California Teacher's Assn. v. Governing Board
| Decision Date | 07 June 1985 |
| Citation | 214 Cal.Rptr. 777,169 Cal.App.3d 35 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , 25 Ed. Law Rep. 438 CALIFORNIA TEACHERS' ASSOCIATION, et al., Plaintiffs and Appellants. v. GOVERNING BOARD Of the YOSEMITE COMMUNITY COLLEGE DISTRICT, et al., Defendants and Respondents. Civ. F003725. |
The issue in this case is whether a public teacher whose claim for earned but unpaid salary is barred by the statute of limitations is likewise barred from receiving retirement service credits under the State Teachers' Retirement System. We will conclude that she is not.
The California Teachers' Association (CTA) and Elizabeth Tye and Erma George (teachers) appeal from a judgment denying their petition for writ of mandate and complaint for declaratory relief seeking retirement benefits and service credits from their employer, Yosemite Community College District (District) and the State Teachers' Retirement System (STRS).
In January 1983, CTA and teachers filed a petition for writ of mandate and complaint for declaratory relief in Stanislaus County Superior Court, alleging that the District and STRS had failed to comply with EDUCATION CODE SECTIONS 450251 and 22703, thereby denying teachers salary, fringe benefits and service credit.
Following the filing of responses by District and STRS, a hearing was held on March 30, 1983. The court found that CTA and teachers had failed to exhaust available administrative remedies.
On or about April 6, 1983, CTA and teachers requested an administrative hearing before STRS. On or about June 6, 1983, STRS granted the request and referred the matter to its chief executive officer.
On July 17, 1983, following his review, the chief executive officer of STRS informed CTA and teachers that he had determined their request for additional service credit should be denied and that an administrative hearing would not be held because their appeal was a question of law, not disputed facts. CTA and teachers were also advised they had exhausted their administrative remedies with STRS.
In September 1983, CTA and teachers filed another petition for writ of mandate and complaint for declaratory relief. They reiterated their requests for fringe benefits and service credit. CTA and teachers further requested the court to take judicial notice of the proceedings in the prior action, No. 188766.
STRS filed a response contending that service credit for teachers had been properly calculated based upon reports and contributions made by District. District filed a response contending, among other things, that teachers' claims for relief were barred by Code of Civil Procedure section 338, subdivision 1.
Following a hearing, judgment was entered denying the petition for writ of mandate and declaratory relief on the ground that the relief sought was barred by the statute of limitations.
The facts are essentially undisputed. Teachers began teaching for the District in the early 1960's, Elizabeth Tye in 1960-1961 and Erma George at least by the 1965-1966 school year. They both taught part time; both were paid on an hourly basis. Section 45025, in fact, required that they be paid on a pro rata basis to the full-time employees. By paying them on an hourly basis, they were substantially underpaid. District designated them permanent, or tenured, employees of District in the 1971-1972 school year. They were not advised of the change in their status and they continued to work, year after year, for District in varying amounts of time and to be paid as part-time hourly employees. In 1978, teachers learned that they had been permanent employees since 1971 and they demanded to be paid as pro rata permanent employees and provided with the benefits of such employees. District complied with their demands from that time forward. Teachers also demanded to be paid on the basis of pro rata pay from 1979 retroactively. District and teachers had numerous discussions and correspondence back and forth, and teachers had their representatives contact District trying to resolve the issue regarding their back pay and retirement pay. The issue was never resolved.
As a result of being paid hourly, as opposed to being paid on a pro rata basis as required by the Education Code, teachers lost thousands of dollars throughout the years in the form of salary.
The first action filed by teachers on January 18, 1984, was filed in excess of three years after they learned of their underpayment. Since their rights are based upon statute, teachers concede they were precluded by the statute of limitations contained in Code of Civil Procedure section 338 from obtaining back pay for salary purposes. However, at the time the first action was filed, neither teacher had retired from District.
Teachers are not entitled to retirement benefits until they retire.
The effect of District underpaying teachers by paying them on an hourly basis as opposed to a pro rata basis had a dramatic impact on their retirement benefits that they will receive. One of the key elements in determining the appropriate amount of retirement pay for any teacher with STRS is the amount of service credit ( § 24000). Service credit, or years of service, is defined in section 22700 et seq. District reported to STRS that teachers were hourly employees and sent contributions to STRS based upon an hourly formula contained in section 22703. Use of the hourly formula resulted in substantially less money being sent to STRS than was required had teachers been paid as pro rata employees and resulted in substantially less service credit being granted to teachers and, thus, ultimately less retirement benefits payable to them.
We begin our discussion by noting that a teacher has a fundamental vested right in the retirement fund of the STRS to which he or she is entitled by law. (Purdy v. Teachers' Retirement Board (1980) 113 Cal.App.3d 942, 949, 170 Cal.Rptr. 360.)
It is undisputed that teachers were entitled to pro rata pay pursuant to section 45025. 2 Even though the school board had determined as of 1971 that teachers were tenured employees, they did not advise teachers of the tenure until 1978 and, during that period, continued to pay teachers an hourly wage which was below the salary which teachers were actually earning. It is also undisputed that the concomitant result of the District's indefensible failure to pay teachers properly under section 45025 was an underaccounting of service credits which will adversely affect their benefits upon retirement. ( §§ 22703, 3 24000 .)4 Finally it is undisputed that teachers were shortchanged in credited service because they were being improperly underpaid and, therefore, they did not receive the correct number of sick leave days. Had they been paid on a pro rata basis, teachers would have received additional sick leave days which they could have accumulated and used for service credit upon retirement. ( § 22719 .)5
Teachers concede that they are not entitled to the salary that they lost because the statute of limitations had run at the time that a lawsuit was first filed in the case. District contends that when stripped to its essence, Teachers' claim is for back pay even though they disguise it as a claim for retirement benefits. We disagree.
Teachers are not seeking as damages the amount that they would have received had they been properly paid. Teachers instead seek the service credits which they earned but went uncredited. These are two entirely different types of compensation to which teachers were entitled. While they both stem from the same wrong--the District's wrongful nondisclosure of teachers' true status as tenured teachers and underpayment of salary earned--the time at which the causes of action accrue is the critical point. Teachers' right to payment of salary obviously accrued at the time they earned it because that was also the time it became payable. However, as we will demonstrate, the entitlement to service credits would not accrue until teachers' retirement.
Teachers correctly contend that the trial court's holding that the statute of limitations barred teachers' claim for correct retirement benefits is erroneous.
In Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 326 P.2d 484, an action filed in 1955, no statutory limitation was found as to future payments from the retirement system on individuals who had been receiving pensions since before 1927. The court made it clear that even though the action could have been filed some 20 years earlier, it was not barred. (Id., at p. 463, 326 P.2d 484.) There, the plaintiffs were either retired firemen or policemen, or widows of firemen or policemen, who had worked prior to January 1925 and 1927, respectively. All of the plaintiffs' pensions had become due or they were entitled to receive their pensions after 1925 and 1927. Anyone retiring prior to 1925 and 1927 was entitled to a fluctuating pension. The city amended its charter in 1925 and 1927 and provided for payment of pensions on a fixed basis for anyone who retired after 1925 and 1927, even though they began working prior to said dates.
In their complaint for declaratory relief, plaintiffs stated that they were...
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