Court Opinion

ID: 4695316
Source: CourtListenerOpinion
Date Created: 2021-06-14 19:21:55.547745+00
Date Added: 2024-06-11T08:05:34.688000
License: Public Domain

FILED
                                                                                  June 14, 2021
                                                                                     released at 3:00 p.m.
                                                                                 EDYTHE NASH GAISER, CLERK
                                                                                 SUPREME COURT OF APPEALS
                                                                                      OF WEST VIRGINIA

No. 20-0350 – West Virginia Consolidated Public Retirement Board v. Clark et al

WOOTON, J., concurring, in part, and dissenting, in part:

              I concur with the majority’s conclusion that respondents, current and former

DNR officers and/or their beneficiaries (hereinafter “respondents” and/or “DNR officers”),

cannot now be stripped of retirement benefits which were calculated inclusive of their

subsistence pay, due to the West Virginia Consolidated Public Retirement Board’s failure

to timely take corrective action.     I respectfully dissent, however, to the majority’s

determination that the subsistence pay did not constitute compensation in the first instance.

The applicable statutory language, along with the treatment and handling of this pay for

more than twenty years, undermines any contrary conclusion.

              After years of enjoying the benefits of their full retirement income,

respondents are informed by the majority that they were overpaid because the statutory

subsistence payments were not properly considered “compensation” for purposes of

retirement benefits issued under the Public Employee Retirement System (“PERS”). It

reaches this conclusion despite the undisputed fact that the subsistence pay otherwise bore

all the hallmarks of ordinary compensation for over twenty years, in that it was utilized for

purposes of calculating 1) respondents’ Federal and State taxable income; 2) the amount

respondents were assessed for PEIA insurance premiums; 2) the amount of the DNR and

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respondents’ retirement contributions to PERS; and 4) the amount of retirement benefits

to be paid to respondents under PERS. 1

              The subsistence pay, representing statutory remuneration to DNR officers for

telephone services, uniform dry cleaning and meals, was reported on a form W-2 and

included in each of respondents’ regular biweekly paychecks. Unlike traditional expense

reimbursements, respondents were not required to utilize this pay for any particular items,

not required to submit expense documentation of any type to receive the pay, and not

required to return any unused portions. In contrast, for actual expenses incurred when

working outside of their primary assignment area, respondents were authorized, pursuant

to a separate statutory provision, to submit reimbursement vouchers, just as traditional

expense reimbursements are typically handled. See W. Va. Code § 20-7-1(h) (2017)

(“[A]ctual expenses incurred shall be paid whenever the duties are performed outside the

area of primary assignment and still within the state.”). This disparate handling of the

subsistence pay and expense reimbursement demonstrates that they are by no means

equivalent. Most notably, however, the subsistence pay was still paid to employees who

were on paid annual, sick, or military leave—employees who plainly were incurring no

job-related expenses. Therefore, to suggest that the subsistence pay is merely expense

       1
         The majority curiously declares that the parties “agree” that the tax treatment of
the pay “does not bear on” whether it constitutes pensionable compensation. Certainly, the
Court’s analysis must be based upon the applicable statutory language; however, to
obstinately disregard the decades-long, “real world” treatment of the subsistence pay as
ordinary compensation smacks of artifice.
                                             2
reimbursement in wages’ clothing defies reality. The subsistence pay was handled in every

meaningful way just as ordinary compensation—issued with no questions asked and no

strings attached insofar as an employee was otherwise receiving his or her salary. See

Anderson v. City of Long Beach, 341 P.2d 43, 46 (Cal. Ct. App. 1959) (finding relevant

“how the ‘uniform allowance’ was computed and paid, or ‘treated’” for purposes of

determining whether allowance was pensionable compensation).

             The Court of Appeals of Oregon found subsistence pay issued under

precisely these same circumstances to constitute “wages,” highlighting its inclusion with

ordinary paycheck wages and lack of any restraints on or prerequisites for the payment:

             [C]laimant was not paid back an equivalent amount of the
             expenses that he incurred. Rather, for each project, claimant
             received a set amount of subsistence and travel pay “regardless
             of any expenditures made during any particular pay period.”
             Claimant was provided that additional payment along with his
             regular hourly wages in a single paycheck, and the board noted
             that claimant was “not required to submit receipts,” further
             supporting the conclusion that claimant was not paid back in
             an equivalent amount based on his specific expenditures.

SAIF Corp. v. Sparks, 309 P.3d 174, 177 (Or. Ct. App. 2013). Accordingly, the SAIF Corp.

court determined that “claimant’s subsistence and travel pay were part of the payment that

he was ‘contractually entitled to receive’ pursuant to his employment contract and

‘irrespective of any expenses actually incurred.’” Id. (footnote omitted); compare with

N.M. Stat. Ann. § 29-2-13 (West 1989) (providing that “subsistence pay shall be expended

only for the purposes allowed and any portion of the uniform allowance or subsistence pay

                                            3
not so spent in each fiscal year shall revert to the general fund.”). 2 Accord Anderson, 341

P.2d at 45-46 (finding officers’ pensionable compensation properly included clothing

allowance which “was in fact an increase in the ‘salary attached to the rank or position’

held by respondents” because allowance “was added to the pay for work done by each

employee who worked full time”).

              In addition to the handling and treatment of the subsistence pay by DNR, it

is also clear from the statutory language authorizing the subsistence payments how the

Legislature intended the pay to be viewed. The applicable statute, West Virginia Code §

20-7-1(i), provides, in pertinent part, that

              [n]atural resources police officers shall receive, in addition to
              their base pay salary, a minimum biweekly subsistence
              allowance for their required telephone service, dry cleaning or
              required uniforms, and meal expenses while performing their
              regular duties in their area of primary assignment in the amount
              of $60 per biweekly pay. . . .

       2
         Further, the subsistence pay’s treatment and handling as ordinary wages is fully
consonant with its treatment in other areas of the law. See In re Marriage of Murphy, 885
P.2d 440 (Mont. 1994) (finding subsistence pay part of gross income for child support
calculations); Iron Workers Loc. 118, Int’l Ass’n of Bridge & Structural Iron Workers,
AFL-CIO v. N.L.R.B., 804 F.2d 1100 (9th Cir. 1986) (approving inclusion of subsistence
pay in back-pay award in NLRB proceedings).
                                             4
(emphasis added).    The critical requirement that the subsistence allowance be paid

biweekly makes it a regularly recurring payment to which an employee is entitled by virtue

of his employment—just as any other wages. 3

              Further, the Legislature’s specific reference to the subsistence pay being “in

addition to [the officers’] base pay salary,” simply put, means merely that the subsistence

pay is an addition to their base salary, as scheduled in West Virginia Code § 20-7-1c

(2017), just as any other salary enhancement. This reference also unquestionably links the

subsistence pay to salary, in contrast to the standalone expense reimbursements authorized

by West Virginia Code § 20-7-1(h). 4 The Legislature could easily have omitted this phrase

from the subsistence allowance, leaving the pay to operate as a standalone payment akin to

expense reimbursement, yet it deliberately injected the connection to salary. As indicated

       3
         The majority suggests that had the Legislature wanted to increase the officers’
salary by the amount of the subsistence pay, it could have simply increased their base
salaries. It fails to explain, however, how mandating the implementation of an increased
set amount payable across the board in each biweekly paycheck is not precisely that—a
salary increase. This is particularly so when that sum is included in the officers’ biweekly
paycheck.
       4
         In contrast, the majority’s discussion of this same language focuses on the phrase
“in addition to,” positing the exact opposite conclusion—that this phrasing differentiates
the subsistence pay from the base pay salary. However, West Virginia Code § 20-7-1c
provides that DNR officers’ base pay salaries may be augmented based upon rank, length
of service, and merit—all of which still obviously constitute compensation despite being
technically “in addition to” the base pay salary.

        This stark contrast in construction merely demonstrates that different readings of
this language are entirely plausible, thereby belying the majority’s conclusion that the
statute’s intent is “clearly expressed” and not susceptible to the rules of statutory
construction employed by the circuit court. See discussion infra.
                                             5
above, subsection (h) separately—and without reference to salary or compensation—

provides for reimbursement for “actual expenses incurred” when duties are performed

outside of an officer’s primary assignment area. Id. § 20-7-1(h) (emphasis added). This

provision therefore differentiates the regularly paid, service-related subsistence pay from

irregular, separately reimbursed expenses which do not qualify as compensation under the

statute. See also SAIF Corp., 309 P.3d at 177 n.1 (distinguishing subsistence pay from

“reimburse[ment] for actual expenses”).

              Moreover, the statutory language defining “compensation” for retirement

purposes leads to the same conclusion. West Virginia Code § 5-10-2(8) (2016) defines

“[c]ompensation” as “the remuneration paid a member by a participating public employer

for personal services rendered by the member to the participating public employer.” More

importantly, however, this definition specifically exempts from the realm of retirement

compensation “[a]ny lump sum or other payments paid to members that do not constitute

regular salary or wage payments[.]” Id. (emphasis added). The statute then goes on to

carefully describe the types of “non-regular” payments which do not constitute

“compensation” as “[including] attendance or performance bonuses, one-time flat fee or

lump sum payments, payments paid as a result of excess budget, or employee recognition

payments.” Id.

             It is here where the majority most dramatically misses the mark. In declaring

the subsistence payments the type of “other payments” that are excluded from
                                            6
“compensation,” the majority glosses over the caveat that such “other payments” do not

include “regular salary or wage payments.” Id. (emphasis added). 5 There is no discussion

whatsoever of the critical modifier “regular,” likely because it is indisputable that the

subsistence payments were regularly paid, commingled with, and otherwise uniformly

treated as wages. The majority’s failure to appreciate the significance of the regularity of

payment of the subsistence pay is fully demonstrated in the extra-jurisdictional case upon

which it relies.

               The majority cites Hilligoss v. LaDow, 368 N.E.2d 1365 (Ind. Ct. App. 1977)

as support for its conclusion that the subsistence payment is not compensation. However,

this reliance fails to acknowledge that the clothing allowance at issue in Hilligoss was paid

in an “annual cash allowance” and was paid only if police and fire personnel were required

to purchase their own clothing. Id. at 1371. Therefore, not only was the annual clothing

allowance precisely the type of “lump sum” specifically excluded in our statute, its

payment was expressly dependent upon an officer incurring an obligation for that expense.

More interestingly, however, the Hilligoss court contrasted the clothing allowance with

longevity pay which it observed was an “integral part of the individual employee’s regular

salary, whether or not the city appropriation ordinance designates it as such.” Id. at 1370

(emphasis added). See also Anderson, 341 P.2d at 45 (rejecting argument that because

       5
          In a discussion that manages to be at best circular, the majority merely incorporates
its previous conclusion that subsistence pay is not compensation to then conclude, as a
result, that it is likewise not a “regular salary or wage payment.” Id. § 5-10-2(8).
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clothing allowance was “not provided in the salary ordinance, but a separate one” it was

not pensionable compensation).

              The majority’s disregard for the “regularity” aspect of the analysis permits it

to similarly ignore the blatant disparity between the regularly paid subsistence allowances

and the types of payments the Legislature described as being excluded from

“compensation”—all of which are of an irregular, non-recurring, and extraordinary nature.

In addressing the types of irregular “lump sum or other payments” which are not

pensionable compensation, the majority first attempts to obscure the issue with

misdirection about the nature of the circuit court’s error. The majority suggests that the

circuit failed to appreciate that simply because the subsistence payments are not

specifically identified, they do not necessarily fall outside of the exempted payments

described. The majority focuses on the “other payments” and “not limited to” language to

insinuate that the circuit court must have viewed the list as exhaustive and failed to consider

that the subsistence payment may be the type of “other payments” referenced.

              Of course, the circuit court did not overlook or misconstrue this language. In

fact, it is precisely because of this language that the circuit court utilized the canons of

statutory construction to determine whether the subsistence payments are the type of “other

payments” to which the statute is “not limited.” As the majority observes, the circuit court

invoked the doctrines of ejusdem generis and noscitur a sociis to conclude that the

subsistence pay was not of the same kind or type of payments specifically excluded from
                                              8
compensation under the statute. To defeat the circuit court’s sound reasoning, the majority

adopts a misguided interpretation of the ejusdum generis canon and simply disregards the

noscitur a sociis canon on the basis that the statutory language is “plain” and therefore

eludes construction.

                As to the ejusdem generis doctrine, the majority states that this canon

requires that general words are limited to the “nature or class” of more particularly

described persons or things only where the “general words . . . follow a list of classes or

things.” (emphasis added). This restatement of the ejusdem generis doctrine, taken from

Black’s Law Dictionary, does indeed permeate our caselaw. Missing the entire purpose of

this canon, the majority concludes that because the general words “lump sum or other

payment” precede the more particularized list in West Virginia Code § 5-10-2(8), ejusdem

generis simply does not apply. However, nothing in our caselaw demands that the doctrine

be applied so literally and, in fact, it is often employed with the companion noscitur a sociis

maxim which requires only that general words be construed in light of the surrounding

words. 6 This Court has explained this well-understood application of the two maxims:

       6
           As better explained by one court:

               We are also guided by the doctrine of ejusdem generis, which
               means “of the same kind or class.” This doctrine provides that
               when general expressions such as “including” or “including,
               but not limited to” precede a list of specific items, the general
               words are to be interpreted as “words of enlargement and not
               limitation.” When interpreting a non-exhaustive statutory list,
               “any additional matters purportedly falling within the
(continued . . .)
                                              9
“The doctrines are similar in nature, and their application holds that in an ambiguous phrase

mixing general words with specific words, the general words are not construed broadly but

are restricted to a sense analogous to the specific words.” Murray v. State Farm Fire &

Cas. Co., 203 W. Va. 477, 485, 509 S.E.2d 1, 9 (1998); see also Vector Co. v. Bd. of Zoning

Appeals of City of Martinsburg, 155 W. Va. 362, 366, 184 S.E.2d 301, 303-04 (1971)

(“‘The rule is based on the obvious reason that if the legislature had intended the general

words to be used in their unrestricted sense they would have made no mention of the

particular classes.’”). Significantly, the majority does not even address the patent

applicability of the closely-related doctrine of noscitur a sociis—which “literally means ‘it

is known from its associates[]’”—other than to say that the statute requires no construction.

Murray, 203 W. Va. at 485, 509 S.E.2d at 9.

              Upon application of these doctrines, it is evident that subsistence pay is

simply not of the “same general nature or class” of the lump sum payments which the

Legislature intended to exclude from compensation. See Marcellus Shale Coal, 193 A.3d

at 472. “[A]ttendance or performance bonuses, one-time flat fee or lump sum payments,

              definition, but that are not express, must be similar to those
              listed by the legislature and of the same general class or
              nature.” However, items that are not of the same general nature
              or class as those enumerated should not be included. The
              critical inquiry is whether items are of the “same general class
              or nature” as the included items.

Marcellus Shale Coal. v. Dep’t of Env’t Prot., 193 A.3d 447, 472 (Pa. Commw. Ct. 2018)
(citations omitted).
                                           10
payments paid as a result of excess budget, or employee recognition payments” are

markedly different than the regularly paid subsistence payments at issue. See W. Va. Code

§ 5-10-2(8). Rather than the “red herrings” the majority declares them to be, these

doctrines provide a dispositive construction of the applicable statutory language. Because

subsistence pay is completely dissimilar from the type of irregular, extraordinary payments

described therein, these doctrines demonstrate that West Virginia Code § 5-10-2(8) does

not command the exclusion of subsistence pay from “compensation.”

              Finally, the fact that subsistence pay is not expressly included in the list of

excluded payments cannot be overlooked. The Legislature has expressly excluded certain

payments from pensionable compensation on numerous occasions. See W. Va. Code § 5-

10-2(8) (excluding nonmonetary remuneration from final average salary computation); W.

Va. Code § 5-5-6(c)(3) (2009) (excluding unused sick leave from final average salary

computation); W. Va. Code § 5-10-22(a) (2009) (excluding lump sum payment of unused,

accrued leave from final average salary computation); W. Va. Code § 5-5-3 (2005) (same).

Further, it is apparent that the subsistence pay’s impact on retirement matters for DNR

officers specifically was well within the Legislature’s contemplation, as demonstrated by

its 2010 amendment making retirement income deductions from federal adjusted gross

income inapplicable to DNR officers’ pensions under PERS. 7 Had the Legislature seen fit

       7
         See W. Va. Code § 20-7-1(k) (“Notwithstanding any provision of this code to the
contrary, the provisions of subdivision (6), subsection c, section twelve, article twenty-one,
chapter eleven of this code are inapplicable to pensions of natural resources police officers
paid through the Public Employees Retirement System.”).
                                              11
at any point to exclude subsistence pay from compensation, it would have said so expressly

as other states have, or, made it payable in a lump sum such that it is necessarily excluded

under the statutory language. See, e.g., Ala. Code § 36-27-1(14) (2017) (“[T]he term

earnable compensation for retirement purposes shall not include subsistence payments that

are made to a member[.]”); Nev. Admin. Code § 612.080 (1960) (providing subsistence

pay is “not wages” for purposes of unemployment compensation); Iowa Admin. Code §

871-23.3(96) (same).

              Accordingly, while I concur in the majority’s conclusion that respondents

may not be stripped of their retirement benefits, I respectfully dissent to its determination

that subsistence pay does not constitute “compensation” under West Virginia Code § 5-10-

2(8).

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