STATE OF MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES BUREAU OF HEARINGS. Agency No.

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1 STATE OF MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES BUREAU OF HEARINGS In the matter of Ned S. Curtis, III, Petitioner v Public School Employees Retirement System, Respondent / Docket No Agency No. Agency: Case Type: Appeal Disability Department of Management & Budget Issued and entered this 28th day of March, 2001 by Howard T. Spence Administrative Law Judge PROPOSAL FOR DECISION PROCEDURAL HISTORY This matter began with a filing by Mr. Ned S. Curtis, III, (Petitioner or Curtis) on or about March 17, Mr. Curtis is appealing the denial by the Public School Employees Retirement System (PSERS or Respondent) of non-duty disability retirement benefits he was seeking. On May 8, 2000, a Notice of Hearing was mailed scheduling the hearing to commence on July 14, 2000, at 9:00 a.m. at 611 West Ottawa Street, Lansing, Michigan. On July 14, 2000, an Order Granting Adjournment was issued and entered at Petitioner s request, rescheduling the hearing to be held August 28, On August 28, 2000, the hearing commenced, and it concluded on that same day. The Petitioner appeared in this matter

2 Page 2 without the benefit of an attorney. The Michigan Public School Employees Retirement System was represented in this matter by Assistant Attorney General Alan J. Lambert. The only witness who testified at the hearing was the Petitioner. The entire Administrative Record developed on Mr. Curtis application for benefits was admitted into the record as Respondent s Exhibit 1. Respondent s Proposed Exhibit 2 is a copy of Section 86 of the Michigan Public School Employees Retirement Act of 1979, as amended. Since the proposed exhibit is actually a copy of a statute, it is not admitted into the record as an exhibit but is considered to be applicable law. The Petitioner offered one exhibit which was admitted into the record. Petitioner s Exhibit A is a copy of a Settlement Agreement entered into by Mr. Curtis with the Leslie Public School s Board of Education. That Settlement Agreement is dated October 9, 1995, and states that Mr. Curtis resigned from his position as superintendent of schools for the Leslie Public School District, effective ISSUES AND APPLICABLE LAW The legal standard for granting duty disability retirement under the Michigan Public School Employees Retirement System is found in MCL However, Section 86 of the Act is the applicable law in this case. That section provides as follows in pertinent part: (1) A member whom the retirement board finds to have become totally and permanently disabled for purposes of employment by his or her reporting unit by reason of personal injury or mental or physical illness before termination of reporting unit service shall receive a disability allowance if all of the following requirements are met:

3 Page 3 (D) The member or reporting unit makes written application to the retirement board not more than 12 months after the date the member terminated public school employment. (2) The retirement board may extend the application time limit provided in subsection (1) not more than 24 months for a member or deferred member who satisfies the other requirements of subsection (1), if evidence of extenuating circumstances is presented to the satisfaction of the retirement board. ***** (Emphasis added) The issue in this case is generally stated to be whether Petitioner qualifies for a duty disability retirement allowance. More particularly, the issue actually is whether the Petitioner has timely filed an application for retirement as required by the Act and whether the retirement board (Board) has jurisdiction or authority to accept and process the Petitioner s application for retirement benefits. FINDINGS OF FACT retirement allowance. The undersigned Administrative Law Judge (ALJ) finds the following facts: 1. On December 8, 1999, Petitioner applied for a non-duty disability 2. On February 15, 2000, the Office of Retirement Services denied the application filed by Mr. Curtis as being untimely. 3. The Office of Retirement Services has not evaluated the medical or mental health condition of Mr. Curtis to date or referred his case to independent medical examiner review because of its initial determination that Mr. Curtis did not meet the statutory filing requirements for timeliness.

4 Page 4 4. Mr. Curtis has approximately 19 years of creditable service in this retirement plan. 5. Effective October 9, 1995, Mr. Curtis entered into a Settlement Agreement with his employer, the Leslie Public School Board, in which he agreed to resign from his position as Leslie school superintendent, effective " unless he found other full-time employment before that date. 6. Mr. Curtis has not found other employment since that date, although at the time of his resignation he anticipated returning to work as a school superintendent in some other location at a subsequent time. 7. Mr. Curtis mental health deteriorated following his resignation from the Leslie School District, and he has been diagnosed since that time to be either severely depressed or, more recently, to be suffering from a bipolar disorder. 8. Mr. Curtis mental health condition is debilitating, although the record is not developed adequately at this point to determine whether his health condition is a total or permanent disability. 9. Mr. Curtis was not precluded by his Settlement Agreement and resignation from Leslie Public Schools from applying for or obtaining retirement benefits, if eligible. 10. Mr. Curtis was not aware that he might be eligible for non-duty retirement benefits through the Act until some point in 1999, when such a possibility was suggested to him by a therapist or treatment provider.

5 Page Since his resignation from the position of superintendent of schools in the Leslie Public Schools, Mr. Curtis has been unable to find other employment in his profession and has been subject to depression, serious financial distress, attempted suicide, and has experienced other serious and unfortunate circumstances in his personal and family life. 12. Mr. Curtis has raised claim that his application for non-duty disability benefits was delayed due to extenuating circumstances contemplated by the Act and should thus be considered by the Board at this time. CONCLUSIONS OF LAW The threshold issue which must be resolved in this case is whether Mr. Curtis is precluded from being considered for non-duty disability retirement by the Board. His application was rejected because of a determination by the Office of Retirement Services that his application was untimely. If the application can be considered, then it becomes appropriate to look at the actual health condition and circumstances of Mr. Curtis to determine if he has a disability which is both permanent and total to qualify for disability retirement. The facts in this case are not in significant dispute. Although the Settlement Agreement entered into the record as Petitioner s Exhibit A states that the resignation by Mr. Curtis is effective June 30, 1996, the parties have stipulated on this record that the termination date is actually August 29, In any case, both the August 29, 1995, date and the June 30, 1996, date are more than 36 months before Mr. Curtis filed his application with Respondent on December 8, 1999.

6 Page 6 The operant statute in the Act is set forth in the applicable law and is MCL That section mandates, among other things, that an applicant for non-duty disability retirement benefits must apply for the benefits not more than 12 months after the date the member terminated public school employment. Apparently the legislature, in its wisdom, thought that there might need to be some leeway in filing for such benefits. The legislature therefore enacted subsection (2), being MCL (2). That section states that the retirement board may extend the application time limit provided in subsection (1) NOT MORE THAN 24 MONTHS for a member or deferred member who satisfies the other requirement of subsection (1), IF EVIDENCE OF EXTENUATING CIRCUMSTANCES IS PRESENTED TO THE SATISFACTION OF THE RETIREMENT BOARD. (Emphasis added). The plain language of the statute precludes the processing of Mr. Curtis application based upon the facts in this record relating to his resignation date and his application for retirement date. The Board does have some discretion to determine if there are extenuating circumstances which would justify receiving and processing an application for as long as 36 months after the employment termination date. But the statute on its face precludes the Board from exercising any discretion to receive applications which are made more than 36 months after the completion of the employment. In light of the facts as placed on this record, the ALJ is inclined to conclude that there have been extenuating circumstances which would justify the ALJ recommending to the Board that Mr. Curtis application be received and processed if such were not precluded by the statute. But even so, a finding of extenuating circumstances cannot override the clear

7 Page 7 language of the statute which precludes the Board from accepting applications which are filed more than 36 months after termination of service. The ALJ has no choice under the law as enacted but to recommend to the Board that the denial of retirement benefits to Mr. Curtis by the Respondent on these facts be upheld. The time limits in the statute are explicit and can be considered jurisdictional to the Board for receiving and processing delayed applications for non-duty disability retirements. Mr. Curtis is still a relatively young man who was 47 years of age at the time of the hearing. If he is able to secure employment with any school district in any capacity for even a very brief period of time, it may well be that he will be able to move on to reapply for benefits in a timely manner thereafter providing he can still show he has a disability that is permanent and total. But on this record he is not eligible for application for such benefits given the fact that it was more than 36 months after resignation before he submitted an application to the Respondent. PROPOSED DECISION Based on the above Findings of Fact and Conclusions of Law, the undersigned Administrative Law Judge recommends the following decision: Petitioner does not qualify for a non-duty disability retirement allowance under the Michigan Public School Employees Retirement System. EXCEPTIONS

8 Page 8 Either party may file exceptions to this Proposal for Decision within 20 days after the Proposal for Decision is issued and entered. An opposing party may file a response within 10 days after exceptions are filed. Exceptions shall be filed at the following address: Department of Management and Budget, Office of Retirement Services, 7150 Harris Drive, 3 rd Floor, P.O. Box 30171, Lansing, Michigan, 48909, Attention: Janet Darling. Howard T. Spence Administrative Law Judge