Title: Eastham v. PUBLIC EMPLOYEES'RETIREMENT ASS'N BD.

State: new-mexico

Issuer: New Mexico Supreme Court

Document:

553 P.2d 679 (1976) 89 N.M. 399 John P. EASTHAM and Thomas W. Hoover, Plaintiffs-Appellants, v. The PUBLIC EMPLOYEES' RETIREMENT ASSOCIATION BOARD, Orlando Fernandez, Mrs. Betty Fiorina, Robert I. Griego, Jesse S. Kornegay, Frank M. Olmstead, R. F. Apodaca, Dennis D. Luna, Richard E. Aragon, Floyd Avila, James W. Harrison, Leonard T. Valdes, R. C. Morgan, Frank Bateman and Lilburn C. Homan, Defendants-Appellees. No. 10322. Supreme Court of New Mexico. August 23, 1976. *680 John P. Eastham, pro se. Stephen L. ReVeal, Albuquerque, for plaintiffs-appellants. Kegel & McCulloh, Lyle E. Teutsch, Jr., Santa Fe, for defendants-appellees. MONTOYA, Justice. Plaintiffs, claiming membership in the Public Employees' Retirement Association under the Legislative Retirement Act [§ 5-5-6.1, N.M.S.A., 1953 (Repl.Vol. 2, pt. 1, 1974)], brought an action seeking a judgment in the District Court of Santa Fe County to declare the Legislative Retirement Act unconstitutional. They also sought an injunction forbidding retirement payments to annuitant legislators if the Legislative Retirement Act was declared unconstitutional. Named as defendants in the action were members of the Public Employees' Retirement Association Board (PERA), its executive secretary, and three annuitant legislators, being R.C. Morgan, Frank Bateman and Lilburn C. Homan. Defendants answered, attacking the plaintiffs' standing to sue, and contending that the suit was an improper class action. They also generally denied other allegations of the complaint. At the trial, defendants asserted that certain indispensable parties were not joined as defendants, and that by reason thereof, the complaint should be dismissed. The trial court, after hearing testimony, made findings which, insofar as they are pertinent to the disposition of this appeal, are as follows: Pursuant to the aforementioned findings, the court concluded as follows: On appeal, the plaintiffs contend that the trial court committed error, alleging that plaintiffs have standing to sue in this action and that this was a proper class action. We first consider the pertinent Rules of Civil Procedure for the District Courts of the State of New Mexico [§§ 21-1-1(1) through 21-1-1(94), N.M.S.A., 1953 (Repl. Vol. 4, and 1975 Supp.)]. Rule 19(a), supra, dealing with joinder of a person needed for just adjudication, sets forth facts requiring a person who is subject to service of process to be joined as a party to an action if Subsection (c) of Rule 19, supra, requires the pleader to state, if known to him, the names of those persons as described in Rule 19(a) who are not joined, and the reasons why they are not joined. No reason is given for failure to join other members of the legislative retirement plan. In the instant case, the court found that there are thirty-one additional persons who are retired from the legislature and are receiving annuities as legislative members of the PERA. In addition, the court found twenty additional members who qualify for retirement, except that they have not reached the eligible age. The court further found that, except for the three former legislators named as defendants, none of the others received any notice of the instant action. These persons have an initial and vested interest in the retirement plan and are indispensable parties to insure a just adjudication of the issues herein involved. In State v. Scarborough, 78 N.M. 132, 134, 429 P.2d 330, 332 (1967), we said: It is of further interest to note that none of the above findings were attacked and therefore are the undisputed facts before this court. We find the following language in C. de Baca v. Baca, 73 N.M. 387, 394, 388 P.2d 392, 397 (1964): The plaintiffs also claim error in the trial court's decision to dismiss the action because of the failure of the plaintiffs to give notice to the persons affected by a class action. The plaintiffs' complaint is framed joining the three annuitant legislators as representatives of the class of legislative annuitants pursuant to Rule 23(a), supra, which is pertinent here and deals with three types of class actions. It makes a requirement common to all three, that the persons constituting the class must be so numerous as to make it impracticable to bring them all before the court, in which case such numbers of them, one or more as will fairly insure the adequate representation of all, may, on behalf of all, sue or be sued. The three types of class suits covered by Rule 23(a), supra, have become popularly known as "true," "hybrid" and "spurious." Thus, an action that is brought to enforce a right which is "joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it[,]" is known as a "true" class action. The second class refers to those actions where the right to be enforced is several but "the object of the action is the adjudication of claims which do or may affect specific property involved in the action[,]" and the label of "hybrid" is applied. The other action involves suits to enforce a several right where there is "a common question of law or fact affecting the several rights and a common relief is sought[,]" and is known as a "spurious" action. Plaintiffs say that the class action involved is a "spurious" action. The labeling of the type of action is unimportant here and the pigeonholing of suits into one class or another has baffled both courts and legal writers. The trial court made no determination as to the type of class action, but found that no notification of the existing action had been given to the thirty-one individuals in the same category, or the twenty other legislators who had completed all requirements for retirement except that of age. On the basis of such a finding the court concluded that due process under both State and Federal Constitutions requires that a person affected by a class action be given notice of the action, and that the absence of such notice requires a dismissal of the complaint. We agree. *683 In Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173-74, 94 S. Ct. 2140, 2150-2151, 40 L. Ed. 2d 732, 746 (1974), though decided after the amendment of the federal rules to provide for notice, the court said: It is interesting to note that Mullane v. Central Hanover Bank & Trust Co., supra, was decided when Federal Rule 23 was identical to our own Rule 23. Accordingly, we hold that the trial court was correct in holding that procedural due process required notice to other members of the class whose rights would be affected. Ordinarily, when a suit is decided against the plaintiff on the grounds that indispensable parties are not named, we remand for a new trial or, if decided prior to trial, give the party an opportunity to amend the complaint to bring in the indispensable parties so that the action may proceed. See Sellman v. Haddock, 62 N.M. 391, 310 P.2d 1045 (1957). However, in the instant case the trial court also held that plaintiffs lacked standing to bring the suit as citizens and taxpayers. We now consider that issue as it becomes important in deciding whether the trial court was correct in dismissing the action with prejudice. The pertinent findings of fact and conclusions of law made by the trial court are as follows: (Findings of Fact) (Conclusions of Law) The plaintiffs did not attack findings Nos. 1, 2, 3, 4, 11 and 12. Therefore, those are the facts before this court. They argue in their brief that finding of fact No. 10 is wholly without foundation. The testimony reveals that as to one of the plaintiffs there has only been individual legislator's contributions for a period of three years service credit and that he was not going to continue as a member of the legislature after December 31, 1974. The other plaintiff, who is no longer a member of the legislature, had only paid $40 toward a service credit of only one year. An individual legislator must make a contribution of $100 per year for each year of service to qualify for eligibility under the legislative retirement program. At the time of trial, neither plaintiff indicated that he intended to pay in the additional moneys required to bring his paid service credit to a total of five years. There is no record of any agreement with PERA to do so while they were members of the legislature. Therefore, neither plaintiff has the required number of years of contributing service credit to make him eligible for retirement under the Legislative Retirement Act. In view of the foregoing evidence, the trial court's finding that neither plaintiff has any reasonable expectation of receiving an annuity as a legislative member of the PERA is supported by substantial evidence. How does the trial court's finding No. 10 affect plaintiffs' standing to sue? We recently reviewed the law of standing in De Vargas Savings & L. Ass'n of Santa Fe v. Campbell, 87 N.M. 469, 473, 535 P.2d 1320, 1324 (1975), where we said: Under the holding of that case we can only conclude, in view of the trial court's findings, that they have no standing to sue as potential retirees under the program. That leaves for consideration whether they have standing as citizens and taxpayers. Such a question has been before us many times. In three cases this court held that actions by certain citizens and taxpayers could be brought. Those three cases are State ex rel. Sego v. Kirkpatrick, 86 N.M. 359, 524 P.2d 975 (1974); State ex rel. Castillo Corp. v. New Mexico St. T. *685 Com'n, 79 N.M. 357, 443 P.2d 850 (1968); and State v. Campbell, 75 N.M. 86, 400 P.2d 956 (1965). In those cases we established that even though a private party may not have standing to invoke the power of this court to resolve constitutional disputes and enforce constitutional compliance, we would, on a discretionary basis, grant private citizens standing to "vindicate the public interest" in such cases as present issues of great public importance. Plaintiffs in the instant case do not assert that this case is of such a category, nor do we consider it to be. In Asplund v. Alarid, 29 N.M. 129, 139, 219 P. 786, 790 (1923), where a taxpayer brought suit against the Santa Fe County Assessor seeking to declare the Soldiers Exemption Law unconstitutional, this court said: Following that this court decided Asplund v. Hannett, 31 N.M. 641, 645, 249 P. 1074, 1075 (1926), where it was claimed again by the same citizen and taxpayer a violation of the Enabling Act and our Constitution by alleged illegal expenditures from an income fund created for the establishment of "permanent reservoirs for irrigating purposes." In that case we stated: This court answered that query in the negative, saying (31 N.M. at 650, 249 P. at 1077): This court answered that question as follows (31 N.M. at 665, 249 P. at 1083): In considering the effect of the two Asplund cases, supra, in State ex rel. Overton v. State Tax Commissioners, 80 N.M. 780, 782-83, 461 P.2d 913, 915-16 (1969), we said the following: Again in State ex rel. Overton v. New Mexico State Tax Com'n, 81 N.M. 28, 33, *686 462 P.2d 613, 618 (1969), where the county assessor questioned the validity of the veterans' exemption statute, the court stated: In view of all of the foregoing, we agree with the trial court that plaintiffs as citizens and taxpayers have no standing to sue. The judgment of the trial court is affirmed. IT IS SO ORDERED. OMAN, C.J., and McMANUS and SOSA, JJ., concur. EASLEY, J., not participating.