Dunham v. City of Berkeley

• Decision Date: 11 May 1970
• Citation: 7 Cal.App.3d 508,86 Cal.Rptr. 569
• Court: California Court of Appeals Court of Appeals
• Parties: Kenneth I. DUNHAM et al., Plaintiffs, Respondents and Appellants, v. CITY OF BERKELEY, a municipal corporation, and Police Employees Pension Board of the City of Berkeley, Defendants, Appellants and Respondents. Civ. 27005.

Page 569

86 Cal.Rptr. 569

7 Cal.App.3d 508

Kenneth I. DUNHAM et al., Plaintiffs, Respondents and Appellants, v. CITY OF BERKELEY, a municipal corporation, and Police Employees Pension Board of the City of Berkeley, Defendants, Appellants and Respondents.

Civ. 27005.

Court of Appeal, First District, Division 4, California.

May 11, 1970.

Robert T. Anderson, City Atty., Robert P. Berkman, Asst. City Atty., Berkeley, for City of Berkeley, and others.

Howard W. Wayne, Berkeley, for Kenneth I. Dunham, and others.

CHRISTIAN, Associate Justice.

Plaintiffs (retired Berkeley policemen or widows of retired policemen) sought both a declaration defining disputed pension rights and a money judgment for accrued, unpaid pension benefits. The trial court gave judgment for plaintiffs. Defendants (the City of Berkeley and its Police Employees Pension Board) appeal from the judgment; plaintiffs cross-appeal, contending that the court's award was inadequate.

Each plaintiff or deceased husband of a plaintiff began service in the Berkeley Police Department prior to June 16, 1944. Their pension rights vested under a plan then in effect known as a 'fluctuating' plan in which benefits are based on 'the average salary attached to the respective rank or ranks held during the three years immediately preceding the date of retirement, * * *' ¹ The benefit therefore increases with the salary of an active member occupying the applicable rank. (Terry v. City of Berkeley (1953) 41 Cal.2d 698, 263 P.2d 833.) The present appeal presents the question whether plaintiffs are entitled to benefit from salary increments provided by a new 'Senior Patrolman' and 'Career Incentive' program established in the police department.

Before the new program was instituted, there was one rank of patrolman with five salary steps; progression was automatic with length of service, and the fifth step was reached after four years of service. The higher ranks, such as sergeant, inspector, lieutenant and captain, had only one salary step each.

In 1964, the Senior Patrolman classification was established. The stated purpose was 'to provide advancement opportunities for senior officers who endeavor to improve their individual proficiency by participating in a program of continuous inservice training.' A patrolman with at least four years' experience could receive a Senior Patrolman classification with a salary 5 percent higher than top step patrolman if he participated on his own time in at least 50 hours per year of departmental training courses, courses at educational institutions, teaching, public speaking activities or research projects.

In 1967 the Career Incentive program was established, extending the concept of increased pay for training to the higher police ranks. ² Classifications, I, II, III and IV were added to each of the basic ranks (including Senior Patrolman). ³ Thus, where previously there was a single rank of Sergeant, there now is Sergeant, Sergeant I, Sergeant II, Sergeant III and Sergeant IV. A 'I' classification requires 10 years of service and training; Each upward step represents 5 years more training rewarded by a 2 1/2 percent increase in pay, so that a 'IV' classification is earned after 25 years of participation in the program. All years of service were counted as years of qualifying training for police officers enrolled at the inception of the Career Incentive program. Therefore, a sergeant with 15 years' service received a new classification of Sergeant II if he enrolled in September 1967. Thereafter, only years of actual training counted toward the pay increases.

Enrollment in the program is not automatic; eligible employees must volunteer. Classifications are awarded for one year; to retain his class and pay status, the officer must qualify annually by participating in the required hours of training. Training time may be waived by the department when duty requirements limit the time available for training.

Before the Senior Patrolman and Career Incentive program was established, the department provided continuous training for its employees. The hours and type of training have not changed significantly since the incentive program was established. The principal difference is that policemen now receive higher pay for participation, while previously they received compensating time off. Under the new system, policemen choosing not to enroll in the Senior Patrolman and Career Incentive program can still attend training courses and receive time credit as before; the courses available to those in the program and not in the program are the same. Duties of policemen have not changed.

All eligible officers have applied for Career Incentive status; all but one eligible patrolman have enrolled for Senior Patrolman status. Several policemen who enrolled initially have dropped out. All of the plaintiffs or their husbands would have been eligible, by years of service, to participate.

The city's position is that the Senior Patrolman and Career Incentive classifications are new ranks and that the retired employees are therefore not entitled to a pension increase. The trial court decided that the essential factor in determining whether a patrolman is classified as Senior Patrolman, or whether an employee receives a pay raise provided by the Career Incentive program, is length of service. Concluding that the new system added salary groupings within each rank rather than new ranks, the court ruled that plaintiffs are entitled to pensions reflecting the higher salaries paid to participants in the Senior Patrolman and Career Incentive plan. The judgment declared: (1) each plaintiff's pension should be based on the salary now available to an active policeman, with the years of service at which the pensioner retired, who has participated in the program; (2) pensions are to be computed by using a weighted average of the salaries attributable to the 3-year period immediately prior to retirement. Plaintiffs were awarded judgment for past accrued and unpaid benefits.

There was evidence that the city intended to establish new ranks that would not be applicable to retired employees. The salary schedule recommended by the personnel board was expressed in terms of pay steps within ranks; the city council in its salary resolution changed these designations to separate ranks without changing the salary recommendation. It was apparently hoped that a pension increase for retired policemen would thereby be avoided. But the city's intent is not necessarily determinative. Pension provisions are, unless excluded by agreement, part of the contemplated compensation of the city employee and therefore a consideration of the employment contract. (Kern v. City of Long Beach (1947) 29 Cal.2d 848, 852, 179 P.2d 799; Malone v. City of Los Angeles (1954) 126 Cal.App.2d 447, 451, 272 P.2d 796.) A retired employee has a contractual right, protected by constitutional guarantees, in a pension; his benefits may not be changed to his detriment. (Meinheit v. City of Berkeley (1960) 179 Cal.App.2d 492, 495, 3 Cal.Rptr. 821; City of Long Beach v. Allen (1956) 143 Cal.App.2d 35, 38--39, 300 P.2d 356.) Pension provisions are to be liberally construed in favor of the pensioner. (Terry v. City of Berkeley (1953) 41 Cal.2d 698, 702, 263 P.2d 833; City of Long Beach v. Allen, Supra, 143 Cal.App.2d at p. 38, 300 P.2d 356.) The primary purpose of a fluctuating pension plan is to guarantee the pensioner and his widow a constant standard of living and to maintain equality of position between the retired member and the person currently holding the same rank. (Abbott v. City of Los Angeles (1960) 178 Cal.App.2d 204, 215--216, 3 Cal.Rptr. 127.)

Abbott v. City of Los Angeles, Supra, and City of Long Beach v. Allen, Supra, involved fluctuating pension plans. In both cases, after the plaintiff's retirement, the cities adopted a 'longevity-merit pay' plan which provided additional pay, based on years of service, to employees whose work was certified as satisfactory. The Los Angeles plan also provided that an individual's longevity and merit pay would cease if his service later became unsatisfactory. In both cases, it was held that the merit pay constituted a part of the 'salary attached to the rank or position' formerly held by the retired members and must be considered in computing pensions. The courts rejected the cities' contention that the plaintiffs were not entitled to increased pensions because they had not performed the condition of certified satisfactory service required of active members. In Allen, the court stated: '(T)hese men were not and could never become eligible for a pension based on the top salary currently paid to the officers holding the same positions from which they retired.

'It is therefore obvious that the new ordinance as applied by the city operated to the detriment of appellants and violated the vested contractual pension rights they had acquired upon their retirement. * * *

'* * * The difficulty * * * with the City's position is that it would have appellants' pension rights measured by a salary ordinance that simply is not and never was applicable to them. Appellants' retirement benefits were acquired on a different contractual basis. Under the terms of that contract they performed the required services and earned their deferred compensation.' (City of Long Beach v. Allen, Supra, 143 Cal.App.2d 35, 40, 300 P.2d 356, 359.) One of the factors relied on by the court in Abbott was the fact that all but a small percentage of the active employees were receiving the merit pay.

In Baldwin v. City of San Diego (1961) 195 Cal.App.2d 236, 15 Cal.Rptr. 576, the court rejected the pensioner's contention that she was entitled to the benefit of a new 5 percent pay rate added to the highest regular salary paid for her position. The extra pay was available to employees who were subject to duty on legal holidays without compensating time off or...