Industrial Indemnity Co. v. Teachers' Retirement Board

*95 Opinion

The Teachers’ Retirement Board and its chief executive officer appeal from a summary judgment in favor of respondent Industrial Indemnity Company, determining the status in relation to teachers’ retirement benefits of payments received by a retired teacher under a certain group accident and health insurance policy purchased by the Grossmont Union High School District. We affirm the judgment.

On November 1, 1970, Industrial Indemnity Company issued a group disability policy to the Grossmont Union High School District. The premiums for the policy were paid from salary funds budgeted by the school district, but were remitted directly to Industrial Indemnity by the school district. The policy provides for disability benefits for all permanent, active, full-time salaried employees. Monthly benefits up to $1,000 are payable to age 65 in an amount equal to 66% percent of the employee’s monthly salary. The policy contains the following integration clause: “Integration—benefits provided will be reduced by any amounts paid or payable under the disability or retirement provisions of the Social Security Act (including any payments for eligible dependents) any Workmen’s…

I respectfully dissent. I agree with all of the conclusions expressed in the text of the majority opinion down to and including its footnote No. 5, but not thereafter. Specifically, I do not agree that the operation of former Education Code sections 22136 and 24102, on and after July 1, 1972, had an invalid “retroactive effect” upon respondent Industrial Indemnity Company’s contractual obligation to Hazel Bole as it stood at that time. I am not persuaded, moreover, that the case presents any issues of statutory retroactivity or constitutionality.

At all times since Ms. Bole’s disability commenced on December 12, 1971, Industrial has been contractually obligated to make disability benefit payments to her (1) which are scheduled in its insurance policy up to a maximum of $1,000 per month but (2) which the policy’s so-called “integration clause” reduces by the amounts of specified parallel benefits “paid or payable” to her, including “any Disability or income benefits provided by or through . . . [her] . employer.” 1 The last-quoted provision operates to reduce Industrial’s payments to Ms. Bole by the offsetting amounts she is receiving from STRS.

However, the offsetting amounts of…