Opinion
C086611
09-13-2019
DIXON POLICE OFFICERS ASSOCIATION, Plaintiff and Respondent, v. CITY OF DIXON, Defendant and Appellant.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 34-2017-00220451-CU-PT-GDS)
Defendant and appellant City of Dixon (City) appeals from an order confirming an arbitration decision in favor of plaintiff and respondent Dixon Police Officers Association (DPOA). The City contends the arbitrator's decision was only advisory under the provisions of the "City of Dixon Personnel Rules" (Personnel Rules). The City also appeals from an award of $900 in sanctions the trial court imposed when the City filed a motion to dismiss DPOA's confirmation petition that was substantially identical to its opposition to DPOA's petition, and then declined to withdraw the motion after the trial court ruled in favor of the petition.
We find that the trial court correctly interpreted the Personnel Rules in determining that the arbitrator's decision was final and binding. We further conclude that court did not err in imposing sanctions on the City for insisting on a hearing on a motion to present arguments the trial court had already rejected.
The judgment is affirmed.
FACTUAL AND PROCEDURAL BACKGROUND
The Personnel Rules govern all City employees. The rules set forth separate sections on disciplinary procedure, disciplinary appeal procedure, and grievance procedure.
Section 4.10, disciplinary procedure, details the procedures for imposing discipline on City employees, including employee representation during the disciplinary process, notice of proposed disciplinary action, a "Skelly" meeting affording an employee an opportunity to respond to misconduct charges, and a written order implementing any discipline. Discipline may consist of an oral reprimand, a written reprimand, suspension without pay for up to 30 days, demotion, or termination. Only disciplinary action consisting of suspension, demotion, or termination is appealable.
See Skelly v. State Personnel Board (1975) 15 Cal.3d 194, 215 (prediscipline public employee safeguards "must include notice of the proposed action, the reasons therefor, a copy of the charges and materials upon which the action is based, and the right to respond, either orally or in writing, to the authority initially imposing discipline").
Section 4.9, standards of conduct, of the Personnel Rules specifies various forms of misconduct that may result in discipline, including sleeping during work hours, disorderly conduct, stealing, "[t]hreatening, intimidating, coercing, interfering, or fighting on City premises or while on City business or in City uniform or while wearing City insignia," discrimination, harassment, retaliation, destruction of property, use of alcohol or illegal drugs while on duty, failing to report injury or harm to property, falsifying records, making false statements, and conduct unbecoming a City employee.
Section 4.11, disciplinary appeal procedure, lays out the steps to appeal suspension, demotion, or termination. These include a written request for an appeal (Section 4.11), selection of a hearing officer (Section 4.11.1), and conduct of the hearing and the decision (Section 4.11.2).
Section 4.11.2 provides that the appeal hearing is an evidentiary hearing with due process rights, including the right to present evidence, the right to examine and cross-examine witnesses, the right to legal counsel, findings by the hearing officer to support the decision, and a decision within the 30 days. Formal rules of evidence do not apply and the hearing officer may rely "upon any evidence that reasonable persons would commonly rely upon in the course of conduct of their business."
Section 4.11.2 further provides: "The decision of the hearing officer shall be provided to both parties. Any decision of the arbitrator shall be advisory to the City Manager. Upon review of the decision, the City Manager may affirm, modify, reverse, or otherwise resolve the disciplinary action. The decision of the City Manager shall be final subject only to judicial review pursuant to the Code of Civil Procedure Section 1094.5."
Section 4.12, grievance procedure, sets forth procedures for resolution of grievances. Section 4.12.2 defines a grievance as "a complaint of one or a group of employees or dispute between the City and an Exclusively Recognized Employee Organization involving the interpretation, application, or enforcement of the express terms of these Rules or a Memorandum of Understanding." DPOA is a recognized employee organization that executed a memorandum of understanding (MOU) on behalf of its members with the City, which the city council approved. Section 4.12.2 further provides that, "[d]isciplinary action shall not be subject to grievance. These matters shall be governed by the disciplinary procedures set forth in these Rules."
A memorandum of understanding in this context is a signed contract between a city and its unions governing the terms and conditions under which union members work. (City and County of San Francisco v. International Union of Operating Engineers, Local 39 (2007) 151 Cal.App.4th 938, 941.)
The grievance process begins with an informal procedure, consisting of a discussion of the grievance between the employee and supervisor followed by four levels of formal procedure. Level I of the formal procedure, Section 4.12.4.1, involves an employee filing a written grievance and the employee's supervisor providing written answer. Level II, Section 4.12.4.2, is an appeal to the department head by an employee dissatisfied with the Level I outcome, involving an investigation, potentially a meeting with the parties concerned, and a written answer provided by the department head to the employee. Level III, Section 4.12.4.3, escalates the appeal to the city manager, who follows the same procedure as the department head in Level II. At Level III, the city manager's written answer is "final and binding unless appealed." In addition, if appealed, the "City Manager may affirm, modify, reverse, or otherwise resolve the decision appealed."
Level IV, Section 4.12.4.4, sets forth the final internal appellate process, which commences with a request by the employee for "a hearing before an arbitrator." Section 4.12.4.4 provides that "[g]rievance arbitrations shall be conducted according to the rules of disciplinary matters as defined in section 4.11."
Section 4.12.4.4 concludes: "The arbitrator shall conduct a hearing and shall within thirty (30) days of conclusion of the hearing, render a written decision and/or order. Any decision and/or order of the arbitrator shall be final. The cost of the arbitration, including the arbitrator's fee, shall be shared equally by the employee and the City."
The dispute that led to a Level IV arbitration between the City and DPOA concerned the interpretation of article 2.1.3 of the MOU providing that "[s]hould the Dixon Professional Firefighters Association receive an increase in their Salary, the DPOA unit members will receive the same increase in addition to the three percent (3%) above." In July 2016 the firefighters received a "step" increase that the City maintained did not require a concomitant increase for DPOA under article 2.1.3 of the MOU, arguing that this provision only applied to "base salary," not additional "step" increases. DPOA initiated a formal grievance process, which led to a Level IV arbitration.
DPOA refers to this provision as a " 'Me-Too' clause in the MOU," which is a colloquial expression for a parity agreement providing for a salary increase for members of a union to match the higher salary of another bargaining unit. (Banning Teachers Assn. v. Public Employment Relations Bd. (1988) 44 Cal.3d 799, 801.) --------
At the hearing, the City advised the arbitrator that, under Section 4.11 of the Personnel Rules, the arbitrator's decision was advisory. DPOA argued that the arbitrator's decision was final under Section 4.12.4.4.
The arbitrator determined that the City violated article 2.1.3 of the MOU in failing to match the 5 percent increase provided to the firefighters. While not expressly determining the parties' competing positions on the finality of the decision, the arbitrator's order stated, "City of Dixon Personnel Rule Section 4.12.4.4 provides '[a]ny decision and/or order of the arbitrator shall be final.' "
The City issued a modified award reversing the arbitrator's decision. The City asserted that the Personnel Rules state that "grievance arbitration shall be conducted according to the rules for disciplinary matters, as defined by Section 4.11. Subsection 4.11.2 states any arbitration decision is only advisory to the City Manager. The City interprets the Subsections to permit the City Manager to modify any arbitrator's final decision."
DPOA filed a petition in the trial court to confirm the arbitrator's award pursuant to Code of Civil Procedure section 1285, arguing that the arbitrator's decision was final and should be confirmed and judgment entered accordingly. DPOA maintained that the arbitrator's decision was final and binding under Section 4.12.4.4 and the time had run for the City to challenge that decision.
The City filed an opposition arguing that Code of Civil Procedure section 1285 was inapposite because the arbitrator's decision was advisory and not a binding arbitration award. Two days later, the City filed a motion to dismiss DPOA's petition making substantially the same arguments.
The trial court granted DPOA's petition to confirm the arbitrator's decision. The court reasoned that Section 4.12.4.4, which states that the arbitration shall be "conducted" pursuant to Section 4.11 procedures, refers to selection of the arbitrator and presentation of evidence. The language in Section 4.11.2 regarding the advisory nature of the decision refers to the "effect" of the outcome in a disciplinary proceeding, not the conduct of the hearing. Section 4.12.4.4, by contrast, states the arbitrator's ultimate decision in a grievance proceeding is "final," not advisory. The trial court also observed that Section 4.11.2 provides that city manager may modify a hearing officer's decision regarding "disciplinary action," but a grievance is not disciplinary action. Finally, the court noted that the city manager may modify a department head's decision at Level III of the grievance procedure, and, unless appealed to Level IV, the city manager's Level III decision is final. The trial court concluded that it would make no sense for the city manager to have the power to change the decision at Level III and Level IV.
The City's motion to dismiss was set for hearing subsequent to the hearing and order of the trial court on DPOA's petition to confirm the arbitration award. The City kept the motion on calendar, despite DPOA's request that the City withdraw the motion in light of the court's order granting the petition. DPOA filed a short opposition to the motion to dismiss, which included a request for sanctions under Code of Civil Procedure section 128.5. DPOA argued the City's motion to dismiss a petition that the court had already granted was totally without merit. The City filed an equally short reply arguing that the trial court had refused its request to consolidate the hearing on the City's motion with DPOA's petition and maintaining that the motion was procedurally distinct from the petition. The City said it sought a ruling on the motion to clarify the record since the court did not consolidate the petition and motion hearing. For these reasons, the City argued the motion was not frivolous or filed in bad faith and DPOA's request for sanctions should be denied.
The trial court denied the City's motion to dismiss as moot in that there was nothing left to resolve. The court granted DPOA's request for sanctions reasoning that there was no legitimate basis to keep the motion on calendar after the petition was granted and judgment entered in favor of DPOA. The court awarded $900 in sanctions, representing the costs incurred by DPOA in opposing the motion to dismiss.
The City appealed the order granting DPOA's petition to confirm the arbitration award and the order awarding sanctions.
DISCUSSION
The Decision of the Arbitrator Was Final and Binding
The City contends that Code of Civil Procedure section 1285 does not apply because the arbitrator's decision was not final and binding, which is to say it was not actually an arbitration. (Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676, 687-688 ["[A]lthough arbitration can take many procedural forms, a dispute resolution procedure is not an arbitration unless there is a third party decision maker, a final and binding decision, and a mechanism to assure a minimum level of impartiality with respect to the rendering of that decision." (Fn. omitted.)].) The City contends that the second element—"a final and binding decision"—is lacking here.
" 'On appeal from an order confirming an arbitration award, we review the trial court's order (not the arbitration award) under a de novo standard. [Citations.]' " (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217; EHM Productions, Inc. v. Starline Tours of Hollywood, Inc. (2018) 21 Cal.App.5th 1058, 1063.) In this instance, the trial court's decision was based on its interpretation of the language of the Personnel Rules. The interpretation of public employee rules is also a question of law subject to de novo review. (Superior Court v. Public Employment Relations Bd. (2018) 30 Cal.App.5th 158, 188.) A fundamental principle of interpretation is that language must be understood in context, not construed in isolation. (Ibid.) A related interpretive principle is that no part of the rules should be rendered surplusage if a construction is available that avoids doing so. (Ibid.)
The City contends that the "plain language of the Personnel Rules belies any characterization of the . . . Grievance hearing as 'binding' arbitration." The City relies entirely on the provision in Section 4.12.4.4 that "[g]rievance arbitrations shall be conducted according to the rules of disciplinary matters as defined in section 4.11," which the City maintains embraces the provision in Section 4.11.2 that "[a]ny decision of the arbitrator shall be advisory to the City Manager."
However, the Personnel Rules include provisions indicating that the term "conducted" in Section 4.12.4.4 refers to the manner in which the hearing proceeds, not the status of the decision after hearing. For example, Section 4.12.4.4 states "[t]he arbitrator shall conduct a hearing and shall within thirty (30) days of conclusion of the hearing, render a written decision and/or order." (Italics added.) This distinction between the hearing conducted and the decision rendered appears as well in Section 4.11.1, which states that disciplinary appeals "shall be heard by a hearing officer" contracted by the City to "conduct hearing[s]," and Section 4.11.2, stating that "[w]ithin thirty (30) days of the conclusion of the hearing, the hearing officer shall render a written decision." (Italics added.)
On the strength of this language in the Personnel Rules, we conclude that Section 4.12.4.4 merely borrows the provisions of Section 4.11.2 regarding the procedural rules under which the hearing is conducted, e.g., presentation of evidence and right to counsel, not the status of the decision rendered by the arbitrator. But other provisions of the Personnel Rules take pains to distinguish between the treatment of disciplinary action and grievance decisions. As the trial court noted, Section 4.11.2 providing that "[a]ny decision of the arbitrator shall be advisory to the City Manager" specifies that "[u]pon review of the decision, the City Manager may affirm, modify, reverse or otherwise resolve the disciplinary action." (Italics added.) This language confers on the city manager ultimate internal decision-making authority on disciplinary action, and, at the same time, limits the city manager's final say to that context. This interpretation of the Personnel Rules is reinforced by Section 4.12.2, which expressly rules out employing the grievance procedure for disciplinary action: "Disciplinary action shall not be subject to grievance. Those matters shall be governed by the disciplinary procedures set forth in these Rules." (Italics added.) This language indicates that the grievance procedure, where the city manager does not have the final word, may not be used to circumvent the city manager's authority on disciplinary action.
The Personnel Rules contain parallel provisions regarding a "final" decision that also differentiate between disciplinary action and a grievance. Section 4.11.2 states that the city manager's decision on disciplinary action is final: "The decision of the City Manager shall be final subject only to judicial review pursuant to the Code of Civil Procedure Section 1094.5." (Italics added.) Section 4.12.4.4 of the formal grievance procedure provides that "[a]ny decision and/or order of the arbitrator shall be final." (Italics added.) In Section 4.11.2 on disciplinary action, the city manager's decision is final, and in Section 4.12.4.4 on grievances, the arbitrator's decision is final.
The City would have us interpret these parallel provisions not to mean what they plainly say, that the ultimate internal decision maker is different for disciplinary action and grievances. The City would append a further "final" review by the city manager of the "final" decision of the arbitrator. This interpretation renders the term "final" meaningless with respect to grievances, contrary to the rules of interpretation. (Superior Court v. Public Employment Relations Bd., supra, 30 Cal.App.5th at p. 188; Watts v. Civil Service Bd. (1997) 59 Cal.App.4th 939, 946.)
Moreover, as the trial court also observed and DPOA points out, there is language in Section 4.12.4.3 regarding the city manager's prerogative to review and potentially modify or reverse a decision at Level III of the grievance procedure. To interpret Section 4.12.4.4 to call for another round of review by the city manager already covered by section 4.12.4.3 contravenes our obligation to avoid surplusage. (Superior Court v. Public Employment Relations Bd., supra, 30 Cal.App.5th at p. 188.)
The City argues that Section 4.12.4.4 "states that 'any decision and/or order of the arbitrator shall be final,' but does not state it is binding on the parties." (Italics added.) Incorporation of the word "binding" is not a necessary component of a "final" decision in arbitration. Arbitration is generally intended by the parties to be binding, whether the decision says so or not. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 [" 'The very essence of the term "arbitration" . . . connotes a binding award.' [Citation.]"].)
There is, of course, no prohibition on public employee rules providing for different types of arbitration for different matters. As the Supreme Court of New Jersey observed, a grievance procedure may provide "that different classes of grievable matters will be subject to different types of terminal resolution or even to none at all." (West Windsor Township v. Public Employment Relations Com. (1978) 78 N.J. 98, 107 [393 A.2d. 255, 299].) "[G]rievances involving the application of the relevant provisions of the collective agreement or of any controlling statutes or regulations . . . [citation] . . . may be subjected to resolution by binding arbitration." (Ibid.) "[G]rievances not involving contractual, statutory or regulatory provisions [may] be subject only to advisory arbitration or not even to be permitted to proceed beyond the initial presentation stage." (Id. at p. 108.) We conclude that the City followed such a pattern in adopting the Personnel Rules, which differentiate between the resolution of disciplinary action and grievances.
The City relies on American Federation of State, County & Municipal Employees v. Metropolitan Water Dist. (2005) 126 Cal.App.4th 247. In American Federation, the court considered an MOU which involved a multi-step formal grievance and appeal procedure, the final step of which was an appeal to a neutral hearing officer. (Id. at p. 254.) One provision of the MOU stated the hearing officer's decision was " 'final and binding on the parties,' " but the succeeding provision stated the hearing officer's decision could be appealed to a court under Code of Civil Procedure section 1094.5, a statute which authorizes a more extensive review of the decision than review of an arbitration decision under Code of Civil Procedure section 1285. (American Federation, supra, at pp. 254, 258-259.) In reconciling these apparently conflicting provisions, the court concluded that the hearing officer's decision was not a binding arbitration because it could be appealed by a Code of Civil Procedure section 1094.5 mandamus petition. (American Federation, supra, at p. 259.)
Here, there is no need to reconcile conflicting provisions. An appeal of discipline under Section 4.11.2 leads to a decision by an arbitrator followed by "[t]he decision of the City Manager [which] shall be final subject only to judicial review pursuant to the Code of Civil Procedure Section 1094.5." The arbitrator's decision under Section 4.11.2 is not final and binding, since it is subject to review by the city manager and the court on mandamus. By contrast, a grievance appeal involving nondisciplinary disputes under Section 4.12.4.4 results in an arbitration order that is "final," period. Section 4.12.4.4 does not refer to any further review under Code of Civil Procedure section 1094.5 or otherwise. Thus, there is no conflict between Section 4.11.2 and Section 4.12.4.4, as in American Federation, because the former section applies to disciplinary action appeals and the latter to grievance appeals.
We conclude the arbitrator's order at issue was the result of a final and binding arbitration, which was subject to confirmation by the trial court under Code of Civil Procedure section 1285.
The Trial Court Did Not Abuse Its Discretion in Awarding Sanctions Against the City
DPOA requested sanctions against the City under Code of Civil Procedure section 128.5, contending the motion to dismiss was totally devoid of merit because, in granting the petition to confirm the arbitration award, the court had already considered and rejected the arguments the City made in the motion.
Under Code of Civil Procedure section 128.5, sanctions may be awarded for "actions or tactics, made in bad faith that are frivolous or solely intended to cause unnecessary delay." (Code Civ. Proc., § 128.5, subd. (a).) " 'Actions or tactics' " include "the making or opposing of motions . . . ." (Code Civ. Proc., § 128.5, subd. (b)(1).) Subdivision (b)(2) of section 128.5 defines "frivolous" as "totally and completely without merit or for the sole purpose of harassing an opposing party." Courts have held that Code of Civil Procedure section 128.5 requires a showing of subjective bad faith, but that "prosecution of a frivolous action may in itself be evidence from which a finding of subjective bad faith may be made." (West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 702.) More recently, San Diegans for Open Government v. City of San Diego (2016) 247 Cal.App.4th 1306, 1318-1319, abrogated by statute on another point as discussed in Nutrition Distribution, LLC v. Southern SARMs, Inc. (2018) 20 Cal.App.5th 117, 129-130, held that the proper standard is objective reasonableness. Under the objective standard, "a suit indisputably has no merit only 'where any reasonable attorney would agree that the action is totally and completely without merit.' " (Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 12.)
"We review the imposition of monetary sanctions for prejudicial abuse of discretion." (20th Century Ins. Co. v. Choong (2000) 79 Cal.App.4th 1274, 1277.)
The City does not dispute that its opposition and motion to dismiss made the same arguments that the arbitrator's decision was merely advisory. More than a month before the hearing on the motion to dismiss, the trial court ruled on DPOA's petition that the arbitrator's decision was final and binding. The City kept the motion on the court's calendar, notwithstanding the trial court's rejection of the City's arguments and the City's failure to articulate any others. The City's desire for a ruling on the motion to dismiss does not detract from the fact that the court had definitively ruled on the dispute and the City offered no basis to change that ruling. Filing motions that repeat claims rejected by the court constitutes bad faith. (Harris v. Rudin, Richman & Appel (2002) 95 Cal.App.4th 1332, 1344.) Insisting on presenting such claims at a hearing or trial warrants sanctions. (Muega v. Menocal (1996) 50 Cal.App.4th 868, 873-874.) The trial court did not abuse its discretion in awarding sanctions.
DISPOSITION
The judgment is affirmed. DPOA shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
RAYE, P. J. We concur: BLEASE, J. MAURO, J.