LCW Partner Morin Jacob and Associate Attorney Anthony Risucci prevailed on behalf of a city in a lawsuit brought by a retired fire captain. The lawsuit was dismissed at the outset of the case because of LCW’s successful demurrer.
The captain was on an approved disability leave prior to his retirement. While he was on leave, the city and the firefighters’ union were negotiating a new Memorandum of Understanding (MOU). The captain retired in June 2018. Approximately six months later, the city council approved the MOU. The MOU gave a retroactive pay increase of 2.5% for all firefighters employed on or after December 17, 2017.
The retired captain claimed in his lawsuit that he was entitled to the retroactive pay increase for the time he was on disability prior to retiring in 2018. He also claimed that the retroactive compensation would have increased his final compensation for purposes of determining his CalPERS pension benefits, as his pension was based upon a percentage of his three highest years of compensation.
The captain’s lawsuit had a single claim for declaratory relief. The captain sought an order from the court that would require the city to report his final compensation to CalPERS in a manner that reflected the retroactive 2.5% pay increase. The city demurred on three grounds: (1) failure to exhaust administrative remedies available through the CalPERS Board of Administration; (2) failure to follow pre-litigation procedures under the Government Claims Act; and (3) the claim was unsuitable for declaratory relief, as it sought to correct past conduct and was more properly asserted as a breach of contract cause of action.
The court sustained the demurrer based on the first and third arguments. The Court did not address the Government Claims Act because the other two arguments were dispositive.
In its ruling, the court reasoned that the CalPERS Board of Administration has the power to both correct errors and omissions of contracting agencies, and the ultimate authority to calculate a beneficiary’s “final compensation.” As a result, the retired captain was first required to exhaust his CalPERS administrative remedies by appealing the city’s decision to deny him the MOU retroactive pay increase to the CalPERS Board of Administration. The court also declined to exercise its power to provide equitable relief because the purpose of declaratory relief is to prevent future wrongs. The city’s decision to exclude the captain from a pay increase in 2018 was a past wrong, albeit with future implications, and was a fully accrued cause of action for a breach of contract claim.
After the court’s decision, the retired captain elected to dismiss the complaint with prejudice. This result allowed the city to avoid the time and expense of pre-trial discovery.
Note:
By convincing the court at the outset of this case that the claim had no legal merit, LCW was able to quickly end this litigation. Agencies can count on LCW attorneys to apply their deep knowledge of employment law and litigation procedures to minimize the costs of litigation.
