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Taylor v. City of Lenoir

April 07, 1998

DALE E. TAYLOR, B.J. FORE, DILLARD A. BROWN, HARVEY R. COOK, JR., THOMAS P. DEIGHTON, JAMES M. FLOYD, CATHY ANN HALL, GRANT HARROLD, MARY ROSE HART, RAYMOND HIGGINS, KENNETH D. HINSON, ALLEN C. JONES, JAMES T. MALCOLM, III, RANDY W. MARTIN, RICHARD N. OULETTE, RALPH PITTMAN, SID A. POPE, DANIEL L. POWERS, II, DARYL D. PRUITT, LISA D. ROBERTSON, RICKY E. SHEHAN, GREGORY F. SNIDER, TIMOTHY C. STOKER, ANN R. STOVER, JOAN C. SMITH, INDIVIDUALLY, AND FOR THE BENEFIT OF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS
v.
CITY OF LENOIR, A MUNICIPAL CORPORATION, BOARD OF TRUSTEES OF THE NORTH CAROLINA LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM, BODY POLITIC AND CORPORATE; O.K. BEATTY, JOHN W. BRITTE, JR., JAMES M. COOPER, RONALD E. COPLEY, CLYDE R. COOK, JR., BOB ETHERIDGE, JAMES R. HAWKINS, SHIRLEY A. HISE, WILMA M. KING, GERALD LAMB, W. EUGENE MCCOMBS, WILLIAM R. MCDONALD, III, DAVID G. OMSTEAD, PHILLIP M. PRESCOTT, JR., JAMES W. WISE, AS TRUSTEES; DENNIS DUCKER, AS DIRECTOR OF THE RETIREMENT SYSTEMS DIVISION, AND DEPUTY TREASURER FOR THE STATE OF NORTH CAROLINA AND CHAIRMAN OF THE BOARD OF TRUSTEES OF THE NORTH CAROLINA LOCAL GOVERNMENT RETIREMENT SYSTEM; AND THE STATE OF NORTH CAROLINA, A SOVEREIGN, DEFENDANTS



Appeal by defendants from order entered 24 September 1996 by Judge Claude S. Sitton in Caldwell County Superior Court. Heard in the Court of Appeals 26 August 1997.

The opinion of the court was delivered by: Timmons-goodson, Judge.

Defendants, City of Lenoir (the City) and the Board of Trustees of the North Carolina Local Government Employees' Retirement System and its individual members or successors, Dennis Ducker, Harlan E. Boyles, and the State of North Carolina (collectively, the State defendants), appeal from an order granting summary judgment to plaintiffs, who are present and former law enforcement officers for the City, as to their claim for declaratory relief. The trial court conducted a hearing to determine plaintiffs' rights under sections 128-23(g) and 143-166.50(b) of the North Carolina General Statutes and concluded that, as a matter of law, defendants were liable to plaintiffs for failing to enroll them in the Local Government Employees' Retirement System (LGERS) on or after 1 January 1986. Having carefully considered the questions presented by this appeal, we hold that the trial court erred in interpreting and applying sections 128-23(g) and 143-166.50(b) of our General Statutes. Accordingly, we reverse the order of the trial court.

Plaintiffs are law enforcement officers who are currently employed by the City or who were in the City's employ on 1 January 1986, the effective date of sections 128-23(g) and 143-166.50(b) of the General Statutes. Following a majority vote of its employees, the City applied for participation in LGERS and, on 1 July 1995, became a participating employer in the retirement program. Upon participation, the City transferred the assets of its then-existing pension plan to LGERS, pursuant to North Carolina General Statutes section 128-25. The City, however, did not enroll any of its law enforcement officers in LGERS until the filing of this action. Plaintiffs filed this action against the City on 19 August 1992 seeking declaratory relief determining their rights under sections 128-23(g) and 143-166.50(b). Additionally, plaintiffs sought damages against the City, claiming that the City improperly failed to enroll them, and others similarly situated, in LGERS as of 1 January 1986. Plaintiffs later amended their complaint to add the State defendants, each of which is, in some way, responsible for administering LGERS. On 31 August 1992, the Caldwell County Superior Court entered an order granting plaintiffs class certification, and, pursuant to Rule 2.1 of the Superior and District Court Rules of Practice, the Chief Justice of the North Carolina Supreme Court designated this action as an "exceptional case." This case was then assigned to the Honorable Claude S. Sitton, Senior Resident Judge for the Superior Court of Caldwell County, North Carolina.

Plaintiffs and the City entered into stipulations regarding the procedure for litigating the issues involved in this case and, thereby, agreed that this action would be tried in three phases. Phase I gave rise to the present appeal. In Phase I, the issue to be decided was whether, under sections 128-23(g) and 143.166.50(b) of the General Statutes, plaintiffs were entitled to automatic enrollment in LGERS as of 1 January 1986. On 9 September 1996, the trial court conducted a hearing as to Phase I. At the hearing, plaintiffs argued that the language of section 143-166.50(b) was more specific than that of section 128-23(g) and was, therefore, controlling. Plaintiffs maintained that, as a consequence, the City had an affirmative obligation to enroll its law enforcement officers in LGERS as of 1 January 1986.

After considering all of the evidence, the trial court entered a judgment on 24 September 1996 in favor of plaintiffs on the issue of statutory construction. The trial court ruled that, as a matter of law, the City was liable to plaintiffs, under section 143-166.50(b), for failing to enroll them in LGERS as of 1 January 1986. In rendering its decision, the trial court found that the language of section 143- 166.50(b) was more explicit than that of section 128-23(g) and that the latter section was "out of sync" with the rest of the retirement statute. The trial court, therefore, held that the provision for converting to LGERS by election contained in section 128-23(g) yielded to what the trial court determined to be a mandatory conversion requirement contained in section 143-166.50(b). The City and the State defendants (hereinafter collectively referred to as "defendants") appeal.

On appeal, the City and the State defendants assert numerous assignments of error. The threshold issue for our review, however, is whether the trial court erred in interpreting and applying the provisions of North Carolina General Statutes sections 128-23(g) and 143-166.50(b). The several other assignments of error raise questions that are subordinate to this one, and those questions will be addressed only as the Disposition of the threshold issue requires.

Defendants contend that the trial court erred in construing sections 128-23(g) and 143-166.50(b) so as to impose an affirmative obligation on the City to enroll all of its law enforcement officers in LGERS as of 1 January 1986. Defendants argue specifically that the trial court's interpretation contravenes well-established tenets of statutory construction. This argument has merit.

As a principle of statutory construction, it is well-settled that the intent of the legislature controls when interpreting the provisions of a statute. State ex rel. Utilities Commission v. Public Staff, 309 N.C. 195, 210, 306 S.E.2d 435, 443 (1983). To ascertain legislative intent, the "courts should consider the language of the statute, the spirit of the statute, and what it seeks to accomplish." Id. at 210, 306 S.E.2d at 444. "`Other indicia considered by this Court in determining legislative intent are the legislative history of an act and the circumstances surrounding its adoption[.]'" County of Lenoir v. Moore, 114 N.C. App. 110, 115, 441 S.E.2d 589, 592 (1994) (quoting In Re Banks, 295 N.C. 236, 239-40, 244 S.E.2d 386, 389 (1978)), aff'd, 340 N.C. 104, 455 S.E.2d 158 (1995).

The General Assembly established LGERS in 1939, "for the purpose of providing retirement allowances and other benefits . . . for employees of those counties, cities and towns or other eligible employers participating in [it]." N.C. Gen. Stat. § 128-22 (1995) (emphasis added). When LGERS was instituted, local government entities were not required to participate in the program. Rather, participation occurred only at the election of the employer, upon a vote to participate by a majority of its employees. See N.C. Gen. Stat. § 128-23(a),(b),(c) (1995). Once an employer elected to participate, all of its employees became members of LGERS, unless they individually opted out. See N.C. Gen. Stat. § 128-24(1),(2) (1995)).

At the time LGERS was implemented, North Carolina law enforcement officers, whether employed by the State or a unit of local government, were eligible for membership in a retirement system known as the Law Enforcement Officers' Retirement System (LEO). See generally N.C. Gen. Stat. Chapter 143, Article 12 (repealed by 1985 N.C. Sess. Laws ch. 479, § 196(t)). As with LGERS, membership in LEO was optional. Law enforcement officers enrolled in LEO individually, and, once they became LEO members, they could not also be active-contributing members of LGERS or the Teachers' and State Employees' Retirement System. See N.C. Gen. Stat. § 143-166(d) (repealed by 1985 N.C. Sess. Laws ch. 479, § 196(t)) (allowing transfers from LGERS to LEO). Then, effective 1 January 1986, the General Assembly dissolved LEO by enacting legislation that transferred all State-employed members of LEO into the Teachers' and State Employees' Retirement System. See N.C. Gen. Stat. § 143-166.30 (1996). At the same time, the legislature transferred all locally- employed LEO members, such as the City's law enforcement officers, into LGERS. See N.C. Gen. Stat. § 143-166.50 (Cum. Supp. 1997). With this historical perspective in mind, we turn now to the particulars of defendants' arguments. First, defendants take issue with the trial court's Conclusion that the language of section 143-166.50(b) is more specific than that of section 128-23(g) and that section 143-166.50(b) is, therefore, mandatory and controlling as to any conflict that may exist between the two statutes. Defendants submit, instead, that section 128-23(g) is the more specific statute, because it speaks specifically to law enforcement officers who are employed by local government entities that are non-participants in LGERS. We agree.

When multiple statutes address a single matter or subject, they must be construed together, in pari materia, to determine the legislature's intent. Whittington v. N.C. Dept. of Human Resources, 100 N.C. App. 603, 606, 398 S.E.2d 40, 42 (1990). Statutes in pari materia must be harmonized, "to give effect, if possible, to all provisions without destroying the meaning of the statutes involved." Id. Stated another way, statutes "relating to the same subject or having the same general purpose, are to be read together, as constituting one law . . . such that equal dignity and importance will be given to each." Barron's Law Dictionary 239 (3rd ed. 1991).

North Carolina General Statutes sections 128-23(g) and 143- 166.50(b) were simultaneously enacted as part of Senate Bill 410, which was introduced in 1985. Section 128-23(g) amends Chapter 128, which is entitled "Retirement Systems for Counties, Cities, and Towns." Section 128-23 is entitled "Acceptance [of LGERS] by cities, towns and counties," and subsection (g) states as follows:

Notwithstanding any other provisions of this Article, any employer who is not a participating employer and who employs law enforcement officers transferred from the Law Enforcement Officers' Retirement System to this Retirement System on January 1, 1986, or who employs law enforcement officers electing to become members of this Retirement System on and after January 1, 1986, shall be employers participating in this Retirement System as this participation pertains to their law enforcement officers. The election of membership in ...


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