Court Opinion

ID: 6472129
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:21:54.867027+00
Date Added: 2024-06-11T15:53:50.891142
License: Public Domain

ROBINSON, Judge (dissenting). {33} I respectfully dissent. This case is a good example of the unfairness that results from PERA’s position. Mrs. Longacre selected an option for her retirement fund that required her husband’s signature as consent, but Mr. Longaere’s signature was never obtained. There is no evidence of fraud on the part of the Longacres. It would seem that PERA should have caught such an obvious error when the form was turned in, but did not. {34} It is reasonable to assume that for any one application that a state employee fills out and reviews in his or her lifetime, a PERA staffer will see and review hundreds and perhaps thousands. It is also reasonable to assume that the PERA staff is in charge of its own paperwork and familiar with the processing of a state employee’s application paperwork. Now PERA accepts no responsibility for its error, presents Mr. Longacre with a large bill after his wife has died and years after the money Mrs. Longacre received has presumably been spent, and argues that the New Mexico Constitution provides support for this inequitable result. I cannot accept that argument. {35} In my view, the legislature acted constitutionally to address the unfairness that results when PERA is allowed to recover overpayments without limitation. Section 10-11-4.2 is properly characterized as a statute of repose, rather than a statute of limitations, because it limits the remedy, instead of providing that a cause of action must be filed within a certain time period. See Cummings v. X-Ray Assoc. of N.M., 121 N.M. 821, 834-35, 918 P.2d 1321, 1334-35 (1996); Montoya, 32 N.M. at 317, 255 P. at 635 (a statute that merely bars the remedy is one of repose). I believe that Section 10-11-4.2(A) is constitutional because the legislature may properly create a statute of repose for overpayments that have not yet accrued. Article IV, Section 32, provides that when the obligation or liability is “held or owned by or owing to the state,” it cannot be “extinguished” by the legislature. “Held or owned by or owing to the state” connotes a requirement that the debt is already fixed and definite. Furthermore, a debt must exist before it can be “extinguished.” Article IV, Section 32, read as a whole, supports a conclusion that there is no constitutional violation unless the debt is already fixed and definite at the time the legislature seeks to extinguish it. {36} I see nothing unconstitutional about a law that limits PERA’s ability to collect future overpayments caused by PERA’s own error. The legislature has the power to enact statutes of repose and of limitation. See Cummings, 121 N.M. at 827-836, 918 P.2d at 1327-36; Jaramillo v. State, 111 N.M. 722, 725, 809 P.2d 636, 639 (Ct.App.1991). Section 10-11 — 4.2 is presumed valid, and PERA bears the burden of proving it unconstitutional. See City of Albuquerque v. Jones, 87 N.M. 486, 488, 535 P.2d 1337, 1339 (1975). I do not believe PERA has met its burden to overcome the presumption of validity. Future overpayments, not yet in existence, are not “obligations” or “liabilities.” It is undisputed that at the time the legislature passed Section 10-11-4.2, Mrs. Longacre had been overpaid $969.76. I agree that the existing oveipayments of $969.76 could not be forgiven. But the rest of the overpayments, totaling $6566.14, had not yet occurred. I agree with Longacre that at the time the legislature passed Section 10-11-4.2(A), the bulk of the overpayments in this ease had not yet occurred, and consequently were not yet “held or owned by or owing to the state.” Consequently, the legislature could constitutionally limit PERA’s ability to collect over-payments that had not yet occurred. {37} The purpose of Article IV, Section 32 is to prevent legislative mischief in relieving people of debts that are fixed and definite. It is intended to prevent favoritism or relief to people who do not deserve it. To the extent the statute in question deals with overpayments that have not yet accrued, I do not believe it violates the constitutional prohibition in Article TV, Section 32, or its underlying purpose. This case is more like cases in which the legislature acts to affect liabilities, not yet due, that will become due in the future. For example, the legislature can constitutionally alter a tax rate applicable in the future. See N.M. Att’y Gen. Op. No. 91-14. It could be said that Article IV, Section 32 has redefined the notion of debt owed to the state. {38} The majority is concerned with the impact of the word “ever” in Article IV, § 32, essentially saying that “No obligation or liability of any person, ... held or owned by or owing to the state, ... shall ever be ... diminished by the legislature.” In my reading of this constitutional provision, the word “ever” does not have any force or effect until a debt, “obligation or liability” has reached the stage where it is held or owned by or owing to the state. For the vast majority of PERA’s overpayments to Longacre, this had not yet happened at the time the statute took effect. {39} This case is distinguishable from cases, relied on by the majority, in which the legislature has attempted to relieve taxpayers from taxes that are already due and owing. See e.g., Asplund, 29 N.M. 129, 132-33, 219 P. 786, 787 (legislature could not forgive taxes after they had become a fixed and definite liability); McRae, 29 N.M. at 88, 218 P. at 347 (poll tax had already been levied and legislature could not act to forgive it); Gutierrez, 99 N.M. at 335, 657 P.2d at 1184 (hospital debt was already fixed and definite). {40} Nor do I agree that Montoya, relied on by the majority, is dispositive. In Montoya, the statute commanded county treasurers to mark taxes “paid” that were already assessed but were really unpaid. Consequently, Montoya is consistent with other New Mexico cases holding that liabilities that have already accrued cannot be forgiven. Montoya is distinguishable from this case because the debt in Montoya was already fixed and definite. Montoya, 32 N.M. at 318, 255 P. at 635 (statute invalid because it sought to prevent state from recovering “judgments for taxes previously assessed”). Contrary to the majority’s suggestion, our case does not involve “postponing” a debt. It involves the legislative power to create a statute of repose limiting actions to collect overpayments that will arise in the future, but are not yet in existence. {41} To the extent Section 10-11-4.2 deals with overpayments that, as of the statute’s effective date in 1993, had not yet occurred, I believe it is constitutional. It is within the legislature’s power to craft statutes of limitation, Jaramillo, 111 N.M. at 725, 809 P.2d at 639, and I do not believe PERA has demonstrated that the statute is unconstitutional. It is not for us to pass on the wisdom of legislative acts, Madrid v. St. Joseph Hosp., 1996-NMSC-064, ¶10, 122 N.M. 524, 928 P.2d 250, but the equities underlying this statute are strong. PERA admitted at oral argument that under its theory it can go back fifty or one hundred years to collect overpayments, without any limitation whatsoever. Under the majority’s holding, PERA is allowed to impose undue hardship on families years and even decades after the money received by the retiree has been spent. Additionally, accepting PERA’s argument means there is no limitation on its actions and no requirement that it act diligently. PERA, on discovering an overpayment, could also wait years before seeking to collect it. Moreover, in this case, there is not a shred of evidence that the Longacres engaged in fraud or misled PERA in any way. It was PERA’s error that resulted in overpayments. PERA never questioned the form submitted by Mrs. Longacre and for years mailed what it now claims are incorrect checks. Presumably, the Longacres considered the payments correct and spent the money. Under the circumstances, I do not think it is appropriate to hold that our New Mexico Constitution shields PERA from its error. Cf. Gonzales v. Pub. Employees Bet. Bd., 114 N.M. 420, 425-28, 839 P.2d 630, 635-38 (Ct.App.1992) (equitable estoppel can be applied against the PERA board); Eldredge v. Utah State Ret. Bd, 795 P.2d 671, 675-78 (Ut.CtApp.1990) (Retirement Board estopped from reducing benefits where it misled retiree by telling him he did not have to purchase prior years of service); Indursky v. Pub. Employees’ Ret. Sys., 137 N.J.Super. 335, 349 A.2d 86, 91 (1975) (Board demanded that retiree pay $5302.32 as overpayment for a six-year period; Board was estopped from recovering the overpayments because of “lack of diligence” on Board’s part, and requiring retiree to repay would be “inequitable”); but see, Office of Personnel Management v. Richmond, 496 U.S. 414, 424-34, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) (equitable estoppel not applied in favor of a retired Navy employee because Appropriations Clause precluded any payment that did not comply with the applicable statutory condition); Romano v. Ret. Bd. of Employees’ Ret. Sys., 767 A.2d 35, 36-43 (R.I.2001) (holding that estoppel is not available against government retirement board where the representations by the board’s employees were in conflict with law and ultra vires). {42} For these reasons, I have concluded that the risk of overpayments should be placed upon PERA, and not the retiree. {43} Finally, I am concerned that the majority’s holding provides a foundation for an argument that tax amnesty programs are also unconstitutional. {44} For these reasons, I dissent.