Opinion
B228240
12-01-2011
RONALD MICHAEL DANIELS, Plaintiff and Appellant, v. BOARD OF RETIREMENT OF THE LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION et al., Defendants and Respondents.
B. Kwaku Duren & Associates and B. Kwaku Duren for Plaintiff and Appellant. Los Angeles County Employees Retirement Association, Robert S. Van Der Volgen, Jr., Johanna M. Fontenot, and Michael D. Herrera for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC382538)
APPEAL from a judgment of the Superior Court of Los Angeles County. David L. Minning, Judge. Affirmed.
B. Kwaku Duren & Associates and B. Kwaku Duren for Plaintiff and Appellant.
Los Angeles County Employees Retirement Association, Robert S. Van Der Volgen, Jr., Johanna M. Fontenot, and Michael D. Herrera for Defendants and Respondents.
Plaintiff and appellant Ronald Michael Daniels (plaintiff) appeals from the judgment entered in favor of defendants and respondents the Board of Retirement (Board) of the Los Angeles County Employees Retirement Association (LACERA), Fern Billingy (Billingy), James Castranova (Castranova), David Muir (Muir), and Niki Webb (Webb) after the trial court sustained, without leave to amend, the Board's demurrer and the individual defendants' demurrer and motion to strike plaintiff's second amended complaint. We affirm the judgment.
The Board and the individual defendants are referred to collectively as defendants.
BACKGROUND
1. The Parties
Plaintiff is a former employee of the County of Los Angeles (County) and a member of LACERA. LACERA is a public pension fund created under the County Employees Retirement Law of 1937 (Gov. Code, § 31450 et seq.) (CERL). LACERA is governed by the Board, which is charged with responsibility for determining eligibility for and paying pension benefits to members under CERL. (Weber v. Board of Retirement of the Los Angeles County Employees Retirement Ass'n (1992) 62 Cal.App.4th 1440, 1442.)
All further statutory references are to the Government Code, unless otherwise indicated.
Billingy, Castranova, and Muir are attorneys employed by LACERA; Webb is a retirement benefits specialist employed by LACERA.
2. Section 31494.5
LACERA administers defined benefit retirement plans denoted as Plans A, B, C, D, and E. Plans A through D are "contributory" plans under which the member and the County make contributions. Plan E is an optional, noncontributory retirement plan. (§ 31487 et seq.)
Plaintiff's lawsuit concerns section 31494.5, a statute enacted in 2002 to enable County employees to voluntarily transfer from noncontributory pension Plan E to contributory Plan D. At the time relevant to this action, section 31494.5, subdivision (e) imposed a two-year waiting period before employees transferring into Plan D became eligible to receive disability benefits. The statute in effect at the time provided:
Section 31494.5, subdivision (e) was amended in 2010 to allow a member who transfers into Plan D and becomes permanently disabled before satisfying the two-year waiting period to transfer back to Plan E. (Stats. 2010, ch. 86, § 3.)
"Notwithstanding any other provision of Retirement Plan D or Retirement Plan E, a member who transfers into Retirement Plan D under this section may retire for service-connected or nonservice-connected disability and receive disability benefits under Retirement Plan D only if he or she has either (1) completed two continuous years of active service after his or her most recent transfer date, or (2) earned five years of retirement service credit under Retirement Plan D after his or her most recent transfer date. A member who becomes disabled and retires before meeting either of these conditions (1) may apply for and receive only a deferred or service retirement allowance, and (2) for the purposes of calculating his or her retirement benefits under this section, shall be credited with service under Retirement Plan E as provided under subdivision (g) of Section 31488 during any period he or she is totally disabled and is receiving, or eligible to receive, disability benefits, either during or after any elimination or qualifying period, under a disability plan provided by the employer."
3. Plaintiff's Plan Transfer and Subsequent Disability
Plaintiff transferred prospectively from pension Plan E to Plan D on November 1, 2002. Less than two years later, on July 14, 2004, he became disabled and unable to work. On January 14, 2005, plaintiff applied for disability retirement benefits under Plan D. That application was denied on the ground that plaintiff did not satisfy the two-year waiting period specified in section 31494.5, and was therefore ineligible for disability retirement benefits under Plan D.
Plaintiff applied for and began receiving long term disability benefits under the County's Long Term Disability Benefits Plan (LTD benefits or LTD Plan) and began receiving LTD benefits in January 2005. During the next two years, he received various letters from the third party administrator (TPA) of the LTD Plan asking whether plaintiff was a Plan D or Plan E member. In February 2007, plaintiff spoke to defendant Webb, asking whether he could transfer back to Plan E. Webb advised plaintiff that he was not eligible to transfer back to Plan E until three years from the effective date of his last plan transfer.
The County's LTD Plan, codified at chapter 5.38 of the Los Angeles County Code, provides income replacement for a disabled employee as long as the employee remains eligible for up to 24 months after the qualifying period. After such time, members in retirement Plans A, B, C, or D must apply for retirement. LTD benefits may be terminated if a member of retirement Plans A, B, C, or D fails to apply for retirement benefits after 24 months of eligibility for disability payments. (L.A. County Code, § 5.38.020.) The County maintains that members in Plan E do not have to retire in order to receive LTD benefits and accrue Plan E service credit until age 65.
Plaintiff disagreed with Webb's analysis, and he appealed to the Board. Following a hearing on March 15, 2007, at which plaintiff was allowed to present both evidence and argument, the Board voted unanimously that plaintiff was entitled to Plan E service credit, but limited the accrual period to the last day plaintiff received Plan D service credit through January 2007, the date his LTD benefits were terminated.
Plaintiff disagreed with the Board's decision to limit the accrual period to January 2007. He argued that section 31494.5, subdivision (e) allowed him to accrue Plan E service credit for as long as he received disability benefits up to the age of 65.
4. Proceedings Below
Plaintiff filed a lawsuit against the Board for breach of fiduciary duty, declaratory relief, and writ of mandate. That action was subsequently transferred from Department 71 to the writs department of the Los Angeles Superior Court.
On March 28, 2008, plaintiff filed a verified petition for writ of mandate and first amended complaint that included one claim against the Board for damages for breach of fiduciary duty. After briefing and supplemental briefing by the parties, Judge Yaffe granted plaintiff's petition for writ of mandate and ruled that plaintiff is entitled to accrue Plan E service credit during the period that he is receiving disability benefits under a plan provided by his employer. Judge Yaffe further ruled that plaintiff's claim for damages for breach of fiduciary duty could not be adjudicated in the writs department. That claim was transferred to the trial court.
The Board filed its answer to the first amended complaint and then moved for judgment on the pleadings, on the ground that it was immune from liability for its actions. In response, plaintiff requested leave to amend to add Webb and the individual Board members as defendants, claiming he could allege facts to support a breach of fiduciary duty cause of action based on their conduct. The trial court granted the motion for leave to amend.
Plaintiff filed a second amended complaint naming Billingy, Castranova, Muir, and Webb as individual defendants, along with LACERA CEO Gregg Rademacher and nine individual Board members. The second amended complaint also included three new causes of action for aiding and abetting breach of fiduciary duty, misrepresentation, and intentional infliction of emotional distress.
Rademacher and the nine Board members are not parties to this action because they were never properly served.
The Board and the individual defendants filed separate demurrers, and the individual defendants also moved to strike the three new causes of action. The trial court sustained both demurrers without leave to amend and sustained the individual defendants' motion to strike.
Judgment was entered in defendants' favor, and this appeal followed.
THE PARTIES' CONTENTIONS
Plaintiff contends the trial court erred by granting the Board's motion for judgment on the pleadings, by sustaining the individual defendants' demurrer to the cause of action for breach of fiduciary duty, and by granting the individual defendants' motion to strike the remaining three causes of action for aiding and abetting breach of fiduciary duty, misrepresentation, and intentional infliction of emotional distress. Plaintiff further contends the trial court erred by denying him further leave to amend the second amended complaint to add a cause of action against the Board for breach of a mandatory duty.
The trial court granted the Board's motion for judgment on the pleadings with leave to amend, and plaintiff subsequently filed a second amended complaint. The trial court then sustained the Board's demurrer to the second amended complaint without leave to amend. Plaintiff's challenge on appeal should therefore be directed to the order sustaining the demurrer without leave to amend.
The Board contends its decision regarding plaintiff's eligibility for disability retirement benefits was immune from liability under section 820.2 and that mandamus relief is the exclusive remedy available to plaintiff in this case. The Board further contends the trial court did not err by denying plaintiff leave to amend to add a cause of action for breach of a mandatory duty and that such a cause of action would also be barred by section 820.2.
The individual defendants contend plaintiff's breach of fiduciary duty claim fails as a matter of law because they owed no duty to plaintiff, the motion to strike was properly granted because adding the three new causes of action was an impermissible amendment of the complaint, they are immune from liability, plaintiff did not plead the elements for intentional infliction of emotional distress, and plaintiff's action is barred by the Tort Claims Act and by the statute of limitations.
DISCUSSION
I. Standard of Review
"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed 'if any one of the several grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]" (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966- 967.) The legal sufficiency of the complaint is reviewed de novo. (Montclair Parkowners Assn. v. City of Montclair (1999) 76 Cal.App.4th 784, 790.)
"The standard of review for a motion for judgment on the pleadings is the same as that for a general demurrer: We treat the pleadings as admitting all of the material facts properly pleaded, but not any contentions, deductions or conclusions of fact or law contained therein. . . . We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any theory. [Citation.]" (Dunn v. County of Santa Barbara (2006) 135 Cal.App.4th 1281, 1298.) We review the trial court's denial of leave to amend for abuse of discretion. (Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.)
II. Governmental Immunity
A. Individual Employee Immunity
Section 820.2 accords employees of a public entity, immunity for injuries caused by their discretionary acts. The statute provides: "Except as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused."
Section 822.2 immunizes a public employee acting in the scope of employment from liability for negligent and intentional misrepresentation, excluding fraud: "A public employee acting in the scope of employment is not liable for an injury caused by his misrepresentation, whether or not such misrepresentation be negligent or intentional, unless he is guilty of actual fraud, corruption or actual malice."
B. Public Entity Immunity
Section 815.2 accords a public entity, employer immunity for the discretionary acts of its employees to the extent those employees are immune from liability. It provides in pertinent part: "Except as otherwise provided by statute, a public entity is not liable for an injury resulting from an act or omission of an employee of the public entity where the employee is immune from liability." (§ 815.2, subd. (b).)
A public entity is also immune from liability for the intentional and negligent misrepresentations of its employees. Section 818.8 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."
III. Breach of Fiduciary Duty Cause of Action
A. The Board
The trial court found that the Board had discretionary immunity for the breaches of duty alleged in the second amended complaint. Plaintiff contends discretionary immunity does not apply because the Board failed to perform a ministerial duty required to be performed under the mandate of section 31494.5 without the exercise of discretion or judgment.
Courts have recognized that attempting to draw a distinction between "discretionary" and "ministerial" acts can lead to "a hopeless semantic quagmire." (Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 45 (Masters), citing Johnson v. State (1968) 69 Cal.2d 782, 793 (Johnson).)A more meaningful distinction is one based on the doctrine of separation of powers, recognizing "that '[m]uch of what is done by officers and employees of the government must remain beyond the range of judicial inquiry.' [Citation.]" (Johnson, supra, at p. 793.) This approach assures "judicial abstention in areas in which the responsibility for basic policy decisions has been committed to coordinate branches of government. Any wider judicial review . . . would place the court in the unseemly position of determining the propriety of decisions expressly entrusted to a coordinate branch of government." (Ibid.)
"Adjudicatory decisions of administrative tribunals are a classic example of the kind of discretion vested in public officials which is intended to be immunized." (Masters, supra, 32 Cal.App.4th at p. 45.) A decision is adjudicatory in nature when "it involves the application of general standards . . . to specific individuals' applications for benefits. [Citations.]" (Respers v. University of Cal. Retirement System (1985) 171 Cal.App.3d 864, 870.) Such was the case here. The Board's adjudicatory decision to limit the accrual of plaintiff's Plan E retirement service was a basic policy decision committed to a coordinate branch of government. That determination is therefore shielded by the doctrine of discretionary immunity. (Masters, supra, at pp. 46-47.) Judgment on the pleadings was properly granted on that basis.
Plaintiff argues that discretionary immunity does not apply because section 31494.5, subdivision (e) imposes on LACERA a mandatory duty to include Plan E retirement service credit accrued during the period of the employee's disability when calculating a disabled employee's retirement benefits. The statute in effect at the time states that "for the purposes of calculating [the disabled employee's] retirement benefits under this section, [the employee] shall be credited with service under Retirement Plan E . . . during any period he or she is totally disabled and is receiving . . . disability benefits, either during or after any elimination or qualifying period, under a disability plan provided by the employer." (Former § 31494.5, subd. (e)(2), italics added.)
The wording of the statute does not foreclose the Board's exercise of its decision in determining a member's disability retirement benefits. Inclusion of the word "shall" in the statutory language "does not necessarily create a mandatory duty; there may be 'other factors [that] indicate that apparent obligatory language was not intended to foreclose a governmental entity's or officer's exercise of discretion.' [Citations.]" (Guzman v. County of Monterey (2009) 46 Cal.4th 887, 899.) For example, "if the predicate enactment confers the exercise of discretion on government officials, the use of 'shall' and other like words will not alone support liability under the California Tort Claims Act. [Citations.]" (Sutherland v. City of Fort Bragg (2000) 86 Cal.App.4th 13, 20.)
The Board "is vested with powers under CERL to manage the county's retirement system, including the responsibility of determining the amount of retirement allowance to which members are entitled. [Citation.]" (Howard Jarvis Taxpayers' Assn. v. Board of Supervisors (1996) 41 Cal.App.4th 1363, 1373.) Its decisions, while subject to judicial review in a mandamus proceeding, are not a basis for imposing civil liability. (See Respers v. University of Cal. Retirement System, supra, 171 Cal.App.3d at p. 870.) Plaintiff can point to nothing in the statutory scheme that would authorize an award of civil damages in this case.
There is nothing in the statutory scheme that accords a member the right to recover civil damages if the Board's decision on retirement benefits is found to be an abuse of discretion. Judge Yaffe's determination that the Board erroneously applied section 31494.5 to plaintiff's application for disability benefits did not give rise to a right to recover civil damages. (See Keech v. Berkeley Unified School Dist. (1984) 162 Cal.App.3d 464, 471 [statutory provisions setting specific time limits for assessing a handicapped child's special education needs were not "springboards for private damage suits"].) Plaintiff's recourse against the Board was to obtain a writ of mandate. He did so and obtained the appropriate relief -- an order requiring LACERA to accord him service credit during the period of his disability for the purpose of calculating his retirement benefits.
B. Individual Defendants
The individual defendants, Billingy, Castranova, Muir, and Webb, are employees of LACERA. As employees, the individual defendants were not in a fiduciary relationship with plaintiff and they owed him no fiduciary duty as a matter of law. (Masters, supra, 32 Cal.App.4th at p. 40 [complaint failed to state a cause of action for breach of fiduciary duty by medical advisor employed by retirement association because as a mere employee of the association, medical advisor owed no fiduciary duty to claimant].) The demurrer of the individual defendants was properly sustained on that basis.
IV. Motion to Strike and Denial of Leave to Amend
Plaintiff contends the trial court erred by granting the individual defendants' motion to strike the causes of action for aiding and abetting breach of fiduciary duty, misrepresentation, and intentional infliction of emotional distress. The motion to strike was properly granted because plaintiff had previously requested and was granted leave to amend for the sole purpose of adding additional defendants. He did not seek leave to amend the complaint to add any new causes of action, and the trial court did not grant him permission to do so. A "plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend. [Citation.]" (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)
In response to the Board's motion for judgment on the pleadings, plaintiff argued that he could easily amend the first amended complaint to overcome the Board's claim of immunity by adding as defendants Webb and individual members of the Board. Plaintiff claimed he could allege that Webb acted with actual fraud, corruption, or malice, and that the individual Board members knowingly and willfully voted against him. The trial court granted plaintiff leave to amend for that purpose, and not to add any new causes of action. The trial court accordingly did not err by granting the individual defendants' motion to strike.
Because we conclude the trial court did not err by granting the individual defendants' motion to strike, we need not address their arguments that plaintiff failed to plead the elements of intentional infliction of emotional distress and that the additional causes of action are barred by the Tort Claims Act and by the statute of limitations.
--------
For the same reason, the trial court did not abuse its discretion by not granting plaintiff further leave to amend the second amended complaint to add a cause of action against the Board for breach of a mandatory duty. A cause of action for breach of a mandatory duty was not within the scope of the order granting leave to amend the first amended complaint. The trial court did not abuse its discretion by denying plaintiff leave to amend the second amended complaint to add such a cause of action.
DISPOSITION
The judgment is affirmed. Defendants are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
CHAVEZ We concur: ___, Acting P. J.
DOI TODD
___, J.
ASHMANN-GERST