Flethez v. San Bernardino Cnty. Emps. Ret. Ass'n
| Decision Date | 02 March 2017 |
| Docket Number | S226779 |
| Citation | 389 P.3d 1232,214 Cal.Rptr.3d 482,2 Cal.5th 630 |
| Court | California Supreme Court |
| Parties | Leticia FLETHEZ, Plaintiff and Respondent, v. SAN BERNARDINO COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Defendant and Appellant. |
Michael P. Calabrese ; Arias & Lockwood and Christopher D. Lockwood, San Bernadino, for Defendant and Appellant.
Nossman, Ashley K. Dunning, San Francisco, Michael V. Toumanoff, Los Angeles, and Catherine F. Ngo, San Francisco, for Alameda County Employees' Retirement Association, Kern County Employees' Retirement Association, Los Angeles County Employees' Retirement Association, Marin County Employees' Retirement Association, Sacramento County Employees' Retirement Association, San Joaquin County Employees' Retirement Association, Tulare County Employees' Retirement Association and Ventura County Employees' Retirement Association as Amici Curiae on behalf of Defendant and Appellant.
Reed Smith, Harvey L Leiderman and Jeffrey R. Rieger, San Francisco, for California Public Employees' Retirement System as Amicus Curiae on behalf of Defendant and Appellant.
Faunce, Singer & Oatman, Mark Ellis Singer, Edward L. Faunce, Fallbrook, and Larry J. Roberts for Plaintiff and Respondent.
Law Offices of John Michael Jensen and John Michael Jensen as Amici Curiae on behalf of Plaintiff and Respondent.
In this action for a writ of mandamus, the superior court determined that San Bernardino County Employees Retirement Association (SBCERA) wrongfully denied Frank Flethez the correct starting date for his disability retirement allowance.1 The court then awarded Flethez prejudgment interest under Civil Code section 3287, subdivision (a) ( section 3287(a) ) as part of his damages, to be retroactively calculated from the same starting date.2 On appeal, SBCERA challenged only the calculation of the prejudgment interest award.
The Court of Appeal agreed with SBCERA that the superior court had erred in its calculation of prejudgment interest and reversed the court's judgment to the extent it awarded section 3287(a) interest on all of Flethez's retroactive disability retirement benefits starting from the first date of those benefits—July 15, 2000. In doing so, the Court of Appeal expressly disagreed with the reasoning of Austin v. Bd. of Retirement (1989) 209 Cal.App.3d 1528, 258 Cal.Rptr. 106 (Austin ). We granted review to consider how prejudgment interest under section 3287(a) should be calculated when a retroactive award of service-connected disability retirement benefits under the County Employees Retirement Law of 1937 is ordered in an administrative mandamus proceeding.
As we will explain, we agree with the Court of Appeal that the superior court erred in its award of prejudgment interest.
Public employee retirement boards have plenary authority regarding, and fiduciary responsibility for, the administration of their retirement systems. (Cal. Const., art. XVI, § 17.) A county's retirement system is administered by a county retirement board, under the County Employees Retirement Law of 1937. (Gov. Code, § 31450 et seq. (hereafter the CERL).)
County retirement systems formed under the CERL provide both service retirements based on age and years of service (Gov. Code, § 31670 et seq. ) and disability retirements based on an employee becoming permanently incapacitated for the performance of his or her work duties. (Gov. Code, § 31720 et seq. )
When the statutory requirements are met, an employee member of a county retirement system who is permanently incapacitated may separate from county service and receive either a service-related disability retirement and allowance, or a general disability retirement and allowance. (Gov. Code, § 31720.) An application for either type of disability retirement must be made "[1] while the member is in service, [2] within four months after his or her discontinuance of service, [3] within four months after the expiration of any period during which a presumption is extended beyond his or her discontinuance of service, or [4] while, from the date of discontinuance of service to the time of the application, he or she is continuously physically or mentally incapacitated to perform his or her duties." (Gov. Code, § 31722.)
Because a county retirement board is "required to administer the retirement system ‘in a manner to best provide benefits to the participants of the plan,’ " (McIntyre v. Santa Barbara County Employees' Retirement System (2001) 91 Cal.App.4th 730, 734, 110 Cal.Rptr.2d 565 (McIntyre ); see also Cal. Const., art. XVI, § 17 ), it must "investigate[ ] applications and pay[ ] benefits only to those members who are eligible for them." (McIntyre , at p. 734, 110 Cal.Rptr.2d 565.) The board may require such proof as it deems necessary to determine the existence of a disability. (Gov. Code, § 31723.) "Permanent incapacity for the performance of duty shall in all cases be determined by the board." (Gov. Code, § 31725.) The applicant bears the burden of proving his or her disability and that it is service related. (Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 46, 37 Cal.Rptr.2d 860 ; Rau v. Sacramento County Retirement Bd. (1966) 247 Cal.App.2d 234, 238, 55 Cal.Rptr. 296.) (Masters , at p. 46, 37 Cal.Rptr.2d 860.) If the board is not satisfied that the member is permanently incapacitated according to the proof received, the request for disability retirement must be denied. (Gov. Code, § 31725.)
Government Code section 31724 governs the timing of disability retirements and allowances. The statute provides that when a county retirement board is satisfied that the member is permanently incapacitated and grants the member a disability retirement, the retirement is "effective on the expiration date of any leave of absence with compensation to which [the member] shall become entitled ... or effective on the occasion of the member's consent to retirement prior to the expiration of such leave of absence with compensation." (Gov. Code, § 31724.) In the case of a member who has been granted or is entitled to sick leave, the statute provides that the retirement is not effective until the expiration of such leave with compensation, unless the member consents to an earlier date. (Ibid. )3
Government Code section 31724 also states the general rule that the member's "disability retirement allowance shall be effective as of the date such application is filed with the [county retirement] board, but not earlier than the date following the last day for which [the member] received regular compensation." (Italics added.) In other words, a retiree's disability retirement allowance will typically be effective on the latter of two dates: the actual application date or the date following the last day for which regular compensation was received after separation. However, "[w]hen it has been demonstrated to the satisfaction of the board that the filing of the member's application was delayed by administrative oversight or by inability to ascertain the permanency of the member's incapacity until after the date following the day for which the member last received regular compensation, such date will be deemed to be the date the application was filed." (Ibid .) Here we are concerned with the latter provision—delay due to the inability to ascertain the permanency of the disability.4
In 1990, Flethez became an employee of San Bernardino County (County). He worked as an equipment operator from 1991 until 2000. In 1998, he was injured while performing his job duties. His last day of work was on January 28, 2000. He underwent spinal surgery for his 1998 injury on February 1, 2000. His last day of regular compensation was July 14, 2000. Flethez underwent additional surgeries in 2001 and 2002 and received physical therapy through 2004.
More than eight years after he last worked for the County, on June 12, 2008, Flethez filed an application with SBCERA for a service-related disability retirement and allowance. It was rejected for omission of a signed medical records authorization. A little more than one year later, Flethez filed a complete application, including a signed medical records authorization and a supporting physician's report. In August 2010, SBCERA granted Flethez's application for service-related disability retirement benefits, effective as of the date of his initial application in 2008. That is, Flethez's retirement allowance was made effective under the general rule of Government Code section 31724 granting retroactive benefits back to the date of his June 2008 application.
Flethez then filed a request for review and reconsideration limited to the question of the starting date for his benefits. Flethez does not dispute that this was the first time he contended that his retirement allowance should be retroactive, under the inability to ascertain permanency clause of Government Code section 31724, to July 15, 2000, the date following his last day of regular compensation. When SBCERA, in April 2011, maintained its original decision setting June 12, 2008 as the commencement date for his benefits, Flethez requested a formal administrative hearing on the issue. An administrative hearing was held and the hearing officer subsequently issued proposed findings of fact, conclusions of law, and a recommended decision denying Flethez's request for benefits retroactive to July 15, 2000. On October 4, 2012, SBCERA adopted the hearing officer's proposed decision and maintained the original June 2008 date as the effective date of Flethez's disability retirement benefits.
Flethez filed a petition for writ of mandate in the superior court pursuant to Code of Civil...
To continue reading
Request your trial