Peterson v. Pub. Employees' Retirement Sys. of Miss.
| Docket Number: | 2010-CA-01224-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 01-10-2012 Opinion Author: Barnes, J. Holding: Reversed and remanded. |
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| Additional Case Information: |
Topic: Wills & estates - Disability retirement benefits - Change of beneficiary designation - Disqualifiction of beneficiary - Future benefits - Section 25-11-117.1 - Section 25-11-115(2) Judge(s) Concurring: Lee, C.J., Irving and Griffis, P.JJ., Ishee, Roberts, Maxwell and Russell, JJ. Non Participating Judge(s): Carlton and Fair, JJ. Procedural History: Admin or Agency Judgment Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES |
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| Trial Court: |
Date of Trial Judgment: 03-04-2009 Appealed from: Hinds County Circuit Court Judge: W. Swan Yerger Disposition: SUMMARY JUDGMENT GRANTED IN FAVOR OF PERS Case Number: 251-04-000616-CIV |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Richard Manley Peterson, Individually and Executor of the Estate of Cornelia Barnett Peterson, Deceased and Jason Andrew Peterson |
ROBERT M. LOGAN JR. |
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| Appellee: | Public Employees' Retirement System of Mississippi | OFFICE OF THE ATTORNEY GENERAL: PETER W. CLEVELAND |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Wills & estates - Disability retirement benefits - Change of beneficiary designation - Disqualifiction of beneficiary - Future benefits - Section 25-11-117.1 - Section 25-11-115(2) |
| Summary of the Facts: | Thomas Calvin Peterson (Calvin) was appointed by an Alabama probate court as guardian and conservator of his mother, Cornelia Barnett Peterson, who was suffering under a disability due to drug addiction. Cornelia, a long-time employee of the State of Mississippi, had recently retired due to her disability, and Calvin submitted an application on her behalf to the Public Employees’ Retirement System for disability retirement benefits, naming himself as beneficiary. Under the “Option 4-A” plan that Calvin selected, Cornelia was to receive a reduced benefit during her lifetime, and he was to receive 50% of the benefits upon Cornelia’s death. She began receiving benefits in 1997. In 1999, the Alabama court removed any guardianship or conservatorship over Cornelia, and a few months later, she requested that her beneficiary designation be changed to another son. PERS, citing statutory restrictions, denied this request. Cornelia died in 2002, and Calvin began receiving benefits. Cornelia’s estate filed a complaint and subsequent motions of summary judgment against PERS and Calvin, claiming that Calvin was guilty of “fraudulent and unauthorized misconduct,” and PERS should have honored Cornelia’s request to change her beneficiary. The circuit court granted the motion against Calvin, finding that he was “disqualified ab initio” as a beneficiary. The circuit judge’s order remanded the issue to the chancery court that was handling the estate probate proceedings for a determination of who should be designated the beneficiary of Cornelia’s benefits under section 25-11-117.1. However, in a second order, the circuit court denied the Estate’s motion for summary judgment against PERS, citing the statutory language prohibiting the change of beneficiary designation after the member has received benefits. PERS, therefore, ceased all benefit payments claiming that Calvin’s designation as the beneficiary was void. The Estate appeals. |
| Summary of Opinion Analysis: | The Estate argues that the circuit court’s two rulings pertaining to its motion for summary judgment were inconsistent. The circuit judge’s January 22, 2009 order disqualified Calvin from receiving any future payments; and citing section 25-11-117.1(1)(b), the judge requested that the Newton County Chancery Court, which has jurisdiction over Cornelia’s estate, determine the beneficiary(ies) of Cornelia’s retirement benefits. However, in the circuit court’s March 6, 2009 order denying summary judgment against PERS, it did not address the issue of designation of future benefit payments. Thus, the Estate argues that the March 6, 2009 order should be reversed for clarification that future benefit payments are to continue and “paid to the appropriate beneficiaries as determined by the [c]hancery [c]ourt, and PERS should recover from [Calvin] for payments erroneously made by PERS to him.” PERS’s interpretation of the circuit court’s judgments is that Calvin’s election as a beneficiary is completely void. Further, PERS claims that no additional benefits are payable since Cornelia’s retirement benefit payments have exceeded her total contributions. PERS also contends that section 25-11-117.1 cannot apply since the statute reads that the designated beneficiary must be disqualified when benefits become payable. The circuit court did not conclude that the PERS application, which designated “Option 4-A,” was invalid. Rather, the circuit court merely found Calvin, as fiduciary, “disqualified ab initio” as a beneficiary. Further, Cornelia did not attempt to designate another option; in fact, she reaffirmed “Option 4-A” and sought to have another son designated as the beneficiary. Moreover, PERS has failed to address the fact that Cornelia received a reduced benefit during her life based on the “Option 4-A” selection. If PERS views the application as one in which no beneficiary was selected, then Cornelia was compensated inadequately in the payment of her disability benefits during her life. The benefits should be distributed to Cornelia’s remaining eligible children as outlined in section 25-11-117.1. Section 25-11-115(2) prohibits a change in beneficiary after the retired member receives his first payment because PERS bases the amount of benefits on the actuarial computation of the life of the retired member and, depending on which option the member chose, the life of the designated beneficiary. But although Calvin’s fraudulent behavior as Cornelia’s fiduciary “disqualified” him from future benefits, there is no reason why the benefit payments based upon Calvin’s lifetime may not continue to be paid to the beneficiary(ies) designated by the chancery court under section 25-11-117.1. Thus, the case is remanded to the circuit court. |
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