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Tuesday, July 22, 2008

Belief

Is what will be required for the Kay Bell verdict to have any long term benefits for PERS members. The following email was sent out to a general distribution list of SEIU members.

"On July 16, 2008, a Marion County Circuit Court jury unanimously found the PERS Board liable for $200,707.04 in damages for negligent misrepresentations made to a PERS member in the case of Kay Bell v. Public Employees Retirement Board (Marion County Case No. 07C11097). PERS Coalition attorney, Aruna Masih, represented the PERS member at trial.

Prior to trial, Marion County Circuit Court Judge Claudia Burton found that the PERS Board owes a “special duty” of care to PERS members to protect them from economic loss caused by false information or other material misrepresentation made by PERS. Trial evidence established that, in this case, PERS had provided the PERS member, a school teacher and counselor, incorrect information on annual statements and estimates over a period of many years. The PERS member resigned her position and retired in reliance on that incorrect information. Only months after the PERS member retired did PERS reveal that the information it had provided her was inaccurate by over $1,100 per month. Of course, by this point, the PERS member’s former position had already been filled, and she had lost the seniority she had accrued. The PERS member testified that had PERS provided her accurate information in a timely manner, she would never have resigned her position and would have continued working until age 62.

The jury unanimously found that the PERS member reasonably relied on the false information provided by PERS and that she suffered loss of salary and benefits of $200,707.04 as a result of giving up her job in reliance on the false information provided by PERS. The PERS Board has already notified the trial court of its intent to challenge the $200,707.04 jury verdict as exceeding the caps set by the Oregon Tort Claims Act. Once the tort claims caps issue is decided by the trial judge and a judgment is entered, the case will likely also be appealed by the PERS Board.

The appeal will give the Oregon appellate courts not only the opportunity to set precedent on whether the PERS Board owes a special duty of care to PERS members to provide them accurate information but also whether the Tort Claims Act should limit damages between a fiduciary and beneficiary like the PERS Board and PERS members. The jury verdict can also be used to support legislative and administrative reform of the PERS retirement audit process, requiring PERS to perform such an audit before a member retires to allow both the member and PERS sufficient time to challenge the accuracy of the information before retirement. Possible reform proposals at the next PERS Coalition meeting."

Of particular interest are the last two sentences of this email (forwarded from Hartman's office to Coalition members). Also is the question of the applicability of the "tort cap" in an instance where the tortious act arises from a fiduciary trustees' actions against a beneficiary. This is quite a different circumstance than a case of medical malpractice. PERS was screwing with Kay Bell's retirement account and denies any responsibility for accurate information. If you can't trust PERS to give you accurate information before you retire, who can you trust? The answer is that no one else has the information to enable you to audit their figures and insure they are correct before you irrevocably give up your job. It seems to me we've heard this claim before, but no Judge has felt quite the same way as a group of outraged jurors. Let's hope that this case finally pushes PERS into accountability. It is probably too late for those of us already ensnared in the web of lies fed us when *we* retired, but hopefully future retirees will be insulated against such arbitrary and capricious acts.


5 comments:

texipup said...

I guess I don't understand why this Bell victory came too late to help us that have already retired and been given the wrong information. I am not as versed as you are on all the comings and goings , but I feel with this common sense verdict that those of us that retired under the Entitlement "promise" that we were going to get an X amount of $s and they reduced that two years later that the supreme court will (as I thought they had previously in the Strunk Case) will tell the PERB "that there has been enough of this Intellectual Dishonesty" and quit spending more of their retirement money on trying to justify what you would want instead of what the contract says.

texipup said...

I guess I don't understand why this Bell victory came too late to help us that have already retired and been given the wrong information. I am not as versed as you are on all the comings and goings as you, but I feel with this common sense verdict that those of us that retired under the Entitlement "promise" that we were going to get an X amount of $s and they reduced that two years later that the supreme court will (as I thought they had previously in the Strunk Case) will tell the PERB "that there has been enough of this Intellectual Dishonesty" and quit spending more of their retirement money on trying to justify what you would want instead of what the contract says.

mrfearless47 said...

Kay's case involved incorrect annual statements that Kay tried to get corrected during her working career. When she failed to get them corrected, she assumed that they were correct after all. She retired on the assumption that her account balance was actually correct. After she retired, PERS audited her account and discovered about 4 months after she retired that the balance was, indeed, incorrect. Consequently, they reduced her benefit by $1100 per month. Her suit involved reparations for lost income as a result of retiring too soon based on the incorrect information.

There are similarities to our situation, but the case has differences too. Since Kay filed it individually after going through all the individual contests required by PERS, it is hard for me to see how this can be generalized to us. It wasn't filed as a class action either.

mrfearless47 said...

texipup:

You might also want to read the latest message posted on OPDG (next to last link on the left) from Jim Coon, the Robinson lawyer of record. I think Jim summarizes the global position pretty well when he says that he doubts there will be any spillover effects from the Kay Bell ruling on the Robinson appeal wending its way to the Oregon Court of Appeals. I think it fair to say that the Arken appeal won't be affected either. The bottom line is that Kay's case is highly individual and the best we can hope for, in my opinion, is legislative change that makes PERS insure that the "special relationship" that exists between members and staff is treated with the utmost care. I doubt it will have any impact on ongoing litigation. I wish I were more optimistic, but I think Kay got the win but we won't be so lucky.

texipup said...

thanks for your comments. Also thank you for your PATIENCE and knowledge.