Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dicarlo v. County of Monterey

California Court of Appeals, Sixth District

May 5, 2017

JOHN DICARLO et al., Plaintiffs and Appellants,
v.
COUNTY OF MONTEREY et al., Defendants and Respondents.

          Certified for publication 6/5/17

         Monterey County Superior Court Superior Court No.: M90970 Hon. Susan J. Matcham Judges, Hon. Robert A. O'Farrell Judges, Hon. Lydia M. Villarreal Judges, Hon. Thomas W. Wills Judges

          Attorneys for Plaintiffs and Appellants:, John DiCarlo, James Bass, Michael Shapiro, and Richard Perez, David E. Mastagni, Isaac Sean Stevens, Mastagni Holstedt APC

          Attorneys for Defendants and Respondents: County of MontereMichael R. Philippi, Deputy County Counsely, County of Monterey Sheriff's Office, Lew Bauman, and Michael Miller, Charles J. McKee, County Counsel, County of Monterey

          Attorneys for Defendants and Respondents: California Public Employees' System and CALPERS Board of Administration, Matthew G. Jacobs, General Counsel, Preet Kaur, Senior Staff Attorney CALPERS

          BAMATTRE-MANOUKIAN, J.

         I. INTRODUCTION

         Defendant County of Monterey entered into a memorandum of understanding (MOU) with the Monterey County Deputy Sheriffs Association (Sheriffs Association). The terms of the MOU included a longevity performance stipend that provided that a member of the Sheriffs Association who achieved 20 years of service with the County of Monterey and a satisfactory or outstanding performance evaluation could receive an additional stipend of up to eight percent. Plaintiffs are members of the Sheriffs Association who either received the longevity performance stipend prior to their retirement, are currently receiving the longevity performance stipend, or anticipate receiving it in the future.

         Plaintiffs brought the instant action against the County of Monterey and its Board of Supervisors (hereafter collectively the County), the County of Monterey Sheriff's Office (Sheriff's Department)[1] and individual defendants, and also against defendants California Public Employees Retirement System (CalPERS) and CalPERS's Board of Administration. Plaintiffs sought peremptory writs of mandamus to compel the County to report the longevity performance stipend to CalPERS as an item of special compensation and to compel CalPERS to include the longevity performance stipend in calculating their retirement benefits. The trial court ruled as a matter of law that the longevity performance stipend was not reportable to CalPERS as an item of special compensation under California Code of Regulations, title 2, section 571, subdivision (a), and granted the County's motion for summary adjudication of issues and CalPERS's motion for judgment on the pleadings.

         On appeal, plaintiffs contend that the trial court erred because California Code of Regulations, title 2, section 571, subdivision (a) is properly interpreted to include the longevity performance stipend as a reportable item of special compensation. We recognize the importance of this CalPERS retirement benefit issue to the plaintiffs. However, as we will further explain, under the rules governing the interpretation of statutes and regulations we determine that the longevity performance stipend does not qualify as an item of special compensation that must be reported to CalPERS and included in the calculation of plaintiffs' retirement benefits. Therefore, we will affirm the judgments in favor of the County and CalPERS.

         II. FACTUAL BACKGROUND

         In 2001 the County entered into a MOU with the Sheriffs Association. The terms of the MOU included a longevity performance stipend, which stated: “Effective the first full period after July 1, 2000, unit members who have earned twenty (20) years of County service shall be eligible to receive a performance stipend of four percent (4%) upon receiving a satisfactory performance evaluation. Employees shall be eligible to receive up to four percent (4%) additional stipend for outstanding performance.”

         A nearly identical longevity performance stipend was included in the 2006 to 2009 MOU, as follows: “Unit members who have earned twenty (20) years of County service shall be eligible to receive a performance stipend of four percent (4%) upon receiving a satisfactory performance evaluation. Employees shall be eligible to receive up to four percent (4%) additional stipend for outstanding performance.”[2]

         John DiCarlo and Richard Perez are retired peace officers who were employed by the County and the Sheriff's Department. DiCarlo retired in 2006 and Perez retired in 2002. Both DiCarlo and Perez were members of the Sheriffs Association. They each received a longevity performance stipend of eight percent during their employment with the Department.

         In 2008, James Bass and Michael Shapiro were employed as peace officers by the County and the Sheriff's Department. At that time Bass had 13 years of service with the Sheriff's Department. Shapiro was a member of the Sheriffs Association and began receiving an eight percent longevity performance stipend in 2007.

         CalPERS provides pension fund retirement services for employees of the County and the Sheriff's Department. The County has never reported the longevity performance stipend to CalPERS and therefore CalPERS has not included the longevity performance stipend as compensation in calculating the retirement benefits of the members of the Sheriffs Association.

         III. PROCEDURAL BACKGROUND

         A. Petition for Writ of Mandamus

         In 2008 DiCarlo, Perez, Bass, and Shapiro (hereafter collectively plaintiffs) filed a first amended verified petition for writ of mandamus on behalf of themselves and others similarly situated against defendants the County, the Sheriff's Department, Lew Bauman (County's chief administrative officer), and Michael Miller (County's auditor-controller). Plaintiffs also named as defendants CalPERS and CalPERS's Board of Administration (hereafter collectively CalPERS).

         Plaintiffs alleged that representatives of CalPERS had advised the County in 2006 that the longevity performance stipend provided in the MOU between the County and the Sheriffs Association should be reported to CalPERS. However, Miller, the County's auditor-controller, advised DiCarlo that the longevity performance stipend was not subject to reporting to CalPERS because it was a combined benefit.

         Attorneys for the Sheriffs Association corresponded with CalPERS regarding the longevity performance stipend and requested an opinion as to whether the County was required to report payment of the longevity performance stipend to CalPERS. CalPERS responded in 2007 that the longevity performance stipend was not reportable because it was not available to all members of the group or class, since not all employees would receive a satisfactory performance rating. CalPERS then denied the Sheriffs Association's demand for an appeal.

         Plaintiffs further alleged that the County had a ministerial duty to report the longevity performance stipend to CalPERS pursuant to California Code of Regulations, title 2, section 571, subdivision (a)(1)[3] as incentive pay and as longevity pay. Based on these allegations, plaintiffs stated several causes of action generally asserting that the County had a duty to report the longevity performance stipend and make the appropriate retirement contributions to CalPERS, and CalPERS was obligated to include the longevity performance stipends that plaintiffs had earned or would earn in the future in calculating their retirement benefits.

         As a remedy, plaintiffs sought writ relief. On behalf of DiCarlo and Perez and similarly situated retired class members, plaintiffs sought a peremptory writ of mandate compelling the County to retroactively and prospectively adjust their retirement contributions to include “all compensation earned as part of their ‘Longevity/Performance Stipend.' ”

         Plaintiffs also sought a peremptory writ of mandate on behalf of DiCarlo and Perez and similarly situated retired class members compelling CalPERS to retroactively and prospectively adjust their retirement contributions and benefits to include “all compensation earned as part of their ‘Longevity/Performance Stipend.' ”

         On behalf of Shapiro and similarly situated class members who were currently receiving the longevity performance stipend, plaintiffs sought peremptory writs of mandate to compel the County to report the longevity performance stipend to CalPERS, and to compel CalPERS to include the longevity performance stipend as compensation and retroactively and prospectively adjust their retirement contributions and benefits.

         On behalf of Bass and similarly situated class members who were approaching 20 years of service, plaintiffs sought peremptory writs of mandate to compel the County to prospectively report the longevity performance stipend they may earn to CalPERS, and to compel CalPERS to ensure that the County reported the longevity performance stipend and to include the longevity performance stipend in adjusting their retirement contributions and benefits.

         Further, plaintiffs sought a declaration that the County was obligated to report all longevity performance stipends being earned by Shapiro and other deputy sheriffs to CalPERS and to also report to CalPERS all longevity performance stipends that may be earned by Bass and other deputy sheriffs in the future.

         County demurred to the first amended verified petition for writ of mandate on the ground that plaintiffs had failed to state a cause of action as to plaintiff Bass and similarly situated class members because they would not be entitled to receive the longevity performance stipend before expiration of the 2006 to 2009 MOU. The trial court determined that plaintiffs' allegations showed that it was uncertain as to whether Bass would serve 20 years and whether an MOU including a longevity performance stipend term would be in effect at that time. For that reason, in the December 11, 2008 ruling the trial court sustained the demurrers to the sixth, seventh, and eighth causes of action as to Bass and any others similarly situated without leave to amend.

         B. The County's Motion for Summary Judgment or Summary Adjudication

         The County filed a motion for summary judgment or summary adjudication of issues on the ground that the longevity performance stipend did not qualify as special compensation that was required to be reported to CalPERS under California Code of Regulations, title 2, section 571, subdivision (a) (hereafter, section 571), and therefore the County was entitled to judgment as a matter of law. CalPERS filed a joinder to the motion for summary judgment.

         According to the County, the longevity performance stipend did not qualify as special compensation for several reasons: (1) the longevity performance stipend combined two elements, longevity and performance, into one stipend that was not included in section 571, subdivision (a)'s exclusive list of compensation items that qualify as reportable special compensation; (2) the longevity performance stipend required individualized, discretionary determinations and therefore was not available to all similarly situated members of the class, as required by Government Code section 20646, subdivision (c)(2)[4] and section 571, subdivision (b)(2); (3) determining that the longevity performance stipend qualified as special compensation at this late date would result in an unfunded liability for CalPERS; and (4) the County and employee representatives never agreed that the longevity performance stipend would be reported to CalPERS and included in CalPERS's retirement calculations.

         Plaintiffs opposed the motion for summary adjudication of issues, arguing that the County had a duty to report the longevity performance stipend as special compensation because it combined bonus pay and longevity pay, which are both listed as items of special compensation under section 571, subdivision (a). They pointed out that section 571 did not prohibit employers from combining two items of special compensation, and argued that any ambiguity in section 571 should be construed in favor of pensioners. Plaintiffs also rejected the County's contention that the longevity performance bonus was not available to all similarly situated members of the class, asserting that it was available to all employees who satisfied the condition precedents of 20 years of service and a satisfactory or outstanding performance evaluation.

         Further, plaintiffs argued that summary adjudication could not be granted because there were several factual disputes: (1) whether the longevity performance stipend would create an unfunded liability for CalPERS; (2) whether CalPERS considered the longevity performance stipend to be special compensation because CalPERS representatives had stated during discovery that the stipend was reportable to CalPERS as special compensation; and (3) the intent of the parties who negotiated the longevity performance stipend.

         C. Order Granting Summary Adjudication

         In a ruling filed on July 28, 2010, the trial court denied the motion for summary judgment because the County had not complied with California Rules of Court, rule 3.1350(b) with respect to its separate statement of facts and because CalPERS's filing of a mere joinder was improper. The trial court then issued a minute order dated August 19, 2010, in which the court denied the motion for summary adjudication of issues as to second, third, fourth and fifth ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.