Baxter v. California State Teachers’ Retirement System

Teachers retired from the Salinas Unified High School District disputed attempts by the California State Teachers’ Retirement System (CalSTRS) to recoup retirement benefit overpayments caused by the District's years-long miscalculation, arguing that the statute of limitations barred recoupment of prior overpayments and reduction of future monthly benefits. An ALJ upheld CalSTRS’s conclusions, rejecting the statute of limitations defense. Teachers obtained a peremptory writ of administrative mandamus compelling CalSTRS to resume payments at the original amounts. The court of appeal reversed. Education Code section 22008(c) provides a three-year statute of limitations applicable for CalSTRS to bring an action to recoup the overpayments, commencing with its “discovery of the incorrect payment.” Discovery means the date CalSTRS actually discovered, or in the exercise of reasonable diligence should have discovered, the incorrect payment. August 18, 2005 was the date on which CalSTRS had inquiry notice of the overpayment issue; the action was commenced on July 6, 2012. Under the continuous accrual theory, the statute of limitations for periodic payments commenced with the due date of each payment. Only payments due more than three years prior to CalSTRS’s commencement of the action on July 6, 2012, were subject to the statute of limitations defense. View "Baxter v. California State Teachers' Retirement System" on Justia Law