Court Opinion

ID: 5128703
Source: CourtListenerOpinion
Date Created: 2021-11-23 15:07:57.840044+00
Date Added: 2024-06-11T08:23:08.026296
License: Public Domain

In the
                                    Missouri Court of Appeals
                                        Western District

                                                   
 HEATHER M. BASS,                                  
                                                   
             Appellant-Respondent,                      WD82700 Consolidated with
                                                         WD82704
 v.                                                
                                                        OPINION FILED:
 POLICE RETIREMENT SYSTEM OF                       
 KANSAS CITY, MISSOURI,                                 NOVEMBER 23, 2021
                                                   
             Respondent-Appellant.                 
                                                   

                  Appeal from the Circuit Court of Jackson County, Missouri
                         The Honorable Charles H. McKenzie, Judge

      Before Division Two: Mark D. Pfeiffer, Presiding Judge, Karen King Mitchell, Judge,
                                Anthony Rex Gabbert, Judge

         Heather Bass appeals and the Police Retirement System of Kansas City, Missouri cross-

appeals the judgment of the Jackson County Circuit Court granting summary judgment in partial

favor of each party. Bass raises four points on appeal complaining the court erred in determining

the offset amount, in denying her request to amend her petition, and in denying prejudgment

interest. The Police Retirement System of Kansas City, Missouri raises one point on appeal

complaining the trial court erred in not including attorney’s fees and costs in the offset calculation.

The judgment is affirmed.

                                                Facts

         Heather Bass was a Kansas City, Missouri police officer who sustained a duty related injury

in January 2008. As a result, she was retired by the Kansas City, Missouri Police Department and
became eligible to receive duty related disability pension benefits. Bass also filed a worker’s

compensation claim and hired an attorney to represent her on that claim. She engaged her attorney

on a contingency fee basis. As a result of her worker’s compensation claim she was awarded

permanent total disability benefits and received lump sum benefits and a weekly periodic award.

       As a member of the Kansas City, Missouri Police Department, Bass’s monthly duty related

disability pension was provided by the Police Retirement System of Kansas City, Missouri

(“PRSKC”). Pursuant to Section 86.11901 there is a reduction in benefits for a member who

receives a duty related disability pension and also a worker’s compensation benefit on account of

the same disability.

       On December 7, 2017, Bass filed a petition for declaratory judgment against PRSKC

requesting that the court determine, as a matter of law, that PRSKC is erroneously applying the

law by reducing her benefits in too large an amount. She challenged the calculations used by

PRSKC to determine that offset and also asserted that the offset should not include any amounts

from her worker’s compensation award that she did not receive but instead went directly to the

attorney she retained to represent her in her worker’s compensation claim.

       Both parties filed motions for summary judgment. The trial court ruled on the motions for

summary judgment on November 16, 2018. It granted in part and denied in part each party’s

motion. The trial court found that there were no material issues of fact in dispute as it related to

the matters presented for the court to resolve regarding the methods used by PRSKC in its

determination of what should be offsets or what should not be considered offsets.

       1
           All statutory references are to RSMo 2016 as supplemented unless otherwise indicated.

                                                         2
        The trial court determined that PRSKC’s interpretations of the statutes were correct and its

offsets as calculated pursuant to the statutes were correct in all respects except for the offset that it

included relating to the attorney’s lien on Bass’s worker’s compensation benefits and the expenses

her attorney incurred in obtaining those benefits. The trial court found that PRSKC violated

section 86.1190 by including those sums of money that are legally and solely owed to Bass’s

attorney because of her attorney’s lien when calculating the offset of Bass’s lump sum and weekly

compensation disability payments against her pension benefits.

        The court concluded that to the extent Bass had to pay attorney fees and litigation expenses,

she did not get a windfall.       It stated that the amount Bass was awarded in her worker’s

compensation case is subject to an attorney’s lien and therefore a portion of her lump sum award

and her weekly benefits have not, and will not, go to Bass to compensate her for the injuries

sustained and the benefits provided to her from her duty related disability pension. It found that

PRSKC’s interpretation of the statutes is incorrect and required PRSKC to consider those amounts

for attorney fees and litigation expenses in its determination of the offset and reduce the offset by

those amounts.

        The trial court denied Bass’s motion for summary judgment in part as it related to any

offsets referenced in the petition for declaratory judgment other than the offsets requested to be

excluded for attorney fees and litigation expenses. The trial court granted Bass’s motion for

summary judgment in part and found that PRSKC was in violation of section 86.1190 RSMo by

including those sums of money that are legally and solely owed to Bass’s attorney.

        The trial court granted PRSKC’s motion in part in all respects relating to the offsets PRSKC

calculated pursuant to section 86.1190 other than those relating to the attorney’s lien and litigation

expenses. The trial court denied PRSKC’s motion for summary judgment in part as it related to

                                                   3
the offsets the PRSKC included in its calculations to reduce Bass’s benefits relating to the

attorney’s lien and litigation expenses.

       The trial court did find, however, that two issues could not be determined in ruling on the

motions for summary judgment. Those issues were the amount of money Bass did not receive

from her worker’s compensation award that went to her attorney because of the attorney’s lien and

her prayer for relief that she should be awarded attorney fees under section 527.100 for pursuing

this lawsuit. The trial court held a trial on December 7, 2018, to determine all issues not resolved

by the ruling on the summary judgment motions. It issued its judgment on February 27, 2019.

       The trial court found that the lump sum benefit awarded to Bass on April 4, 2017 was

$207,537.19. The attorney’s lien on that award was $51,884.30. The litigation expenses incurred

were $11,199.20. Therefore, the trial court found, from the lump sum award after the deduction

of attorney fees and litigation expenses, Bass received $144,453.69. The trial court found that the

offset should have been $144,453.69 and not $207,537.19 as originally calculated by PRSKC

because that is the amount Bass actually received from the total lump sum benefit. Bass was

awarded $742.72 of weekly Worker’s Compensation benefits of which she receives $557.04 after

the attorney’s lien of $185.68.

       The trial court found that as of November 30, 2018, the attorney fees and litigation

expenses that should not have been included in the offset and therefore were wrongly withheld as

of that date were $9,806.26. That amount was ordered to be reimbursed to Bass. The trial court

ordered that as it relates to all future payments, that 25% of the weekly benefits which are not

being paid to Bass but rather her attorney shall not be part of the set off. Finally, the trial court

stated that Bass withdrew her prayer for attorney fees pursuant to section 527.100. It accordingly

denied the motion as moot. The trial court further denied Bass prejudgment interest.

                                                 4
       This appeal follows.

                                        Standard of Review

       “The standard of review in a declaratory judgment action is the same as in any other court

tried case.” Metrc, LLC v. Steelman, 617 S.W.3d 472, 480 (Mo. App. W.D. 2021). “Thus, the trial

court’s Judgment will be affirmed unless there is no substantial evidence to support it, it is against

the weight of the evidence, or it erroneously declares or applies the law.”            Id. at 480-81.

“Statutory interpretation is an issue of law that we review de novo.” Wilson v. Trusley, 624 S.W.3d

385, 396 (Mo. App. W.D. 2021). “A circuit court’s grant of summary judgment is subject to de

novo review on appeal.”       Holmes v. Steelman, 624 S.W.3d 144, 148 (Mo. banc 2021).

“Summary judgment will be affirmed when the moving party has established a right to judgment

as a matter of law on the basis of facts as to which there is no genuine dispute.” Id. (internal

quotation marks omitted).

                                           Bass – Point I

       In her first point on appeal, Bass claims the trial court erred in granting in part PRSKC’s

motion for summary judgment with respect to the offset amount. She argues that the trial court

misinterpreted section 86.1190.1. Bass states the court found that the words “funds provided by

the city” included investment income, interest, and other monies. She maintains these funds were

not provided by the city and should not have been considered in determining any offset.

       PRSKC is created by section 86.910. It is governed by sections 86.900 through 86.1280.

When Bass became a police officer, she became a member of PRSKC. § 86.1090.1. When an

officer retires receiving duty disability retirement benefits and also receives workers compensation

benefits for the same disability, an offset is applied to the officer’s retirement benefits. § 86.1190.

       Section 86.1190 states:

                                                  5
1. Any periodic payment, excluding payments for medical treatment, which may be
paid or payable by cities under the provisions of any workers’ compensation or
similar law to a member or to the dependents of a member on account of any
disability or death shall be offset against any benefits payable to the recipient of the
workers’ compensation payments from funds provided by cities under the
provisions of sections 86.900 to 86.1280 on account of the same disability or death;
except that, amounts payable under subsection 1 of section 86.1250 and section
86.1260 shall not be offset or reduced by any amount paid or payable under any
workers' compensation or similar law. However, in no event shall the amount paid
from funds under the provisions of sections 86.900 to 86.1280 be less than the
amount which represents the member’s percentage, as defined in this section, of
total benefits payable under sections 86.900 to 86.1280, other than under subsection
1 of section 86.1250 and section 86.1260 and before any offset for workers'
compensation benefits.

2. Any lump sum amount, excluding payments for medical treatments, which may
be paid or payable by the cities under the provisions of any workers' compensation
or similar law to a member or to the dependents of a member on account of any
disability or death shall be offset against any benefits payable from funds provided
by cities under the provisions of sections 86.900 to 86.1280 on account of the same
disability or death; except that, amounts payable under subsection 1 of section
86.1250 and section 86.1260 shall not be offset or reduced by any amounts paid or
payable under any workers' compensation or similar law. The amount by which
each periodic payment made under the provisions of sections 86.900 to 86.1280 is
offset or reduced shall be computed as the periodic amount necessary to amortize
as an annuity over the period of time represented by the respective workers'
compensation benefits the total amount of the lump sum settlement received as a
workers' compensation benefit by a beneficiary of the retirement system. Such
computation shall be based upon the same interest rate and mortality assumptions
as used for the retirement system at the time of such computation.

However, in no event shall the amount paid from funds under the provisions of
sections 86.900 to 86.1280 be less than the amount which represents the member's
percentage, as defined in this section, of total benefits payable under sections
86.900 to 86.1280, other than under subsection 1 of section 86.1250 and section
86.1260 and before any offset for workers' compensation benefits.

3. As used in this section, the term “member’s percentage” shall be the fraction
of which the numerator is the percentage of compensation contributed by a working
member to the retirement pension system under section 86.1010 during the pay
period immediately preceding such member’s death or disability which created
entitlement to benefits and the denominator is the sum of the percentages of a
member’s compensation contributed by a working member under section 86.1010
and the city under section 86.1000 to the retirement pension system during such
pay period. Such percentage shall identify the portion of any benefits due under

                                           6
       the provisions of sections 86.900 to 86.1280 which is deemed to have been provided
       by the member's own contributions.

(Emphasis added).

       PRSKC argues the following calculations are applicable to this case: Bass was awarded

$742.72 of weekly Worker’s Compensation benefits. That award was converted into an offset:

$742.72 x 52 weeks = $38,621.44/ 12 months = $3,218.45 per month offset. Bass’s member’s

percentage was calculated by dividing the member contribution rate (10.55%) at the time of her

retirement by the sum of the member contribution rate and the employer contribution rate (19.7%).

Bass’s member percentage is calculated as follows: 10.55/(10.55 + 19.70) = 10.55/30.25 = 34.88%.

That member’s percentage is then applied to Bass’s monthly duty disability retirement benefit to

determine her minimum monthly benefit payment, after the offset is applied, and the maximum

amount of the offset.

       Bass’s monthly duty disability retirement benefit as of May 2017 was $5,029.30. Applying

the member’s percentage determines the minimum monthly benefits payment following the offset:

$5,029.30 x 34.88% = $1,754.22. The maximum offset is the difference between the monthly duty

retirement benefit and the minimum monthly benefit payment: $5,029.30 - $1,754.22 = $3,275.08.

In Bass’s case, the sum of her periodic offset and her lump sum award offset ($3,218.45 + $524.08

= $3,740.53) exceeded the maximum allowable offset of $3,275.08. Accordingly, PRSKC applied

a monthly offset of the lower amount: $3275.08. Bass’s monthly duty retirement benefit was offset

to $1,754.22.

       In her first point on appeal, Bass complains about the 19.70% employer contribution rate

in the calculations set forth above. That number represents the percentage contributed by the city

to the pension system during the pay period immediately preceding such member’s disability

                                                7
which created entitlement to benefits. § 86.1190.3. Bass argues that 19.70 is the percentage of the

pension fund that comes from “funds provided by the cities.” She argues that her monthly benefit

of $5,029.30 should have been offset by 19.70%. Instead, she was only awarded her member’s

percentage (34.88%) which means her benefit was offset by 65.12%. Bass argues that the

legislative intent behind section 86.1190 was to prevent a city from having to pay a member twice

for the same injury and/or disability and to prevent a windfall to the member. She argues that

reducing her benefits by 65.12% is not consistent with that purpose.

       The formula for calculating the member’s percentage in section 86.1190.3 involves

creating a fraction where the percentage the officer contributes from his or her last paycheck is

over the sum of that percentage added with the percentage contributed by the city. The fraction is

not created by taking the percentage the member contributed over 100 (the sum of all

contributions). PRSKC acknowledges that the officer’s benefits are comprised of: the officer’s

contributions, the city’s contribution, and investment earnings and/or interest. The question

presented in this point on appeal is whether those investment earnings are funds provided by the

city, funds provided by the officer, or some other scenario.

       Sisco v. Bd. of Trustees of Police Ret. System of St. Louis, 31 S.W.3d 114 (Mo. App. E.D.

2000), involved interpretation of the St. Louis police pension system. St. Louis’ pension system

is created under the part of Chapter 86 applicable to any city not within a county (sections 86.200

through 86.364) while PRSKC is created under the part of Chapter 86 applicable to cities of

300,000 to 700,000 people (sections 86.900 through 86.1280).

       Section 86.297 authorizes the offset of workers’ compensation against “any benefits

payable out of funds provided by the [City].” (Emphasis added.) The Sisco court stated that the

officer’s “accumulated contributions were not funds provided by the City, and, therefore, were

                                                 8
properly excluded from the setoff calculation by the trial court.” Sisco, 31 S.W.3d at 120. The

Sisco court then looked at section 86.200(1) where “accumulated contributions” was defined as

“the sum of all mandatory contributions deducted from the compensation of a member and credited

to the member’s individual account, together with members’ interest thereon.” (Emphasis added.)

The Sisco court used that definition even though the phrase “accumulated contributions” does not

appear in section 86.297. It held that the interest credited to the officer’s contributions to the

retirement system was not paid from “funds provided by the City.” Sisco, 31 S.W.3d at 120 (citing

§ 86.303).2

        Section 86.900(1), applicable to PRSKC and section 86.1190, defines “accumulated

contributions” as “the sum of all amounts deducted from the compensation of a member and paid

to the retirement board, together with all amounts paid to the retirement board by a member or by

a member’s beneficiary, for the purchase of prior service credits or any other purpose permitted

under sections 86.900 to 86.1280.” Unlike the statute in Sisco, the statute applicable to PRSKC

does not reference interest on an officer’s contributions. Further, the statutory scheme in Sisco did

not have a “member’s percentage.”

        PRSKC is funded by a combination of mandatory city and employee contributions. See

§§ 86.900(1); 86.1000; 86.1010. Unlike a defined contribution plan where the participant has a

        2
          When a member is entitled to receive benefits from the Retirement System, other than benefits
        consisting solely of a refund of that member’s contributions, such benefits are paid from the “benefit
        reserve fund.” Section 86.323. The benefit reserve fund consists of a member’s accumulated
        contributions, which are transferred from the members' savings fund at the time the payment of
        benefits is approved, plus an “additional amount from the general reserve fund as is calculated by
        the actuary to be necessary with the member’s contributions to provide the payment of all benefits
        arising from the service of such member.” Section 86.323. Monies in the general reserve fund are
        contributed by the City. Section 86.327.

Sisco, 31 S.W.3d at 116. Section 86.323 was repealed, effective July 1, 2000.

                                                          9
separate account comprised of contributions and investment returns, PRSKC does not maintain

separate accounts for each member. Instead, it invests and manages the collective pension fund

assets in order to provide a defined retirement benefit upon normal retirement or retirement due to

disability, regardless of investment return. See §§86.1000, 86.1010.

       Section 86.1190 provides that funds provided by the city are reduced by the amount of a

workers’ compensation award for the same disability. Depending on the size of the workers’

compensation award, it is possible that the officer will still receive a benefit that includes funds

provided by the city. Section 86.1190 also provides for a minimum amount that the officer will

receive. As discussed above, this minimum amount is more that the total dollar amount the officer

contributed to the pension fund. Instead, the direct dollar contributions are separated into a

percentage attributable to the officer and a percentage attributable to the city. That percentage is

then applied to the total benefit received by the officer. In this way, credit for the investment

income and interest is allotted between the officer and the city.

       In Bass’s case, her member’s percentage resulted in a finding that she contributed 34.88%

of the monthly funds allotted to her. The resulting conclusion from this calculation is that the city

contributed the remaining 65.12% of the monthly funds allotted to Bass. As Bass’s member’s

percentage was larger than subtracting the workers’ compensation award (both for her lump sum

award and her periodic award) from her total monthly benefit, she was awarded her member’s

percentage. This was not error.

       The point is denied.

                                          Bass – Point II

       In her second point on appeal, Bass claims the trial court erred in denying her motion to

amend her petition. She argues that PRSKC’s failure to lawfully promulgate administrative rules

                                                 10
was tried by implied consent because the issue was fully argued by both parties in their competing

motions for summary judgment. Bass maintains that no hardship or prejudice would have befallen

PRSKC by the proposed amendment to the petition.

         “Rule 55.33 allows an unpleaded issue to be tried by consent of the parties.” Buscher v.

Buscher, 620 S.W.3d 283, 287 (Mo. App. E.D. 2021). “In effect, the implied consent rule

provides that if evidence applying to a new issue is admitted, without a timely and specific

objection, and the evidence is not relevant to issues already present, Rule 55.33(b) treats the new

issue as having been raised in the pleadings.” Id. (internal quotation marks omitted).

         Bass’s petition was for declaratory judgment. She asked the court to declare that: 1)

PRSKC could only offset her pension by the percentage the city paid into it; 2) PRSKC may not

deduct amounts owed to Bass’s attorney; and 3) PRSKC must use a reasonable discount rate for

life expectancy. The petition does not reference Chapter 536 or the failure to promulgate

administrative rules. Both parties filed motions for summary judgment. The trial court granted in

part and denied in part the motions by both parties. The trial court set a trial date to resolve any

remaining issues. The day before trial, Bass filed a motion to amend her declaratory judgment

petition. The parties argued the merits of the motion the day of trial. Bass claimed that while her

petition did not raise a claim under the Missouri Administrative Procedures Act, the issue of

whether PRSKC failed to promulgate administrative rules was subject to discovery and lengthy

discussion in the cross motions for summary judgment. She asserted that no further discovery or

evidence was necessary for the court to rule on the issue of failure to promulgate administrative

rules.

         “Whether to allow the amendment of a pleading is discretionary with the trial court and its

decision will not be disturbed absent an obvious and palpable abuse of discretion.” Ferrellgas,

                                                 11
Inc. v. Edward A. Smith, P.C., 190 S.W.3d 615, 618–19 (Mo. App. W.D. 2006). “Facts come into

a summary judgment record only via Rule 74.04(c)’s numbered-paragraphs-and-responses

framework.” Green v. Fotoohighiam, 606 S.W.3d 113, 117 (Mo. banc 2020) (internal quotation

marks omitted) (emphasis in original). “Courts determine and review summary judgment based

on that Rule 74.04(c) record, not the whole trial court record.” Id. (internal quotation marks

omitted) (emphasis in original). “Affidavits, exhibits, discovery, etc. generally play only a

secondary role, and then only as cited to support Rule 74.04(c) numbered paragraphs or

responses, since parties cannot cite or rely on facts outside the Rule 74.04(c) record.” Id. (internal

quotation marks omitted) (emphasis in original). “[S]ummary judgment rarely if ever lies, or can

withstand appeal, unless it flows as a matter of law from appropriate Rule 74.04(c) numbered

paragraphs and responses alone.” Id. at 117-18 (internal quotation marks omitted) (emphasis in

original). “Taken together, these summary judgment principles require a court to determine

whether uncontroverted facts established via Rule 74.04(c) paragraphs and responses demonstrate

[movant's] right to judgment regardless of other facts or factual disputes.” Id. at 118 (internal

quotation marks omitted) (emphasis in original).

         In her statement of uncontroverted facts, Bass stated that PRSKC has the authority to

promulgate administrative rules and that PRSKC has not promulgated administrative rules,

including with respect to the undefined term “funds provided by the cities.” PRSKC admitted it

had the authority to promulgate administrative rules and that it had not promulgated administrative

rules.   However, it denied that promulgation of a rule was required under the Missouri

Administrative Procedures Act. It also stated that the words “funds provided by the cities” have a

clear meaning as used in the statute.

         Section 536.016 states in relevant part:

                                                    12
       1. Any state agency shall propose rules based upon substantial evidence on the
       record and a finding by the agency that the rule is necessary to carry out the
       purposes of the statute that granted such rulemaking authority.

       2. Each state agency shall adopt procedures by which it will determine whether a
       rule is necessary to carry out the purposes of the statute authorizing the rule. Such
       criteria and rulemaking shall be based upon reasonably available empirical data and
       shall include an assessment of the effectiveness and the cost of rules both to the
       state and to any private or public person or entity affected by such rules.

Bass’s statement of uncontroverted facts did not address the requirements of section 536.016 set

forth above. Moreover, PRSKC specifically stated a rule was not necessary in its response to her

statement of uncontroverted fact.     Bass’s argument that the issue of failure to promulgate

administrative rules was fully tried through the summary judgment motions and was ready for the

court to rule on is without merit.

       Given that the issue was not tried by consent, the question is whether the trial court abused

its discretion in not permitting Bass to amend her petition the morning of trial. See Rule 55.33(a).

We find that it did not.

       The point is denied.

                                         Bass – Point III

       In her third point on appeal, Bass claims the trial court erred in granting part of PRSKC’s

motion for summary judgment with respect to the offset amount. She argues that the evidence

used by the Pension Board to calculate life expectancy to determine the amount of offset was

arbitrary and capricious. Bass states that section 86.1190.1 requires that PRSKC use “mortality

assumptions” that are “used for the retirement system at the time of computation.” She claims that

PRSKC did not do this but instead relied upon other information in an effort to increase the offset

amount and in turn decrease the benefits which are owed to Bass.

                                                13
        Section 86.1190.23 states in relevant part:

        2. The amount by which each periodic payment made under the provisions of
        sections 86.900 to 86.1280 is offset or reduced shall be computed as the periodic
        amount necessary to amortize as an annuity over the period of time represented by
        the respective workers’ compensation benefits the total amount of the lump sum
        settlement received as a workers’ compensation benefit by a beneficiary of the
        retirement system. Such computation shall be based upon the same interest rate
        and mortality assumptions as used for the retirement system at the time of such
        computation.

(Emphasis added). Bass received both a lump sum award and a periodic award for her workers’

compensation claim. This point pertains to her lump sum award.

        The Social Security mortality table sets Bass’s life expectancy at 38 years. PRSKC reduced

that number by five years, using an expectancy of 33 years. This is because PRSKC applies a five

year set forward assumption to disabled members. Bass argues that PRSKC Actuarial Reports

have found that there is insufficient data to provide a credible analysis to support PRSKC’s five

year set forward for disabled members. She asks this court to find a breach of fiduciary duty and

order PRSKC to stop using the five year set forward.

        PRSKC’s Actuarial Valuation Report, completed by a consulting firm in April 2017, states

the following:

        Disabled Members: There is insufficient data to provide credible analysis. We
        recommend the disabled mortality assumption remain unchanged, i.e., the RP-
        2000 Healthy Annuitant Mortality Tables for males and females with a five
        year set forward and generational mortality improvements anticipated by
        Scale AA.

(Emphasis in original.) Section 86.920 establishes the PRSKC retirement board and states:

        3
           Bass’s point relied on and argument cite section 86.1190.1. She even quotes that section as stating in
pertinent part:
         Any awards…[of] workers’ compensation…to a member…shall be offset against any benefits
         payable from funds provided by cities …. Such computation shall be based upon the same
         interest rate and mortality assumptions as used for the retirement system at the time of such
         computation.
The phrase “any awards” does not appear in section 86.1190. The rest of the language is from section 86.1190.2.

                                                       14
       The general administration and the responsibility for the proper operation of the
       retirement system and for making effective the provisions of sections 86.900 to
       86.1280 are hereby vested in a retirement board of nine persons.

The calculations used by PRSKC to determine the statutory offset of a member’s duty disability

benefits by the member’s workers’ compensation award are based upon actuarial assumptions

approved by the Board of PRSKC. Section 105.664 requires the PRSKC to prepare a biennial

actuarial valuation. The PRSKC Board is required to periodically review and approve certain

actuarial assumptions, including the interest rate and mortality assumptions, used in its actuarial

valuation.

       The Board-approved actuarial assumptions, which the PRSKC is required to use, are: an

interest rate of 7.5% and the Social Security mortality tables, available at the time of calculation,

set forward five years by a mortality rate, based on PRSKC experience, for members receiving a

duty disability retirement benefit. While the Actuarial Valuation Report stated that “[t]here is

insufficient data to provide credible analysis” it also recommended that the five year set forward

“remain unchanged.” Bass has not shown that the PRSKC’s calculation of the life expectancy of

disabled members is arbitrary and capricious. See, e.g., Leggett v. Missouri State Life Ins. Co.,

342 S.W.2d 833, 910–11 (Mo. 1960).

       The point is denied.

                                          Bass – Point IV

       In her fourth point on appeal, Bass argues the trial court erred in denying her claim for

prejudgment interest. She claims the trial court misinterpreted the nature of her claims. Bass states

that PRSKC had a fiduciary duty to her and that her claims for damages were readily ascertainable

                                                 15
on May 31, 2017. She maintains that her claims were appropriate for an award of prejudgment

interest which she sought in her petition.

       “Judgments do not bear interest either as a matter of legal right or under the common law.”

A.G. Edwards & Sons, Inc. v. Drew, 978 S.W.2d 386, 396 (Mo. App. E.D. 1998). “Any allowance

of interest, therefore, must be based upon either a statute or a contract, either express or implied.”

Id. Bass cites A.G. Edwards & Sons, Inc. for the proposition that she is entitled to prejudgment

interest because PRSKC breached a fiduciary duty owed to her. In A.G. Edwards & Sons, Inc., the

plaintiff filed a petition alleging breach of contract and breach of fiduciary duty. Id. at 388. The

court noted that, pursuant to section 408.020, creditors can receive interest “on all accounts after

they become due and demand of payment is made.” Id. at 396. “As used in section 408.020,

‘account’ is regarded as equivalent to ‘claim’ or ‘demand.’” Id. at 397.

       In the current case, Bass brought a declaratory judgment action. She did not bring a cause

of action for breach of contract or breach of fiduciary duty. Her argument is without merit. See

Pediatric Associates, Inc. v. Charles L. Crane Agency Co., 21 S.W.3d 884, 886 (Mo. App. E.D.

2000) (“All of plaintiff’s cases are distinguishable in that the parties requesting pre-judgment

interest under Section 408.020 prevailed on contract claims; or contract and tort claims; or it

wasn’t clear from the record under which statute the party seeking pre-judgment interest was

relying on.”).

       The point is denied.

                                         PRSKC – Point I

       In its first point on appeal, PRSKC claims the trial court erred in ruling that Bass’s

attorney’s fees and expenses could not be included in the offset calculation. It argues that the court

misapplied the law because the plain language of section 86.1190 states that PRSKC “shall” offset

                                                 16
from any duty disability payments “any” periodic or lump sum workers’ compensation payments

“which may be paid or payable” to a member on account of the same disability or death. PRSKC

further states that the only exception contained in the statute excludes “payments for medical

expenses.” It maintains that there is nothing in the plain language of the statute that permits

PRSKC to remove from the offset calculation amounts that Bass may owe her attorney in relation

to the workers’ compensation action.

        Chapter 287 codifies Missouri’s Workers’ Compensation Law. Section 287.260.1 provides

in relevant part:

        … if written notice is given to the division or the commission of the nature and
        extent thereof, the division or the commission may allow as lien on the
        compensation, reasonable attorney’s fees for services in connection with the
        proceedings for compensation if the services are found to be necessary and may
        order the amount thereof paid to the attorney in a lump sum or in installments. All
        attorney’s fees for services in connection with this chapter shall be subject to
        regulation by the division or the commission and shall be limited to such charges
        as are fair and reasonable and the division or the commission shall have jurisdiction
        to hear and determine all disputes concerning the same.

Missouri regulations also provide:

        If the services of an attorney are found to be necessary in proceedings for
        compensation, the administrative law judge shall set a reasonable fee considering
        relevant factors which may include, but are not limited to, the nature, character and
        amount of services rendered, the amount in dispute, and the complexity of the case
        and may allow a lien on the compensation due to the claimant.

8 C.S.R. § 50–2.010(15). Under this statutory framework, the Labor and Industrial Relations

Commission is authorized to set reasonable attorneys’ fees or impose a lien after considering all

relevant factors. “The general practice in Missouri is to set a fee not to exceed 25% of the award.”

Sterling v. Mid Am. Car, Inc., 456 S.W.3d 473, 476 (Mo. App. W.D. 2014).

“[D]enying attorney’s fees for work prosecuted on behalf of an injured claimant can have a chilling

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effect upon the ability of an injured party to obtain adequate representation.” Id. at 477 (internal

quotation marks omitted).

       In Sisco, 31 S.W.3d at 119, the Board of Trustees of the Police Retirement System of St,

Louis argued that the trial court erred in its application of section 86.297 when it reduced the

amount of the workers’ compensation award to be offset against retirement benefits by the

attorneys’ fees and expenses occurred by the police officer. The Eastern District noted that “[t]he

purpose of this setoff is to prevent double compensation for one injury, thus giving the injured

person a windfall.” Id. (internal quotation marks omitted). It held, “[t]o the extent that [the officer]

had to pay attorney’s fees and related expenses to obtain his workers’ compensation award, he did

not receive a windfall.” Id. at 120. In Sisco, as in the current case, the officer’s workers’

compensation award was subject to a lien in the amount of 25% in favor of his attorney. Id. “The

award amount subject to the lien will not go to [the officer] but to his attorney; therefore, [the

officer] is not receiving a windfall.” Id. “The trial court correctly reduced [the officer’s] workers’

compensation offset by the attorney’s fees and related expenses incurred in connection with his

workers' compensation claim.”

       This is precisely what the trial court did in Bass’s case. PRSKC acknowledges that its

argument is in opposition to the holding in Sisco. It argues that the court’s conclusion in Sisco

“does not stand up to a reasoned scrutiny,” that Sisco did not correctly engage in statutory

interpretation, that Sisco misinterpreted precedent, and that cases from jurisdictions outside of

Missouri support PRSKC’s argument. The Supreme Court of Missouri denied the application of

transfer in Sisco. The Eastern District’s opinion is still good law, and we find no error in its

holding.

       The point is denied.

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                                   Conclusion

       The judgment is affirmed.

                                           Anthony Rex Gabbert, Judge

All concur.

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