IN THE SUPREME COURT OF MISSISSIPPI
N O. 2013-CT-01179-SCT
KAY LA V AUGHN

v. PUBLIC EMPLOY

EES’ RETIREMENT SY STEM OF MISSISSIPPI ON WRIT OF CERTIORARI DATE OF JUDGMENT: 06/21/2013 TRIAL JUDGE: HON. W INSTON L. KIDD COURT FROM W HICH APPEALED: HINDS COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: JIM W ARREN, III JACOB THOMAS EVANS STUTZMAN JOSHUA REID DANIEL ATTORNEY FOR APPELLEE: OFFICE OF THE ATTORNEY GENERAL BY: JANE L. MAPP NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES DISPOSITION: AFFIRMED - 11/12/2015 MOTION FOR REHEARING FILED: MANDATE ISSUED:
EN BANC. KING, JUSTICE, FOR THE COURT: ¶1. Kay la Vaughn appeals the decisions of Mississippi’s Public Em ploy ees’ Retirem ent Sy stem ( PERS), the Hinds C ounty Circuit Court, and the Court of Appeals, in which she say s she was denied the benef

its due to a m em

b er of PERS. The retiree died prior to collecting benef its, and her benef

iciary d i e d p r i o r t o collecting all o f t he retiree’s benef i ts. As the surviving f

am i ly m em ber of the benef iciary , but not of

the retiree, Kay la asserts that she is entitled to the rem aining benef its. W hile PERS, t he Hinds County C i r cuit Court, and theCourt of Appeals e rred by apply ing the c urrent versions of the PERS statutes, rather than the

version in f

orce when t he retiree m ade her elections, we ultim ately f ind that such error was harm less, and thus af

f irm the judgm ents of

each of these entities in result only

. F ACTS AND PROCEDURAL HISTORY 1 ¶2. Marjorie Kahn was a state em ploy ee and consequent m e m ber of PERS. In October 1999, she applied f o r disability retirem ent. Like other applicants, s h e w a s g iven a choice of pay m ent o ptions. She chose “Option 4-B.” See Miss. Code Ann. § 25-11-115(1) (Rev. 1999). U nder this o p t i o n , Marjorie would receive “ [ a ] reduced retirem ent allowance” throughout her lif e in exchange f

or “the f urther g u a r a ntee of pay

m ent to the n am ed benef i ciary , benef iciaries, or to the estate, f or a specif

ied num ber of y ears certain.” Id. And if she or her last designated benef icia ry died “ prior to receiving all g u a ranteed p ay

m ents due,” then “the actuarial e quivalent of the rem a i nin g pay m ents would b e paid to the estate of the retired as intestate property .” Id. Marjorie nam ed her daughter, Heather Vaughn, as her benef iciary . Marjorie nam ed no other co n t i n g e n t benef iciary

. Soon af

ter m aking these e lections, Marjorie died. So under Option 4-B, PERS began m aking m onthly pay m ents to Heather in the am ount of $922.63, guaranteeing these m onthly pay m ents f or twenty y e ars, through October 2019. Six m onths af

t er Marjorie’s death, the L egislature am ended section 2 5- 11-115(1). The revised Option 4-B directed P ERS, i n t h e e v ent “the retired m em ber or the l a s t d e s i g nated benef iciary both d ie bef

ore r eceiving all guaranteed p a y

ments due,” to pay “the actuarial e quivalent of the rem a ining pay m ents

. . . under [ the newly created] Section 25-11-117.1(1)[ .]” M iss. Code Ann. § 25-11-115(1) (Rev. 2010) (citing M i s s . C ode Ann. § 25-11-117.1(1) (Rev. 2010), enacted by 2000 Miss. Laws, Ch. 628, § 2 (H.B. 1281)).
In August 2011, Heather a lso died. Traveling u nder revised Option 4- B, PERS calculated the actua r i a l equivalent of the m ore than eight y ears of rem aining g uaranteed pay m ents to be $110,163. PERS then looked t o section 25-11-117.1(1), w hich, according to PERS, directed it to pay the re ma i n i ng money to Marjorie’s statutory successors.[ ] So PERS contacted Marjorie’s

1 T h e recitatio n o f f

a cts an d p ro ced u ral h isto r y is t a k e n p r i marily f

ro m th e C o u rt o f A p p e als’ d ecisio n . 2f

am ily to d etermi n e w h i ch of Marjorie’s s urviving f am ily m em

b ers were entitled to this pay

m ent. PERS also contacted Heather’s f am ily , inf orm ing t hem that, based on subsection (2) of s ection 25-11-117.1, they were entitled to a prorated cost-of

living adjustm ent f

or the portion of the 2011-2012 f i scal y ear when Heather was still alive and received m onthly pay m ents. See Miss. Code Ann. § 25-11- 117.1(2).[ ]
At t his point, Heather’s [ paternal] half -sister, Kay l a Vaughn, objected to PERS distributing the actuarial equivalent of t he rem aining pay m e n ts to Marjorie’s statutory successors. Instead, K ay l a insisted that even though s he is not related to Marjorie,[ ] PERS should give her the rem ainder of Marjorie’s retirem ent benef

its.
As Kay la saw it, t he $ 1 1 0 , 1 6 3 should have been paid to H eather’s s t a t u t ory successors under section 25-11-117.1(2), n ot retiree Marjorie’s statutory successors under section 25-11-117.1(1). W hen PERS rejected her position, Kay la asked f

or and was granted an adm inistrative hearing bef ore the Claim s Com m ittee f

or the PERS Board of Trustees. See Miss

. C o d e A nn. § 25-11-120(1) (Rev. 2010). The Com m i ttee conf i rm ed the $110,163 was to be paid to Marjorie’s successors under subsection ( 1), not Heather’s successors under subsection (2). And the B oard of T rustees adopted the Com m ittee’s recom m e ndation. Kay la then appealed to the Hinds County C ircuit Court. See M iss. Code Ann. § 25-11-120(2). The circuit court af f irme d P E R S ’s decision. But the court did grant Kay la’s request to enjoin PERS f r om disbursing t he $110,163 to Marjorie’s successors until Kay la’s appeal . . . is f inally resolved.
V aughn v. P

ub. E m p.’s Ret. S

ys. , __ So. 3 d

_

_, 2015 W L 528336, No. 2013-CC-01179- COA, at *1- 2 (Miss. Ct. App. Feb. 10, 2015). ¶3. I n t h e a

ppeal to t he Court of Appeals, the parties f ocused on the l a n g u a g e o f t h e
current v ersions of Section 25-11-115(1) and Section 25-11-117.1. At oral argum ent bef ore the Court of Appeals, the issue was raised that the current language of these two sections did

not go into ef

f ect u ntil July 1, 2000, eight and one-half m onths af ter Marjorie selected Option

34-B on h er application f or disability r etir e ment and six m onths af ter she died. Thus, the Court of Appeals ordered supplem ental brief ing on the f

ollowing issues: (1) The r elevance, if a n y , o f the pre-2000-am e ndm e nt l anguage of “Option 4 -B” – language that was in ef f ect when Kahn a

pplied f or b enef its on October 11, 1999, and language that had not y e t b een am ended w hen she d ied in January 2000. This language, f ound in Mississippi Code Annotated Section 25-11-115(1) (

Rev. 1999 ), stated: Option 4-B. A reduced retirem ent allowance shall be continued throughout the lif

e o f the r etirant, but with the f urther g uarantee of pay m e nt t o the nam ed b e n e f i c i ary , b enef

iciaries, or to the estate, f or a specif

ied num ber of y ears certain. I f the retired m e m b er or t he last designated benef i cia r y r e ceiving annuity pay m ents dies prior to receiving a l l guaran t e e d pay m e nts due, the actuarial equivalent of the rem aining pay m e nts would be paid to the estate of

the retired as intestate property

. (2) The relevance, if any , of the f act that, under 2000 Miss. Laws, Ch. 628, § 23 (H.B. 1281), Mississippi Code Annotated Section 25-11-117.1 did not com e into ef

f ect until July

1, 2000 – af

ter Marjorie Kahn had died. The Court of Appeals u ltim ately a f f irm ed the judgm ents of the circ u i t court and P ERS. It held that Marjorie’s intent that the rem a ining pay m ents b e paid i nto her estate were Heather

to die bef ore a ll benef

its were paid was clear. V aughn , 2015 W L 528336, at *2. It f ound that pay ing Heather’s heirs i n s t e ad of Marjorie’s h eirs “would have unconstitutionally
im p aired Marjorie’s contractual right to h ave her heirs receive t he rem ainder of her retirem ent if both she and Heather died bef ore all guaranteed pay

m ents w ere m ade.” Id. at *3. It consequently

rejected any

interpretation of

Section 25-11-117.1 that conf licted with Marjorie’s clear intent, and then went on to hold t hat “PERS’s interpretation [ o f t h e new statutes] h as the additional advantage of being supported by the statute’s language.” Id. The
C o u r t o f A p p e a l s then interpreted the current S ections 25-11-115 a n d 25-11-117.1, and f ound

4that un d er these sections, t he benef its should be awarded to Marjorie’s statutory benef iciaries, r ather than Heather’s statutory benef i ciaries. Kay la f

iled a p etition f

or writ of certiorari with this C ourt, arguing that the Court of Appeals erred in apply ing the statute as it was in 1999 because t h e s tatute did n ot have a savings clause and the Court of Appeals

cou l d n o t discern M arjorie’s intent, and f u rther arguing t hat the Court o f Appeals’ interpretation of Section 25-11

- 1 1 7 .1 contravenes the plain language of the statute. W e granted the petition prim arily t o address the Court of A ppeals’ decision to interpret Section 25-11-117.1, the interpretation of which is a m atter of

f irst im pression in this Court.
ANALYSIS ¶4. W h en this Court reviews an adm inistrative a g ency ’s d e c i s i o n s , the Court m ay not
overturn the agency ’s judgm ent unless t he agency ’s decision is not supported by s u bstantial evidence, is arbitrary

or capricious, is bey ond the scope or power granted to the agency , or violates constitutional rights. P ub. Em p.’s R et. Sys. v

. Porter , 763 So. 2d 845, 847-48 (Miss. 2000). ¶5. The Court of A ppeals was c orrect in apply ing the version of the statute in p lace when Marjorie chose her option and w hen she died. However, it d id not need to go t he extra step
to interpret the m eaning of Section 25-11-117.1. Marjorie sim ply gets t he benef

it of the contract that she m ade; Section 25-11-117.1 has no relevance. ¶6. “No State shall

. . . pass any Bill of Attainder, e x p ost f a cto Law, or Law im

pairing the Obligation of Contracts

. . . .” U.S. Const. art. I , § 10. Additionally , the Constitution of the S tate of Mississippi provides that “[ e]x post f acto laws, or laws im

pairing the obligation

5o f c o n t racts, s hall not b e passed.” Miss. Const. art. 3, § 16. “ The Contract Clauses of the

state and f

ederal constitutions are substantially sim ilar.” Porter , 76 3 So. 2d at 849. They
f orbid t he Legislature f

rom passing laws that will i m p air the obligation of

contracts. Id. at 850. “[ T]he ‘obligation’ of a contract, in a constitutional sense, depends on t he law in ef f ect when that contract w as m ade.” Id. “[ T]he legislature m ay a l t e r a r e t i rem ent sy stem

m em ber’s contractual r ights; but i f doing s o subjects the m em ber to a su b s t a n t i a l disadvantage, a substantial new advantage m ust also be conf

erred upon that m em

ber in order

to pass c onstitutional m

us t e r . ” I d. The statutory r evisions at issue deprived Marjorie o f a signif icant contractual right, the right to choose how her benef its were to be disbursed and

to w hom, w i t h o u t c onf

erring any additional b enef its to her. See id. At the tim e Marjorie chose her retirem ent b enef its in 1999, she chose that, if she a nd Heather were to predecease the end d ate of the benef

its, the benef

its would go to her estate as i ntestate property , and thus, her heirs. Section 25-11-115, as am ended, and Section 25-11-117.1, change this c o ntract and designate them selves the person or persons to whom the benef its will be distributed. Thus, it was error f

or PERS and the courts to use current Sections 25-11-115 and 25-11-117.1 to determ ine who receives Marjorie’s benef i t s, as all involved should have looked to f orm er Section 25-11-115 as part a nd parcel of the contract between Marjorie and PERS. Because f orm er Section 25-11-11 5 s h o u l d r e solve the i ssue, the Court of A ppeals had no reason to go one step f

urther and af

f irm PERS’s interpretation of Section 25-11-117.1. ¶7. However , w e f

i n d t h a t i n t h is particular case, the application of Section 25-11-
1 1 7

. 1(1) to Marjorie’s benef i ts was harm less e rror. In doing s o, we neither endorse no r

6rebuke the general interpretations of Section 25-11-117.1 by PERS, the circuit court, and the

Court of Appeals. W e m ake no pronouncem ent a s to how to interpret this section, a m atter of f i rst im pression, or on whether PERS is correctly interpreting it as a general m atter, and

nor should have the Court o f Appeals. Our f i nding o f h arm less error in this regard is lim ited to this case, and this case only

. ¶8. PERS and t h e C o u r t of Appeals f ound that Section 25-11-117.1(1) applies to the distribution of Marjorie’s benef its in this case. That section provides that under certain

c o n d i t i o n s, 2 certain benef its are pay able to “the f

ollowing p ersons, in descending order of precedence”: (a) The surviving spouse of the m em ber or retiree; (b) The children of

the m em ber or retiree or their descendants, per stirpes; (c) The brothers and sisters of the m em b er o r retiree to their d escendants, per stirpes; (d) The parents of

the m em ber or retiree; (e) The executor or adm inistrator on behalf o f the m em ber or retiree’s estate; (f ) The persons entitled by l aw to distribution o f t he m em ber or r etiree’s estate. Miss. C o d e A n n . § 25-11-117.1(1) (Rev. 2010). The law when Marjorie chose how to distribut e h e r b e n ef

its provided that, should she and her designated benef iciary both die bef ore a ll benef

its were distributed, the benef its would be pai d t o Marjorie’s estate as intestate property

. Miss. Code Ann. § 25-11-115 (Rev. 1999). Intestate p r operty is

2 A g ain , w e o f

f er n o o p in io n as to w h eth er th o se co n d i tio n s w ere actu ally m et in th is case. 7distributed: 1) to a spouse and children, or the children’s descendants (sharing their deceased

parent’s s hare), in equal parts; 2) to siblings, or their descendants ( s h a r i n g t h eir deceased
p a r e nt’s share), and parents in equal parts; 3) to grandparents, aunts and uncles, in e q u a l parts; and then 4 ) to the next of k in in equal degree, com p uting by t h e r

u l e s o f c ivil law. Miss. Code Ann. §§ 91-1-3, 91-1-7 (Rev. 2013). ¶9. W h ile not e xactly the s am e, the PERS statutory list of who is t o r eceive benef its and the list of heirs to receive i ntestate property are substantially s im ilar such t hat the e nd result of apply ing the law as it s tood in 1999 and apply ing Section 25-11-117.1(1) will be sim ilar,
if not identical. Thus, w hile PERS a pplied t h e i ncorrect law, which im pacts Marjorie’s contractual rights, because the end result is substantially sim ilar to that f o r which Marjorie contracted, we f

ind t hat in this specif

ic case, the incorrect a p p l i c a tion was harm less error. Because the end result i s s o sim ilar, it i s dif f icult to say that this specif i c a p p l i cation of Section 2 5-11-117.1 would unconstitutionally im pair Marjorie’s contractual rights. To reiterate, w e lim i t this holding to this specif ic case only , and m ake no f i ndings o n the general
i n t e r p r e t a t ion of Section 2 5-11-117.1, or on whether PERS’s general interpretation is correct

. ¶10. For the af

orem entio n e d r e a s o n s , we af f irm the result, if not the rationale, of PERS, the Hinds County

Circuit Court, and the Court of Appeals. ¶11. AFFIRMED. WALLER, C.J., DICKINSON A N D R A N D O L P H , P . J J . , L A M A R, KITCHENS, CHANDLER, PIERCE AND COLEMAN, JJ., CONCUR.

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