintiff was injured on 2 July 1973. As a result, his left leg was amputated on 20 February 1975. He retired on disability on 30 June 1975.
Based on an agreement reached with the Patrol prior to his retirement, the plaintiff began work as a Patrol telecommunicator on 1 July 1975. Prior to his retirement, the plaintiff was informed by Patrol Lieutenant J. S. Powell that he was not eligible to receive benefits from the Fund.
On 25 July 1978, the plaintiff requested a hearing before the Fund Committee. The hearing occurred on 15 December 1978 and benefits were denied in an 18 December 1978 letter from Patrol Captain O. R. McKinney, the Fund Committee Chairman. This action was filed in Superior Court on 18 December 1981.
After denial of summary judgment motions by both parties, this case was decided on affidavits by stipulation of the parties. The trial judge held that the plaintiff's claim was not barred by the statute of limitations and that he was entitled to receive $10 from each person who was a member of the Fund on 1 July 1975. From that judgment, the defendants appealed.
Under G.S. 1-52(1), the statute of limitations for breach of contract is three years. It does not begin to run until the contract is breached and the alleged cause of action accrues. City of Reidsville v. Burton, 269 N.C. 206, 211, 152 S.E.2d 147, 152 (1967).
This action is timely because it was filed three years after the Fund notified the plaintiff's attorney that benefits would be denied. That action was the administrative determination that gave the defendants right of appeal to this Court. A mere opinion in 1975 by Lieutenant Powell that the plaintiff would not be eligible for benefits is not enough to make this cause of action accrue.
We also reject the defendants' argument that this action accrued 30 days after the plaintiff retired. That contention is based on paragraph seven, which says that benefits are payable thirty days after retirement. It ignores the fact, however, that benefits were not finally denied until the Fund's decision on 18 December 1978.
The defendants argue that the plaintiff is estopped from obtaining benefits because he made no formal request to grant benefits to two Fund members who were disabled and declared ineligible in 1974 for the same reason as the plaintiff. We find this argument unpersuasive.
The plaintiff was not a member of the Fund Committee and had no influence on the denial of benefits to the two other members. Mere inaction when there was nothing the plaintiff could do for the two members does not bar his recovery. In fact, a 12 February 1982 affidavit of the plaintiff shows that he thought in 1976 that troopers in situations similar to his were being paid Fund benefits.
Finally, the defendants contend that paragraph six's reference to Social Security was intended to mean permanent benefits. They also argue that the relevant time for receiving benefits was when the Fund made a final decision in 1978 and point to the 1977 revision to the Fund contract that explicitly excludes retroactive payments. We reject these contentions.
Principles stated in Bray v. N.C. Police Voluntary Benefit Ass'n, 258 N.C. 419, 128 S.E.2d 766 (1963), help us to resolve the defendants' arguments. In affirming a finding that the plaintiff was entitled to retirement benefits under the Association's rules and regulations, the Court in Bray said:
The constitution, by-laws, rules and regulations of a beneficial association operate as a contract and should be reasonably and liberally construed to effectuate the benevolent purpose of the association and the manifest intention of the parties. That construction must be put on the by-laws and rules of the association, taken as a whole, which is most favorable to the members.
258 N.C. at 423, 128 S.E.2d at 769.
Under this rule of construction, paragraph six is naturally interpreted to mean that the relevant date for receipt of Social Security is 30 June 1975, the plaintiff's retirement date. He was receiving Social Security payments on that date.
As for the argument that paragraph six means only permanent Social Security benefits, the plain and unambiguous language of the Fund contract provides no such reading.
Affirmed.
Judge WEBB concurs.
Judge BRASWELL dissents.