Conway v. San Diego City Emps' Ret. Sys.
| Decision Date | 28 November 2022 |
| Docket Number | D079355 |
| Parties | SEAN CONWAY et al., Plaintiffs and Appellants, v. SAN DIEGO CITY EMPLOYEES' RETIREMENT SYSTEM et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No 37-2020-00007020-CU-FR-CTL, Gregory W. Pollack, Judge. Affirmed.
Law Office of Michael A. Conger and Michael A. Conger for Plaintiffs and Appellants, Sean Conway and Susanne Conway.
Noonan Lance Boyer & Banach, David J. Noonan and Genevieve M Ruch for Defendants and Respondents, San Diego City Employees' Retirement System and Sandra Claussen.
Plaintiffs and appellants Sean Conway and Susanne Conway sued the San Diego City Employees' Retirement System (SDCERS) and its employee/medical review officer Sandra Claussen for breach of fiduciary duty and damages arising out of Claussen's alleged assurances that Sean Conway[1]would not lose his disability pension by taking a new job, and SDCERS's ensuing administrative proceeding requiring him to establish entitlement to his pension. The trial court sustained SDCERS and Claussen's demurrer to plaintiffs' operative complaint without leave to amend, ruling the action was barred by Government Code[2] sections 821.6 and 815.2, as the gravamen of the plaintiffs' claim was one for malicious prosecution: that SDCERS wrongfully commenced an action against Conway based on Claussen's concealment.
On appeal, plaintiffs contend the court should have granted them leave to amend state claims against SDCERS for its violation of section 815.6 in failing to discharge a mandatory duty and against Claussen for actual malice, corruption or fraud. They further contend the court erred by applying section 821.6, as their lawsuit was not based on SDCERS's steps to ensure payment of proper disability benefits, but on Claussen's actions in, among other things, failing to properly advise them about the risks of Conway accepting a new job, which had nothing to do with SDCERS's administrative process. Plaintiffs finally contend that contrary to SDCERS's argument, their government claim was timely filed on the basis of delayed discovery due to Claussen's intentional concealment. We affirm.
We state the facts from plaintiffs' operative complaint. In so doing, we accept the truth of material facts properly pleaded, not "contentions, deductions, or conclusions of fact or law," and consider matters properly subject to judicial notice. (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512; State Dept. of State Hospitals v. Superior Court (2015) 61 Cal.4th 339, 346; San Diego Unified School Dist. v. Yee (2018) 30 Cal.App.5th 723, 726.)
In 2004, Conway, then an officer for the San Diego Police Department, sustained a work-related back injury resulting in multiple surgeries and spinal fusions. In 2008, Claussen, a medical review officer employed by SDCERS, recommended that SDCERS's board approve Conway's disability retirement. SDCERS granted Conway permanent disability retirement after finding his injuries had resulted in permanent incapacity from the substantial performance of his duties.
Conway and his family moved to Idaho in 2008. The following year, he obtained a job as a jail technician, and later secured a job as a detention specialist at a juvenile detention facility.
In 2013, Conway considered applying for a position as a detention deputy in an Idaho county jail that paid $23 per hour, but became concerned that accepting this position might jeopardize his disability pension. That year, plaintiffs met with Claussen to inquire whether Conway's acceptance of the detention deputy position would jeopardize his disability pension. Claussen told plaintiffs that the position was similar to a corrections deputy in the San Diego County Jail system run by the San Diego County Sheriff, and that since the San Diego Police Department did not staff jails, there was no comparable position with the San Diego Police Department so that Conway's taking the Idaho position would not jeopardize his disability pension. Plaintiffs asked Claussen multiple times to put her assurances in writing, but she declined, telling them, "We don't do that, but you have nothing to worry about."
Conway took the Idaho position. Claussen intentionally concealed her assurances to plaintiffs from SDCERS, which later commenced an administrative action to have Conway's disability retirement taken away. Plaintiffs did not discover Claussen's concealment until they deposed her in June 2019. That month, Conway and SDCERS participated in a hearing before a retired judge. The judge ruled in Conway's favor and recommended his disability retirement continue. In November 2019, the SDCERS board voted to continue his disability retirement.
Plaintiffs sued SDCERS for intentional and negligent representation and concealment. In part, they alleged that had Claussen told Conway that taking the Idaho detention deputy position would have jeopardized his disability retirement, Conway would not have taken the position but he took it as a result of her statements. They alleged Claussen either knew her representations were false when she made them or she made them recklessly and without regard for their truth, Claussen intended plaintiffs rely on her representations, and plaintiffs' reliance on them was a substantial factor in causing them harm.
After SDCERS demurred, plaintiffs filed a first amended complaint alleging a single cause of action for breach of fiduciary duty against both SDCERS and Claussen. The operative complaint was based on the same underlying facts, but added allegations concerning Claussen's intentional concealment and plaintiffs' failure to discover it. Plaintiffs alleged that "in her position as medical review officer, Claussen acts as an administrator of SDCERS." (Some capitalization omitted.) Plaintiffs alleged they "incurred substantial expenses and suffered substantial emotional distress during SDCERS' efforts to eliminate [Conway's] disability pension."
SDCERS and Claussen again demurred, arguing a fair reading of the first amended complaint showed it was premised on allegations that plaintiffs were wrongfully subjected to the administrative process, but SDCERS and Claussen were absolutely immune from liability under the Government Code for prosecuting an administrative proceeding. Specifically, they argued Claussen's actions in instituting any judicial or administrative proceeding within the scope of her employment, even if malicious or without probable cause, were immune under section 821.6 and because she was immune, SDCERS was likewise immune under section 815.2, subdivision (b). They further argued that Claussen as a medical advisor did not stand in a fiduciary relationship to Conway in any event, but even if she did, she did not breach any fiduciary duty, which was only to fully and fairly describe the retirement plan or various options and procedures. Finally, SDCERS and Claussen argued plaintiffs' claims were barred because they failed to timely comply with the Government Claims Act filing requirements under section 911.2, subdivision (a). They argued plaintiffs could not amend their complaint to state a valid cause of action, asking the court to sustain the demurrer without leave to amend. SDCERS and Claussen sought judicial notice of certain SDCERS board rules, several Municipal Code sections, the filing and contents of plaintiffs' government claim, and the retired judge's proposed statement of decision on SDCERS's proceeding to review Conway's retirement disability.
In opposition, plaintiffs argued they were not suing because SDCERS brought an administrative proceeding, but because Claussen intentionally concealed relevant evidence from the SDCERS's board. They argued case law-Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30 (Masters) and Hittle v. Santa Barbara County Employees Retirement Assoc. (1985) 39 Cal.3d 374 (Hittle)-refuted the argument that they could not state a claim for breach of fiduciary duty as their claim was that Claussen intentionally concealed her statements from SDCERS, which was assertedly conduct that survived a demurrer in Masters. Plaintiffs argued the Government Claims Act did not apply to their claim, which was timely because they adequately pleaded delayed discovery of Claussen's intentional concealment. They argued the court should grant leave to amend any defect found in their pleading.
Granting SDCERS and Claussen's request for judicial notice, the trial court sustained the demurrer without leave to amend. It ruled: (Italics omitted.) The court further ruled that the absolute immunity of section 821.6 was not limited to malicious prosecution causes of action, but "extends to claims for defamation and intentional infliction of emotional distress, as well as acts undertaken in the course of the investigation, statements made to a plaintiff in the course of investigating, action taken in preparation for...
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