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Waller v. Stalnaker (5/10/96), 915 P 2d 637
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NOTICE: This opinion is subject to formal correction before
publication in the Pacific Reporter. Readers are requested to bring
errors to the attention of the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, phone (907) 264-0607, fax (907)
276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
JAMES J. WALLER, )
) Supreme Court No. S-6466
Appellant, )
) Superior Court No.
v. ) 3AN-93-3215 CI
)
ROBERT STALNAKER, ) O P I N I O N
ADMINISTRATOR OF THE PUBLIC )
EMPLOYEES' RETIREMENT SYSTEM, ) [No. 4348 - May 10, 1996]
et al., )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Donald Hopwood, Judge.
Appearances: James J. Waller, pro se, Tacoma,
Washington. John B. Gaguine, Assistant
Attorney General, and Bruce M. Botelho,
Attorney General, Juneau, for Appellees.
Before: Compton, Chief Justice, Rabinowitz,
Matthews and Eastaugh, Justices, and Shortell,
Justice pro tem.
COMPTON, Chief Justice.
I. INTRODUCTION
James Waller appeals the superior court's affirmance of
the decision of the Public Employees' Retirement Board (Board)
denying his claim for occupational disability benefits. The
superior court held that Waller was ineligible for occupational
disability benefits because he had requested and received a refund
of his Public Employees' Retirement System (PERS) contribution
account. We affirm.
II. FACTS AND PROCEEDINGS
James Waller worked as the chief investigator for the
Anchorage office of the Alaska Public Defender Agency (PDA) from
May 1984 until September 15, 1987, when his employment was
terminated. According to his supervisor, Waller was no longer able
to function in his position due to "mental stress"and "burnout."
On the day before his termination, Waller signed a form requesting
a refund of his PERS contribution account. The following
preprinted statement appears on the form:
REFUND: I understand that application for a
refund of my PERS contribution account will
result in the forfeiture of my PERS service.
I also understand that if I become reemployed
under the PERS my prior refunded PERS service
may be reinstated only by repaying the full
amount refunded plus accrued interest from the
date of the refund to the date of repayment
Caution: Refunded service is not reinstated
until the entire refund amount, including
interest that has accrued, is completely paid.
Refunded service may not be used to satisfy
vesting or retirement eligibility requirements
unless it is reinstated.
Although Waller does not deny signing the form, he asserts the
PDA's administrative assistant completed it.
Waller applied to the Division of Retirement and Benefits
(Division) for occupational disability benefits on September 22,
1987. He claimed he was disabled due to "stress and ulcers,"and
that the cause of his disability was "work-related stress." On
October 6, Waller was notified by the Division that it needed
further information, including a statement from his physician, to
process his disability claim.
Waller received his PERS refund check on October 7, and
cashed it in December 1987.
Waller did not submit all of the documentation requested
by the Division until December 1988. Shortly thereafter, the PERS
Administrator denied Waller's claim, stating in part:
During a review of the documentation you
recently submitted in support of your
application for occupation disability
benefits, it came to our attention that you
have received a refund of your PERS
contribution account. Consequently, you are
not a member of the system and therefore do
not meet the criteria to apply for
occupational disability benefits.
Waller appealed the Administrator's decision to the
Board. In Decision 89-7, the Board upheld the Administrator's
denial of Waller's claim. It found that "there is sufficient
dispute as to Mr. Waller's eligibility to apply for occupational
disability benefits, and as such, the Board deems it appropriate to
consider the substantive issue of Mr. Waller's medical eligibility
for occupational disability." The Board concluded that Waller was
not eligible for occupational disability benefits "because it has
not been demonstrated that he is suffering from an apparently
permanent condition caused by work-related circumstances."
Waller appealed Decision 89-7 to the superior court, but
before the matter was heard the parties agreed to a dismissal of
the appeal and a remand to the Administrator. Waller thereafter
submitted additional medical evidence to the Administrator. The
Administrator again denied Waller's claim, this time on the
substantive ground that Waller's medical condition was not caused
by an occupational injury.
Waller appealed to the Board. In Decision 93-3, the
Board noted the jurisdictional problem of Waller applying for
disability benefits after he had received his PERS refund, but felt
bound to reach the substantive issue of medical entitlement to
benefits:
Because the Board arguably did not
definitively assess jurisdictional and
eligibility considerations in Decision 89-7,
because of the existence of an appeal to the
superior court, and the existence of a
stipulation remanding issues brought to the
superior court which did not specify whether
only medical issues or eligibility issues as
well would be considered on remand, the Board
is compelled to rule on the medical bases
presented by Mr. Waller to determine
entitlement to occupational disability
benefits. . . .
If the Board were addressing Mr. Waller's
appeal for the first time, and to the extent
the Board might be compelled to assess the
eligibility and jurisdictional issues of Mr.
Waller's appeal, the Board finds that because
Mr. Waller is not an `employee,' he is not
eligible to apply for occupational disability
benefits and the Board has no jurisdiction to
hear an appeal respecting benefits relating to
him.
The Board concluded that Waller was not suffering from an
occupational disability, and denied his claim.
Waller appealed Decision 93-3 to the superior court. The
superior court held that Waller was not eligible for occupational
disability benefits because he had requested and received a PERS
refund. Waller appeals.
III. DISCUSSION (EN1)
The superior court correctly analyzed the eligibility
issue. Only "employees"are eligible for occupational disability
benefits under PERS. AS 39.35.410(a). "Former members"of PERS
are not considered "employees." AS 39.35.680(21)(C)(i). Alaska
Statute 39.35.680(19) defines "former member"to include any
employee who "has received a total refund of the balance of the
employee contribution account, or who has requested in writing a
refund of the balance in the employee contribution account." It
follows from this statutory scheme that when Waller requested a
refund of his PERS contribution account, he became a "former
member"of PERS, and was therefore ineligible for occupational
disability benefits.
To avoid this result, Waller first argues that the
superior court was bound by res judicata and the "law of the case"
to find that he was eligible to apply for benefits. He asserts
that the Board found him eligible to apply for disability benefits
in Decision 89-7, and that the decision he is now appealing,
Decision 93-3, did not alter that conclusion. This argument is
factually flawed because the Board did not hold in Decision 89-7
that Waller was eligible to apply for disability benefits. Rather,
it reserved judgment on the issue, concluding that since there was
"sufficient dispute as to Mr. Waller's eligibility to apply for
occupational benefits,"it would address the substantive issue of
Waller's medical eligibility.
Waller alternatively argues that he was an "employee"
when he applied for disability benefits because he had not yet
received or cashed his PERS refund check. Waller became a "former
member"of PERS, and therefore ineligible to apply for disability
benefits, when he requested a refund, not when the refund was
actually received or cashed. See AS 39.35.680(21)(C)(i). Even if
Waller was an "employee"when he applied for disability benefits,
his eligibility to receive such benefits would cease as soon as he
cashed his refund check. See Newlun v. Dep't of Retirement
Systems, 770 P.2d 1071, 1079 (Wash. App. 1989) (a retirement system
"cannot operate if it is subject to claims by persons who have
withdrawn their monies from use by the system.").
Waller argues that the Administrator denied him due
process by delaying a decision on his claim until after the statute
of limitations had run on "all other causes of action [he] might
otherwise have had available." This argument was not raised below
and is therefore waived. See Arnett v. Baskous, 856 P.2d 790, 791
n.1 (Alaska 1993).
IV. CONCLUSION
The superior court's judgment is AFFIRMED.
ENDNOTES:
1. When the superior court acts as an intermediate appellate
court, we review the merits of the underlying administrative
decision giving no deference to the superior court's determination.
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,
903 (Alaska 1987). Whether Waller is eligible to apply for
occupational disability benefits is a question of law involving no
agency expertise; we therefore apply the "substitution of judgment"
standard of review to this question. See Handley v. State, Dep't
of Revenue, 838 P.2d 1231, 1233 (Alaska 1992).
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