Rose v. City of Hayward

• Citation: 126 Cal.App.3d 926,179 Cal.Rptr. 287
• Court: California Court of Appeals
• Decision Date: 18 December 1981
• Parties: Frank ROSE; Mrs. John S. Munoz; Frank Tapia, et al., Plaintiffs and Appellants, v. CITY OF HAYWARD, William C. Hanley, Board of Administration of the Public Employees' Retirement System, Defendants and Respondents. Civ. 47885.

Page 287

179 Cal.Rptr. 287

126 Cal.App.3d 926

Frank ROSE; Mrs. John S. Munoz; Frank Tapia, et al., Plaintiffs and Appellants, v. CITY OF HAYWARD, William C. Hanley, Board of Administration of the Public Employees' Retirement System, Defendants and Respondents.

Civ. 47885.

Court of Appeal, First District, Division 2, California.

Dec. 18, 1981.

Hearing Denied Feb. 24, 1982.

Duane W. Reno, Davis, Cowell & Bowe, San Francisco, for plaintiffs and appellants.

John W. Scanlon, City Atty., Myron A. Johnson, Asst. City Atty., Hayward, for defendant and respondent, City of Hayward.

George Deukmejian, Atty. Gen., Eleanor Nisperos, Deputy Atty. Gen., San Francisco, for defendant and respondent, Public Employees' Retirement System.

MILLER, Associate Justice.

This is an appeal by retired public employees from a judgment denying a petition for writ of mandate seeking an order compelling the City of Hayward and the Public Employees Retirement System (hereinafter "PERS") to include certain "fringe benefits" in the salary base from which their pension allowances are computed. Appellants also appeal from an order entered by the trial court denying certification as a class action.

The parties have stipulated to the facts of the case. We summarize the relevant facts from that stipulation. The named plaintiffs in this action are a retired police officer and a retired fire fighter and the widows of a deceased police officer and a deceased fire fighter formerly employed by the City of Hayward. Named petitioners have vested pension rights and at the time they filed their petition, were receiving monthly pensions from PERS (the System).

During their tenure with the City of Hayward, both the fire fighters and police officers received an annual uniform allowance, holiday pay, and/or lump sum payment for unused sick leave time. The police officers also received an ammunition allowance.

Pursuant to the state retirement law, by which the City agreed by written contract to be bound, respondent PERS administers the City's pension plan for the police officers and fire fighters ("local safety members"). In calculating retirement benefits for appellants, respondent PERS did not consider the local safety members' uniform allowances, ammunition allowance, holiday pay and lump sum unused sick leave pay as part of their "final compensation," a factor used in PERS' service retirement formula.

Appellants filed their petition for a writ of mandate on December 22, 1976, to compel PERS to include the "fringe benefits" in its calculation of the pension benefits. Appellants did not seek an administrative hearing with PERS prior to instituting the action. PERS and the City of Hayward demurred to the petition on the ground that the court lacked jurisdiction because appellants did not exhaust their administrative remedies. Respondent City of Hayward also demurred on the ground that no cause of action was stated against the city. The trial court overruled those demurrers on January 31, 1977.

On March 28, 1977, appellant moved for class action certification. Respondents PERS and the City of Hayward objected to certification, but stipulated that liability be determined prior to determination of class maintainability. Thereafter, the trial court held that the annual uniform allowance should be included in the computation of pension benefits, but that holiday pay, ammunition allowance and cash payment upon retirement for unused sick leave should be excluded. At the same time, the trial court ruled that appellants need not have exhausted their administrative remedies prior to filing suit if the action is certified as a class action, but if appellants were not certified as class representatives, their suit would be barred by their failure to individually seek administrative relief.

On June 30, 1978, the trial court denied the motion for class certification and ordered that the action be dismissed for failure of appellants to exhaust their administrative remedies.

On appeal, appellants contend that they are entitled to certification as a class action suit in order to present their claims without exhausting their administrative remedies. Appellants also urge the court of appeal to reach the merits of the case, and to hold that not only the annual uniform allowance, but also the ammunition allowance, the holiday pay, and the lump sum payment of sick leave time, qualify as "compensation" that must be considered in the computation of their pension benefits.

Respondent PERS contends that appellants do not represent an ascertainable class with a well-defined community of interest and that, as individuals, appellants must exhaust their administrative remedies. Respondents also contend that the merits are not properly before the court in that the trial court's immediate order of February 1, 1978 that the uniform allowance be included in the computation of pension benefits was an interlocutory judgment. Respondents further contend that if this court does reach the merits, the trial court's interim decision that appellants' uniform allowance be considered in the computation of pension benefits should be reversed. Respondent City of Hayward also contends that the trial court's decision overruling its demurrer to the petition of mandate should be reversed in that no cause of action has been stated against the city.

Class Certification

Section 382 of the Code of Civil Procedure provides, in pertinent part, "... when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all." Two requirements must be met to sustain a class action under section 382: There must be an ascertainable class, and there must be a well-defined community of interest in the questions of law and fact involved. (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.) We find the present action eminently suitable for class action disposition.

Class members are "ascertainable" where they may be readily identified without unreasonable expense or time by reference to official records. (Hypolite v. Carleson (1975) 52 Cal.App.3d 566, 579, 125 Cal.Rptr. 221.) The identity of the class in the instant case is readily ascertainable from PERS' departmental records. Respondents' contention that the four named appellants cannot be certified as representatives of present and future recipients of benefit is erroneous. In construing the class to include future retired local safety members, respondents apparently relied upon the language in the appellant's original petition for writ of mandate rather than the subsequent notice of motion and motion for order determining that action is maintainable as a class action. The latter document seeks an order certifying a class to include only present retirees or widowed spouses receiving pensions. Moreover, in a very practical sense, named appellants are representative of future member employees. Their representative capacity stems from the fact that PERS will likely amend its administrative procedures to harmonize with the ultimate outcome of the substantive merits of this litigation, rather than pursue the undesirable alternative of repetitive and unavailing litigation.

The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.) In the present action, only the first two elements are disputed by the litigants. We find that appellant has satisfied both of the elements in question. The one decisive issue pervading the litigation, whether the class members have been wrongfully deprived of pension benefits by an improper method of computation, will not be decided on the basis of facts peculiar to each class member, but rather, on the basis of a single set of facts applicable to all members. Thus, appellants' action involves only one claim which turns on only one question of law common to all class members. Consolidation in a class action thereby creates substantial benefits for both the parties and the courts in that class action disposition averts the unnecessary risk of numerous and repetitive administrative and judicial proceedings with the attendant possibility of inconsistent adjudication.

A finding of common questions of law and fact in the present case accords fully with prior decisions where plaintiffs seeking retroactive payment of governmental benefits have sued as a class. In Hypolite v. Carleson, supra, the plaintiff sought class certification in an action for AFDC benefits which were allegedly wrongfully withheld under a statute that provided for aid to families with children during the continued absence of a parent. Pursuant to this statute, the Department of Social Welfare denied AFDC benefits to families where parents maintained a home together but apart from their child. The defendant agency conceded that the designated class shared a common question of law because each plaintiff's case turned on construction of the same statute regulating AFDC payments. In contending that the action should not be certified, the agency's argument rested on the premise that the many variables which determine eligibility would have to be evaluated in each case in order to determine the propriety of the retroactive aid. Since such an evaluation would require inquiry into "a myriad of factors," the agency inferred that plaintiffs failed to make a showing of common questions of fact. The court of appeal rejected the agency's argument, holding that the designated class consisted only of those individuals who were rendered ineligible for AFDC solely because their parents maintained a home...