August 14, 2009 – Dennis Gonzales and Tobias Pino v. State of New Mexico Public Employee Retirement Association and its Board, Nos. 28,108 & 28,109 (consolidated)

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: 	AUGUST 14, 2009
NO. 28,108/28,109 (Consolidated)
DENNIS GONZALES and
TOBIAS PINO,
Petitioners-Appellants,
v.
STATE OF NEW MEXICO PUBLIC
EMPLOYEE RETIREMENT
ASSOCIATION, and its BOARD,
Respondent-Appellee.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
James A. Hall, District Judge
Law Offices of E. Justin Pennington
E. Justin Pennington
Albuquerque, NM
for Appellants
G.T.S. Khalsa
Santa Fe, NM
for Appellee

Youtz and Valdez, P.C.
Shane Youtz
Brandt Milstein
Albuquerque, NM
for Amicus Curiae American Federation
of State, County & Municipal Employees
(AFSCME Council 18)

OPINION
FRY, Chief Judge.
{1} 	In these consolidated cases, Petitioners Dennis Gonzales and Tobias Pino
challenge the decision of the Public Employees Retirement Board (the Board) denying
them disability retirement benefits. Relying on a statutory provision applicable to a
member of the Public Employees Retirement Association (PERA) who “is not a
currently employed, contributing employee of an affiliated public employer,” the
Board concluded that each Petitioner met this definition when his application for
benefits was filed. NMSA 1978, Section 10-11-10.1(C)(2) (1993). Because of this
employment status, the Board determined that neither Petitioner was eligible for
benefits because neither was “totally incapacitated for any gainful employment.”
Section 10-11-10.1(C)(2)(a). We hold that the Board applied the wrong standard for
determining 	disability. 	Because 	each 	Petitioner 	was 	a 	currently 	employed,
contributing employee at the time his disability was incurred, the Board should have
utilized the standard applicable to such an employee, which permits disability benefits
if the employee is “totally incapacitated for continued employment with an affiliated
public employer.” 	Section 10-11-10.1(C)(1)(a). 	We reverse and remand for
reconsideration of each Petitioner’s application in light of the proper standard. We
also deny PERA’s motion to dismiss Gonzales’s appeal.

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BACKGROUND
Gonzales
{2} 	Petitioner Gonzales was employed as a juvenile correctional officer by the
Children, Youth & Families Department (CYFD) beginning in 1997. He sustained an
injury to his back, later diagnosed as a herniated disk, on March 16, 2004. He was
placed on leave and began receiving workers’ compensation benefits on September
1, 2004. By January 2005, Gonzales had exhausted all of his accrued annual and sick
leave, and in March 2005, he reached maximum medical improvement. 	When his
employer determined that there was no suitable employment within CYFD that could
accommodate Gonzales’s restrictions, it terminated him effective August 15, 2005.
Upon learning of his impending termination, Gonzales applied with PERA for
disability retirement benefits on August 5, 2005. 	PERA determined that more
information was needed for Gonzales’s application, and the application was finally
deemed complete on September 30, 2005.
{3} 	The following facts are undisputed. At the time of his application for benefits,
Gonzales had five or more years of PERA service credit, he was not able to continue
the job he had when he was injured, but he was not disabled from commensurate
gainful employment. He made no PERA employee contributions in 2005, with the
possible exception of June 2005.

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{4} 	PERA informed Gonzales on October 13, 2005, that its Disability Review
Committee 	(DRC) 	recommended 	denial 	of 	disability 	benefits 	“because 	the
information provided did not show that [he] was totally and permanently incapacitated
from performing any gainful employment.” Gonzales appealed the recommendation,
and the appeal was heard by a hearing officer.
{5} 	At the hearing, Gonzales argued that under the proper interpretation of the
applicable statute, he was a currently employed, contributing PERA member at the
time of his application on August 5, 2005. As such, he maintained that he was entitled
to disability benefits because he was incapacitated for continued employment with an
affiliated public employer. He argued alternatively that his membership status should
be determined at the time his disability arose.
{6} 	The hearing officer filed his recommended decision, in which he rejected
Gonzales’s argument and concluded that the determinative date was the date
Gonzales’s application for benefits was complete, September 30, 2005. 	However,
even if the date of the initial application—August 5, 2005—were deemed conclusive,
the hearing officer determined that Gonzales was not a currently employed,
contributing employee at that time because he made no contributions to PERA in
August or September 2005, and he was terminated on August 15, 2005. As a result
of this status, the hearing officer determined that Gonzales would be entitled to

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benefits only if he could establish that he was incapacitated for any gainful
employment. 	Because Gonzales stipulated that he was not so incapacitated, the
hearing officer concluded that Gonzales was not entitled to benefits.
{7} 	The Board adopted the hearing officer’s recommended decision and Gonzales
appealed the Board’s decision to the district court. 	The district court affirmed the
Board’s decision, and we granted Gonzales’s petition for certiorari.
Pino
{8} 	Petitioner Tobias Pino was employed as a firefighter with the City of
Albuquerque since 1989. On November 10, 2000, Pino sustained an on-the-job injury
to his left knee. Although the City terminated his employment in August 2001, the
City’s personnel board reinstated him retroactively. Pino was employed by the City
until he resigned on April 12, 2006, at which time he was on leave without pay. The
parties stipulated that Pino’s last PERA contributions were made in December 2005.
{9} 	Pino filed his application for disability benefits with PERA on January 18,
2006. PERA informed Pino that it required more information, and Pino’s application
was deemed complete March 1, 2006. The DRC denied Pino disability retirement
benefits, and Pino appealed. A hearing officer presided over the appeal hearing.
{10} 	Pino argued that the date of his injury was the date for determining his
employment status and that on the date of his injury he was a currently employed,

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contributing member of PERA. Consequently, he argued, he was entitled to disability
retirement benefits if he was not able to continue employment with an affiliated public
employer. The hearing officer rejected this argument and concluded that the operative
date for determining employment status was the date of Pino’s application. Because
Pino was not a currently employed, contributing employee on that date, he was
entitled to disability retirement benefits only if he established that he was totally
incapacitated for any gainful employment. The hearing officer concluded that Pino
had failed to meet this standard and affirmed the DRC’s denial of benefits. The Board
adopted the hearing officer’s recommended decision, and Pino appealed to the district
court, which affirmed. We granted Pino’s petition for certiorari.
DISCUSSION
{11} 	On certiorari, “we conduct the same review of an administrative order as the
district court sitting in its appellate capacity, while at the same time determining
whether the district court erred in the first appeal.” Talamante v. Pub. Employees Ret.
Bd., 2006-NMCA-032, ¶ 6, 139 N.M. 226, 131 P.3d 76 (filed 2005) (internal
quotation marks and citation omitted). “We review the Board’s decision to determine
whether (1) [it] acted fraudulently, arbitrarily or capriciously; (2) the final decision
was not supported by substantial evidence; or (3) [the Board] did not act in accordance
with [the] law.” 	Id. (alterations in original) (internal quotation marks and citation

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omitted). To the extent our review requires statutory interpretation, we undertake de
novo review. Id.
{12} 	This case presents issues of statutory construction. 	We must determine the
meaning of “currently employed, contributing employee” as used in Section 10-11-
10.1(C)(1) of the Public Employees Retirement Act (the Act), NMSA 1978, Sections
10-11-1 to -141 (1987, as amended through 2007). In addition, we must determine
the triggering event for assessing an employee’s status under the Act’s provisions
governing disability retirement benefits.
{13} 	Our Supreme Court recently articulated the role of appellate courts in
construing a statute in Bishop v. Evangelical Good Samaritan Society, 2009-NMSC-
036, ___ N.M. ___, ___ P.3d ___. The Court first observed that “if the meaning of
a statute is truly clear—not vague, uncertain, ambiguous, or otherwise doubtful—it
is of course the responsibility of the judiciary to apply the statute as written and not
to second-guess the [L]egislature’s selection from among competing policies.” Id. ¶
10 (internal quotation marks and citation omitted). 	But the Court also “cautioned
against an overly simplistic application of the plain-meaning rule.” 	Id. 	The Court
stated that statutory construction should begin with an examination of the statute’s
language, which “is the primary indicator of legislative intent,” and that the reviewing
court should read all parts of a statute together “so that all parts are given effect.” Id.

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¶ 11. 	The appellate court “must also consider the practical implications and the
[L]egislative purpose of a statute, and when the literal meaning of a statute would be
absurd, unreasonable, or otherwise inappropriate in application, [the court must] go
beyond the mere text of the statute.” Id.
Relevant Provisions of the Act
{14} 	We begin with an overview of the Act’s relevant provisions. The Act sets out
the requirements for an award of disability retirement benefits as follows:
The disability review committee may retire a member on account
of disability before the time the member would otherwise be eligible for
retirement if the following requirements are satisfied:
(1) 	the member applying for disability retirement was a member
at the time the disability was incurred;
(2) 	a written application . . . has been filed with the association
by the member or by the member’s affiliated public employer;
(3) 	employment is terminated within forty-five days of the date
of approval of the application for disability retirement;
(4) 	if:
(a) 	the member has five or more years of service credit;
. . . .
(5) 	the member submits to all medical examinations and tests
. . .;
(6) 	the disability review committee makes the determination
required under Subsection C of this section.

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Section 10-11-10.1(B)(1)-(6).
{15} 	There is no dispute that Gonzales and Pino each satisfied requirements (1), (2),
(4), and (5). Because their applications were denied, we cannot determine whether
Subsection (B)(3) would have been satisfied. Therefore, the requirement at issue in
this case is Subsection (B)(6), the determination of the DRC under Subsection C of
the statute.
{16} 	Before turning to Subsection C, we focus on requirement (1) above because it
informs our analysis of Subsection C. 	Notably, requirement (1) states that the
“member applying for disability retirement” must be “a member at the time the
disability was incurred.” Section 10-11-10.1(B)(1). There are two important aspects
of this requirement: 	the applicant must be (a) a “member” (b) “at the time the
disability was incurred.”
{17} 	The Act defines a “member” in Section 10-11-2 as:
[either (1)] a currently employed, contributing employee of an affiliated
public employer, or [(2)] a person who has been but is not currently
employed by an affiliated public employer, who has not retired and who
has not received a refund of member contributions[.]
Section 10-11-2(M). Thus, the Act draws a distinction between a member who is “a
currently employed, contributing employee” and one who is no longer working for a
public employer, providing the latter has not retired and has not obtained a refund of
his or her contributions to PERA. Section 10-11-10.1(C)(1).

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{18} 	Either type of member may be eligible for disability retirement benefits if he
or she was a member “at the time the disability was incurred.” 	Section 10-11-
10.1(B)(1). 	A former employee of an affiliated public employer whose date of
disability occurred after receiving a refund of member contributions or during
retirement is not eligible to receive disability retirement benefits. However, a person
who was “a currently employed, contributing employee” at the time disability was
incurred would be eligible for benefits. Section 10-11-10.1(C)(1).
{19} 	We turn now to Section 10-11-10.1(C). Assuming that an applicant satisfies
requirements (1) through (5) of Section 10-11-10.1(B), the remaining requirement is
that the DRC “makes the determination required under Subsection C.” Section 10-11-
10.1(B)(6). Subsection C provides:
The disability review committee shall review applications for
disability retirement to determine whether:
(1) 	if 	the 	member 	is 	a 	currently 	employed, 	contributing
employee of an affiliated public employer:
(a) 	the 	member 	is 	mentally 	or 	physically 	totally
incapacitated for continued employment with an affiliated public
employer; and
(b) 	the incapacity is likely to be permanent; or
(2) 	if the member is not a currently employed, contributing
employee of an affiliated public employer:
(a) 	the 	member 	is 	mentally 	or 	physically 	totally

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incapacitated for any gainful employment; and
(b) 	the incapacity is likely to be permanent.
Section 10-11-10.1(C)(1)(a)-(b) to (2)(a)-(b).
{20} 	We make two observations about Subsection C. We first note that the statute
imposes two different standards for awarding disability benefits. Depending on the
member’s status, the member must demonstrate total physical and mental incapacity
that is likely to be permanent either (a) “for continued employment with an affiliated
public employer” or (b) “for any gainful employment.” Section 10-11-10.1(C)(1)(a),
(2)(a). The second type of incapacity is obviously more difficult to demonstrate than
the first. 	Our second observation is that the choice of which incapacity standard
applies depends on whether the member is (a) “a currently employed, contributing
employee of an affiliated public employer” or (b) “not a currently employed,
contributing employee of an affiliated public employer.” Section 10-11-10.1(C)(1),
(2) (emphasis added). A member of the first category must demonstrate the lesser
standard of incapacity—total incapacity “for continued employment with an affiliated
public employer” as opposed to total incapacity “for any gainful employment.”
Section 10-11-10.1(C)(1)(a), (2)(a).
{21} 	Looking at the Act’s definition of “member” in conjunction with the two
standards of incapacity justifying an award of disability retirement benefits, we are

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able to make some preliminary assessments of the Legislature’s intent when it enacted
Section 10-11-10.1. 	The Act has two, and only two, definitions of “member.”
Similarly, Section 10-11-10.1 provides two standards of incapacity, depending on the
type of member who has applied. It therefore makes sense that the two incapacity
standards correspond to the two definitions of “member.” One standard applies to a
member who is defined as “a currently employed, contributing employee of an
affiliated public employer,” and the other applies to a member who is defined as “a
person who has been but is not currently employed by an affiliated public employer,
who has not retired and who has not received a refund of member contributions.”
Section 10-11-2(M).
{22} 	We further observe that a member who is approved to receive disability
retirement benefits is entitled to only one year of such benefits, regardless of which
standard of incapacity applied to the member. Section 10-11-10.1(D). At the end of
that year, PERA reevaluates the member under the more difficult standard: 	total
incapacity “for any gainful employment.” See § 10-11-10.1(C)(2)(a), (D), (E), (F).
{23} 	Against this backdrop, we turn to the parties’ arguments.
The Parties’ Contentions
{24} 	Gonzales and Pino argue that their eligibility for disability retirement benefits
should be governed by the less demanding standard of incapacity applicable to

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“currently employed, contributing employee” members. Section 10-11-10.1(C)(1).
They appear to make two alternative arguments in support of their contention. First,
they maintain that their eligibility for benefits should be determined by their
membership status at the time disability was incurred, not at the time they applied for
benefits. Both Gonzales and Pino were undisputedly employed and making PERA
contributions at the time their respective disabilities were incurred. Second, even if
the determinative date is the date of the benefits application, they contend that they
should be deemed to have been “currently employed, contributing employee[s]”
because they were still employed at that date even if they were not technically making
contributions. Id.
{25} 	PERA responds that the operative date for determining member status is the
date a member files an application for disability retirement benefits. In support of this
position, PERA maintains that we should focus on the use of the word “is” in Section
10-11-10.1(C)(1), which applies the less onerous standard of incapacity to a “member
[who] is a currently employed, contributing employee.” Id. The more burdensome
standard of incapacity is reserved for a “member [who] is not a currently employed,
contributing employee.” 	Section 10-11-10.1(C)(2). 	Thus, according to PERA,
because the determination of member status under Section 10-11-10.1(C) is made
during review of an existing application, the member’s employment situation should

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be assessed as it exists at the time of the application. In addition, PERA argues that
even if a member is technically employed on the date of his or her application, the
member cannot rely on the less onerous standard of incapacity unless the member is
also making PERA contributions.
Interpretation of the Act
{26} 	The Act is silent as to the date for determining the status of a member for
purposes of disability retirement benefits. The Act references “the time the disability
was incurred” in its requirement that an applicant for benefits have been a member at
that time. Section 10-11-10.1(B)(1). But, as noted by PERA, the Act also references
the time the application for benefits was submitted, stating that “[a]fter approval,
payment [of benefits] shall be effective commencing the first of the month following
submission of the initial application.” 	Section 10-11-10.1(D). 	Neither reference
provides much guidance as to the date for assessing membership status.
{27} 	One potential guidepost is the language used to distinguish between the two
types of members. One type is “a currently employed, contributing employee of an
affiliated public employer” while the other is “a person who has been but is not
currently employed by an affiliated public employer, who has not retired and who has
not received a refund of member contributions.” Section 10-11-2(M). Bearing these
definitions in mind, at the time their respective disabilities were incurred, Gonzales

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and Pino were both “currently employed” and “contributing” employees. However,
at 	the 	time 	of 	their 	applications, 	each 	was 	“currently 	employed” 	but 	not
“contributing.” 	Thus, at the time of their applications, they fell into a nonexistent
category because they fit neither of the categories of “member” defined in Section 10-
11-2(M). They did not fit the first category because they were no longer contributing
to PERA, and they did not fit the second category because they were still currently
employed.
{28} 	It would be absurd to conclude that Gonzales and Pino fell into a limbo status
not addressed by the Act. Consequently, we read into the definition of membership
the notion that one cannot be deemed a “currently employed” employee unless one is
also a “contributing” employee. See Bishop, 2009-NMSC-036, ¶ 9 (explaining that
where “adherence to the literal use of words would lead to injustice, absurdity or
contradiction, the statute will be construed according to its obvious spirit or reason,
even though this requires the rejection of words or the substitution of others” (internal
quotation marks and citation omitted)). 	In other words, a member is either “a
currently employed, contributing employee” or “a person who has been but is not [a]
currently employed[, contributing employee of] an affiliated public employer who has
not retired and who has not received a refund of member contributions.” Section 10-
11-2(M). 	This reading of the definition of “member” is consistent with the two

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categories of membership described in Section 10-11-10.1(C): 	(1) one who “is a
currently employed, contributing employee” and (2) one who “is not a currently
employed, contributing employee.” Section 10-11-10.1(C)(1), (2).
{29} 	With this in mind, it is clear that as of the date disability was incurred, both
Gonzales and Pino were currently employed, contributing employees and that as of
the date of their applications, they were not. 	Their status determines the extent of
incapacity each had to demonstrate in order to receive disability retirement benefits.
We therefore look for guideposts that can assist us in determining which date triggers
assessment of membership status.
{30} 	The applicable regulations articulate the objective of the Act’s disability
retirement scheme. 	“The intent of the Board in promulgating these rules is to
encourage continued employment of members while providing protection in cases of
disability.” 	2.80.1000.6 NMAC (12/28/00) (emphasis omitted). 	Viewing the Act
through this lens, we conclude that the operative date for determining a member’s
status for purposes of disability retirement benefits is the date disability is incurred.
{31} 	If the determinative date were the date of the member’s application for benefits,
a member would feel urgency about applying for benefits even before the member
knows the extent of his or her disability or the likelihood of permanency. 	For
example, in the case of Gonzales, he was injured in November 2000 but did not apply

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for benefits until January 2006. In the intervening five years, he received workers’
compensation benefits and exhausted his annual and sick leave. When he learned that
his public employer could not accommodate his physical limitations, he applied for
disability retirement benefits. 	At that point, although he was still technically an
employee of CYFD, he was no longer making PERA contributions because he was not
being paid. If his membership status was determined at the time of his application, he
would have to demonstrate the more onerous standard of incapacity for any gainful
employment. Consequently, he would reduce this burden of demonstrating eligibility
if he applied for benefits before he exhausted his leave while he was still making
PERA contributions. In other words, had he applied for benefits a year sooner than
he did, he likely could have demonstrated entitlement to benefits under the lesser
burden of Section 10-11-10.1(C)(1).
{32} 	Advocating such premature applications for disability retirement benefits is
contrary to the stated goal of “encourag[ing] continued employment of members while
providing protection in cases of disability.” 2.80.1000.6 NMAC. Indeed, tying the
assessment of membership status to the application date does just the opposite. 	It
encourages members to cut short their employment and seek disability benefits before
they are certain they will really need those benefits.
{33} 	By contrast, if a member’s status is assessed at the time disability is incurred,

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the member may remain an employee of a public employer, continue making
contributions, and access support avenues other than disability retirement benefits,
such as workers’ compensation or accrued leave, in the hope that the member can
regain the ability to return to work before circumstances compel the member to apply
for disability retirement benefits. This scenario is consistent with the intent articulated
in the regulations and protects the public fisc from premature and possibly
unnecessary payment of benefits.
{34} 	PERA maintains that if the Legislature had wanted to tie assessment of
membership status to the date disability was incurred, it would have used language
other than the present tense “is” and “is not” in Section 10-11-10.1(C) when referring
to the DRC’s review of applications. 	We are not persuaded. 	This kind of
hypertechnical scrutiny of a statute’s language is an example of the “overly simplistic
application of the plain-meaning rule” our Supreme Court cautioned against in Bishop,
2009-NMSC-036, ¶ 10. We conclude that Section 10-11-10.1(C) should instead be
interpreted so that it is consistent with the purpose of the Act’s disability retirement
provisions. We therefore hold that the applications of Gonzales and Pino should have
been evaluated according to their membership status at the time their respective
disabilities were incurred. Because the Board’s decision was not in accordance with
this interpretation of the Act, it must be reversed. See Talamante, 2006-NMCA-032,

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¶ 6 (explaining that appellate court may reverse an administrative decision if the board
or agency “did not act in accordance with [the] law” (alteration in original) (internal
quotation marks and citation omitted)).
Motion to Dismiss Gonzales Appeal
{35} 	After briefing was completed in this appeal, PERA filed a motion to dismiss
Gonzales’s appeal because he withdrew all of his PERA contributions in March 2007.
PERA contends that “[o]nly PERA members are eligible to receive PERA disability
retirement benefits” and that “even if [Gonzales] were to prevail in this matter, he
would not be eligible to receive the disability retirement benefits that is [sic] the basis
of his claim.” Gonzales responds that if his application for benefits, filed on August
5, 2005, had been granted, he would have been entitled to benefits for only one year
until August 2006. In other words, all of his benefits had accrued before he withdrew
his contributions.
{36} 	These issues are properly determined by the Board in the first instance because
they may involve factual disputes, and we remand for the Board’s consideration. To
the extent PERA contends that Gonzales’s claim is moot, we disagree. 	“A case is
moot when no actual controversy exists, and the court cannot grant actual relief.”
Gunaji v. Macias, 2001-NMSC-028, ¶ 9, 130 N.M. 734, 31 P.3d 1008 (internal
quotation marks and citation omitted). Given our reversal of the Board’s denial of

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benefits, if Gonzales is correct that his benefits accrued before he withdrew his
contributions, then he may be entitled to benefits. Thus, his claim is not moot. We
therefore deny PERA’s motion to dismiss Gonzales’s appeal.
CONCLUSION
{37} 	For the foregoing reasons, we reverse the district court’s judgment affirming
the Board’s denial of disability retirement benefits and remand for proceedings
consistent with this opinion.
{38} 	IT IS SO ORDERED.
CYNTHIA A. FRY, Chief Judge
WE CONCUR:
MICHAEL D. BUSTAMANTE, Judge
CELIA FOY CASTILLO, Judge