Opinion
No. 1-741 / 00-0338.
Filed April 24, 2002.
Appeal from the Iowa District Court for Linn County, WILLIAM R. EADS, Judge.
The plaintiff appeals from the district court's ruling dismissing an action seeking interest on defendant's contribution to the retirement system for back pay awarded to a city fire fighter. REVERSED AND REMANDED.
Alice E. Helle and Douglas E. Gross of Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C., Des Moines, for appellant.
James H. Flitz, City Attorney's Office, Cedar Rapids, for appellee.
Heard by MAHAN, P.J., and MILLER and HECHT, JJ.
The Board of Trustees (Board) of the Municipal Fire and Police Retirement System of Iowa (system) appeals from the district court's ruling dismissing its action seeking the collection of interest charged on the City of Cedar Rapids's (City) contribution to the system for back pay awarded to a city fire fighter. The Board contends (1) the district court erred in concluding the Board had no statutory authority to collect interest on such a contribution, (2) it had a fiduciary duty to collect such interest, and (3) 2000 Iowa Acts chapter 1077, section 108, which amended Iowa Code section 411.11 (1999) to authorize the Board to impose such interest, imposes liability on the City for the interest. We reverse and remand.
I. BACKGROUND FACTS.
In January 1994, Peggy Clay was discharged as a fire fighter for the City for alleged misconduct. Subsequent legal proceedings reversed the discharge and provided that she be reinstated. See Clay v. City of Cedar Rapids, 577 N.W.2d 862 (Iowa Ct.App. 1998). Pursuant to that decision, the City reinstated Clay and awarded her back pay in the amount of $143,035.51. The City also paid Clay interest on the judgment in the amount of $28,448.31.
Iowa Code section 400.27 (1999) provides that if the district court reverses the ruling or decision being appealed from, "the appellant, if it be an employee, shall then be reinstated as of the date of the . . . discharge and shall be entitled to compensation from the date of such . . . discharge."
Chapter 411 deals with retirement systems for police officers and fire fighters. Espinosa v. Bd. of Trs. of the Fire Ret. Sys. of City of Council Bluffs, 466 N.W.2d 914, 915 (Iowa 1991). This chapter's purpose is "to promote economy and efficiency in the municipal public safety service by providing an orderly means for . . . fire fighters to have a retirement system which will provide for the payment of pensions to retired members and members incurring disabilities. . . . " Iowa Code § 411.1A. On account of each member of the system, each participating city must annually make contributions to the fire and police retirement fund in an amount equal to a certain percentage of the earnable compensation of the member. Iowa Code § 411.8(1)(a).
The Board determined the amount of contribution payable to the system for Clay's benefits under chapter 411 based on the back pay award. The amount was based on the contributions that would have been paid by the City to the system if Clay had worked during the relevant time periods. The amount of the contribution was $38,443.69. The City paid the amount into the system on or about April 20, 1998.
The Board also requested interest on the contribution in the amount of $6051.18. Its computation was based on the dates contributions would have been paid if Clay had been working during this time period and paid accordingly. The City refused to pay the interest. It does not dispute the amount claimed by the Board if interest is due on the contribution.
The Board commenced this action against the City to collect the interest. On January 31, 2000, the district court entered a ruling dismissing the Board's petition. The court determined that the City was not required to pay such interest as part of its contribution to the system under section 411.8(1)(a). The Board appeals.
II. SCOPE AND STANDARD OF REVIEW.
Our review of this law action is for the correction of errors at law. Iowa R. App. P. 6.4. Questions of statutory interpretation are questions of law, which we review without deference to the trial court's opinion. Wilson v. IBP, Inc., 589 N.W.2d 729, 730 (Iowa 1999); Prod. Credit Ass'n of Midlands v. Farm Town Indus., Inc., 518 N.W.2d 339, 341 (Iowa 1994).
III. INTEREST ON THE CONTRIBUTION AWARD.
The Board contends the district court erred in concluding the Board had no authority to impose the interest in question, and in focusing on section 411.38. It also argues recent statutory amendments render the City liable for the interest. Because the Board did not cite or rely on section 411.38 and agrees with the district court that section 411.38 is not applicable in this case, we decline to address the applicability of section 411.38.
A. Earnable compensation. The district court determined that payment for back pay to Clay was not "earnable compensation" under chapter 411. The Board argues that whether or not the back pay constituted "earnable compensation" is not at issue. The only issue, it contends, is the City's liability for interest on the contribution to the system. The City maintains that Clay's lump sum payment was not "earnable compensation" because it was not in exchange for her work performed as a firefighter.
We agree with the Board that whether Clay's back pay constituted "earnable compensation" is not at issue in this case. The City has already paid the system under section 411.8 for the contribution that should have been made during the time Clay was terminated. This contribution was an amount equal to a certain percentage of Clay's earnable compensation for the time between her discharge and reinstatement. See Iowa Code § 411.8(1)(a). This appeal does not involve whether the rate of contribution was inappropriate, but whether the City is required to pay interest on the contribution it was required to pay and in fact has paid. We conclude the district court erred in relying on its determination that Clay's back pay was not earnable compensation to find that the City was not liable for interest on that contribution.
B. Applicability of recent statutory amendments. The Board argues recent amendments to section 411.11 render the City liable for the interest in question. If the amendments apply, then interest on contributions to the system based on Clay's back pay would be calculated pursuant to section 411.11 as if the City's contributions were unpaid as of the dates the contributions would have been due if Clay had been paid the back pay during the period in which it was due. 2000 Iowa Acts ch. 1077, § 108. The legislature made this statutory amendment effective April 12, 2000 and retroactive to January 1, 1992. 2000 Iowa Acts ch. 1077, § 110.
Although the legislature may make legislation retroactive, see Iowa Code § 4.5 (statutes presumed to be prospective in operation unless expressly made retrospective), subsequently enacted legislation is ineffective to retroactively change the law governing an adjudicated case. State v. Guzman-Juarez, 591 N.W.2d 1, 3 (Iowa 1999); see State ex rel. Lankford v. Mundie, 508 N.W.2d 462, 463 (Iowa 1993) (stating that the legislature lacks the power to change a valid judgment after it is entered); see also Scott v. State, 517 N.W.2d 718, 720-21 (Iowa Ct.App. 1994) (stating that statutes controlling an appeal are those in effect at the time the judgment being appealed from was rendered).
We conclude that the statutory amendments to section 411.11 do not apply to this appeal. This case was finally adjudicated January 31, 2000. The legislature made the statutory amendments to section 411.11 effective April 12, 2000. Thus, the amendments do not apply here.
C. Applicability of Board rules. Prior to the 2000 legislation, there was no statutory directive for the payment of the interest at issue here. However, the Board has the authority to promulgate rules for administering the system, Iowa Code § 411.5(3), and the Board has done so. Rule 7.1 requires the contribution to the fund must be received by the system from the City by the fifth working day following each payday. Rule 7.3 provides that interest shall accrue on contributions not received by the date specified in rule 7.1. The term "payday" is not defined in the Board's rules.
The district court determined that there were no paydays between Clay's termination and her reinstatement. It concluded the "payday" was the date the lump-sum payment was actually made. It found that was the first date the City was obligated to make any payments to Clay as a result of judicial proceedings.
The Board contends that the court ignored the fact that, absent the City's improper termination of Clay, she would have been paid during the period in question, the corresponding contributions to the system would have been paid each pay period, and the system would have immediately invested those amounts. It argues the interest on the late contributions is not a penalty, but rather to compensate the system for lost investment earnings. The City maintains that the Board did not have the power to create the system and its attendant obligations, and even if the Board's rules were to apply, payment of interest is not required because there were no paydays during the time between Clay's termination and reinstatement. It also argues there is no showing that there have been any lost investment earnings or that the Board would have been able to profitably invest the contributions.
The City has not cited any legal authority in support of its argument that the Board has to prove the lost contributions would have been profitably invested in order to receive interest, or the exact amount of lost investment earnings. Thus, we find the City has waived these arguments. Iowa Rs. App. P. 6.14(1)(c) and 6.14(2) (failure in the brief to cite authority in support of an issue may be deemed waiver of that issue).
We conclude that the term payday under the applicable Board rule refers to each day that Clay would have been paid had she not been improperly terminated. If Clay had not been terminated, she would have been paid during the period in question, and the corresponding contributions to the system would have accrued interest if not paid by the fifth working day following each payday, pursuant to the Board's rules. We therefore further conclude the Board was entitled to interest pursuant to the Board's rules.
IV. CONCLUSION.
We have considered all issues raised by the parties, whether specifically discussed or not, and find those not discussed not preserved, without merit, or unnecessary to the disposition reached. We conclude that the Board was entitled to interest on the City's contribution to the system. We note that the parties agree on the amount of interest the City must pay the retirement system. We reverse the district court's ruling and remand for entry of judgment consistent with this opinion.
REVERSED AND REMANDED.