Court Opinion

ID: 6317286
Source: CourtListenerOpinion
Date Created: 2022-02-24 18:11:44.828048+00
Date Added: 2024-06-11T09:00:34.501974
License: Public Domain

[Cite as State ex rel. Worthington v. Ohio Pub. Emps. Ret. Sys., 2022-Ohio-535.]

                              IN THE COURT OF APPEALS OF OHIO

                                   TENTH APPELLATE DISTRICT

State ex rel. Therese Worthington,                      :

                 Relator,                               :

v.                                                      :                          No. 20AP-425

The Ohio Public Employees                               :                  (REGULAR CALENDAR)
Retirement System et al.,
                                                        :
                 Respondents.
                                                        :

                                            D E C I S I O N

                                    Rendered on February 24, 2022

                 On brief: Hurm Law Firm, LLC, and Matthew T. Hurm, for
                 relator.

                 On brief: Dave Yost, Attorney General, Samuel A.
                 Peppers, III, and Lisa A. Reid, for respondent Ohio Public
                 Employees Retirement System.

                 On brief: Dave Yost, Attorney General, Holly E. LeClair
                 Welch, for respondent Ohio State University.

                                             IN MANDAMUS

LUPER SCHUSTER, P.J.
        {¶ 1} Relator, Therese Worthington, initiated this original action seeking a writ of
mandamus ordering respondent, The Ohio Public Employees Retirement System
("OPERS"), to rescind a retroactive revocation of her health insurance coverage from March
2018 through June 2018 and to reinstate her health insurance for that same period. The
requested writ of mandamus related to Worthington's re-employment as an independent
contractor after retirement with respondent, The Ohio State University ("OSU").
No. 20AP-425                                                                                2

       {¶ 2} Pursuant to Civ.R. 53 and Loc.R. 13(M) of the Tenth District Court of Appeals,
we referred this matter to a magistrate of this court. The magistrate issued the appended
decision, including findings of fact and conclusions of law. The magistrate determined
Worthington did not show a clear legal right to health insurance coverage during her work
as an independent contractor and did not show OPERS has a clear legal duty to provide
such benefits. The magistrate additionally determined Worthington did not show that OSU
has a clear legal duty to remedy the gap in healthcare coverage for her. Thus, the magistrate
recommends this court deny Worthington's petition for a writ of mandamus.
       {¶ 3} No party has filed objections to the magistrate's decision. The case is now
before this court for review.
       {¶ 4} Finding no error of law or other defect on the face of the magistrate's decision,
we adopt the magistrate's decision as our own, including the findings of fact and
conclusions of law contained therein. In accordance with the magistrate's decision, we deny
Worthington's request for a writ of mandamus.
                                                                 Writ of mandamus denied.

                           SADLER and DORRIAN, JJ., concur.
No. 20AP-425                                                                        3

                                      APPENDIX

                        IN THE COURT OF APPEALS OF OHIO

                            TENTH APPELLATE DISTRICT

State ex rel. Therese Worthington,           :

             Relator,                        :

v.                                           :                    No. 20AP-425

The Ohio Public Employees                    :              (REGULAR CALENDAR)
Retirement System et al.,
                                             :
             Respondents.
                                             :

                        MAGISTRATE'S DECISION

                            Rendered on November 30, 2021

             Hurm Law Firm, LLC, and Matthew T. Hurm, for relator.

             Dave Yost, Attorney General, Samuel A. Peppers, III, and
             Lisa A. Reid, for respondent Ohio Public Employees
             Retirement System.

             Dave Yost, Attorney General, Holly E. LeClair Welch, for
             respondent Ohio State University.

                                     IN MANDAMUS

      {¶ 5} Relator, Therese Worthington, seeks a writ of mandamus ordering
respondent, The Ohio Public Employees Retirement System ("OPERS"), to rescind a
retroactive revocation of relator's health insurance coverage from March 2018 through
June 2018, and reinstate relator's health insurance for that period.
      {¶ 6} The dispute arose when relator retired from employment with respondent
Ohio State University ("OSU") and began receiving retirement benefits from OPERS, then
No. 20AP-425                                                                           4

returned to work for OSU as an independent contractor. OPERS determined that relator
was not entitled to health insurance benefits during her period of re-employment with
OSU, and retroactively rescinded relator's healthcare coverage.

Findings of Fact:
       {¶ 7} 1. Relator became an OPERS member through employment beginning in
approximately 1978 and eventually was an OPERS member through her employment with
OSU from February 2005 to November 30, 2017. (Compl. at 3.)
       {¶ 8} 2. Relator applied for retirement with OPERS with her final date of
employment being November 30, 2017 and commencement of retirement benefits on
December 1, 2017. (Stip. at 5, 38-39.)
       {¶ 9} 3. After taking a lump sum payout, relator received a gross monthly
retirement benefit of $3,725, and from this paid a healthcare premium deduction of
$96.13. (Stip. at 38.)
       {¶ 10} 4. After exploring the impact of re-employment upon her retirement
benefits from OPERS, relator accepted an offer from OSU to provide teaching services as
an independent contractor, with services commencing on February 6, 2018. (Stip. at 2.)
       {¶ 11} 5. Relator terminated her contract employment with OSU effective
June 29, 2018. (Stip. at 13.)
       {¶ 12} 6. OSU submitted to OPERS a notice of re-employment of OPERS benefit
recipient on July 30, 2018, notifying OPERS that relator had returned to service with her
former employer, OSU, under an independent contractor agreement. (Stip. at 2.)
       {¶ 13} 7. After receiving notice of relator's return to service with OSU, OPERS
concluded that relator was ineligible for retirement benefits and healthcare coverage
pursuant to R.C. 145.38 and Ohio Adm.Code 145-4-30(I) for the period of her contract
employment. OPERS notified relator that it had issued a refund of relator's healthcare
premiums withheld from her retirement benefit during the period, minus the cost of
certain prescription drug claims paid. (Stip. at 36.)
       {¶ 14} 8. Because OSU had not timely advised OPERS of relator's re-employment
as an independent contractor, OPERS billed OSU under R.C. 145.38(B)(2) and 145.51 for
No. 20AP-425                                                                            5

the amount of overpayment of retirement benefits to relator that she should not have
received during the contract of employment. The amount billed was $14,238.28. (Stip.
at 4.)
         {¶ 15} 9. OPERS has not attempted to recoup from relator the monthly retirement
benefits paid to her during the contract employment period.
         {¶ 16} 10. Upon learning that she would lose her retirement benefits and OPERS
healthcare coverage during the period of contract employment, relator contacted OSU to
inquire if her services through that period could be deemed as volunteer service hours if
she returned for contract payments. OSU notified her that this was not possible via letter
sent from Sean Driscoll, benefits administration manager with OSU, dated October 22,
2018. (Stip. at 14.)
         {¶ 17} 11. During the period in which relator was exploring contract re-
employment with OSU, she inquired of OSU regarding the impact of this on her
retirement benefits. OSU declined to opine on this and suggested relator contact OPERS.
(Stip. at 29.)
         {¶ 18} 12. A series of phone calls ensued in which, relator asserts, OPERS staff
verbally assured her that her retirement benefits would not be affected if she resumed
employment with OSU as an independent contractor more than 60 days after her
retirement date. (Stip. at 34.)
         {¶ 19} 13. Respondent OSU has submitted certified evidence containing e-mail
communications between relator and OSU as she considered the possibility of contract
re-employment. The documents submitted include an early draft of a contract proposal
between relator and OSU and Geauga County, an interested party in relator's teaching
position. (Stip. at 9.)
         {¶ 20} 14. In an exchange of e-mails between OSU employee Erik Draper and
relator dated January 23, 2018, Draper suggests to relator that relator "[l]ook closely at
the statement because it states 'will forfeit pension benefits and access to health care
through OPERS for the entire period of service as an independent contractor.' "
(Emphasis sic.) (OSU Certified Evid. at 10.) Draper and relator discussed the impact of
OPERS statutes and regulations, and relator emphasized that she was aware of the
possibility of forfeiture but did not think that it would apply to her because of the two-
No. 20AP-425                                                                               6

month interval between retirement and resumption of contract employment. (OSU
Certified Evid. at 11.)
       {¶ 21} 15. In a January 25, 2018 e-mail between Draper and relator, Draper
quoted relator as confident that, after conversations with an OPERS representative
named Anita, she was confident that she would not lose benefit as long as she did not
return to a public sector job before February 2, 2018. (OSU Certified Evid. at 16.)
       {¶ 22} 16. Relator filed her complaint in mandamus on September 14, 2020. The
complaint prays for a writ that "requires Respondents to comply with the laws of the State
of Ohio and to order Respondents to find Relator is eligible for health insurance benefits
from March 2018 through June 2018." (Compl. at 10.)
       {¶ 23} 17. OPERS has submitted a certified record of proceedings in OPERS'
administrative determination in the matter, and OSU has submitted certified evidence
consisting primarily of e-mail communications authenticated by affidavit. The magistrate
denied relator's request to submit a letter from an OSU employee as additional evidence
because it was not presented in affidavit form. Relator also sought to introduce audio
recordings of her conversations with OPERS' staff. The magistrate denied leave because
this evidence was offered outside the evidentiary cutoff for the case and in any event was
never received by the clerk.

Discussion and Conclusions of Law:
       {¶ 24} To obtain a writ of mandamus, a relator must show a clear legal right to the
relief sought and a clear legal duty on the part of the respondent to provide that relief, in
conjunction with the absence of a plain and adequate remedy in the ordinary course of
the law. State ex rel. Pressley v. Indus. Comm., 11 Ohio St.2d 141 (1967); State ex rel.
Berger v. McMonagle, 6 Ohio St.3d 28 (1983). Jurisdiction and venue for an original
action in mandamus lie with this court pursuant to the Ohio Constitution, Article IV,
Section 3(B)(1)(b), R.C. 2731.02, and R.C. 149.43(C)(1)(b).
       {¶ 25} Relator seeks a writ of mandamus ordering OPERS to reinstate her
healthcare coverage from March 1, 2018 to July 1, 2018. In the alternative, relator argues,
although the complaint does not present a specific request for a writ to this effect, that
No. 20AP-425                                                                              7

OSU is liable to OPERS for any healthcare claims that were initially paid by OPERS'
insurance, and then rescinded.
       {¶ 26} Ohio law expressly permits OPERS retirees to resume employment with a
public employer. R.C. 145.38(B)(1); Sherman v. Ohio Pub. Emps. Retirement Sys., 163
Ohio St.3d 258, 2020-Ohio-4960, ¶ 10. Such re-employment, however, is subject to
numerous timing and notification requirements. R.C. 145.38(B)(1) through (7). To avoid
the possibility of circumventing these restrictions and notice requirements, R.C.
145.38(B)(6) expressly addresses a resumption of work for a former public employer as
an independent contractor:
              A PERS retirant who enters into a contract to provide services
              as an independent contractor to the employer by which the
              retirant was employed at the time of retirement or, less than
              two months after the retirement allowance commences, begins
              providing services as an independent contractor pursuant to a
              contract with another public employer, shall forfeit the pension
              portion of the retirement benefit for the period beginning the
              first day of the month following the month in which the services
              begin and ending on the first day of the month following the
              month in which the services end.

       {¶ 27} Relator, in resuming work for OSU, relied on the lapse of a two-month
interval between her retirement and her resumption of work as an independent
contractor as shielding her from forfeiture. OPERS, to the contrary, interprets this
statute's initial sentence in two parts: first, a forfeiture applicable to any OPERS retiree
who provides services as an independent contractor to the public employer from which
the employee retired, regardless of when such contract for services takes place; and
second, a required 60-day interval for resumption of work as an independent contractor
with all other public employers.
       {¶ 28} Because the state retirement systems, including OPERS, are creatures of
statute, they may only act in strict compliance with their enabling statutory schemes.
Cosby v. Cosby, 96 Ohio St.3d 228, 2002-Ohio-4170, ¶ 19; Dreger v. Pub. Emps.
Retirement Sys., 34 Ohio St.3d 17, 20-21 (1987). As a result, "[a]s a retirement system
created by statute, PERS can only pay benefits as specifically provided by statute." Ohio
No. 20AP-425                                                                                    8

Pub. Emps. Retirement Sys. v. Coursen, 156 Ohio App.3d 403, 2004-Ohio-1229, ¶ 7 (9th
Dist.).
          {¶ 29} The only evidence potentially in dispute in this case is what relator was told
by OPERS staff in verbal conversations as relator prepared to resume work for OSU as an
independent contractor.          The conditions of relator's retirement and subsequent
resumption of work as an independent contractor are not in dispute. As a result, two legal
questions present themselves: (1) Did OPERS correctly interpret its statute as mandating
a forfeiture of retirement benefits, including healthcare coverage, and (2) is OPERS bound
by the verbal representations of its staff in telephone conversations with relator.
          {¶ 30} Answering the second question first, Ohio law could not be clearer that state
agencies are bound to act by law, and estoppel cannot apply to require an agency to
comply with representations tendered by its staff that are contrary to the governing law:
                 This conclusion is supported by a number of decisions from
                 this court in which we refused to apply promissory estoppel to
                 the retirement systems as a matter of law. See Sandhu v. Public
                 Emp. Retirement Sys. (Oct. 9, 1980), Franklin App. No. 80AP-
                 333, 1980 Ohio App. LEXIS 13384 ("Estoppel could not be
                 applied against the defendant in this case, as the defendant
                 only performed its duties as defined by statute.") McAuliffe v.
                 Bd. of Pub. Emp. Retirement Sys. (1994), 93 Ohio App. 3d 353,
                 361-363, 638 N.E.2d 617 (PERS could not be estopped from
                 following the relevant statutory provisions despite
                 representations of staff); State ex rel. Shumway v. Ohio State
                 Teachers Retirement Bd. (1996), 114 Ohio App. 3d 280, 289,
                 683 N.E.2d 70 (court refused to apply estoppel to STRS,
                 concluding that "estoppel is not applied against the state or its
                 agencies in the exercise of a governmental function"); State ex
                 rel. Swartzlander v. State Teachers Retirement Bd. (1996), 117
                 Ohio App. 3d 131, 136, 690 N.E.2d 36 (estoppel did not apply
                 against STRS); Smith v. State Teachers Retirement Bd. (Feb. 5
                 1998), Franklin App. 97APE07-943, 1998 Ohio App. LEXIS
                 403 (estoppel cannot be used to abrogate the statutory schemes
                 that strictly control the state retirement systems).

          {¶ 31} Turning    to    respondents'    interpretation     of   R.C.       145.38(B)(6),
notwithstanding an awkward comma placement in the statutory language, OPERS'
interpretation of the statute is correct. Relator forfeited her retirement benefits for the
period in which she worked as an independent contractor for the public employer from
No. 20AP-425                                                                            9

which she retired, regardless of whether she allowed a 60-day interval to lapse before
commencing contract work. The 60-day interval only shields retirement benefits when
resuming contract work for a public employer from which the employee did not retire.
       {¶ 32} Having determined that forfeiture of retirement benefits was required,
OPERS then applied its pertinent regulations to assess relator's right to healthcare
coverage during the contested period. Under Ohio Adm.Code 145-4-30(I), presenting
OPERS' rules for pre-medicare coverage for retirees, "[b]enefit recipients under this rule
are not eligible for coverage during any period of benefit suspension or forfeiture."
       {¶ 33} In sum, OPERS properly concluded that, first, relator was subject to a
suspension of benefits under R.C. 145.38(B)(6), and second, that this suspension or
forfeiture mandated that relator was no longer eligible for healthcare benefits during the
period of suspension or forfeiture. OPERS properly rescinded coverage for the period in
question and refunded insurance premiums withheld from relator's monthly retirement
benefits. Relator has not demonstrated a clear legal right to health insurance coverage
during her period of work as an independent contractor with the former public employer
from which she retired, or a clear legal obligation on the part of OPERS to provide such
benefits.
       {¶ 34} Nor has relator demonstrated a clear legal duty on the part of OSU to
address any aspect of this situation. Relator has demonstrated no clear legal duty on the
part of OSU, either under law or contract, to remedy the gap in healthcare coverage for
her. While relator proposes that OSU must refund money to OPERS in connection with
healthcare coverage, as it did for payment of the monthly retirement benefit, this would
not resolve relator's gap in healthcare coverage because payment of funds to OPERS in
this respect would in no way create an obligation or even a legal right on the part of
OPERS to provide healthcare coverage to relator for the months in dispute.
       {¶ 35} It is therefore the decision and recommendation of the magistrate that
relator is not entitled to a writ of mandamus in this case against either respondent.

                                             /S/ MAGISTRATE
                                             MARTIN L. DAVIS
No. 20AP-425                                                                    10

                           NOTICE TO THE PARTIES

           Civ.R. 53(D)(3)(a)(iii) provides that a party shall not assign as
           error on appeal the court's adoption of any factual finding or
           legal conclusion, whether or not specifically designated as a
           finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii),
           unless the party timely and specifically objects to that factual
           finding or legal conclusion as required by Civ.R. 53(D)(3)(b).