Allstot v. City of Long Beach

• Decision Date: 25 May 1951
• Citation: 231 P.2d 498,104 Cal.App.2d 441
• Court: California Court of Appeals Court of Appeals
• Parties: ALLSTOT et al. v. CITY OF LONG BEACH et al. Civ. 17908.

Page 498

231 P.2d 498

104 Cal.App.2d 441

ALLSTOT et al. v. CITY OF LONG BEACH et al.

Civ. 17908.

District Court of Appeal, Second District, Division 3, California.

May 25, 1951.

Rehearing Denied June 12, 1951.

Hearing Denied July 19, 1951.

Kenneth Sperry, Long Beach, for appellants.

Irving M. Smith, City Atty., Clifford E. Hayes, Deputy City Atty., of Long Beach, for respondents.

SHINN, Presiding Justice.

Plaintiffs, 36 in number, brought this action for a declaration of their rights to pensions under the Charter of the City of Long Beach. Nineteen of the plaintiffs are employees of the Police or Fire Departments. The remaining 17 have retired as members of one or the other department. Plaintiffs appeal from portions of the judgment, and the questions involved are common to all of them.

Under section 187 of the City Charter, St.1931, p. 2785, a member of either department could retire after 20 years of service and would be entitled to receive as a pension 50 per cent of the amount of salary received by him one year prior to retirement, plus 1 2/3 per cent thereof for each year of service in addition to 20 years and not to exceed 30 years. On March 29, 1945, St.1945, p. 2954, section 187.1 of the Charter was adopted. This section purported to repeal section 187 and, with a single exception to be mentioned, to terminate all rights to retirement pensions. In Kern v. City of Long Beach, 29 Cal.2d 848, 179 P.2d 799, it was denied the effect of a general repeal upon the ground that those were members of either department at the time of the attempted appeal had 'a vested pension right and that respondent city, by completely repealing all pension provisions, has attempted to impair its contractual obligations. This it may not constitutionally do, and therefore the repeal is ineffective as to petitioner.' 29 Cal.2d at page 856, 179 P.2d at page 803.

Section 187.1 contained a proviso to the effect that any member of either department who had served 20 years or more on the effective date of the amendment, March 29, 1945, would be entitled to retire at any time within five years thereafter and to be paid a pension of such percentage of his salary as he would have been entitled to receive had he retired on the effective date of the amendment.

After the Kern case was decided, the question arose whether this proviso was effective to place a limitation upon the amounts that might be earned by continuous service under the plan established by section 187, namely, an increase at the rate of 1 2/3 per cent for each year of service in excess of 20 years. This question was presented and answered in Palaske v. City of Long Beach, 93 Cal.App.2d 120, 208 P.2d 764; and Allen v. City of Long Beach, Cal.App., 224 P.2d 792. It was there contended by the employees that to deprive them of their right to earn increases in their pensions by remaining in service after the date of the amendment of their constitute an unlawful impairment of their contractual rights with the city, and that the attempt so to do was void and ineffectual. This contention, first made by the plaintiff in the Palaske case, was rejected, the court saying, 93 Cal.App.2d at page 132, 208 P.2d at page 771: 'His [plaintiff's] contractual right to such a pension has not been impaired by legislation which, operating prospectively, merely withdraws his right or option to earn a bonus by continuing in employment after he has become eligible for retirement.' This holding was based upon the opinion of the Supreme Court in Kern v. City of Long Beach, supra, 29 Cal.2d at page 855, 179 P.2d at page 803, that 'The employee does not have a right to any fixed or definite benefits, but only to a substantial or reasonable pension. There is no inconsistency therefore in holding that he has a vested right to a pension but that the amount, terms and conditions of the benefits may be altered.'

In the Allen case the District Court of Appeal was asked to reverse its holding in the Palaske case and declined to do so, adopting as a part of its opinion the following from the former decision, 224 P.2d at page 795: "Those who were eligible for retirement on the effective date were entitled to the pension they had earned on the effective date and no more, while those who reached the 20-year mark subsequent to the effective date became eligible for retirement on a 50% pension and no more." Plaintiffs now ask us to disregard the quoted holding in the Kern case and also to disapprove of the holdings in the Palaske and Allen case to the same effect. It is said that the point did not require decision in the Kern case and received practically no consideration by the court in the Allen case. We are not sympathetic to the criticism of either decision.

In Packer v. Board of Retirement, 35 Cal.2d 212, 214, 217 P.2d 660, 662, where the point was directly involved, in referring to the decision in the Kern case, the court said: 'It was recognized, however, that the employee was not entitled to any fixed or definite benefits, but only to a substantial pension, and that the statutory language was subject to the implied qualification that the governing body may make reasonable modifications and changes in the system,' and quoted from the former decision as follows: "The rule permitting the modification of pensions is a necessary one since pension systems must be kept flexible to permit adjustments in accord with changing conditions and at the same time maintain the integrity of the system and carry out its beneficent policy."

The contentions and arguments now made against the validity of the limitation of retirement rights are but a reiteration of those presented by the briefs in the Allen case and by the petitions for hearing in that case and the Palaske case, both of which were denied by the Supreme Court.

It is contended by the present plaintiffs that the proviso of section 187.1, which limits the amount of the employee's pension, cannot stand inasmuch as the attempted repeal of section 187 was void as to vested pension rights; the proviso was not severable from the attempted complete repeal and must fall with it. This contention was urged to and rejected by the District Court of Appeal in the Palaske case and that holding was specifically approved and followed in the Allen case, the court stating, 224 P.2d...