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Chaidez v. Board of Administration of California Public Employees' Retirement System

California Court of Appeal, Third District

February 3, 2014

Leonard Chaidez et al., Plaintiffs and Appellants,
v.
Board of Administration of California Public Employees' Retirement System et al., Defendants and Respondents.

[DEPUBLISHED BY ORDER]

[CERTIFIED FOR PARTIAL PUBLICATION[*]]

Editorial Note:

This opinion is published in the advance at this citation, Chaidez v. Board of Administration of California Public Employees' Retirement System, 167 Cal.Rptr.3d 587, was withdrawn from the bound volume and republished. For republished opinion, see 2014 WL 1067328.

APPEAL from a judgment of the Superior Court of Sacramento County No. 07CS01248, Michael P. Kenny, Judge.

COUNSEL

Law Offices of John Michael Jensen and John Michael Jensen for Plaintiffs and Appellants.

Peter H. Mixon and Wesley E. Kennedy for Defendants and Respondents.

OPINION

MAURO, J.

Plaintiff Leonard Chaidez worked as a full-time employee for plaintiff City of Hawaiian Gardens (the City) from 1988 until 1997, ultimately earning $7, 374 per month as city administrator. Chaidez became a “miscellaneous” member of the Public Employees’ Retirement System (PERS) during that employment. Later, Chaidez served as an elected member of the City Council of Hawaiian Gardens from 1999 until 2007, receiving compensation of $721.85 per month, during which time he became an “optional” member of PERS.

Chaidez thought his retirement benefits would be based on his highest salary (his city administrator salary) multiplied by all his years of service, including his years on the city council. But respondent Board of Administration of PERS (the Board) determined that while Government Code sections 20037 and 20042[1] governed the calculation of Chaidez’s time as a City employee, his time as an elected official was instead governed by section 20039.[2] Accordingly, the Board determined that the statutory scheme required PERS to calculate Chaidez’s retirement benefits on a bifurcated basis: his time as a City employee would be calculated using his highest employee salary, and his time on the city council would be calculated separately using his highest compensation as an elected official. The bifurcated calculation resulted in retirement benefits that were lower than Chaidez had expected.

Chaidez and the City filed petitions for writ of administrative mandamus (Code Civ. Proc., § 1094.5) and writ of mandate (Code Civ. Proc., § 1085) in the trial court, challenging the Board’s determination. After numerous demurrers and amended pleadings, the trial court ultimately entered judgment in favor of the Board.

Chaidez and the City assert on appeal that Chaidez is entitled to higher pension benefits because PERS did not timely inform him of the bifurcated calculations required by section 20039. Specifically, Chaidez and the City contend (1) PERS has a constitutional fiduciary duty to provide information to its members, and that duty trumps statutory requirements; (2) PERS is equitably estopped from applying section 20039; (3) section 815.6 negates any governmental immunity derived from section 818.8; and (4) the trial court erred in dismissing their constitutional challenge to section 20039.[3]

The contentions lack merit. In the published portion of this opinion, we conclude the calculation of pension benefits is governed by statute, and Chaidez is only entitled to the retirement benefits he actually earned. On this record, nothing in the California Constitution bars PERS from applying the governing statutes in a bifurcated manner to calculate Chaidez’s retirement benefits. In the unpublished portion of this opinion, we conclude the doctrine of equitable ...


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