Opinion
NOT TO BE PUBLISHED
San Francisco City & County Super. Ct. No. CGC-09488156.
Reardon, J.
California Public Employees’ Retirement System (CalPERS) officials determined that certain staff members of appellant California County Superintendents Educational Services Association (CCSESA) were ineligible for retirement service credit. While an administrative appeal was pending, CCSESA and other affected individuals filed a declaratory relief action challenging the notice and administrative appeal procedures of respondent Board of Administration of CalPERS (Board). (Code Civ. Proc., § 1060.) After the trial court granted CalPERS’s motion for judgment on the pleadings, CCSESA appealed from the resulting judgment for CalPERS. (§ 438.) CCSESA contends inter alia that the trial court abused its discretion in determining that a declaratory judgment was not then necessary or proper. (§ 1061.) We affirm the judgment.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
As this appeal comes to us after an order granting judgment on the pleadings, our statement of facts assumes that all allegations of CCSESA’s complaint are true. (See, e.g., Colberg, Inc. v. State of California ex rel. Dept. Pub. Wks. (1967) 67 Cal.2d 408, 411-412.)
A. The Parties
CalPERS is a state agency charged with administering the retirement program for many of California’s public employees. Appellants are (1) CCSESA, a statewide association of California county superintendents of schools; (2) certain employees of the San Joaquin County Superintendent of Schools (San Joaquin Superintendent), including Dr. Glen Thomas (San Joaquin employees); (3) certain employees of the El Dorado County Superintendent of Schools (El Dorado Superintendent), including Dr. Thomas (El Dorado employees) and (4) the County Superintendents of Schools of various California counties. Respondents are the Board and Kenneth Marzion, in his official capacity as assistant executive officer of CalPERS. Marzion was also sued in his individual capacity, as was Lori McGartland, chief of CalPERS’s employer services division, and Sharen B. Scott, manager in the employer services division of CalPERS. McGartland and Scott are not respondents on appeal, nor is Marzion as an individual.
B. Service Credit Dispute
CCSESA is a network composed of all 58 California county superintendents of schools. This association designs and implements regional and statewide programs on behalf of the county superintendents, who are responsible for such tasks as fiscal oversight of local school districts, curriculum and instructional support, administrative services, personnel services, and technology and telecommunications services. It employs a statewide staff paid from a fund of service fees paid by the county superintendents. Part of those fees pays the annual employer and employee CalPERS contributions on behalf of the statewide staff. From July 1998 through December 2006, Dr. Glen Thomas served as CCSESA’s executive director.
Since 1998, CCSESA’s statewide staff has been employed by one designated county school superintendent. From July 1998 through September 2003, CCSESA designated the San Joaquin Superintendent as their employer. From October 2003 to the present, the El Dorado Superintendent was designated by CCSESA to serve as its staff’s employer. The designated superintendent reported those CCSESA employees performing statewide services on behalf of all county superintendents to CalPERS for service credit as school members. All required employer and employee contributions were submitted to CalPERS on behalf of those employees during the relevant time period.
In February 2004, CalPERS began an investigation into whether CCSESA’s El Dorado employees were eligible for service credit. In June 2006, CalPERS staff met with the El Dorado Superintendent and its lawyer, and Glen Thomas, who was then employed as the executive director of CCSESA. At this meeting, a CalPERS employee mentioned that CalPERS was questioning the pension service credit of several individuals, but it is not clear if Thomas knew if his pension service credit was in question at the time. In November 2006, Thomas met with a CalPERS manager to discuss his anticipated retirement. At the meeting, Thomas was assured that CalPERS did not dispute his retirement status or his 32.47 years of CalPERS service credit. Thomas submitted his retirement letter on December 30, 2006. In January 2007, CalPERS notified Thomas that it was conducting an inquiry into his service credit and that he would receive an interim retirement allowance of $3,282.93 each month, rather than his anticipated monthly pension check of $15,135.05. (See California County Superintendents of Schools Educational Assn. v. Marzion (N.D. Cal., Mar. 2, 2009, No. C 08-04806CW) 2009 WL 513742, *1 (CCSESA).)
In March 2007, CalPERS sent Thomas a final determination letter stating that CalPERS rejected his retirement service credit retroactive to July 1, 1998. At no point before Thomas learned of this rejection did CalPERS offer him a predetermination hearing. That same month, CalPERS also sent a final determination letter to the El Dorado Superintendent retroactively rejecting retirement service credit from 2003 to the present for El Dorado employees who worked for CCSESA and who were reported to CalPERS as employees of the El Dorado County Office of Education. (See CCSESA, supra, 2009 WL 513742, *2.) It directed the El Dorado Superintendent to “reverse out” the payroll for these employees.
None of the other individual appellants has submitted a retirement application to CalPERS. (See CCSESA, supra, 2009 WL 513742, *2.)
CalPERS did not personally notify any of the El Dorado employees of its decision until November and December 2008.
El Dorado County has not complied with this order.
In September 2007, CalPERS sent a final determination letter to the San Joaquin Superintendent, retroactively rejecting retirement service credit from 1998 to 2003 for San Joaquin employees who worked for CCSESA and who were reported to CalPERS as employees of the San Joaquin County Office of Education. (See CCSESA, supra, 2009 WL 513742, *2.) It was also instructed to retroactively “reverse out” all payroll that had been sent to CalPERS on behalf of the affected employees.
CalPERS did not personally notify any of the San Joaquin employees of the decision, other than Thomas, until August 2008.
The San Joaquin Superintendent has not returned these contributions.
C. Federal Action
In October 2008, CCSESA brought an action in federal court against CalPERS employees Marzion, McGartland and Scott, arguing that CalPERS’s notice and appeal procedures violated their procedural due process rights. Marzion was sued individually and in his official capacity. McGartland and Scott were sued individually. CCSESA asserted that CalPERS did not provide them with adequate notice of its decisions; that CalPERS should have afforded them a predetermination hearing before making any decision about their pension credit; and that CalPERS failed to provide a timely postdetermination hearing. CCSESA sought damages under title 42 United States Code section 1983, as well as declaratory and injunctive relief, and attorney fees. (See CCSESA, supra, 2009 WL 513742, *2.) On abstention, ripeness and qualified immunity grounds, the district court dismissed that action in March 2009 over CCSESA’s opposition. (See id., *9.)
D. Administrative Proceedings
Meanwhile, the administrative appeals process was unfolding. In April and September 2007, Thomas, the El Dorado Superintendent and the San Joaquin Superintendent had filed administrative appeals of the CalPERS determinations. In February 2008, CalPERS issued a statement of issues on Thomas’s service credit. In March 2008, CalPERS limited the administrative appeal to that of Thomas. In April 2008, an administrative law judge (ALJ) consolidated into one action the appeals of all San Joaquin employees and El Dorado employees who worked for CCSESA.
By June 2009, the ALJ hearings for the San Joaquin employees and El Dorado employees had been bifurcated. In early 2009, an administrative hearing was held to adjudicate the pension eligibility of the San Joaquin employees from the 1998-2003 period. The parties stipulated that if the Board made a determination on the San Joaquin employees’ eligibility for service credit, that ruling would apply to the El Dorado employees as well. In July 2009, an ALJ issued a 50-page proposed decision, concluding that the San Joaquin employees were properly reported to CalPERS. The proposed decision ordered CalPERS to restore denied service credit to Thomas and the other San Joaquin employees. In September 2009, the Board rejected the ALJ’s proposed decision, opting to conduct its own hearing on the issue and to issue its own ruling on the matter. In December 2009, the Board adopted its own decision, rejecting CCSESA’s claims of eligibility for service credit.
E. State Declaratory Relief Action
In May 2009—while the administrative process was still underway—CCSESA, the county superintendents of schools and the affected San Joaquin employees and El Dorado employees brought the underlying action for a declaratory judgment. They named the Board, Marzion, McGartland and Scott as defendants. The lawsuit alleged three causes of action. A declaratory relief cause of action alleged against CalPERS and Marzion in his official capacity sought a determination that the applicable CalPERS notice and appeal regulations were unconstitutional. The complaint also alleged causes of action against Marzion, McGartland and Scott in their individual capacities for violation of due process and of the federal civil rights of the individual employees to their public employee pensions. The complaint prayed for compensatory damages and attorney fees from all defendants and sought punitive damages from the individual defendants.
CalPERS filed a demurrer challenging the complaint. In October 2009, the trial court overruled the demurrer on the declaratory judgment cause of action. It sustained the demurrer without leave to amend on the other two causes of action, citing res judicata grounds. These two causes of action were dismissed with prejudice. Judgment was entered in favor of Marzion in his individual capacity and in favor of McGartland and Scott entirely on the second and third causes of action.
In November 2009, CalPERS filed its answer to the remaining cause of action for declaratory relief. One defense alleged in the answer was that the trial court should dismiss the complaint because the relief that CCSESA sought was not necessary or proper at the time under all the circumstances. (§ 1061.) At the same time, CalPERS moved for judgment on the pleadings. (§ 438.) One basis of that motion was that dismissal was appropriate because a declaratory judgment was not then necessary or proper. (§ 1061.) CCSESA opposed this motion.
In July 2010, the trial court granted CalPERS’s motion for judgment on the pleadings. It reasoned that even if all the factual allegations of CCSESA’s complaint were true, the CalPERS regulations were not unconstitutional on their face or as applied. It ruled that under California law, an administrative hearing must be held within a reasonable time if a more specific time limit is not fixed by statute. As such, the trial court concluded that as a matter of law, CCSESA had a right to immediate writ review if a hearing was not held within a reasonable time. Alternatively, the trial court exercised its authority to dismiss the declaratory judgment cause of action with prejudice as not then necessary or proper. (§ 1061.) It dismissed CCSESA’s declaratory judgment cause of action with prejudice and entered judgment in favor of the Board and Marzion, acting in his official capacity.
F. State Administrative Mandamus Action
Meanwhile, in January 2010, CCSESA filed a petition for writ of administrative mandate in San Francisco Superior Court, raising due process issues. In March 2010, the mandamus action was designated as a complex matter in the trial court, where the action is still pending resolution. (§ 1094.5.)
II. DECLARATORY JUDGMENT
A. Scope of Discretion
On appeal, CCSESA contends that the trial court erred in granting CalPERS’s motion for judgment on the pleadings in its declaratory judgment action. It asserts inter alia that the availability of another remedy is an insufficient basis for denial of a declaratory relief action. (§ 438.) One who desires a declaration of his or her rights under certain circumstances may bring an action for a declaratory judgment. In response to that action, the trial court may make a binding declaration of rights. (§ 1060.)
However, the trial court also has the authority to decline to exercise this power when a declaration “is not necessary or proper at the time under all the circumstances.” (§ 1061; Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 647; see 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 866, p. 282.) In the matter before us, the trial court exercised its discretion to refuse to entertain any declaratory relief, finding that it was not necessary or proper to do so. Thus, our inquiry is not whether CCSESA stated a cause of action for declaratory relief, but—assuming that it did so—whether the trial court properly exercised its discretion to refuse to exercise its power to issue declaratory relief. (See § 1061; Filarsky v. Superior Court (2002) 28 Cal.4th 419, 433.) On appeal from a judgment based on such an exercise of discretion, we determine whether the trial court abused its discretion in dismissing the declaratory judgment cause of action. (Meyer v. Sprint Spectrum L.P., supra, 45 Cal.4th at p. 647; Filarsky v. Superior Court, supra, 28 Cal.4th at p. 433.)
A trial court’s discretion under section 1061 is not boundless. (Meyer v. Sprint Spectrum L.P., supra, 45 Cal.4th at p. 647; Guinn v. County of San Bernardino (2010) 184 Cal.App.4th 941, 951.) The exercise of judicial discretion must be measured against the specific statute granting that discretion. The trial court’s exercise of discretion must, in its judgment, best effectuate the legislative purposes of declaratory relief. (See Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393-394 [Fair Employment and Housing Act case].)
As a declaratory judgment is a cumulative remedy, the existence of another remedy is not, alone, a sufficient basis to reject a declaratory relief action. (§ 1062; Filarsky v. Superior Court, supra, 28 Cal.4th at p. 433; In re Claudia E. (2008)163 Cal.App.4th 627, 633-634.) Only when the trial court believes that more effective relief can and should be obtained by another remedy would a declaratory judgment not serve a useful purpose, warranting dismissal of that cause of action pursuant to section 1061. (See In re Claudia E., supra, 163 Cal.App.4th at p. 634.) If an appropriate procedure has been provided by special statute and the court believes that more effective relief can and should be obtained through that procedure, the trial court may properly decline to grant declaratory relief if an alternative remedy is available. (Filarsky v. Superior Court, supra, 28 Cal.4th at p. 433.) In such circumstances, a trial court might abuse its discretion by permitting the declaratory judgment action to proceed and thus circumventing the procedures set out in statute by the Legislature. (Ibid.)
B. Judgment on the Pleadings
This dismissal arose in the context of a motion for judgment on the pleadings. The grounds for a judgment on the pleadings must appear on the face of the challenged complaint or from any matter of which the trial court must take judicial notice. It may also be based on matter of which the trial court may take judicial notice. (§ 438, subd. (d).) A motion for judgment on the pleadings may be filed if the moving party’s demurrer to the complaint has already been overruled if there has been a material change in the applicable case law or statute since the time of the ruling on the demurrer, or if grounds not raised in the demurrer are asserted in the motion for judgment on the pleadings. (§ 438, subd. (g); see Yancey v. Superior Court (1994) 28 Cal.App.4th 558, 562 fn. 1.)
C. Propriety of Exercise of Discretion
By the time that the trial court filed its judgment in July 2010, CCSESA had filed a petition for writ of administrative mandamus—the very remedy that the trial court concluded would be a more appropriate vehicle for resolving the legal issues involved than the declaratory relief action. (See § 1094.5.)
CCSESA filed this administrative mandamus action on the same day that the trial court conducted its hearing on the motion for judgment on the pleadings in the declaratory relief action. This circumstance arising after the earlier overruling of CalPERS’s demurrer to the declaratory relief cause of action constitutes a basis for the motion for judgment on the pleadings that was not asserted in the demurrer. (See § 438, subd. (g).) The trial court was entitled to take judicial notice of the fact that CCSESA filed an administrative mandamus action related to the same issues as those posed in the declaratory relief cause of action. (Evid. Code, § 452, subd. (d)(1).) Thus, this new circumstance could properly be considered by the trial court when ruling on the motion for judgment on the pleadings. (§ 438, subd. (d).)
The administrative mandamus action offered CCSESA an opportunity to raise the legal issues it raised in the declaratory relief action. That action has been designated as complex litigation and has been assigned to a single judge for determination of all issues. That judge will have the benefit of reviewing the full administrative record in this matter, including the Board’s decision. Viewed in this context, the administrative mandamus action is not merely an alternative remedy, but one that is likely to prove more effective than a declaratory judgment. (See, e.g., In re Claudia E., supra, 163 Cal.App.4th at p. 634.) The trial court was of the view that mandate was a more appropriate method of obtaining the relief that CCSESA sought. (See Horsford v. Board of Trustees of California State University, supra, 132 Cal.App.4th at pp. 393-394.) As such, at the time it filed its judgment the trial court’s exercise of discretion to dismiss the declaratory judgment cause of action was within the proper scope of discretion afforded by section 1061.
At oral argument, CCSESA asserted that some of its due process concerns may not be determined in the pending petition for writ of administrative mandamus. As that petition is not before us, we cannot determine the scope of the issues to be addressed in that matter.
In light of this conclusion, we need not determine the validity of the trial court’s alternative ruling on the judgment on the pleadings—that is, the merits of the declaratory judgment cause of action. As we do not reach these issues, we find that the matter forming the basis of CCSESA’s request for judicial notice is not relevant to our decision.
The judgment is affirmed.
We concur: Ruvolo, P.J., Rivera, J.