November 10, 2010 – Diane Wood v. State of New Mexico Educational Retirement Board, No. 29,680

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: November 10, 2010
NO. 29,680
DIANE WOOD,

Petitioner Appellee,
V.
STATE OF NEW MEXICO
EDUCATIONAL RETIREMENT
BOARD,

Respondent-A ppellant.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Daniel A. Sanchez, District Judge

Atkinson & Kelsey, P.A.
Thomas C. Montoya

Albuquerque, NM

for Appellee

Gary K. King, Attomey General

Andrea R. Buzzard, Assistant Attomey General
Santa Fe, NM

for Appellant

OPINION
VANZI, Judge.
{1} 	The State of New Mexico Educational Retirement Board (ERB) appeals from
an order of the district court directing the ERB to pay Petitioner the unpaid
accumulated interest in her deceased husband’s account under the Educational
Retirement Act (the Act), NMSA 1978, Sections 22-11-1 to -53 (1967, as amended
through 2010) at the time of his retirement. The district court concluded that the ERB
erred when it denied Petitioner the interest in the account and reversed the ERB’s
administrative order. 	The sole issue on appeal is whether the 1999 amendment to
Section 22-11-29(E) of the Act should be applied retroactively because it was simply
a “clarification” of the statute. 	We hold that the amendment to the statute applies
prospectively and reverse the district court.
BACKGROUND
{2} 	The following facts are undisputed. Petitioner Diane Wood is the widow of
Howard N. Rabinowitz. Mr. Rabinowitz was an employee under the Act and made
regular contributions to his retirement plan. In January 1998, Mr. Rabinowitz retired.
When an employee under the Act retires, he can choose to receive retirement benefits
under one of three provisions of the Act. Under Options B and C of Section 22-11-
29(A), a retiree receives a reduced annuity that continues upon death to the retiree’s

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designated beneficiary. 	Mr. Rabinowitz did not select either Option B or C but
instead elected to receive his benefits under Section 22-11-30 of the Act. Section 22-
11-30 is a single life annuity, which pays a higher monthly amount and which
terminates upon a retiree’s death.
{3} 	Mr. Rabinowitz received pension payments for seven months until his death on
July 11, 1998. Because he died before receiving benefits equaling the total amount
of his contributions plus interest, Mr. Rabinowitz’s designated refund beneficiary was
entitled to the balance of his accumulated contributions pursuant to the Act. Section
22-11-29(E). 	The 	ERB 	paid 	Petitioner 	the 	principal 	amount 	of 	retirement
contributions left in Mr. Rabinowitz’s account to which she was entitled, not including
interest.
{4} 	On September 23, 1998, Petitioner wrote a letter to the ERB requesting that the
ERB pay the interest amount to her to which she claimed she was entitled. The deputy
director of the ERB responded that, based on ERB policy, which mirrored the
applicable provision of the Act in effect at the time, § 22-11-29(E), Petitioner was not
entitled to the interest accumulated in Mr. Rabinowitz’s account.
{5} 	Subsequently, in June 1999, the Legislature amended Section 22-11-29(E) to
require the payment of accumulated interest to designated beneficiaries at the average
rate earned by the fund during the preceding five fiscal years. 	The statute was
amended again in 2003 and still requires the payment of accumulated interest but at

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a rate set by the ERB rather than at the previous average rate earned by the fund.
{6} 	Petitioner wrote to the ERB in September 2000 requesting that the ERB apply
the 1999 amendment to Section 22-11-29(E) to pay her the claimed share of the
interest in Mr. Rabinowitz’s account at the time of his retirement. Petitioner asserted
that, because the 1999 amendment was merely a clarification of the predecessor law,
it should operate retroactively to require that the ERB pay interest to her. The ERB
disagreed and responded that its interpretation of the statute was that it applied
prospectively only and that the Legislature did not intend that someone in Petitioner’s
shoes should receive interest on accumulated contributions. 	Petitioner filed suit
against the ERB in the district court.
{7} 	In Wood v. State of New Mexico Educational Retirement Board, No. 29,699,
slip op. at 2 (N.M. Sup. Ct. Apr. 10, 2007), the New Mexico Supreme Court in a
decision noted that a question of statutory construction exists as to whether the
legislative amendment applies to Petitioner. However, the Court determined that the
ERB should first decide the question by way of an administrative appeal instead of
through the district court because the issue involves “matters of fact and policy that
are peculiarly within the scope of the ERB’s statutory function.” 	Pursuant to the
decision, Petitioner requested an appeals hearing.
{8} 	At the administrative hearing, Petitioner again argued that amendment of the
statute was for “clarification” purposes and should be given retroactive effect. The

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hearing officer disagreed, and in his recommended decision filed November 12, 2007,
concluded that “the plain language of the original statute does not require interest and
the plain language of the amended statute does not expressly provide for retroactive
application to [Petitioner] and those similarly situated, and there is no requirement to
go beyond the plain language of the statute in resolving the administrative appeal.”
The hearing officer also noted that the fiscal impact of retroactive application was
never presented to the Legislature, and concluded that this was because of the
prospective interpretation of the statute. The hearing officer’s decision was approved
by the ERB in an order dated February 26, 2008.
{9} 	Pursuant to Rule 1-075 NMRA and the decision of the Supreme Court,
Petitioner filed a petition for writ of certiorari in the First Judicial District Court
seeking review of the ERB’s decision and order. 	The district court reversed the
ERB’s decision, finding that the right to interest implicitly existed in the original
version of the statute. As a result, the district court found that the 1999 amendment
was “merely a clarification of the predecessor law and that the provision should
therefore have been applied retroactively.” This appeal timely followed.
STANDARD OF REVIEW
{10} 	We granted the ERB’s petition for writ of certiorari to review the district court’s
decision pursuant to Rule 12-505(J) NMRA. It is well settled that on certiorari in an

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administrative 	appeal 	of 	this 	type, 	“[w]e 	‘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.’” Gallup
Westside Dev., LLC v. City of Gallup, 2004-NMCA-010, ¶ 10, 135 N.M. 30, 84 P.3d
78 (quoting Rio Grande Chapter of the Sierra Club v. N.M. Mining Comm’n, 2003-
NMSC-005, ¶ 16, 133 N.M. 97, 61 P.3d 806). Under this standard, “we independently
review the entire record of the administrative hearing to determine whether the
[ERB’s] decision was arbitrary and capricious, not supported by substantial evidence,
or otherwise not in accordance with law.” Martinez v. N.M. State Eng’r Office, 2000-
NMCA-074, ¶ 31, 129 N.M. 413, 9 P.3d 657; see Rule 1-075(R). Finally, we review
any legal interpretations of the district court de novo. Gallup Westside, 2004-NMCA-
010, ¶ 11.
DISCUSSION
{11} 	The ERB argues that the district court erred in ruling that the 1999 amendment
to Section 22-11-29(E) was merely a clarification of the law and that the statute
should be given retroactive application. We begin with a discussion of the statute as
it existed at the time of Mr. Rabinowitz’s retirement and death. We then turn to the
1999 amendment to determine whether it has prospective or retroactive application.
The Pre-1999 Version of Section 22-11-29(E) Did Not Provide for Interest
{12} 	Interpreting a statute is a question of law; therefore, our review is de novo.

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Meyers v. W. Auto, 2002-NMCA-089, ¶ 13, 132 N.M. 675, 54 P.3d 79. Our goal is
to give primary effect to the intent of the Legislature. Id. Our courts have repeatedly
stated that the guiding principle in statutory construction requires that we look to the
wording of the statute and attempt to apply “the plain meaning rule, recognizing that
when a statute contains language which is clear and unambiguous, we must give effect
to that language and refrain from further statutory interpretation.” Truong v. Allstate
Ins. Co., 2010-NMSC-009, ¶ 37, 147 N.M. 583, 227 P.3d 73 (alteration omitted)
(internal quotation marks and citation omitted); State v. Johnson, 2009-NMSC-049,
¶ 10, 147 N.M. 177, 218 P.3d 863 (“The primary indicator of legislative intent is the
plain language of the statute.”). Moreover, unless the Legislature expresses a contrary
intent, we are to give statutory words “their ordinary meaning,” and this Court is
prohibited from reading “into a statute . . . language which is not there, particularly
if it makes sense as written.” 	Johnson v. N.M. Oil Conservation Comm’n, 1999-
NMSC-021, ¶ 27, 127 N.M. 120, 978 P.2d 327 (internal quotation marks and citation
omitted). The Legislature itself has codified the plain meaning rule in the Uniform
Statute and Rule Construction Act: 	“The text of a statute or rule is the primary,
essential source of its meaning.” NMSA 1978, § 12-2A-19 (1997).
{13} 	As we have noted, when Mr. Rabinowitz passed away in July 1998, he had not
received retirement benefits in an amount equal to the amount of contributions that he
had paid into the fund. Consequently, and consistent with its long-standing policy and

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interpretation of Section 22-1-29(E), the ERB determined that Mr. Rabinowitz’s
designated refund beneficiary was entitled to the difference between the amount of his
contributions to the fund and the amount of benefits paid to him, less interest. At the
time, Section 22-11-29(E) (1993) provided:
In the case of death of a retired member who did not elect either Option
B or C and before the benefits paid to him have equaled the amount of
his accumulated contributions to the fund, the balance shall be paid to
the beneficiary designated in writing to the director by the member or,
if no beneficiary was designated, to the estate of the member.
{14} 	We begin with the plain language of Section 22-11-29(E) to ascertain the
legislative intent. We first observe that nowhere in the plain language of Section 22-
11-29(E) does it explicitly state that interest is to be paid to a retiree’s designated
beneficiary. Indeed, neither the parties nor the district court dispute this fact.
{15} 	Although the district court acknowledged that the plain language in Section 22-
11-29(E) as it existed in 1998 did not provide for the payment of interest, it
nevertheless 	found 	that 	such 	payment 	is 	implicitly 	required 	in 	the 	statute.
Specifically, the district court concluded that “interrelated legislative histories indicate
that a right to interest implicitly existed before Subsection E of Section 22-11-29 was
amended in 1999.” The court first compared the Educational Retirement Act, Sections
22-11-1 to -53, the Public Employees Retirement Act (PERA), NMSA 1978, Sections
10-11-1 to -142 (1987, as amended through 2010), the Judicial Retirement Act (JRA),
NMSA 1978, Section 10-12B-2(M) (2003) (defining member contribution to include

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interest), and the Magistrate Retirement Act (MRA), NMSA 1978, Section 10-12C-
2(J) (2003) (also defining member contribution to include interest) (collectively,
PERA and PERA-related statutes). It then reasoned that, because some ERA statutes
and all of the PERA and PERA-related statutes have express provisions for paying the
balances of accumulated member contributions, including interest, the Legislature
must have intended—but presumably forgot—to allow the payment of interest under
Section 22-11-29(E) as well. We are not persuaded by the district court’s analysis.
{16} 	As our precedents dictate, only where a plain language analysis does not
provide a clear interpretation can we “look to other statutes in pari materia in order to
determine legislative intent.” 	United Rentals Nw., Inc. v. Yearout Mech., Inc.,
2010-NMSC-030, ¶ 22, 148 N.M. 426, 237 P.3d 728 (internal quotation marks and
citation omitted). 	This approach “has the greatest probative force in the case of
statutes relating to the same subject matter passed at the same session of the
Legislature.” State v. Davis, 2003-NMSC-022, ¶ 12, 134 N.M. 172, 74 P.3d 1064.
{17} 	Our reading of Section 22-11-29(E) leads to the inexorable conclusion that
although the statute does not expressly prohibit the payment of interest, the plain
language is clear and unambiguous about whether the balance of accumulated
contributions includes the payment of interest. It does not. Further, the ERB’s long-
standing method of calculating benefits under Section 22-11-29(E)—i.e., subtracting
the amount in pension benefits paid by the ERB to a member before his death, from

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the member’s total contributions to the fund—is a reasonable and common sense
construction of the statute as it is written. There is no indication that the payment of
interest is part of the statutory requirement, and we cannot read into the statute any
meaning other than what is stated in the plain language.
{18} 	Moreover, we note that the Legislature has expressly included the right to
interest payment in other statutory provisions of the Act. 	See, e.g., § 22-11-15(A)
(stating that a member is entitled to a refund of contributions plus interest); § 22-11-
29(D) (stating that a surviving beneficiary of deceased member who has not retired
may elect to receive contributions plus interest); § 22-11-29(G) (stating that a
surviving beneficiary, or if there is none, the estate of deceased member with less than
five years service credit is entitled to contributions plus interest). This Court assumes
that the Legislature was fully aware of the language in all of the Act’s statutory
provisions when it enacted Section 22-11-29(E) and that it specifically chose not to
require the payment of accumulated interest under the provision at issue. See Jicarilla
Apache Nation v. Rodarte, 2004-NMSC-035, ¶ 15, 136 N.M. 630, 103 P.3d 554 (“We
presume that the Legislature acts with full knowledge of, and consistent with, existing
legislation.”). Importantly, we are mindful that we should not read language into the
statute simply because we believe the Legislature would have wanted the language
there but for some reason forgot to add it.
{19} 	We conclude that there was no ambiguity in Section 22-11-29(E) prior to the

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1999 amendment. Consistent with our rules of statutory construction and case law,
therefore, we refrain from any further statutory interpretation and apply the language
in the statute as written.
The 1999 and 2003 Amendments to Section 22-11-29(E) Have Prospective
Application Only
{20} 	Having concluded that the pre-1999 version of Section 29-11-29(E) plainly did
not provide for payment of interest, we now turn to the 1999 amendment to the Act.
The ERB contends that the district court erred in finding that the amendment is a
clarification of the original statute. Instead, the ERB argues that the amendment is a
change of law requiring prospective application only. We agree.
{21} 	As we have noted, interpretation of a statute is a question of law that we review
de novo. Meyers, 2002-NMCA-089, ¶ 13. “[T]he general rule is that statutes apply
prospectively unless the Legislature manifests clear intent to the contrary.” Gallegos
v. Pueblo of Tesuque, 2002-NMSC-012, ¶ 33, 132 N.M. 207, 46 P.3d 668; see also
NMSA 1978, § 12-2A-8 (1997) (“A statute or rule operates prospectively only unless
the statute or rule expressly provides otherwise or its context requires that it operate
retrospectively.”). 	Our Supreme Court has further provided that the adoption of a
statutory amendment “is presumptive evidence of a legislative intention to change
existing law.” Rutherford v. Chaves County, 2003-NMSC-010, ¶ 21, 133 N.M. 756,
69 P.3d 1199. On the other hand, a statute or regulation is considered retroactive if

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it impairs vested rights acquired under prior law or requires new obligations, imposes
new duties, or affixes new disabilities to past transactions. 	See Coleman v. United
Eng’rs & Constructors, Inc., 118 N.M. 47, 52, 878 P.2d 996, 1001 (1994).
{22} 	Section 22-11-29(E) was amended in 1999 by House Bill 353. The amended
statute provided:
In the case of death of a retired member who did not elect either Option
B or C and before the benefits paid to him have equaled the sum of his
accumulated contributions to the fund plus accumulated interest at the
average rate earned by the fund during the preceding five fiscal years,
the balance shall be paid to the beneficiary designated in writing to the
director by the member or, if no beneficiary was designated, to the estate
of the member.
(Emphasis added.)
{23} 	The statute was subsequently amended again in 2003 and now reads:
In the case of death of a retired member who did not elect either Option
B or C of Subsection A of this section and before the benefits paid to
him have equaled the sum of his accumulated contributions to the fund
plus accumulated interest at the rate set by the board, the balance shall
be paid to the beneficiary designated in writing to the director by the
member or, if no beneficiary was designated, to the estate of the member.
Section 22-11-29(E) (emphasis added).
{24} 	The 2003 amendment is not at issue in this case. However, we include both
amendments here to highlight the fact that the Legislature did not expressly provide
in either amendment that the newly enacted right to interest payment was to have
retroactive application. Again, neither the parties nor the district court dispute this

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fact.
{25} 	Nevertheless, relying on Swink v. Fingado, 115 N.M. 275, 284, 850 P.2d 978,
987 (1993), the district court found that the 1999 amendment to Section 22-11-29(E)
merely clarified existing law and, therefore, should have retroactive application. See
Swink, 115 N.M. at 284-85, 850 P.2d at 987-88 (stating that “a statute which clarifies
existing law may properly be regarded as having retroactive effect”). This Court has
explained that a clarification occurs when, rather than amending an existing law to
provide a change, a statutory provision is amended to clarify what was previously
implicit in the law. See Piña v. Gruy Petroleum Mgmt. Co., 2006-NMCA-063, ¶ 22,
139 N.M. 619, 136 P.3d 1029.
{26} 	As we have discussed in the previous section, the district court looked to other
statutorily-created retirement provisions to find that the right to interest in Section 22-
11-29(E) implicitly existed prior to the 1999 amendment. Based on that implicit right,
the district court stated that it could not “read an unwritten intention into the statutory
scheme,” but that in this case, “the intent to clarify an existing right by enacting the
1999 amendment is unavoidable when the amendment to Section 22-11-29[(E)] is
read together with sister provisions that preceded the 1999 amendment.” Therefore,
the district court concluded, this “clarification” must be given retroactive effect. For
the reasons we have discussed above, we do not agree with the district court’s
characterization of the pre-1999 version of the statute. Rather, we determine that the

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1999 	amendment 	added 	a 	new 	requirement 	to 	the 	statute—the 	payment 	of
accumulated interest. This new requirement and the explanation of how interest was
to be calculated was plainly not inherent in the pre-amendment statute.
{27} 	Again, we presume that the Legislature, when it enacted the 1999 and 2003
amendments, was aware that other provisions of the ERA provided for payment of
interest. Had the Legislature intended to simply correct an existing oversight in the
law, or clarify what the law was always meant to say, it should have expressly
provided for retroactive application in the amendment’s text. 	Herrera v. Quality
Imps., 1999-NMCA-140, ¶ 8, 128 N.M. 300, 992 P.2d 313 (stating that the
“Legislature is presumed to know of existing law when it enacts legislation” (internal
quotation marks and citation omitted)).
{28} 	Given the Legislature’s presumed knowledge of our canons of statutory
interpretation, its silence on the question of retroactivity with regard to the 1999
amendment, and our determination that no implicit right to interest exists in the pre-
1999 version of Section 22-11-29(E), we conclude that the amendment must apply
prospectively only.
CONCLUSION
{29} 	We hold that the 1999 amendment to Section 22-11-29(E) cannot be applied
retroactively. We reverse the decision of the district court.
{30} 	IT IS SO ORDERED.

WE CONCUR:

LINDA M. VANZI, Judge

JAMES J. WECHSLER, Judge

MICHAEL D. BUSTAMANTE, Judge

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