Opinion
D057543 37-2009-00088422-CU-BC-CTL)
09-23-2011
GARRY COLLINS et al., Plaintiffs and Appellants, v. CITY OF SAN DIEGO, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
APPEAL from a judgment of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Affirmed.
I.
INTRODUCTION
Garry Collins, Harry Eastus, William Farrar and the San Diego Police Officers Association (SDPOA) (collectively, appellants) filed this action against the City of San Diego (City) and the San Diego City Employees' Retirement System (SDCERS). Collins, Eastus, and Farrar are former presidents of the SDPOA. While serving as president of the SDPOA, each took a leave of absence from City employment. In their first amended complaint, which contained 13 causes of action against the City, appellants alleged that Collins, Eastus, and Farrar were due certain pension benefits that they had accrued while serving as president of the SDPOA. The trial court sustained the City's demurrer without leave to amend as to all 13 causes of action in the first amended complaint and entered judgment in favor of the City.
After the trial court sustained the City's demurrer, appellants dismissed all of their causes of action against SDCERS, with prejudice. SDCERS is not a party to this appeal.
On appeal, appellants' sole contention is that the trial court erred in sustaining the City's demurrer to their cause of action for equitable estoppel. We conclude that there is no such cause of action under California law, and affirm the judgment.
II.
FACTUAL AND PROCEDURAL BACKGROUND
In September 2009, appellants filed a verified first amended complaint against SDCERS and the City. In their complaint, appellants alleged that in 1997, the City adopted an ordinance that codified an existing practice that had been in effect since 1989, pursuant to which City police officers were permitted to continue participating in the City's pension plan while on an approved leave of absence from City employment, serving as president of the SDPOA. Appellants alleged that the SDPOA made contributions to SDCERS to continue Collins's, Eastus's, and Farrar's participation in the pension plan while each of them served as president of the SDPOA. According to appellants, the SDPOA made the contributions to SDCERS based on Collins's, Eastus's, and Farrar's salaries, which the SDPOA paid.
In their opening brief, appellants refer to their first amended complaint as a "proposed" first amended complaint. The record contains a filed first amended complaint. The City demurred to the first amended complaint. We assume that appellants intended to refer to the first amended complaint contained in the record.
Appellants alleged that Collins, Eastus, and Farrar had relied on the "City's and SDCERS' promise that they would be paid a pension benefit," based on "all of their years of service while actively employed by City and while on an approved leave of absence for which contributions had been or would be paid to SDCERS," and that "their Union-paid annual salary—on which contributions were being made—would be used when calculating their pension benefits . . . ." Appellants alleged that in 2002, the City adopted a resolution (R-297212) that guaranteed that each of the appellants would be paid a pension benefit calculated in this manner. Appellants also alleged that in 2003, the City entered into a separate contract with Farrar (the Farrar Agreement) that provided that Farrar would accrue pension benefits in a manner consistent with the provisions of R-297212. Finally, appellants alleged that in 2008, the City adopted an ordinance (0-19740) that retroactively rescinded R-297212 by providing that no SDCERS plan participant was permitted to accrue creditable service, make contributions, or include compensation while acting as an employee of SDPOA, and that the City's adoption of this ordinance breached the Farrar Agreement.
With respect to the City, the complaint contained causes of action entitled unconstitutional impairment of contract; violation of public policy; breach of contract; negligence; breach of fiduciary duty; intentional infliction of emotional distress; negligent infliction of emotional distress; declaratory relief; writ of mandate; promissory estoppel; equitable estoppel; quantum meruit; and specific performance. With respect to their equitable estoppel claim, appellants alleged that the City had made representations to them concerning their pension benefits, including R-297212 and the Farrar Agreement. Appellants claimed that the City should "be equitably estopped from failing to follow through with said representations, and they should be forced by this Court to abide by said representations."
The individual appellants brought the claims for intentional infliction of emotional distress. Farrar brought the claims for promissory estoppel and specific performance. The remainder of the claims were brought by all of appellants.
In October 2009, the City filed a demurrer to all of the claims in appellants' first amended complaint. In its demurrer, the City contended that the Internal Revenue Service (IRS) had determined that R-297212 and the Farrar Agreement were unlawful. The City argued that federal tax law provided that benefits from a tax exempt pension plan may be provided only to employees of an employer who participates in the pension plan. Because the SDPOA was not a participating employer of the City's pension plan, no pension benefits could be based on a salary paid by the SDPOA. The City contended that the City had entered into a settlement agreement with the IRS that required that the pension plan return to Eastus, Collins, and Farrar all of the contributions to the plan that were derived from appellants' employment with the SDPOA, with interest.
The City also claimed that R-297212 and the Farrar Agreement were unenforceable because under the City Charter, pension benefits may be granted only by ordinance, and neither R-297212 nor the Farrar Agreement were ordinances. The City also contended that appellants could not invoke the doctrine of equitable estoppel to contravene the limitations on granting pension benefits contained in the City Charter.
Appellants filed an opposition in which they argued that R-297212 and the Farrar Agreement created binding contractual obligations, and that the doctrine of equitable estoppel prevented the City from "reneging on its contractual obligations." Appellants also maintained that the IRS had not concluded that R-297212 violated federal tax law. Rather, appellants argued, the IRS had determined only that the tax exempt status of the City's pension plan would be jeopardized if the City were to perform its contractual obligations set forth in R-297212 using pension fund assets.
The trial court sustained the City's demurrer without leave to amend. The trial court ruled that neither R-297212 nor the Farrar Agreement constituted an enforceable contract, for the reasons stated in the City's demurer. The trial court also agreed with the City that appellants could not invoke the doctrine of equitable estoppel to defeat the limitations on granting pension benefits contained in the City Charter. The trial court stated that "there was nothing preventing one or more of the plaintiffs from doing the independent work necessary to determine if proceeding in the fashion selected would place the entire retirement system at risk vis-a-vis the IRS."
In January 2010, the trial court entered a judgment in favor of the City. Appellants filed a motion for reconsideration, which the trial court denied in February 2010. In March 2010, the trial court entered a second judgment in favor of the City. Appellants filed a notice of appeal in June 2010.
III.
DISCUSSION
A. Appellate jurisdiction
We first consider, sua sponte, whether appellants' notice of appeal was timely filed. (E.g., Drum v. Superior Court (2006) 139 Cal.App.4th 845, 849 ["because the timeliness of an appeal poses a jurisdictional issue, we must raise the point sua sponte"].)
On January 6, the trial court entered judgment in favor of the City. On January 12, appellants filed a motion for reconsideration. On February 26, the trial court denied the motion for reconsideration. On March 3, the trial court entered a second judgment.
A motion for reconsideration that is filed after entry of a judgment, rather than after an interim appealable order, is invalid and does not extend the time for filing a notice of appeal. (Passavanti v. Williams (1990) 225 Cal.App.3d 1602, 1606-1608.) Thus, we must consider whether appellants' June 7, 2010 notice of appeal was timely as to the January 6, 2010 judgment.
Neither the record on appeal nor the superior court file indicates that appellants ever received notice of entry of the January 6 judgment, as defined in California Rules of
Court, rule 8.104(a)(1),(2). Thus, pursuant to rule 8.104(a)(3), appellants had 180 days from the date of the January 6 judgment to file a notice of appeal. Appellants' June 7 notice of appeal was filed 152 days after the January 6 judgment. Accordingly, we conclude that appellants' notice of appeal was timely filed, and that we have appellate jurisdiction to consider their claims. B. The trial court properly sustained the City's demurrer to appellants' equitable estoppel cause of action without leave to amend, because there is no such cause of action under California law
All rule references are to the California Rules of Court. On our own motion, we order the record on appeal augmented with the superior court file. (Rule 8.155(a)(1)(A).)
Appellants' June 7, 2010 notice of appeal does not state the date of the judgment from which they are appealing. We construe the notice of appeal as an appeal from the January 6, 2010 judgment.
Appellants claim that the trial court erred in sustaining, without leave to amend, the City's demurrer to their cause of action for equitable estoppel.
Appellants abandoned all of the other causes of action in their first amended complaint by failing to raise any contentions pertaining to such claims in their opening brief. (See Estate of Felder (2008) 167 Cal.App.4th 518, 523.) In their reply brief, appellants confirmed that their sole contention on appeal pertains to their equitable estoppel cause of action by arguing, "The case should be remanded to [the] trial [court] on the single cause of action of equitable estoppel."
Appellants also expressly conceded in their opening brief that they could not prevail on any cause of action that "sounds in contract," including promissory estoppel. Appellants stated, "Appellants concede that any remedy which appears to be an award of damages on a contract might possibly run afoul of the [City's settlement agreement with the IRS], and that cannot be allowed." We express no opinion on this concession, and address only the issue that appellants raise on appeal.
1. Standards of review
We review de novo an order sustaining a demurrer to determine whether the complaint alleges facts sufficient to state a cause of action. (CPF Agency Corp. v. Sevel's 24 Hour Towing Service (2005) 132 Cal.App.4th 1034, 1042.) We exercise our independent judgment as to whether the complaint states a cause of action. (Palestini v. General Dynamics Corp. (2002) 99 Cal.App.4th 80, 86.) When a demurrer is sustained without leave to amend, "we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).)
2. Governing law
In Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1463, (Behnke), this court reiterated that California does not recognize an independent cause of action for equitable estoppel:
"[A]s Witkin . . . explains, ' "[t]he [equitable estoppel] doctrine acts defensively only." ' (13 Witkin, Summary of Cal. Law [(10th ed. 2005)] Equity, § 190, p. 527; see also Central National Ins. Co. v. California Ins. Guarantee Assn. (1985)165 Cal.App.3d 453, 460 [equitable estoppel 'must be pleaded [] either as a part of the cause of action or as a defense'].) As a stand-alone cause of action for equitable estoppel will not lie as a matter of law, the court properly sustained State Farm's general demurrer to Behnke's equitable estoppel claim."
Behnke is fully consistent with California law in this regard. (See Money Store Investment Corp. v. Southern Cal. Bank (2002) 98 Cal.App.4th 722, 732 ["The Money Store pleaded equitable estoppel as a separate cause of action. It cannot stand as such."]; Pacific Gas & Electric Co. v. Zuckerman (1987) 189 Cal.App.3d 1113, 1148 [equitable estoppel doctrine could not be used as an affirmative theory on which to base the collection of royalties]; Green v. Travelers Indem. Co. (1986) 185 Cal.App.3d 544, 555 ["axiomatic is . . . the rule that the theory of estoppel is invoked as a defensive matter to prevent the party estopped from alleging or relying upon some fact or theory that would otherwise permit him to recover something from the party asserting estoppel"].) Courts in numerous other jurisdictions have also held that equitable estoppel is not an independent cause of action. (See, e.g., Joe v. Two Thirty Nine Joint Venture (Tex. 2004) 145 S.W.3d 150, 156, fn. 1 ["Equitable estoppel is not a cause of action but may be asserted as a defensive plea to bar a defendant from raising a particular defense"]; Jablon v. United States. (9th Cir. 1981) 657 F.2d 1064, 1068 [same].)
3. Application
In their opening brief, appellants contend that they can state an independent cause of action for equitable estoppel. Appellants have not cited any authority that supports this proposition, and they have not addressed any of the authorities cited above. Appellants have thus failed to demonstrate that California law recognizes an independent cause of action for equitable estoppel. Accordingly, we conclude that the trial court properly sustained the City's demurrer to appellants' equitable estoppel claim. (See Behnke, supra, 196 Cal.App.4th at p. 1463 ["a stand-alone cause of action for equitable estoppel will not lie as a matter of law"].)
In their reply brief, appellants appear to argue that they could amend their complaint to assert a claim for misrepresentation based on equitable estoppel. To the extent that appellants intend to raise such an argument, we reject it. Appellants did not mention the tort of misrepresentation in their opening brief, and they offer no reason for raising this argument for the first time in reply. Appellants' failure to discuss the tort of misrepresentation in their opening brief deprived the City of the opportunity to brief the effect, if any, of the immunity conferred in Government Code section 818.8 with respect to such a claim. That section provides, "A public entity is not liable for an injury caused by misrepresentation by an employee of the public entity, whether or not such misrepresentation be negligent or intentional." Accordingly, we decline to consider appellants' argument. (See Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10, citations omitted [points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before" ' "].)
Appellants quote a treatise and the Restatement Second of Torts and argue, "Prosser then cites . . . the Second Restatement of Torts, § 872, which also dovetails nicely with the facts of this case, i.e., a misrepresentation, even if innocently made by the City, that these police employees, especially Mr. Farrar, would be covered for pension benefits during their tenure as Presidents of SDPOA, is actionable under the guise of equitable estoppel."
The precise nature of the claim that appellants intend to assert is unclear from their briefing in this court. Although appellants refer to the tort of misrepresentation in their reply brief, they also argue, "Equitable estoppel can be used by a plaintiff as the 'stand alone' sole cause of action under rare and unique circumstances, as in this case." As stated in the text above, we reject this argument.
In the trial court, the City cited Government Code section 818.8 and case law interpreting this provision in arguing that appellants could not state a negligence cause of action.
Appellants also argue that the trial court abused its discretion in sustaining the demurrer without leave to amend, because in so doing, the court deprived appellants of the opportunity to "conduct discovery to ferret out all of the relevant facts to properly balance the equitable estoppel issues." Appellants have not carried their burden to demonstrate that there is a reasonable possibility that such discovery would enable them to properly state a cause of action. (See Blank, supra, 39 Cal.3d at p. 318.) Accordingly, we conclude that the trial court did not abuse its discretion in refusing to grant appellants the opportunity to amend their complaint.
In light of our conclusions, we need not consider any of the City's alternative grounds for affirming the judgment.
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IV.
DISPOSITION
The judgment is affirmed. Appellants are to bear costs on appeal.
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AARON, J.
WE CONCUR:
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NARES, Acting P. J.
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IRION, J.