City of Oakland v. Hassey

Decision Date17 June 2008
Docket NumberNo. A116360.,A116360.
Citation163 Cal.App.4th 1477,78 Cal. Rptr. 3d 621
CourtCalifornia Court of Appeals Court of Appeals
PartiesCITY OF OAKLAND, Plaintiff, Cross-defendant and Respondent, v. KENNY D. HASSEY, Defendant, Cross-complainant and Appellant; RICHARD WORD, Cross-defendant and Respondent.

Law Offices of Jon Webster, Jon Webster, Alexandra Seldin and Michael Devin for Defendant, Cross-complainant and Appellant.

John A. Russo, City Attorney, Randolph W. Hall, Chief Assistant City Attorney, Kandis A. Westmore, Deputy City Attorney for Plaintiff, Cross-defendant and Respondent.

OPINION

SEPULVEDA, J.

Respondent City of Oakland (Oakland) sued appellant Kenny D. Hassey for breach of contract after Hassey failed to reimburse the city (as agreed) for the costs of training him to become a police officer with the Oakland Police Department. Hassey filed a cross-complaint against Oakland and respondent Richard Word, the chief of the Oakland Police Department, alleging that the agreement to repay Oakland for training costs violated the Fair Labor Standards Act of 1938 (29 U.S.C. §§ 201-219; FLSA) and various state laws. The trial court granted Oakland's motion for summary judgment on its complaint, granted respondents' motion for summary judgment on Hassey's cross-complaint, and denied Hassey's summary judgment motion on both complaints. We conclude that Hassey failed to establish that the agreement to reimburse Oakland for training costs violated the FLSA, although Oakland's withholding of Hassey's final paycheck to cover his debt did. We also agree with Hassey that the trial court erred in concluding that some of the causes of action in his cross-complaint against Oakland were barred by the statute of limitations. We therefore affirm in part and reverse in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

The relevant facts are largely undisputed. Oakland owns and operates the Oakland Police Academy, which is certified by the California Commission on Peace Officer Standards and Training (POST). (Cal. Code Regs., tit. 11 § 1005, subd. (a)(1) [minimum standards for training of entry-level peace officers].) It is city policy to send police officer trainees to its own academy, even though there are other POST-certified academies in the state. Oakland found that it lost money when it trained officers who left its police department within a few years after receiving training. To encourage police officers to stay with the department longer, Oakland entered into a memorandum of understanding (MOU) with the Oakland Police Officers' Association in 1996 authorizing the city to require those who went through training at its academy to reimburse the city for training costs if the person left the police department before completing five years of service. The MOU also provided, "Repayment shall be due and payable at the time of separation and the City shall deduct any amounts owed under this provision from the employee's final paycheck. If said deduction does not fully reimburse the City for outstanding costs, the balance shall thereupon be due and owing."

On December 15, 1997, Hassey signed a "Conditional Offer of Position as a Police Officer Trainee" (conditional offer) with the Oakland Police Department. The conditional offer provided, consistent with the MOU, that Hassey's selection as a police officer trainee was subject to (among other things) the condition that he repay his $8,000 training expenses if he voluntarily terminated his employment with the police department before the end of five years.1 The $8,000 represented the expenses associated with training a police officer at the academy; the figure did not include wages paid to police officer trainees while they attended the academy. Hassey's repayment obligation was to decrease each year he remained with the police department, so that he would owe repayment of the entire $8,000 if he left after less than a year, 80 percent of the $8,000 if he left before the end of his second year, 60 percent if he left before the end of his third year, 40 percent if he left before the end of his fourth year, down to 20 percent of the $8,000 if he left before the end of his fifth year.

Oakland hired Hassey as a police officer trainee on March 16, 1998. The same day, he signed a document titled "reimbursement of training expenses" (reimbursement agreement), which contained the same repayment provision that was set forth in the conditional offer. Hassey attended the Oakland Police Academy from April to November 1998, when he graduated.2 That same month, he was promoted to police officer and was assigned to the police department's field training program to receive additional instruction.

According to Hassey's declaration in support of his summary judgment motion, his field training officer told him in February 1999 that he was "not performing to standards and that [he] should consider resigning in lieu of termination." Hassey resigned on February 10, 1999, based on his field training officer's representation. On February 16, 1999, Hassey signed a document titled "training costs repayment agreement" (repayment agreement), which acknowledged that Hassey owed repayment of $8,000 for his training costs, to be paid in 24 monthly installments of $333.34.

Oakland withheld Hassey's final paycheck dated February 25, 1999, (for $725.28) to cover some of the money owed under the repayment agreement. A check dated April 30, 1999, (for $654.80) to cash out Hassey's retirement balance also was withheld to cover money owed under the repayment agreement. That left a balance of $6,619.92 owed by Hassey under the repayment agreement. Oakland sent a series of collection notices to Hassey; Hassey apparently did not respond.

On October 17, 2001, Oakland filed a complaint against Hassey alleging breach of contract. Oakland sought the amount owed under the repayment agreement, plus a $100 collection fee, interest, attorney fees, and costs. Hassey's answer to the complaint included an affirmative defense that the contract was unenforceable because it violated the FLSA and various provisions of the California Labor and Business and Professions Codes (Lab. Code, §§ 221-223, 432.5, 450; Bus. & Prof. Code, §§ 16600, 17200).

On May 10, 2002, Hassey filed a cross-complaint against respondents Oakland and Word, the chief of the Oakland Police Department. Like Hassey's answer to Oakland's complaint, the cross-complaint alleged that the conditional offer that Hassey was "compelled" to sign violated the FLSA and various state laws. The cross-complaint alleged causes of action for deprivation of civil rights (42 U.S.C. § 1983); violation of the FLSA; violations of Labor Code sections 221, 223, 432.5, and 450; "unlawful contract" (Civ. Code, §§ 1667-1668); "void contract" (Bus. & Prof. Code, § 16600); and unfair competition (Bus. & Prof. Code, § 17200).3

Hassey and respondents filed summary judgment motions on the same day. Hassey argued that Oakland's lawsuit against him had no merit because the conditional offer and repayment agreement violated federal and state law. He sought summary judgment as a defendant on Oakland's complaint and as a cross-complainant on his cross-complaint. Oakland argued in its motion for summary judgment, among other things, that various causes of action in Hassey's cross-complaint were barred by the statute of limitations, and that requiring employees to reimburse Oakland for training costs did not violate the FLSA. Oakland also sought summary judgment on its complaint, arguing that there was no dispute that Hassey owed money under the repayment agreement.

The trial court granted respondents' motion for summary judgment. As to Oakland's complaint against Hassey, it concluded that there were no triable issues as to whether Hassey owed money under the repayment agreement, and concluded that Hassey owed Oakland $6,619.92. As to Hassey's cross-complaint, the trial court concluded that the causes of action were barred by the statute of limitations or failed for other reasons. The trial court also denied Hassey's motion for summary judgment. Hassey timely appealed the subsequent judgment.

II. DISCUSSION

On appeal, the parties disagree over whether the conditional offer, reimbursement agreement, and repayment agreement violate the FLSA and various other laws, but do not always specify to which of the trial court's two orders (or to which of the two complaints at issue) they direct their arguments. We find it helpful to address the complaint and cross-complaint separately.

A. Summary Judgment Proper on Oakland's Complaint.
1. Oakland's breach of contract cause of action.

A plaintiff is entitled to summary judgment on a contract cause of action where it establishes by competent evidence the existence of a contract, the defendant's breach and damages, and the defendant does not controvert such facts. (Law Offices of Dixon R. Howell v. Valley (2005) 129 Cal.App.4th 1076, 1092 (Law Offices); see also Code Civ. Proc., § 437c, subd. (p)(1).) Our review of the granting or denial of summary judgment is de novo. (Law Offices, at p. 1092.) Here, the trial court granted summary judgment on Oakland's complaint for breach of contract, ruling that Hassey owed $6,619.92 on the agreements he signed with Oakland to repay his training costs. We concur with this finding. (Ibid.) Indeed, Hassey admitted in his separate statement in response to Oakland's statement of undisputed facts (Code Civ. Proc., § 437c, subd. (b)(3)) that he signed the conditional offer, reimbursement agreement, and repayment agreement. Although he disputed whether he was legally obligated to repay his training costs, he did not otherwise dispute the accuracy of the amount that was due under the repayment agreement. "Thus, putting aside any affirmative defenses (discussed below), [Oakland] was entitled to summary judgment." (Law Offices, at p. 1092.)

Hassey argued in his summary judgment motion as to Oakland's complaint...

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