Opinion
For Opinion on Rehearing see, 117 Cal.Rptr. 386.
Opinion on pages 706-711 omitted.
REHEARING GRANTED [*]
[116 Cal.Rptr. 358]Robert E. Snyder, Morro Bay, for plaintiff and appellant.
Calvin E. Baldwin, County Counsel, David P. Adalian, Deputy County Counsel, Visalia, for defendants and respondents.
OPINION
FRANSON, Associate Justice.
This case involves a dispute between a surviving spouse, respondent Mary Weyand, and a designated beneficiary, appellant Dorothy Frazier, as to who is entitled to the death benefits payable under the Tulare County Employees' Retirement System as a result of the death of deputy sheriff Clarence Weyand.
In 1930 Clarence Weyand married Mary Weyand; thereafter they separated. In 1948, Clarence began living with Dorothy Frazier. In 1950 Clarence was employed as a deputy sheriff of Tulare County. He became a member of the County Employees' Retirement Association and designated Dorothy as the beneficiary in the association's Enrollment Questionnaire, describing her as his 'wife.' Clarence lived with Dorothy until 1962. He died in 1971 as a result of a heart disease while employed as a deputy sheriff. At the time of his death he was still married to Mary, and Dorothy remained as his designated beneficiary for retirement benefits.
In 1950, when Clarence designated Dorothy as his beneficiary, Government Code section 31780 provided that upon the death before retirement of a member of a county retirement system, the system was liable for a death benefit to such person as the member nominated by written designation. (Gov.Code, § 31780, enacted by Stats.1947, ch. 424, p. 1283, § 1.) In 1955 section 31780 was amended to provide that upon the death of a member before retirement, the death benefits should be paid to a surviving spouse if she elects to claim the benefits rather than to a designated beneficiary. (Stats.1955, ch. 371, p. 830, § 2.)
As the surviving spouse, Mary elected to claim the death benefits under amended Government Code section 31780 and the retirement board determined that she was entitled to the benefits. Thereafter, Dorothy filed suit against the board and Mary to recover the benefits; the trial court granted a summary judgment in favor of the Respondents, and dismissed Dorothy's action. Dorothy filed a timely appeal.
Pension benefits which accrue to a third party upon the death of a public employee constitute an integral part of the employee's contractual compensation for services rendered. (Abbott v. City of Los Angeles, 50 Cal.2d 438, 454-455, 326 P.2d 484; Benson v. City of Los Angeles, 60 Cal.2d 355, 359, 33 Cal.Rptr. 257, 384 P.2d 649; Lyon v. Flournoy, 271 Cal.App.2d 774, 781, 76 Cal.Rptr. 869; Myers v. Fire and Police Pension System, 32 Cal.App.3d 725, 727, 108 Cal.Rptr. 429; Henry v. City of Los Angeles, 201 Cal.App.2d 299, 314-315, 20 Cal.Rptr. 440.) Although the legislative body may modify the employee's contractual rights prior to retirement, the modification must bear a material relation to the theory of the pension system and its successful operation and any change in a pension plan which results in a substantial disadvantage to the employee must be accompanied by a comparable new advantage. (Allen v. City of Long Beach, 45 Cal.2d 128, 131, 287 P.2d 765; Wallace v. City of Fresno, 42 Cal.2d 180, 185, 265 P.2d 884; Kern v. City of Long Beach, 29 Cal.2d 848, 853, 179 P.2d 799; see also Packer v. Board of Retirement, 35 Cal.2d 212, 218-219, 217 P.2d 660.)
[116 Cal.Rptr. 359]For example, in Henry v. City of Los Angeles, supra, a charter amendment modified a provision for widows' pensions. Prior to the amendment the charter provided that no widow of a retired fire or police department employee should receive a pension unless she had been married to the deceased employee at least one year prior to the date of his death. The amendment changed the charter to provide that no widow should be entitled to a pension unless she had been married to the deceased employee at least one year prior to the date of his retirement. It was held that the modification was unreasonable, and thus unconstitutional, because it cut off a vested contractual right of those employees who had married, at least one year prior to death, before the date of the amendment. While recognizing that a widow has no vested right in a death benefit before her husband's death, and even though the modification did not reduce the quantum of benefits to the employee, the court nevertheless stated, 'It is quite apparent the benefit to a fireman or policeman of being able to protect his widow with a pension irrespective of when his marriage to her occurred . . . is a substantial benefit which the 1925 amendment sought to curtail very sharply by requiring that [the] pensioner must have been married to such person at least one year prior to his retirement.' (201 Cal.App.2d at pp. 314-315, 20 Cal.Rptr. at p. 449.)
By clear analogy, Clarence's right to designate a beneficiary in the event of his death was a substantial contractual right which made up part of his compensation as a deputy sheriff. It well may be that this right was of greater importance to Clarence than the quantum of retirement benefits which he would have received during his lifetime. There is no question but that the application of section 31780, as amended in 1955, deprived Clarence of this important right without giving him any comparable new advantage. Nor do we see that the amendment bears any material relation to the theory or successful operation of the plan; the question of who will benefit upon the employee's death has no relevance to the administration or economic integrity of the pension system.
The recent case of Ruster v. Ruster, 40 Cal.App.3d 379, 114 Cal.Rptr. 812, is distinguishable on the facts and the law. There a state employee lived for many years with his mother and had designated her as the beneficiary of his death benefits under the State Retirement System. Later the employee married and, two months and twenty-two days after the marriage, died without making a new designation of beneficiary. The reviewing court upheld the retroactive application of Government Code section 21205 which provides that a member's marriage constitutes an automatic revocation of his previous designation of beneficiary and said: '[W]e must assume that the Legislature found a benefit to the employee, not only by helping him to meet an obligation which he might otherwise have overlooked, but also by comporting with what he would most likely have desired had he been attentive.' Unlike Ruster, there is nothing in the facts in the present case from which it could be concluded that Clarence's failure to leave his death benefits to his surviving spouse was due to inadvertence on his part and that the application of Government Code section 31780, as amended, would comport with his intention so as to result in any advantage to him. On the contrary, the fact that Clarence specifically designated Dorothy as his beneficiary while he was still married to Mary evidences a conscious decision on his part that Mary not receive his death benefits.
It also should be noted that although Government Code section 21205 provides that any revocable designation of beneficiary in effect on the operative date of the section shall become void and of no effect on that date, it expressly provides that upon revocation of any designation a member may designate the same or another beneficiary by a writing filed with the Board. Thus, under the statute as applied [116 Cal.Rptr. 360] in Ruster the member is given the right to redesignate a beneficiary other than his spouse or child if he so desires. No such right is provided in the amendment to Government Code section 31780.
Respondents argument that it is within the sole discretion of the Legislature to favor a surviving spouse and minor children over a putative spouse misses the mark because it goes to the validity of the amended statute as it applies to county employees who became members of the retirement system after the effective date of the amendment rather than to the question of the retrospective application of the amendment to employee-members who nominated a beneficiary by written designation before the statute was amended.
We hold that the application of the amendment to Government Code section 31780 to void Clarence's designation of Dorothy as his beneficiary constitutes an unreasonable impairment of a vested contractual right without due process of law. (Allen v. City of Long Beach, supra, 45 Cal.2d 128, 131, 287 P.2d 765; Kern v. City of Long Beach, supra, 29 Cal.2d 848, 179 P.2d 799.)
The judgment of dismissal following the granting of the motion for summary judgment is reversed; the cause is remanded for a trial on the issues raised by the pleadings.
GEO. A. BROWN, P. J., and GARGANO, J., concur.
[*] See 42 Cal.App.3d 1046 for subsequent opinion.