Court Opinion

ID: 3063384
Source: CourtListenerOpinion
Date Created: 2015-10-14 21:07:16.601527+00
Date Added: 2024-06-11T11:08:33.056584
License: Public Domain

Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE                                          NEWS RELEASE #050

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 14th day of October, 2015, are as follows:

PER CURIAMS:

2015-C -0324      DR. RALPH SLAUGHTER v. LOUISIANA     STATE    EMPLOYEES'   RETIREMENT
                  SYSTEM (Parish of E. Baton Rouge)

                  For the reasons assigned, the judgment of the court of appeal is
                  reversed insofar as it finds the Louisiana State Employees’
                  Retirement System failed to prove that it followed the proper
                  procedure   before  initiating  action  to   reduce  and  recoup
                  plaintiff’s retirement benefits.    In all other respects, the
                  judgment of the court of appeal is affirmed.        The case is
                  remanded to the district court for further proceedings not
                  inconsistent with this opinion.    All costs in this court are
                  assessed against plaintiff.

                  JOHNSON, C.J., concurs and assigns reasons.
10/14/15

                       SUPREME COURT OF LOUISIANA

                                  NO. 2015-C-0324

                             DR. RALPH SLAUGHTER

                                       VERSUS

           LOUISIANA STATE EMPLOYEES' RETIREMENT SYSTEM

           ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,
             FIRST CIRCUIT, PARISH OF EAST BATON ROUGE

PER CURIAM

      In this matter, we are called upon to determine whether the lower courts erred

in finding the defendant retirement system failed to prove that it followed the proper

procedure before initiating action to reduce and recoup plaintiff’s retirement benefits.

For the reasons that follow, we find the lower courts did not apply the proper

statutory analysis and reached an erroneous result.

                    FACTS AND PROCEDURAL HISTORY

      In 2009, plaintiff, Dr. Ralph Slaughter, retired as president of Southern

University System (“Southern”) after thirty-five years of service. Upon retirement,

the Louisiana State Employees’ Retirement System (“LASERS”) began paying

plaintiff retirement benefits of $24,487 per month.

      In 2009, plaintiff filed suit against Southern for past due wages. The district

court ruled that Southern had miscalculated plaintiff’s income base by including

supplemental pay plaintiff had received from the Southern University Foundation,

and determined plaintiff’s terminal pay (500 hours of unused leave) and retirement

should have been calculated only on his $220,000 annual base salary due from

Southern. The court of appeal affirmed on appeal, noting plaintiff “manipulated the

system and used his position for his own benefit.” Slaughter v. Bd. of Supervisors of
Southern Univ. & Agr. & Mech. Coll., 10-1049 (La. App. 1 Cir. 8/2/11), 76 So. 3d

438, writ denied, 11-2110 (La. 1/13/12), 77 So. 3d 970 (“Slaughter I”).

       In the meanwhile, on January 22, 2010, Southern sent a letter to LASERS

advising it had committed an error in including supplemental funds in plaintiff’s

earnings. Because the Slaughter I suit was ongoing at the time, LASERS filed a

concursus proceeding (hereinafter referred to as “Slaughter II”) seeking to deposit

the disputed amount of plaintiff’s benefit in the registry of court pending resolution

of the Slaughter I litigation. Plaintiff filed an exception of no cause of action. The

district court granted the exception and dismissed Slaughter II with prejudice.

LASERS did not appeal this judgment, and it is now final.

       On April 27, 2012, after Slaughter I became final, LASERS sent

correspondence to plaintiff advising it intended to retroactively reduce his retirement

benefit starting June 1, 2012 “due to an error made by Southern University in the

reporting of your earnings.” Relying on La. R.S. 11:192, LASERS maintained it may

adjust benefits and further reduce the corrected benefit to recover overpayment within

a reasonable number of months.

       Plaintiff then filed the instant suit against LASERS, seeking a writ of

mandamus, injunctive relief, and a declaratory judgment confirming LASERS has no

authority or ability to reduce his retirement benefits. The petition alleged plaintiff’s

retirement benefits should be calculated based on the entirety of his earnings over

thirty-five years of employment, including salary supplements.

       After a bench trial, the district court granted plaintiff’s petition for declaratory

judgment. Without reaching the merits of plaintiff’s arguments regarding the

calculation of benefits,1 the court held LASERS was not entitled to reduce plaintiff’s

       1
         It is noteworthy that although the district court did not resolve the merits, it acknowledged
the holding in Slaughter I, explaining the court of appeal found “Dr. Slaughter was able himself to

                                                  2
retirement benefits because it failed to follow the procedural requirements set forth

in La. R.S. 11:407. Specifically, the court found LASERS failed to introduce any

evidence indicating it submitted documentation of the administrative error to the

LASERS board of trustees as required by La. R.S. 11:407.

       LASERS appealed this ruling. Plaintiff answered the appeal, asserting that any

attempt by LASERS to reduce his benefits was barred by res judicata and

prescription.

       On appeal, the court of appeal rejected plaintiff’s res judicata and prescription

arguments.2 However, the court affirmed the district court’s judgment in favor of

plaintiff, finding LASERS failed to prove that it followed the proper procedure before

initiating action to reduce and recoup plaintiff’s retirement benefits. Slaughter v.

Louisiana State Employees' Retirement System, 13-2255 (La. App. 1 Cir. 12/4/14)

(unpublished). One judge concurred and another judge dissented.

       Upon the application of LASERS, we granted certiorari to review the

correctness of that decision. Slaughter v. Louisiana State Employees’ Retirement

System, 13-0324 (La. 6/1/15), __ So. 3d __.

                                         DISCUSSION

       As a threshold matter, we note plaintiff’s brief to this court asserts that any

attempt by LASERS to reduce or recoup the overpayment of benefits is barred under

theories of res judicata and prescription. These arguments were rejected by the court

manipulate how those payments were made and to show them as salary and so forth when, in fact,
they may not have been.”
       2
            In its opinion, the court of appeal concluded these exceptions had not been specially
pleaded in the district court as required by La. Code Civ. P. art. 927. Nonetheless, citing La. Code
Civ. P. art. 2163, the court of appeal reasoned it could consider peremptory exceptions raised for the
first time in an appellate court. Therefore, pretermitting the question of whether the exceptions were
properly raised in the district court, the court of appeal considered the exceptions on the merits.

                                                  3
of appeal. Although plaintiff did not apply for a writ of certiorari in this court

seeking review of this portion of the court of appeal’s judgment, La. Code Civ. P. art.

2133(B) provides that a party “may assert, in support of the judgment, any argument

supported by the record, although he has not appealed, answered the appeal, or

applied for supervisory writs.” Thus, to the extent plaintiff is arguing the district

court reached the correct result in finding LASERS was not entitled to recoup any

overpayment (albeit for different reasons), he is entitled to present these arguments.

See Logan v. Louisiana Dock Co., Inc., 541 So. 2d 182 (La. 1989); Roger v. Estate

of Moulton, 513 So. 2d 1126 (La. 1987) (on rehearing).

       We first find the court of appeal properly rejected plaintiff’s arguments of res

judicata. As the court of appeal explained, the 2010 concursus proceeding in

Slaughter II did not involve the underlying issue of whether or not there was an

overpayment of retirement benefits to plaintiff or whether his supplemental pay

should have been considered in the calculation of those benefits. Thus, the judgment

in Slaughter II does not act as a bar to any attempt by LASERS to reduce and recoup

an overpayment of benefits to plaintiff.

       Similarly, we do not find prescription precludes LASERS from seeking to

reduce and recoup any overpayment of benefits to plaintiff. La. R.S. 11:543 provides

the right to "collect any benefit paid to an individual to whom the benefit was not due

shall prescribe after a period of three years has elapsed from the date of the payment,

except in case of fraud." LASERS began paying retirement benefits to plaintiff

following his retirement on July 1, 2009. By letter dated April 27, 2012, LASERS

notified plaintiff his monthly retirement benefit had been recalculated due to

Southern's reporting error. In response to this letter, plaintiff filed the instant suit on

                                            4
May 30, 2012. Thus, the dispute over benefits was raised at the latest by May 30,

2012, within three years of the first benefit payment on July 1, 2009.3

        On the merits, the narrow question presented for our resolution is whether

LASERS failed to follow the proper procedure before initiating action to reduce and

recoup plaintiff’s retirement benefits. In finding the actions of LASERS were not

procedurally proper, the lower courts relied on La. R.S. 11:407, which provides:

                Except as expressly provided otherwise in this Chapter, the
                director may, upon written documentation that an
                administrative error has occurred in the administration of
                this system, which documentation shall be submitted to the
                board of trustees at the next board meeting, whether such
                administrative error was committed by this system or
                otherwise, correct such administrative error and may make
                all adjustments relative to such correction.

        The courts reasoned that LASERS failed to produce evidence of compliance

with this provision, as it did not show its director presented documentation of the

administrative error to the LASERS board of trustees at the next board meeting after

Southern’s January 22, 2010 letter was received. In the absence of evidence of

compliance with La. R.S. 11:407, the lower courts reasoned LASERS was not entitled

to reduce or recoup any overpayment of benefits to plaintiff.

        However, LASERS argues the case is governed by La. R.S. 11:192, which

provides:

                Whenever any state, parochial, or municipal retirement
                system or pension fund pays any sum of money or benefits
                to a retiree, beneficiary, or survivor which is not due them,
                the board of trustees shall adjust the amount payable to the
                correct amount, and the board is hereby authorized to
                recover any overpayment by reducing the corrected benefit

        3
           La. R.S. 11:543 has not been interpreted in the jurisprudence since it was enacted in
2006. It is unclear whether this statute imposes a requirement on LASERS to file suit within three
years in order to collect an overpayment, or whether the statute simply operates as a limitation on
LASERS’s right to recover an overpayment after three years from the date LASERS becomes aware
of the error. In any event, we are not required to resolve that question under the instant facts, as issue
was joined on May 30, 2012 when plaintiff filed the instant action against LASERS.

                                                    5
                such that the overpayment will be repaid within a
                reasonable number of months. The board shall notify the
                beneficiary, or survivor, of the amount of overpayment in
                benefits and the amount of the adjustment in benefits, thirty
                days prior to any reduction from the benefit amount
                without the overpayment. [emphasis added].

      LASERS argues this statute imposes a mandatory duty on it to adjust benefits

whenever it learns it has paid an amount not due. LASERS submits this statutory

requirement is consistent with the constitutional mandate in La. Const. Art. X, §

29(E)4 to maintain actuarial soundness of state retirement systems.

      The interpretation of any statutory provision starts with the language of the

statute itself. Oubre v. Louisiana Citizens Fair Plan, 11-0097, p. 11 (La.12/16/11),

79 So.3d 987, 997. When the provision is clear and unambiguous and its application

does not lead to absurd consequences, its language must be given effect, and its

provisions must be construed so as to give effect to the purpose indicated by a fair

interpretation of the language used. La. Civ.Code art. 9; La. R.S. 1:4; Boudreaux v.

Louisiana Dept. of Public Safety & Corrections, 12-0239, p. 5 (La. 10/16/12), 101 So.

3d 22, 26. Unequivocal provisions are not subject to judicial construction and should

be applied by giving words their generally understood meaning. La. Civ.Code art. 11;

La. R.S. 1:3; Id.

      The rules of statutory construction instruct that the meaning and intent of a law

is determined by considering the law in its entirety and all other laws on the same

subject matter and by placing a construction on the provision in question that is

consistent with the express terms of the law and with the obvious intent of the

      4
          La. Const. Art. X, § 29(E) provides:

                (E) Actuarial Soundness. (1) The actuarial soundness of state and
                statewide retirement systems shall be attained and maintained and the
                legislature shall establish, by law, for each state or statewide
                retirement system, the particular method of actuarial valuation to be
                employed for purposes of this Section.

                                                 6
legislature in enacting it. Allen v. Allen, 13-2778 (La. 5/7/14), 145 So.3d 341, citing

In re Succession of Boyter, 99-0761, p. 9 (La.1/7/00), 756 So.2d 1122, 1129; Stogner

v. Stogner, 98-3044, p. 5 (La.7/7/99), 739 So.2d 762, 766. A statute must be applied

and interpreted in a manner that is consistent with logic and the presumed fair

purpose and intention of the legislature in passing it. Id. In construing legislation, it

is presumed that the intention of the legislative branch is to achieve a consistent body

of law. Id.

       Applying these principles of statutory construction, we find La. R.S. 11:407

and La. R.S. 11:192 must be interpreted together in a manner which promotes logic

and consistency. A plain reading of La. R.S. 11:407 indicates the focus of that statute

is on the director of LASERS. The statute is written in the permissive, providing the

director “may” correct an administrative error after submitting documentation of the

error to the LASERS board of trustees. However, nothing in this statute addresses the

authority of the board of trustees to adjust benefits nor does it provide that submission

of documentation to the board of trustees is a prerequisite to action by the board.

       In contrast to La. R.S. 11:407, La. R.S. 11:192 specifically addresses the power

of the board of trustees, providing “the board of trustees shall adjust the amount

payable to the correct amount, and the board is hereby authorized to recover any

overpayment by reducing the corrected benefit such that the overpayment will be

repaid within a reasonable number of months.” [emphasis added]. The mandatory

authority of the board of trustees to adjust benefits under La. R.S. 11:192 is not

dependent on notification by the director under the provisions of La. R.S. 11:407.5

Rather, the only requirement for adjustment of benefits under this statute that the

       5
         The interpretation of La. R.S. 11:407 advanced by plaintiff would create an absurd situation
whereby the board of trustees might be forever foreclosed from adjusting a patently erroneous benefit
simply because the director fails to submit written documentation of the error to the board at its next
meeting. Such an interpretation would force LASERS to pay a benefit not due and would be
contrary to the policy of actuarial soundness enshrined in La. Const. Art. X, § 29(E).

                                                  7
board of trustees notify the beneficiary of the amount of overpayment in benefits and

the amount of the adjustment in benefits, thirty days prior to any reduction.

       In the instant case, the LASERS board of trustees, acting through its executive

director, initiated the adjustment in benefits. It is undisputed that plaintiff was

notified of this adjustment by letter dated thirty days prior to the reduction.

Accordingly, all the procedural requirements of La. R.S. 11:192 have been satisfied.

       In summary, we find the lower courts erred in finding LASERS failed to prove

that it followed the proper procedure before initiating action to reduce and recoup

plaintiff’s retirement benefits. We therefore reverse this portion of the court of

appeal’s judgment,6 and we remand the case to the district court to consider the

remaining issues presented in plaintiff’s suit.

                                           DECREE

       For the reasons assigned, the judgment of the court of appeal is reversed insofar

as it finds the Louisiana State Employees’ Retirement System failed to prove that it

followed the proper procedure before initiating action to reduce and recoup plaintiff’s

retirement benefits. In all other respects, the judgment of the court of appeal is

affirmed. The case is remanded to the district court for further proceedings not

inconsistent with this opinion. All costs in this court are assessed against plaintiff.

       6
          As discussed earlier, we find no error in the portion of the court of appeal’s judgment
denying plaintiff’s exceptions of res judicata and prescription. We therefore affirm this portion of
the court of appeal’s judgment.

                                                 8
10/14/15

                       SUPREME COURT OF LOUISIANA

                                 NO. 2015-C-0324

                            DR. RALPH SLAUGHTER

                                      VERSUS

           LOUISIANA STATE EMPLOYEES' RETIREMENT SYSTEM

             ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,
             FIRST CIRCUIT, PARISH OF EAST BATON ROUGE

JOHNSON, C.J. CONCURS AND ASSIGNS REASONS

      I concur in the result reached by the majority. I write separately to clearly

outline the events leading up to the reduction of Dr. Slaughter’s benefits and

recoupment of overpayments, as well as the steps taken by LASERS in adjusting

those payments, and to emphasize there is no longer a dispute over whether

LASERS overpaid benefits to Dr. Slaughter due to an error made by Southern

University in calculating his income base, as that issue is now res judicata.

      In 2009, a district court ruled that Southern University miscalculated Dr.

Slaughter’s income base by including supplemental pay he received from the

Southern University Foundation. Based on this ruling, Southern University counsel

sent a letter, dated January 22, 2010, to notify LASERS that the University

incorrectly reported the earnings upon which Dr. Slaughter’s benefit payments

were calculated. On April 20, 2010, LASERS filed a concursus proceeding in the

district court seeking to deposit the disputed funds into the registry of the court

until the matter was resolved. The district court dismissed the concursus

proceeding on June 17, 2010. LASERS did not appeal this ruling, which then

became final.

      On August 2, 2011, the First Circuit affirmed the wage claim dispute. This

court denied writ on January 13, 2012. Slaughter v. Bd. of Supervisors of Southern

Univ. & Agr. and Mech. Coll., 2010-1049 (La. App. 1 Cir. 8/2/11), 76 So.3d 438,
writ denied, 11-2110 (La. 1/13/12), 77 So.3d 970. As of January 13, 2012, there

was no longer any pending litigation in this matter. The courts determined that Dr.

Slaughter’s income base was miscalculated, therefore rendering LASERS’ benefit

payments inaccurate.

      On April 27, 2012, LASERS sent a letter to Dr. Slaughter notifying him that

it would begin reducing his benefits and would further reduce his payments to

recoup all monies that were paid to him, in error, since his retirement in 2009, to be

effective June 1, 2012. Dr. Slaughter filed the instant suit on June 30, 2012.

Therefore, LASERS reduced Dr. Slaughter’s benefits only once all wage disputes

were resolved. It is clear that LASERS did not reduce Dr. Slaughter’s benefits

upon receipt of a letter from the Southern University System claiming an error in

calculation, but properly reduced Dr. Slaughter’s benefits once the courts

definitively ruled that his wages were improperly calculated. Thus, pursuant to La.

R.S. 11:192, LASERS was authorized to adjust Dr. Slaughter’s benefits and recoup

all overpaid funds.

                                          2