holding right to receive benefits accrued when employee elected to retire; thus, applicable statute of limitations did not begin to run until that timeSummary of this case from Harris v. Cnty. Comm'n of Calhoun Cnty.
Decided June 15, 1977.
Public Employees Retirement System — R.C. Chapter 145 — Employer-employee contributions — Provisions mandatory — Failure to enroll employee — Cause of action accrues, when.
APPEAL from the Court of Appeals for Mahoning County.
The Youngstown Sanitary Police Pension Fund was established by ordinance on December 16, 1935. Taxes to create and maintain the fund were and are levied pursuant to R.C. 741.64 (formerly G.C. 4637 and 4638).
Teamsters Local Union 377, and the seven sanitary policemen of Youngstown (appellants) commenced this mandamus action on March 4, 1975, in the Court of Common Pleas of Mahoning County. Appellants alleged that they had been employed by the city since the following dates:
Robert Moschella June 27, 1960 Al Decapua February 16, 1971 Jacob R. Kent February 16, 1971 Daniel Pecchio April 20, 1960 Joseph M. Gabriel August 7, 1972 Edward L. Komsa June 1, 1956 Fred P. Vicarel June 16, 1953
Their positions are in the classified civil service. They alleged that as city employees they were entitled to be covered by the state of Ohio's Public Employees Retirement System and that the city of Youngstown had a duty to so enroll them and pay whatever amount the system required; that the city was further obliged by statute to deduct from appellants' paychecks a similar amount and forward the same to the system; and that the city, an appellee herein, failed and refused to comply with the statutory scheme provided in R.C. Chapter 145. Appellants maintained further that such action by the city, if allowed to continue, will deprive them of their pension benefits under the statutes for which they have no adequate remedy at law and in the absence of court ordered relief they will suffer irreparable harm.
An alternative writ was issued on the same date requiring the respondents to show cause by March 31, 1975, why they have failed to comply with the statutes. Appellees' answer, while admitting the public employment status of the relators, denied that they were entitled to coverage under R.C. Chapter 145, and further alleged that they were specifically excluded by law. Respondents concluded their answer with the allegation that the relators were guilty of laches, and, finally, that Messrs. Moschella, Pecchio Komsa and Vicarel's claims were barred by the statute of limitations, R.C. 2305.07.
On July 29, 1975, the judgment entry of the trial court allowing the writ was filed. The court ordered appellants' enrollment in the Public Employees Retirement System, and further decreed that the city was liable for both the employer's contribution and the omitted members' contribution not made by payroll deduction, from the date of employment forward. The court concluded its judgment entry with the following language:
"The court holds, therefore, that the statutes are clear and unambiguous and that the remedy of mandamus does lie. Further, considering the nature of the duty sought to be enforced and all of the circumstances of the parties, that the statute of limitations is not a bar to this action and that the doctrine of laches does not apply."
A majority of the Court of Appeals affirmed the trial court judgment ordering appellants' enrollment in the Public Employees Retirement System as of their respective dates of hire, but limited the liability of the city of Youngstown for deficiency contributions to six years prior to the filing of the complaint.
The cause is now before this court pursuant to the allowance of appellants' motion to certify the record.
Messrs. Bavis Bavis and Ms. Mary C.T. Bavis, for appellants.
Mr. William J. Higgins, director of law, and Mr. James E. Roberts, for appellees.
The sole question at issue here is the effect, if any, of a Revised Code section statute of limitations, set forth in R.C. 2305.07, upon the mandatory legislation concerning the Public Employees Retirement System created in R.C. Chapter 145. A majority of the Court of Appeals determined "* * * that R.C. 2305.07 bars the claims of * * * [appellants] beyond six years from the filing of the complaint * * *." We do not agree.
R.C. 2305.07 reads, in pertinent part, as follows:
"[A]n action upon a contract not in writing, express or implied, or upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued."
The rights and obligations concerning employer-employee contributions to the Public Employees Retirement System are clearly set forth in R.C. Chapter 145.
R.C. 145.47 provides in pertinent part:
"* * * The head of each state department * * * and the fiscal officer of each local authority subject to Chapter 145 of the Revised Code, shall deduct from the compensation of each member on every payroll of such member for each payroll period subsequent to the date such employee became a member, an amount equal to the applicable per cent of such member's earnable salary or compensation. The * * * fiscal officer of each local authority * * * shall transmit promptly to the secretary of the public employees retirement board a report of member deductions at such intervals and in such form as the board shall require, showing thereon all deductions for the Public Employees Retirement System made from all the earnings, salary, or compensation of each member employed together with warrants or checks covering the total of such deductions."
R.C. 145.48 provides as follows:
"Each employer described in division (D) of Section 145.01 of the Revised Code shall pay to the employers' accumulation fund an amount which shall be a certain per cent of the earnable compensation of all members to be known as the `employer contribution' * * *. In arriving at the earnable compensation, fees and commissions paid to employees for special services over and above the regular salary payments, or fees and commissions paid as sole compensation for services shall not be included. On the basis of regular interest and of such mortality and other tables as are adopted by the public employees retirement board, the actuary for said board shall determine the liabilities and employer rates of contribution as follows:
"* * *
"(F) Such employer obligation shall include the normal and deficiency contributions and employer liability resulting from omitted member contributions required under Section 145.47 of the Revised Code, but not made by payroll deduction.* * *"
While the appellate court implicitly concedes the mandatory requirements of these two specific sections, it seeks to modify their applicability by applying the statute of limitations, R.C. 2305.07, in a most unusual manner. The last phrase of that section, "* * * shall be brought within six years after the cause thereof accrued," is interpreted as meaning the six years previous to the filing of the complaint in the trial court. Such a holding leads to many pitfalls, with reference to R.C. Chapter 145, and we shall not attempt to enumerate all of them here.
Normally, a cause of action does not accrue until such time as the infringement of a right arises. It is at this point that the time within which a cause of action is to be commenced begins to run. The time runs forward from that date, not in the opposite direction, and thus when one's conduct is not presently injurious a statute of limitations begins to run against an action for consequential injuries resulting from such act only from the time that actual damage ensues.
The duty to make a contribution to the retirement fund is one that is continuing in nature, since the statute provides for an employee deduction for each payroll period. Similarly, the employer's obligation to make contributions occurs each time another payroll period elapses. However, the employee's right to participate in or to receive benefits from the system cannot accrue until such time as he or she actually elects to retire.
Appellees argue that the statute of limitations in this case began to run on the employment date of the appellants. In support of this contention they state that R.C. 145.03 provides for membership in the retirement system beginning with the first date of employment. This question was answered by the decision in the lower court and is not a part of this appeal.
Appellees argue further that the contention of appellants, that the statute of limitations would not apply until such time as they retire, puts them in a position of having no accrued cause of action. This argument might be tenable if this were an action for damages. However, this action was founded in mandamus, premised on the clear legal duty imposed by R.C. 145.03 and 145.48(F).
It should also be noted that the manner in which the Court of Appeals applied the statute of limitations runs contrary to the holding in State, ex rel. Public Employees Retirement Board, v. Baker (1959), 169 Ohio St. 499. In Baker, the employee sought to have deductions (his and the employer's) paid from January 15, 1943, to September 30, 1952, a period of nine years and eight months. This court ordered payment by the employer for that time period, and although the statute of limitations was not in issue in that case, it is apparent that its application under the method prescribed by the appellate court below would have barred that recovery.
This court, in referring to the employer and the employee's obligations to make contributions to the fund, stated in Baker, supra, at page 502:
"* * * In making the performance of each duty mandatory, it was the evident purpose of the General Assembly to avoid hopeless confusion and to maintain the security of the retirement system."
In State, ex rel. Hanrahan, v. Zupnik (1954), 161 Ohio St. 43, a case in which police and firemen sought a writ of mandamus to compel the actual disbursement of monthly pension installments, this court, at page 48, held as follows:
"It is a general fundamental rule that pension statutes are to be liberally construed. 40 American Jurisprudence, 963, Section 4; 62 Corpus Juris Secundum, 1269, Section 614; 70 Corpus Juris Secundum, 425, Section 2. This court approves that rule of construction."
Finally, in State, ex rel. Hammond, v. P.E.R.S. (1972), 29 Ohio St.2d 192, 196, Justice Herbert, in dissent, remarked that "* * * statutes of this general nature [R.C. Chapter 145] are to be liberally construed [citing Zupnik, supra,] and certainly should not be interpreted adversely to the interests of the very people they were designed to protect."
The judgment of the Court of Appeals is reversed insofar as it applies the statute of limitations, and the order of the trial court is reinstated.
O'NEILL, C.J., HERBERT, CELEBREZZE, W. BROWN, P. BROWN, SWEENEY and LOCHER, JJ., concur.