Garrett v. Teachers' & State Employees' Retirement System ex rel. Board of Trustees

WELLS, Judge. Respondent raises several assignments of error concerning the standard of review under the North Carolina Administrative Procedure Act, N.C. Gen. Stat. §§ 150B-1-64 (1987), but we do not deem it necessary to reach them on this appeal. This case involves the interpretation of the “in service” provisions of Ñ.C. Gen. Stat. § 135-5(1) (1979) (current version N.C. [411] Gen. Stat. § 135-5(1) (1987)). The relevant portions of the death benefit provisions of the statute are as follows: Upon receipt of proof, satisfactory to the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the death, in service, of a member who had completed at least one full calendar year of membership in the Retirement System, there shall be paid to such person as he shall have nominated . . ., a death benefit. For the purposes of this Plan, a member shall be deemed to be in service at the date of his death if his last day of actual service occurred not more than 90 days before the date of his death .... In administration of the death benefit the following shall apply: (2) Last day of actual service shall be: a. When employment has been terminated, the last day the member actually worked. b. When employment has not been terminated, the date on which an absent member’s sick and annual leave expire, unless he is on approved leave of absence and is in service under the provisions of G.S. 135-4(h). (3) For a period when a member is on leave of absence, his status with respect to the death benefit will be determined by the provisions of G.S. 135-4(h). In Stanley v. Retirement and Health Benefits Division, 55 N.C. App. 588, 286 S.E. 2d 643, petition for review denied, 305 N.C. 587, 292 S.E. 2d 571 (1982), relied upon by petitioner, this Court reversed the denial of the death benefit to a teacher’s widower, holding that the teacher was “in service” when she died. Mrs. Stanley had taught until 7 June 1974, but applied for a year’s leave of absence due to illness. Her health subsequently improved and on 26 June 1974 she was assigned to begin teaching again the following September. Her condition declined during the summer and she resigned the new position on 12 August 1974. [412] She died on 9 October 1974. The System denied her widower’s request for the death benefit, finding that more than ninety days elapsed from the date her leave ran out, 8 June 1974, to the date of her death. This Court disagreed with the System’s restrictive interpretation and held that because the leave of absence was terminated on 26 June 1974, she had returned to service after 8 June 1974. While recognizing the principles involved in Stanley, including our interpretation of the “90 day deemed in service” (or 180 days, under the current version of N.C. Gen. Stat. § 135-5(1) (1987)) rule as an inclusionary provision, we hold, however, that the petitioner in the case at bar clearly does not qualify for the statutory death benefit. The trial court having found that Mr. Garrett’s employment had not been terminated, the N.C. Gen. Stat. § 135-5(l)(2)(b) (1979) becomes applicable in this case. This section of the statute provides that Mr. Garrett’s last day of service occurred on 18 July 1981, the date his sick and annual leave expired. We disagree with petitioner’s argument that his last day of service was the day his position was vacated, 25 February 1982. Mr. Garrett did nothing to indicate a return to actual service after his hospitalization on 6 June 1981. This case cannot be analogized to Stanley where the teacher’s attempted return to the classroom advanced her last day of actual service. Mr. Garrett did not contribute to the Retirement System after being placed on leave without pay, so the possible extension provided by § 135-4(h) (1979) for plan members who contribute while on leave of absence does not apply. Because his death occurred more than ninety days after his last day of actual service, Mr. Garrett was not in service at the time of his death and his beneficiary is not eligible for the death benefit. The trial court emphasized the portion of Mr. Garrett’s employee handbook that described the death benefit. Although the handbook description may be sufficiently vague to mislead an employee about its availability, we hold that the handbook provision created no contractual agreement to provide a death benefit. See, e.g., Harris v. Duke Power Co., 319 N.C. 627, 356 S.E. 2d 357 (1987). [413] For reasons stated, the judgment of the trial court must be reversed. Reversed. Judge Phillips concurs. Judge Becton concurs in the result.