Whitley v. Bd. of Trustees, Maine Pub. Employees Retirement Sys.

STATE OF MAINE SUPERIOR COURT

CIVIL ACTION

KENNEBEC, ss. DOCKET NO. AP-09-06

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JUDITH WHITLEY,

Petitioner

v. DECISION

BOARD OF TRUSTEES, MAINE

PUBLIC EMPLOYEES

RETIREMENT SYSTEM,

Respondent

Before the court is petitioner's M.R. Civ. P. 80C petition appealing the final

decision of the Board of Trustees, Maine Public Employees Retirement System

("System").

The petitioner, Judith Whitley, is an Educational Technician II who works for

School Union 52. When hired in 1995, she became eligible to participate in the

MainePERS Retirement and Group Life Insurance ("GLI") Program. She was not

informed about this availability until 1997. The petitioner joined the System and

automatically became insured under the GLI Program. She was required to file an

application within 31 days, and she indicated she did so in March of 1997. On June 5,

1997, she filled out a Designation of Beneficiary Group Life Insurance Program form.

The Board of Trustees' final decision states that the petitioner submitted an

enrollment form for GLI, which was apparently never processed. Under the facts

section of the decision, (R. 33.6), it states that the petitioner filled out an enrollment

form. Under the discussion section of the decision, (R. 33.8), it notes that, "Ms. Whitley

filed an GLI application in 1997." The decision went on to contain the following

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quotation, "It appears that the application was lost or not processed for some reason

and Ms. Whitley was told at the time that there was no application on file." The Board

found that by not taking any further action she, "effectively declined enrollment." (R.

33.8.)

The facts are confusing regarding what took place after the petitioner found out

that her application was lost, not processed, and not on file.

On March 6, 1998, the System wrote the petitioner a letter indicating that School

Union 52 had been informed of its responsibility to make back contributions to the

System without mentioning the GLI Program. On October 27, 2004, the System wrote

the petitioner a letter setting out three options in order for her to enroll for GLI: (1) pay

back premiums from the date of eligibility, (2) file evidence of insurability, or (3) wait

for open enrollment. The letter warned her that if she chose the "evidence of

insurability" option but was denied, she could not then elect to pay back the premiums.

Finally, the letter indicated that if she did not return an application by November 24,

2004, she would be considered to have refused coverage. The petitioner never

responded.

In April of 2006, the System sent a form to the petitioner indicating she was not

eligible for GLI because she worked part-time. In October of 2006, the petitioner was

told by the System to fill out the GLI enrollment form and file evidence of insurability.

She was denied coverage on the basis of her insurability due to several medical

conditions.

On March 4, 2008, the Executive Director's designee affirmed the staff

determination denying the petitioner eligibility for GLI. On April 30, 2006, the

Executive Director's designee issued a final decision.

3

The petitioner filed a timely appeal to the Board of Trustees. A hearing was held

on June 26, 2008. The hearing officer's report dated October 27, 2008, was appealed to

the Board of Trustees and the Board's final decision on December 5 2008, affirmed the

Executive Director's designee's decision. The Board's final decision concluded:

Appellant is not eligible for GLI at this time because she did not enroll

when initially offered the opportunity in 1997 and as an employee later

seeking coverage, she has been denied coverage by the insurer after

submitting evidence of insurability.

From this decision, the petitioner has appealed by filing this 80C petition.

Standard of Review

When the decision of an administrative agency is appealed pursuant to M.R. Civ.

P. 80C the court reviews the agency's decision directly for abuse of discretion, errors of

law, or findings not supported by the evidence. Centamore v. Dep't of Human Servs.,

664 A.2d 369, 370 (Me. 1995). "An administrative decision will be sustained if, on the

basis of the entire record before it, the agency could have fairly and reasonably found

the facts as it did." Seider v. Bd. of Exam'rs of Psychologists, 2000 ME 206, err 9, 762 A.2d

551, 555 (citing CWCO, Inc. v. Superintendent of Ins., 1997 ME 226, err 6, 703 A.2d 1258,

1261). The court will "not attempt to second-guess the agency on matters falling within

its realm of expertise" and judicial review is limited to "determining whether the

agency's conclusions are unreasonable, unjust or unlawful in light of the record."

Imagineering, Inc. v. Superintendent of Ins., 593 A.2d 1050, 1053 (Me. 1991).

"Inconsistent evidence will not render an agency decision unsupported." Seider, 2000

ME 206, err 9, 762 A.2d at 555. The burden of proof rests with the party seeking to

overturn the agency's decision, and that party must prove that no competent evidence

supports the Board's decision. Bischoff v. Bd. of Trs., 661 A.2d 167, 170 (Me. 1995).

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When reviewing an agency's interpretation of a statute that is both administered

by the agency and within the agency's expertise, the first inquiry is whether the statute

is ambiguous or unambiguous. Competitive Energy Servs., LLC v. Pub. Utils. Comm'n,

2003 ME 12, err 15, 818 A.2d 1039, 1046. If the statute is unambiguous, it is interpreted

according to its plain language. Arsenault v. Sec'y of State, 2006 ME 111, 111, 905 A.2d

285, 288. If, instead, the statute is ambiguous, deference is given to the agency's

interpretation if the interpretation is reasonable. Id.

Discussion

There is a great deal of confusion throughout the facts in the instant case. The

confusion is compounded by the fact that the Board's decision contains the following

sentence:

In the present case, Ms. Whitley was never enrolled in GLI and thus there

has been no lapse in coverage. Although this could be considered as the

result of MainePERS error in not processing her 1997 application, her

failure to pursue the application moots this provision's application.

(R. 33.9.)

The Board's decision concedes the System's error and places upon the petitioner

an added requirement to pursue her application, a requirement not existing in the law.

Apart from the interpretation of certain complex retirement statutes, the difficulty in

this case arises because the petitioner's employer, School Union 52, and the System

failed to properly handle her initial application. """hat followed was any employee's

nightmare trying to navigate the complex retirement laws. The petitioner was given

options she should not have been confronted with and the System made an assumption

that she had "declined enrollment" because she failed to affirmatively take steps to

pursue her misplaced application.

5

5 M.R.S. § 18058(1) states that all employees are "automatically insured" for

"basic insurance" and that each "employee shall complete an application for insurance

coverage within 31 days of becoming eligible." Following this language, section l(C)

states: "If an application is not completed within 31 days of the employee's first

becoming eligible, the employee may subsequently apply for supplemental and

dependent insurance but must produce evidence of insurability at the employee's own

expense . . . ." Id. § 18058(1)(C). The statute does not provide sanctions (i.e., the

required production of "evidence of insurability") in regard to basic insurance if the

employee fails to complete the application within 31 days. It does provide that if the

application is not completed within 31 days, then subsequently applying for

"supplemental" and "dependent" insurance, requires evidence of insurability. Section

l(C) does not mention basic insurance. This can only mean that the employee is

automatically covered with basic insurance but needs to request the additional coverage

for "supplemental and dependent insurance." See,~.z,., Musk v. Nelson, 647 A.2d 1198,

1201-02 (Me. 1994) ("[A] well-settled rule of statutory interpretation states that express

mention of one concept implies the exclusion of others not listed."). Because basic

insurance is automatically available to the employee, there is no need to provide for

requirements for subsequent enrollment, unlike supplemental and dependent

Insurance.

Furthermore, 5 M.R.S. § 18058(2) provides a mechanism for "written notice" for

any employee not wanting to be insured. This section of the statute affirmatively sets

forth the requirement that if an employee wants to decline insurance, "written notice to

the employee's employing officer and to the retirement system" must be given. Id. §

18058(2). This provision further demonstrates the nature of the "automatic" enrollment

for basic insurance. There is simply no evidence indicating that petitioner declined the

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automatic coverage, and the System's assumption that petitioner was deemed to have

declined it because she failed to fill out the application is not supported by the relevant

statute. 1 The fact that the System misplaced or lost the application, or the fact that

School Union 52 failed to collect the money from her to pay the basic insurance does not

change this basic principle. The error by the System in not properly processing

petitioner's application should not have placed greater burdens upon the petitioner to

pursue her application. The Board's reasoning that petitioner's failure to pursue her

application mooted the mistake made by the System is not supported by law.

Simply stated, the petitioner was automatically insured, and because she never

declined this enrollment through written notice, the System must provide GLI-basic

insurance-to her. The question regarding petitioner's obligation to pay for the

premiums that were never collected is a concern beyond the present issue before the

court, which is whether the Board erred in concluding that petitioner was not

automatically insured pursuant to Maine law. Nevertheless, on remand the System

should work with the petitioner and School Union 52 to determine how she is to pay for

the coverage she should have had.

For the reasons stated above, the court REVERSES the decision of the Board of

Trustees and REMANDS this case to the System to ensure that the petitioner is covered

as required by law, and to resolve the issue of what petitioner owes the System as a

result of this coverage, which should have been in place since 1997.

Dated: 7';::; cl-u:; ~ Joseph . Ja' ar

Jus '~perior Court

1 The court further notes that, as a factual matter, it appears that the petitioner originally complied with

the statute by filling out the application. That application, however, was apparently never processed.

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Attorney for Petitioner

Donald Fontaine, Esq.

P.O. Box 7590

Portland,11E 04112

Attorney for Respondent

Christopher Mann, Esq.

Assistant Attorney General

6 State House Station

Augusta, ME 0433

Date Filed 1/12/09 Kennebec Docket No. AP-09-06

County

Action Petition For Review

SOC

J. JABAR

Board of Trustees, Maine Public

Judith Whitley Ys. Employees Retirement System

Plaintiff's Attorney Defendant's Attorney

Donald F. Fontaine, Esq. Christopher L. Mann, AAG

PO Box 7590 6 State House Station

Portland, ME 04112-7590 Augusta, ME 04333-0006

Date of

Entry

2/19/09 Petition For Review, filed 1/12/09. s/Fontaine, Esq.

2/19/09 Administrative Record, filed 1/22/09. s/Mann, AAG

2/19/09 Stipulation, filed 2/9/09. s/Fontaine, Esq.

2/19/09 Notice And Briefing Schedule mailed to attorneys of record.

3/31/09 Brief of Appellant Judith Whitley, filed. s/Fontaine, Esq.

4/22/09 Response to SOC Petition, filed. s/Mann,AAG

5/7 /09 Reply of Petitioner Judith Whitley, filed. s/Fontaine, Esq.

NotIce of settmg for 7( q 1D1, .....

!Sent to attorneys of record. ...' ~~ c'

>._,_\:!"F

7/9/09 Hearing held with Hon. Justic~ J09~ph Jabar, pr~siding.

Donald Fontaine, Esq. for th~ Pet:ltion~r and Christopher Mann, AAG

for the Respondent.

Oral arguments made to th~ Court. Court to tak~ matter under advisement.

7/24/09 DECISION, Jabar, J.

For th~ r~asons stated abov~, th~ court REVERSES th~ d~cision of th~ Board

Trust~~s and REMANDS this cas~ to th~ Syst~m to ~nsur~ that th~

p~tition~r is cov~r~d as r~quir~d by law, and to r~solv~ th~ issu~ of what

p~tition~r ow~s th~ Syst~m as a r~sult of this cov~rag~, which should

hav~ b~~n in plac~ sinc~ 1997.

Copi~s to attys. of r~cord

Copi~s to r~positori~s