Hittle v. Santa Barbara County Employees Retirement Assn.

• Decision Date: 05 August 1985
• Docket Number: No. 31931,No. L,L,31931
• Citation: 216 Cal.Rptr. 733,703 P.2d 73,39 Cal.3d 374
• Court: California Supreme Court
• Parties: , 703 P.2d 73 William T. HITTLE, Plaintiff and Appellant, v. SANTA BARBARA COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Defendant and Respondent. A.

Page 733

216 Cal.Rptr. 733

39 Cal.3d 374, 703 P.2d 73

William T. HITTLE, Plaintiff and Appellant, v. SANTA BARBARA COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Defendant and Respondent.

No. L.A. No. 31931.

Supreme Court of California.

Aug. 5, 1985.

James R. Christiansen, Ronald E. Williford and Haws, Record & Williford, Santa Barbara, for plaintiff and appellant.

Adrian Kuyper, Santa Ana, and Kenneth L. Nelson, County Counsel, and William R. Allen, Deputy County Counsel, Santa Barbara, for defendant and respondent.

Adrian Kuyper, County Counsel (Orange), and Donald H. Rubin, Deputy County Counsel, Santa Ana, as amici curiae for defendant and respondent.

REYNOSO, Justice.

We are asked to decide whether the decision of the Santa Barbara County Employees Retirement Association (hereafter SBCERA or Association) denying the request of William T. Hittle to be reinstated as a member of the Association for purposes of seeking disability retirement was properly upheld by the Santa Barbara County Superior Court. Specifically, we must decide whether Hittle waived his right to apply for disability retirement upon the withdrawal of his retirement contributions from the Association, and whether his petition for writ of mandate before the trial court was timely filed.

While it is well established that a county employee may apply for disability retirement only if he or she is a member of the county employees' retirement association (see Gov.Code, § 31720 et seq.; Dodosh v. County of Orange (1981) 127 Cal.App.3d 936, 179 Cal.Rptr. 804), we conclude that the termination of such membership by the withdrawal of retirement contributions can be enforced only upon a showing that the decision was an informed one. We also conclude that Hittle's petition for writ of mandate was timely filed.

I.

Hittle began his employment as a heavy truck operator with the Santa Barbara County Public Works Department in July 1977. He became a member of the Association the following month. (See Gov.Code, § 31552.)

In September 1977, Hittle sustained a lower back injury while at work when he slipped as he dismounted from his truck. ¹ His treating chiropractor, Dr. Richard Bluhm, authorized him to return to work on June 21, 1978. However, within a week, on June 28, 1978, a second chiropractor, Dr. Ronald Kemp, recommended to Hittle that he not return to work until the last part of August, when he would be reexamined. On August 14, 1978, an orthopedic surgeon, Dr. W. Gordon Smith, reported to Hittle's attorney that Hittle was "[a]t the present time ... totally disabled as a direct result of his industrial injury of September 21, 1977." The following Meanwhile, Hittle had not reported for work after Dr. Bluhm's authorization, nor responded to a notice that his absence following this authorization provided grounds for termination under the county's civil service rules. SBCERA thereafter sent Hittle two form letters, in August and September 1978, notifying him that his contributions ($187.49) would revert to the retirement system fund after five years if he failed to provide for their disposition. These letters provided in full:

month, on September 8, 1978, a doctor employed by Santa Barbara County, Dr. Dean Smith, reported to Santa Barbara County Special Services ² that "as strenuous as [Hittle] described his work as a truck driver, it would be unrealistic to think that he would ever be able to return to that occupation." ³

"According to our records, you have terminated your full time employment and have money on deposit with the Santa Barbara County Employees Retirement Association. [p] Unless you file an allowable deferred retirement election, you must claim a refund of your contributions and interest within 5 years from the date of this notice, or such money will be deposited in and become a part of the fund of the retirement system. Thereafter, the fund shall not be liable to you for any portion of your contributions and interest. [p] Enclosed is a form for your use in advising us as to the disposition of your retirement account. Please complete and return promptly. Contact our office if any additional information is required." (Emphasis added.)

The first of these letters was dated August 22, 1978, and enclosed a form entitled "Disposition of Retirement Contribution." Consistent with the letter, this form provided two options: (1) withdrawal from SBCERA and a complete refund of contributions and interest, or (2) for employees who had at least five years service or were transferring to a reciprocating retirement system, a deferred retirement election.

The second letter was dated September 29, 1978, three weeks after Santa Barbara County Special Services had received Dr. Dean Smith's letter indicating that it would be unrealistic for Hittle to return to his job. This second form letter bore the following handwritten notation: "Dear Mr. Hittle--if you have filed or intend to file for disability retirement you should not withdraw the above contribution. C. Bolt." (Emphasis added.) The option of filing for disability retirement was not set forth on the form entitled "Disposition of Retirement Contribution."

Limiting himself to the options provided on the "Disposition of Retirement Contribution" form, Hittle requested a refund of his retirement contributions by so indicating on the form, which he executed on October 4, 1978. Hittle received a warrant refunding him the amount of $187.49 on October 12, 1978.

Two and one-half years later, Hittle learned that he may have been eligible for disability retirement at the time he withdrew his contributions. On March 17, 1981, his attorney submitted a disability retirement application to SBCERA on Hittle's behalf. Apparently receiving no response, Hittle's attorney wrote to the county personnel director on June 1, 1981. He requested rescission of his client's "unjustified termination" and reinstatement of his benefits upon Hittle's return of his retirement contributions. The letter indicated that at the time Hittle was released by his chiropractor to return to work he was still "totally temporarily disabled." Enclosed were the reports of Drs. Kemp, W. Gordon Smith, and Strait.

The personnel director referred this letter to the director of the public works On July 30, 1981, Hittle's attorney wrote a letter to the county treasurer, offering to return to SBCERA his client's contributions plus interest, in return for reinstatement of his right to request disability retirement. In a one-sentence letter dated August 20, 1981, the county treasurer notified Hittle's attorney that the retirement board had denied "your request for Mr. Hittle to redeposit his retirement contributions so that he might apply for a disability retirement."

department. In letters dated June 22, and June 26, 1981, the director rejected Hittle's request on the basis that the additional medical reports did not provide timely satisfactory evidence of good cause for Hittle's absence. The director further stated that he continued to rely on the medical report of Dr. Bluhm, submitted by Hittle at the time of his termination.

A month and a half later, on September 15, 1981, Hittle's attorney wrote to the assistant county treasurer requesting reconsideration by the retirement board of its decision. Enclosed were his client's declaration, the medical reports of several doctors (including each of those named above), and a formal points and authorities. On November 19, 1981, the assistant county treasurer, on behalf of SBCERA, replied simply that "[t]he motion was made seconded and passed that the Retirement Board would not accept the application of William T. Hittle for Service Connected Disability Retirement."

Hittle sought judicial review 85 days following the denial of his request for reconsideration. Pursuant to a petition for writ of mandate (Code Civ.Proc., § 1094.5), Hittle sought an order requiring SBCERA to allow him to redeposit his retirement contributions and to reinstate him as a SBCERA member with full rights to apply for disability retirement.

After reviewing the administrative record and hearing the arguments of counsel, the trial court exercised its independent judgment to determine whether the weight of the evidence supported the agency's findings. (Citing Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 112 Cal.Rptr. 805, 520 P.2d 29.) The trial court held that the evidence did not support Hittle's assertion that he was ignorant of his rights to file for disability retirement when he withdrew his contributions, because respondent had placed him on "specific notice" of these rights by its September 29, 1978, letter. The trial court found that once Hittle withdrew his funds from SBCERA he was no longer one of its "members," and thus not entitled to file an application for disability retirement with that system. (Citing Dodosh v. County of Orange, supra, 127 Cal.App.3d 936, 938, 179 Cal.Rptr. 804.) The trial court also concluded that SBCERA had not committed a prejudicial abuse of discretion in denying Hittle's request to regain his membership. Finally, the trial court held that as a "party" (within the definition of the SBCERA by-laws, art. IX, § B(2)) seeking to reenter the retirement system, Hittle was bound by the 60-day time limit for judicial review provided by article IX, section R of the SBCERA By-Laws, and that his petition for writ of mandate was therefore untimely. Accordingly, the trial court entered judgment denying the petition for writ of mandate.

On appeal, Hittle contends that (1) his petition for writ of mandate was timely filed with the trial court, and (2) this court should independently weigh the evidence to conclude that (3) he did not knowingly waive his right to disability retirement at the time he withdrew his retirement contributions, primarily because SBCERA did not fulfill its fiduciary duty to disclose to him this option.

II.

Though the issue of exhaustion...