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Valley v. South Atlantic Conference of Seventh-Day Adventist

Court of Appeals of Georgia, First Division

July 31, 2018

VALLEY
v.
SOUTH ATLANTIC CONFERENCE OF SEVENTH-DAY ADVENTIST.

          BARNES, P. J., MCMILLIAN and REESE, JJ.

          Barnes, Presiding Judge.

         In 2011, the trial court entered default judgment in favor of Plaintiff Clinton Valley in his declaratory judgment action against Defendant South Atlantic Conference of Seventh-day Adventist (the "South Atlantic Conference"), ruling that the South Atlantic Conference owed certain obligations to Valley under its retirement benefits plan based on verbal and written assurances that it had made to him. In 2016, Valley filed a motion for contempt sanctions against the South Atlantic Conference, arguing that it had failed to fulfill those obligations. The trial court denied Valley's motion, resulting in this appeal. For the reasons discuss below, we reverse the trial court's ruling on Valley's motion for contempt and remand for action consistent with this opinion.

         The record reflects that the global ministry of the Seventh-day Adventist Church is coordinated and governed by its General Conference and is further organized into several regional divisions and conferences. The South Atlantic Conference is a member of the North American Division of the General Conference (the "North American Division").

         Before January 1, 2000, the North American Division had a defined benefit retirement plan that was the primary source of retirement benefits for the employees of its regional conferences, including the South Atlantic Conference (the "NAD Retirement Plan"). After that date, the North Atlantic Division adopted a new defined contribution retirement plan, leading the South Atlantic Conference and several other regional conferences to establish their own defined benefit retirement plan for their employees, the Regional Conference Retirement Plan (the "Regional Retirement Plan"). An employee could vest in the Regional Retirement Plan by, among other things, completing five years of qualifying service.

         Valley served as a pastor in the South Atlantic Conference for approximately four years, from June 1999 through July 2003. Before his service in that conference, Valley served in the Seventh-day Adventist Church outside of the United States for over 24 years.

         Following Valley's service as a pastor in the South Atlantic Conference, a dispute arose between the parties as to whether Valley's prior years of service in the Seventh-day Adventist Church outside of the United States would be credited toward the Regional Retirement Plan when he sought to collect retirement benefits. As a result of the dispute, in March 2011, Valley brought a declaratory judgment action against the South Atlantic Conference in the State Court of Fulton County. Valley sought a declaration that the South Atlantic Conference was obligated to credit his prior years of service toward its Regional Retirement Program and had a duty to provide him retirement benefits.

         Valley's complaint alleged that based on his prior years of service in the Seventh-day Adventist Church outside of the United States, he qualified for retirement benefits under the NAD Retirement Plan when he transferred to the South Atlantic Conference. According to the complaint, however, Valley was advised by the South Atlantic Conference to waive his rights to receive any benefits in the NAD Retirement Plan so that he could participate in the South Atlantic Conference's newly established Regional Retirement Plan. In this regard, the complaint alleged that Valley received assurances from the South Atlantic Conference that his "prior years of service to the church would be honored in the . . . Regional Retirement . . . Plan," and that in reliance on those assurances, he signed a written waiver relinquishing his rights to receive any benefits in the NAD Retirement Plan and joined the Regional Retirement Plan. The complaint alleged that Valley thus "relied on [the South Atlantic Conference's] assurances and covenant to credit his prior service years towards the Regional Retirement Program to his detriment." Valley's written waiver of benefits in the NAD Retirement Plan was attached as an exhibit to the complaint. Also attached as an exhibit was a letter written by the Executive Secretary of the South Atlantic Conference memorializing the verbal assurances made to Valley and confirming that the Executive Committee of the South Atlantic Conference had voted to credit his prior years of service outside the United States toward the Regional Retirement Plan, such that Valley had 24 years and 11 months of credited service.

         The complaint further alleged that despite Valley's reliance on those assurances, the Executive Secretary of the South Atlantic Conference later sent a letter to Valley in March 2005 stating that the Regional Retirement Plan would "only cover [his] actual time spent at our conference" and would not credit his prior years of service in the Seventh-day Adventist Church outside of the United States. A copy of the letter was attached to the complaint. According to the complaint, all subsequent efforts by Valley to have the South Atlantic Conference "honor its agreement were rebuffed," such that an actual and justiciable controversy existed between the parties as to whether the South Atlantic Conference would be obligated to credit Valley's prior service years toward the Regional Retirement Plan when he applied for retirement benefits. Consequently, the complaint sought a declaration from the trial court that the South Atlantic Conference was obligated, based on its verbal and written assurances, to credit Valley's prior years of service towards its Regional Retirement Program and to provide him with retirement benefits based on the parties' understanding and the assurances that had been given.[1]

         In March 2011, the South Atlantic Conference was served with the summons and complaint seeking declaratory relief. Because the South Atlantic Conference did not timely file an answer to the complaint, [2] the declaratory judgment action went into automatic default under OCGA § 9-11-55 (a).[3] The South Atlantic Conference did not move to open the default as a matter of right within 15 days of the automatic default. See id. Subsequently, in May 2011, Valley filed a motion for entry of default judgment against the South Atlantic Conference pursuant to OCGA § 9-11-55 (a). That same month, after the South Atlantic Conference did not respond to Valley's motion, the trial court entered default judgment in favor of Valley and against the South Atlantic Conference. The trial court stated in the default judgment order that each and every item and paragraph of Valley's complaint was supported by proper evidence, and the trial court declared that the South Atlantic Conference was "obligated, based on its verbal and written assurances, to credit . . . Valley's prior service years towards the Regional Retirement Program" and "ha[d] a duty to provide [Valley] with retirement benefits based on the parties' understanding and [the South Atlantic Conference's] assurances." Nothing in the record shows that the South Atlantic Conference ever filed a motion to set aside the default judgment under OCGA § 9-11-60 (d), and the South Atlantic Conference does not contend otherwise on appeal.[4]

         In 2013, Valley contacted the South Atlantic Conference and sought to commence the payment of his retirement pension benefits. The South Atlantic Conference responded by seeking information and data from Valley that it contended was necessary to properly determine and calculate the amount of his retirement benefits, but ultimately, in June 2016, the South Atlantic Conference denied benefits to Valley on the ground that he did not meet the eligibility requirements of the Regional Retirement Plan. Specifically, the South Atlantic Conference contended that because Valley had only served for 43 months with the South Atlantic Conference, he fell short of the five years of qualifying service necessary to vest in the Regional Retirement Plan.

         In July 2016, Valley filed a motion for contempt against the South Atlantic Conference in the State Court of Fulton County, asserting that the South Atlantic Conference had refused to fulfill its obligations under the default judgment to credit his prior years of service with the Seventh-day Adventist Church outside of the United States toward the Regional Retirement Plan. Valley contended that the South Atlantic Conference had willfully failed to pay him any retirement benefits, despite the directives contained in the default judgment order, and even though he had provided the South Atlantic Conference with all of the documents it had requested to calculate his benefits. Valley requested that the trial court hold the South Atlantic Conference in willful contempt of the default judgment and sought sanctions and attorney fees.

         The South Atlantic Conference opposed the motion for contempt, contending that Valley was not entitled to retirement benefits because he did not have five years of qualifying service to vest in the Regional Retirement Plan. In July 2017, after conducting a hearing where the Executive Director of the Regional Retirement Plan and the former Executive Secretary of the South Atlantic Conference testified, the trial court denied Valley's motion for contempt. The trial court ruled that vesting in the Regional Retirement Plan could occur upon the completion of five years of qualifying service with a participating employer, but that Valley had only 4.2 years of service with the South Atlantic Conference, and the Regional Retirement Plan "does not give service credit for years worked outside the United States." Consequently, the trial court ruled that Valley had never vested in the Regional Retirement Plan and was not entitled to receive any retirement benefits from the South Atlantic Conference. On that basis, the trial court denied Valley's motion for contempt. The trial court made no reference to the default judgment it had previously entered.

         Valley now directly appeals from the trial court's order denying his motion for contempt.

         1. As an initial matter, the South Atlantic Conference has moved to dismiss Valley's direct appeal, contending that an appeal from an order denying a motion for contempt cannot be directly appealed as a "contempt case" under OCGA § 5-6-34 (a) (2)[5] and instead must be taken by application for interlocutory appeal under OCGA § 5-6-34 (b).[6] South Atlantic Conference relies on authority dismissing direct appeals from orders denying motions for contempt on the ground that the orders did not constitute final judgments and should have been appealed through this Court's interlocutory appeal procedure. See, e.g., Klein v. Standard Fire Ins. Co., 191 Ga.App. 417, 418 (382 S.E.2d 158) (1989); Commercial Bank v. Simmons, 157 Ga.App. 391, 391 (278 S.E.2d 53) (1981). Compare Hamilton Capital Group v. Equifax Credit Information Svcs., 266 Ga.App. 1, 2-3 (1) (596 S.E.2d 656) (2004) (OCGA § 5-6-34 (a) (2) permits a direct appeal from an interlocutory order holding a party in contempt).

         But, whether a trial court's order denying a motion for contempt is considered final or interlocutory turns on the particular facts and circumstances of the case. See Roberts v. Roberts, 206 Ga.App. 423, 423 (1) (425 S.E.2d 414) (1992) (appellant properly filed direct appeal from trial court's postjudgment order denying motion for contempt, where "nothing in the trial court's order reflects it is other than a final judgment"). And, we conclude that under the circumstances of this case, the trial court's ...


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