TRS Board denies all motions, date for contested hearing not yet set

The Teachers Retirement System Board recently denied motions for summary judgment filed by the Ennis School District, former superintendent Doug Walsh and the Teachers Retirement System.

In a decision dated Feb. 8, the board denied a motion from Walsh and the school district to limit claims made by TRS to only go back to 2009.

In 2011, the TRS board issued a decision claiming that Walsh hadn’t properly retired in 2001 and that he had been receiving retirement benefits for which he wasn’t eligible. The board also found the school district owed TRS their share of Walsh’s retirement benefits dating back to 2001. Both Walsh and the school district are appealing the decision.

Walsh and the District had filed a motion requesting summary judgment limiting claims by TRS to two years before the Sept. 7, 2011, notification of the contested case hearing.

The motion requesting summary judgment filed by TRS argued that no statute of limitations applies to their claims to recover benefits collected by Walsh following his alleged retirement in 2001, when he began working as a third time superintendent and two-thirds time independent consultant.

The TRS Board recognized the two-year statute of limitation set forth in MCA 27-2-211 and that the statute is not applicable if it is proven that a defendant has engaged in fraudulent concealment to prevent a plaintiff from discovering a cause of action.

The TRS Board’s decision cites several material facts in the case to support going back to 2001, including a lack of documentation of Walsh’s status as an independent contractor and consultant contracts for two-thirds of his final salary rather than a salary for specific services and duties performed during the period when he allegedly worked for the District as a consultant.

According to Dave Senn, Executive Director of the Teachers Retirement System, TRS ‘may’ have the potential to go back beyond the two-year statute of limitation but that they are a long way from any decisions at this point.

“They denied each of the motions and now the issues will be presented to the Teachers Retirement Board in a contested case hearing,” Senn explained.  “Each side will have the opportunity they deserve to present and argue their position.”

Senn also confirmed that the TRS board will make the final determination and that any of the three parties could appeal that decision.  The hearing schedule has not yet been issued.

At their February meeting, the Ennis School Board discussed the direction in which they should proceed with the matter. Superintendent John Overstreet suggested consulting the Ennis School District’s attorney Elizabeth Kaleva to discuss further options. While Board trustees Bill Clark and Mike McKitrick agreed with Overstreet, trustee Craig George encouraged the board to move forward and made a motion to authorize Kaleva to negotiate a settlement agreement with TRS but the motion failed.

“We’re back exactly where we were two years ago,” said George. “I don’t see where this Board needs any more from Ms. Kaleva as far as arguing legal points as to when the statute of limitations go.”

When asked about the issue, Elizabeth Kaleva explained that the TRS Board recognized the two-year statue of limitations and that TRS will have to prove if there was Fraudulent Concealment.

“We haven’t done any investigating and I don’t know what the board’s next step is going to be,” she said. “Mr. George has made his opinion clear that he wants to settle and that may be what the school board chooses to do, but the school board as a whole needs to explore that. If the board wants to settle it, that’s their choice.  If they choose not to, that’s also their choice.”

The discussion was tabled and the board scheduled an open meeting with Kaleva for Tuesday, Feb. 26.

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