Miller v. State of California

• Decision Date: 04 January 1977
• Citation: 135 Cal.Rptr. 386,557 P.2d 970,18 Cal.3d 808
• Court: California Supreme Court
• Parties: , 557 P.2d 970 Walter H. MILLER, Plaintiff and Appellant, v. The STATE of California et al., Defendants and Respondents. L.A. 30662. In Bank

Page 386

135 Cal.Rptr. 386

18 Cal.3d 808, 557 P.2d 970

Walter H. MILLER, Plaintiff and Appellant, v. The STATE of California et al., Defendants and Respondents.

L.A. 30662.

Supreme Court of California,

In Bank.

Jan. 4, 1977.

Walter H. Miller, in pro. per.

Evelle J. Younger, Atty. Gen., and Melvin R. Segal, Deputy Atty. Gen., for defendants and respondents.

SULLIVAN, Justice.

We deal here with issues arising out of the reduction in the mandatory age of retirement of a state employee from the age of 70 years to the age of 67 years. The controversy presents essentially two questions: First, was plaintiff who had accumulated a number of years of service prior to the change in the law, entitled, notwithstanding the change, to remain in state employment until the age of 70? Second, even if he were not so entitled, did the reduction in the mandatory age of retirement impair a vested right of plaintiff to qualify for a larger monthly pension based on service until the age of 70 so as to entitle him to recover from the state for such financial loss? We answer both questions in the negative and accordingly affirm the judgment.

The facts as found by the trial court are not disputed. Plaintiff, born August 3, 1907, was employed by the State Controller as an assistant inheritance tax attorney in the Inheritance and Gift Tax Division of the Controller's Office under the state civil service laws. He first entered state service on September 1, 1939, at which time he became a member of what is now called the Public Employees' Retirement System (PERS). (Gov.Code, § 20004.) ¹ He continued in state employment, except for a period of military leave, for approximately 35 years and obtained promotions to senior inheritance tax attorney and ultimately to assistant chief inheritance tax attorney. On September 1, 1974, plaintiff was placed on retirement because he had then reached the mandatory retirement age of 67 years as prescribed by section 20981.

Prior to July 1, 1971, section 20981 provided that, with certain exceptions not here applicable, an individual in plaintiff's category 'shall be retired on the first day of the calendar month next succeeding that in which he attains age 70.' Effective on that date, section 20981 was amended to provide inter alia that 'those who attain age 67 on or after October 1, 1973, shall be retired on the first day of the calendar month next succeeding that in which they attain age 67 . . ..' (Stats.1971, ch. 170, § 38, p. 231.) Plaintiff became 67 on August 3, 1974.

Defendant Board of Administration of the Public Employees' Retirement System fixed plaintiff's pension at $1,863 per month and he has been receiving this amount since his retirement. This figure is higher, in an undetermined amount, than plaintiff would have received had he voluntarily retired at age 67 under the law in effect prior to July 1, 1971. This is due to the fact that at the same time as it reduced the mandatory age of retirement, the Legislature increased, for all ages of retirement, the benefit factor set forth in section 21251.13 used in determining the pension of a member of PERS. (Stats.1971, ch. 170, § 42.) The benefit factor, when multiplied by the employee's years of service, gives the percentage of his highest average salary during three consecutive years which the employee will receive as a total pension. In plaintiff's case, the benefit factor was increased from 2.283 percent to 2.418 percent (with an appropriate reduction for service also covered by Social Security) for retirement at age 67. ² If the compulsory age of retirement had not been reduced from 70 to 67, plaintiff would have been permitted to continue in state employment until September 1, 1977. Had he done so, remaining in his final position and receiving salary increases as the Legislature provided, his retirement pension at age 70 based on the benefit factor in effect under former law would have been at least $2,365 per month. ³

Plaintiff's first amended complaint for mandate and for damages for breach of contract sought a variety of relief which we summarize as follows: 1) a judgment declaring the above reduction in the mandatory age of retirement 'void and unconstitutional as applied to plaintiff' as being violative of the contract clause of the federal Constitution (U.S.Const., art. I, § 10) and of the due process clauses of both the federal (U.S.Const., Amends. 5th and 14th) and state (Cal.Const., art. I, § 7, subd. (a)) Constitutions; 2) a writ of mandate restoring plaintiff to his former position in state employment with all rights and benefits accruing to that position; 3) a judgment for the amount of plaintiff's financial loss resulting from his receipt of a smaller pension upon his retirement at age 67 than at age 70.

The trial court on the basis of findings of fact substantially as related above concluded that the change in the mandatory age of retirement applicable to plaintiff's position did not impair or violate any of his rights and that 'Plaintiff had no contractual or vested right to remain employed in state service until the age specified for mandatory retirement under the Public Employees' Retirement System law at any particular time during his employment and is bound by the legislative determination of the age at which he must retire from state service.' ⁴ Accordingly, the court entered judgment denying plaintiff's petition for a peremptory writ of mandate and directing that he take nothing by his complaint. This appeal followed.

We first consider whether plaintiff was entitled to remain in state service beyond the age of 67 notwithstanding the change in the mandatory age of retirement applicable to his position. Plaintiff contends that he has a vested, Contractual right, based on the mandatory retirement age in effect when he was first employed by the state, to continue in state service until age 70. He points out that he accepted employment to age 70, continued to serve the state on this understanding for 31 years and made his life plans accordingly. Furthermore, he argues, since he was at all times a civil service employee, the denial of his alleged vested contractual right not only unlawfully changes the terms and conditions of his employment but also frustrates the state civil service system. Plaintiff cites no authority supportive of his position.

On the contrary it is well settled in California that public employment is not held by contract but by statute and that, insofar as the duration of such employment is concerned, no employee has a vested contractual right to continue in employment beyond the time or contrary to the terms and conditions fixed by law. (Butterworth v. Boyd (1938) 12 Cal.2d 140, 150, 82 P.2d 434; Patton v. board of Harbor Commissioners (1970) 13 Cal.App.3d 536, 540, 91 Cal.Rptr. 832; Humbert v. Castro Valley County Fire Protection Dist. (1963) 214 Cal.App.2d 1, 13, 29 Cal.Rptr. 158; Payne v. State Personnel Board (1958) 162 Cal.App.2d 679, 681, 328 P.2d 849; Boutwell v. State Board of Equalization (1949) 94 Cal.App.2d 945, 950, 212 P.2d 20; Risley v. Bd. of Civil Service Commrs. (1943) 60 Cal.App.2d 32, 37--38, 140 P.2d 167; compare Pennie v. Reis (1889) 80 Cal. 266, 269, 22 P. 176; Miller v. Kister (1885) 68 Cal. 142, 144, 8 P. 813.) Nor is any vested contractual right conferred on the public employee because he occupies a civil service position since it is equally well settled that '(t)he terms and conditions of civil service employment are fixed by statute and not by contract.' (Boren v. State Personnel Board (1951) 37 Cal.2d 634, 641, 234 P.2d 981, 985; see also Martin v. Henderson (1953) 40 Cal.2d 583, 590--591, 255 P.2d 416; California v. Brotherhood of Railroad Trainmen (1951) 37 Cal.2d 412, 417, 232 P.2d 857; Townsend v. County of Los Angeles (1975) 49 Cal.App.3d 263, 267--268, 122 Cal.Rptr. 500; Gilmore v. Personnel Board (1958) 161 Cal.App.2d 439, 448--449, 326 P.2d 874; Risley v. Board of Civil Service Commrs., supra.) Indeed, '(t)he statutory provisions controlling the terms and conditions of civil service employment cannot be circumvented by purported contracts in conflict therewith.' (Boren, supra, 37 Cal.2d at p. 641, 234 P.2d at p. 985.)

In view of these long and well settled principles, we conclude that the power of the Legislature to reduce the tenure of plaintiff's civil service position and thereby to shorten his state service, by changing the mandatory retirement age was not and could not be limited by any contractual obligation.

Plaintiff's reliance upon decisions concerning the pension rights of public employees is misplaced. This court has held, as will be explained hereafter, that pension rights involve 'obligations which are protected by the contract clause of the Constitution.' (Kern v. City of Long Beach (1947) 29 Cal.2d 848, 853, 179 P.2d 799, 802.) The court, however, distinguished decisions containing language, 'to the general effect that public employment is not held by contract' because of the fact that '(t)hese cases involve the right to remain in an officer or employment, or to the continuation of civil service status.' (Id., at pp. 852--853, 179 P.2d at pp. 801--802.) Pension rights, unlike tenure of civil service employment, are deferred compensation earned immediately upon the performance of services for a public employer 'and cannot be destroyed . . . without impairing a contractual obligation. Thus the courts of this state have refused to hold, in the absence of special provision, that public employment establishes tenure rights, but have uniformly held that pension laws . . . establish contractual rights.' (Id., at p. 853, 179 P.2d at p. 802.)

Thus, under settled law, plaintiff had no vested contractual right to remain in state employment until age 70. Since defendants were required by statute to retire plaintiff at age 67 and plaintiff does not in any other manner challenge the validity of his compulsory retirement, we hold that he...