Opinion
E050314
09-16-2011
GARRETT ZIMMON, Plaintiff and Appellant, v. CITY OF SAN BERNARDINO, Defendant and Respondent.
Faunce, Singer, Oatman & Woodson, Faunce, Singer & Oatman, Edward L. Faunce and Larry J. Roberts for Plaintiff and Appellant. Best Best & Krieger and Arlene Prater for 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super.Ct.No. CIVDS906555)
OPINION
APPEAL from the Superior Court of San Bernardino County. W. Robert Fawke, Judge. Reversed.
Faunce, Singer, Oatman & Woodson, Faunce, Singer & Oatman, Edward L. Faunce and Larry J. Roberts for Plaintiff and Appellant.
Best Best & Krieger and Arlene Prater for Defendant and Respondent.
Defendant and Respondent City of San Bernardino (City) denied Plaintiff and Appellant Garrett Zimmon's application for disability retirement. Zimmon petitioned the trial court for an administrative writ of mandate directing the City to find Zimmon eligible for disability retirement. (Code Civ. Proc., § 1094.5.) Zimmon appeals the trial court's denial of his writ petition. Zimmon makes six contentions: (1) Zimmon is entitled to reinstatement; (2) Zimmon falls within a statutory exception; (3) the City waived its affirmative defense; (4) principles of equity, related to the chronology of the events in this case, should remedy the alleged injustice suffered by Zimmon; (5) principles of equity, related to the evidence in this case, should remedy the alleged injustice suffered by Zimmon; and (6) policy supports Zimmon's position. We reverse the denial of the writ petition.
FACTUAL AND PROCEDURAL HISTORY
On November 5, 2001, Zimmon and the City entered into an agreement for Zimmon to serve as the City's chief of police. The agreement provided that Zimmon would be employed as the chief of police from January 15, 2002, through January 14, 2005. On January 11, 2005, the employment period was extended from January 14, 2005, to January 14, 2007. In regard to termination, the agreement provided, in relevant part, "Zimmon serves as an 'at will' employee and may be terminated at any time, with or without cause . . . ."
Zimmon described the City as "a very dynamic city, [with] high crime, [and] a lot of challenges." Zimmon explained a variety of the challenges that he faced while working as the chief of police. The same day Zimmon was sworn-in, the vice president of the Peace Officers Association was in an officer-involved shooting. Also on that day, Zimmon learned about a potential case involving a police officer raping 16 women while on duty, which "was a major blackeye [sic] for the law enforcement agency." Zimmon was involved in the response to the 2003 wildfires. Also, Zimmon found the politics in the City to be "very difficult" because "department heads are often used for political purposes." For example, Zimmon described a time when the mayor, at a city council meeting, wanted Zimmon to personally arrest the city attorney. Zimmon explained that crime was the main issue in the 2005 mayoral election, and in November 2005 a young girl was killed in a gang-related crime, which brought a lot of local and national media attention to the City. Zimmon worked 12 to 14 hour days, usually working from 7:00 a.m. until 10:00 p.m.
During the summer of 2002, Zimmon began feeling lightheaded and dizzy "particularly when [he] stood." Zimmon reported the lightheadedness and dizziness to his physician, Dr. Chou. Dr. Chou found that Zimmon was suffering from paroxysmal atrial fibrillation. Paroxysmal atrial fibrillation refers to the top chambers of the heart beating rapidly and irregularly, which then causes the whole heart to beat rapidly and irregularly. As a result, paroxysmal atrial fibrillation can cause shortness of breath, chest discomfort, profound fatigue, and lightheadedness. The foregoing symptoms can lead to fainting and/or death. The term "paroxysmal" means that the atrial fibrillation "comes and goes." Things that can exacerbate atrial fibrillation include caffeine, alcohol, and stress. If atrial fibrillation is not well controlled, it can lead to cardiomyopathy, which is a "permanent and irreversible weakening of the heart."
Cardioversion is a therapy in which a patient's heart rhythm is converted from atrial fibrillation to sinus rhythm. Cardioversion can be accomplished with medication or a jolt of electricity. Zimmon was treated with a jolt of electricity. The cardioversion was initially successful, but then Zimmon had a recurrence of atrial fibrillation a few days later. Dr. Chou documented the return of Zimmon's atrial fibrillation with an electrocardiogram (EKG). Despite being placed on medication, Zimmon continued to suffer "break-through episodes" of atrial fibrillation. In June 2005, Zimmon applied for workers' compensation benefits, due to stress and heart disease.
In October 2005, Zimmon reported to Dr. Chou that the break-through episodes were increasing in frequency. Dr. Chou prescribed Zimmon different medications to control the atrial fibrillation. When Zimmon did not respond to the changed medications, Dr. Chou referred him to an electrophysiologist—a doctor who specializes in the heart's electrical system. The electrophysiologist suggested doubling Zimmon's medication for several months. Zimmon began suffering side effects from the medication, so the dosage then had to be lowered.
In December 2005, Mayor Valles met with Zimmon to discuss Zimmon's health. Mayor Valles told Zimmon "that there'd been a lot of pressure in the politics with the City and she felt that [Zimmon] really needed to take a look at [his] situation and determine if [he] wanted to remain being the chief or if [he] wanted to deal with the medical situation." Zimmon told the mayor he would make an appointment with Dr. Chou.
Zimmon met with Dr. Chou on January 6, 2006. Dr. Chou recommended that Zimmon take 30 days leave from work. Zimmon returned to see Dr. Chou on February 3, 2006. Dr. Chou concluded Zimmon was "maxed out" on medication, and that it would be detrimental for Zimmon to continue working as a police chief. Dr. Chou recommended that Zimmon take another 30-day medical leave from work, and told Zimmon to make a decision whether he would continue working. Dr. Chou told Zimmon to contact him when he decided about whether or not to continue working.
On February 14, 2006, Mayor Valles contacted Zimmon by telephone; she informed Zimmon, "she was considering terminating [his] contract due to the fact that a new mayor was coming into office and that the chief worked for the mayor and the mayor should have the opportunity to pick his or her own chief." Zimmon asked Mayor Valles if she was allowed to terminate his contract while he was on medical leave/workers' compensation. Mayor Valles told Zimmon she "would look into it."
On February 15, 2006, Zimmon contacted Dr. Chou and informed him that he and his wife decided that Zimmon would no longer work as chief of police, because his health was more important. On February 15, 2006, Dr. Chou wrote a letter concluding that Zimmon was "permanently unable to return to work as the Chief of Police in San Bernardino or any other Chief of Police position within the state of California." Dr. Chou's conclusion was based on Zimmon being "maxed out" on medication, and Dr. Chou's opinion it would not be prudent for Zimmon to continue working as a police chief. Dr. Chou was concerned that if Zimmon worked as a police chief, Zimmon's atrial fibrillation would increase in frequency.
On February 21, 2006, a majority of the city council approved a motion for the mayor to "'proceed with the termination of [Zimmon's] employment agreement and [for] the City Attorney's Office [to] prepare a letter to be sent to Chief Zimmon's attorney.'" On February 22, 2006, Zimmon completed the California Public Employees' Retirement System (CalPERS) "Disability Retirement Election Application."
On February 23, 2006, Mayor Valles wrote a letter to Zimmon's attorney. The letter reflected that a new mayor would be taking office on March 6, 2006, and therefore, on February 21, the city council voted to terminate Zimmon's employment without cause. The letter informed Zimmon that he had 15 days from the date of the letter to appeal the decision. The letter also noted that, when Zimmon's employment contract was extended in 2005, the severance provision, offering Zimmon six months of severance pay for termination without cause, was not part of the extension.
Zimmon's attorney responded with a letter requesting that the City "respect the contract provisions entitling [Zimmon] to the 'six-month severance' protections." Zimmon's attorney requested that Zimmon be given $111,226.96 in severance pay and $37,659.51 in unused benefits.
On March 13, 2006, the city attorney wrote a letter to Zimmon's attorney. The letter confirmed that "Zimmon's last official day as Chief of Police for the City of San Bernardino ended at the close of business on March 10, 2006. [The March 10] date [was] based upon the expiration of the 15-day appeal period referenced in Mayor Valles's February 23, 2006 letter . . . ." The city attorney offered Zimmon $83,268, which was an amount equal to six months of Zimmon's salary, and $41,190.28 for Zimmon's accrued leave.
On March 14, 2006, Zimmon's attorney, Michael Stone, wrote a letter responding to the city attorney. In the letter, Stone wrote, "it would be premature to fix [Zimmon's] last day of work on the 10th, because his appeal is still viable." Stone asserted Zimmon's last day of work would be the day the matter was settled. Stone noted Zimmon was willing to accept the City's severance and accrued leave offer, on the condition that Zimmon's last day of work would be the date the parties' agreed to a final resolution of the matter.
In this letter, Stone reiterated he "did not withdraw [Zimmon's] appeal on March 9, nor at any other time," alluding that an appeal to the city council's decision was tendered; that appeal does not appear to be contained in the record.
Ultimately, the parties agreed Zimmon's termination would be effective on March 15, 2006. Zimmon was given $83,268 in severance pay, and $41,190.28 for unused leave time. The agreement and release specifically excluded Zimmon's pending workers' compensation and disability claims; those claims could proceed forward.
On April 6, 2006, Zimmon was seen by Dr. Edward O'Neill for an "agreed medical examination," in order for Dr. O'Neill to generate a "medical-legal report," which was sent to the Workers' Compensation Appeals Board. Dr. O'Neill verified Zimmon suffered from "[c]ardiac arrhythmia with [a] history of recurrent atrial fibrillation." Dr. O'Neill further concluded Zimmon's heart trouble qualified under Labor Code section 3212. Dr. O'Neill opined Zimmon was 40 percent permanently disabled based upon American Medical Association Guidelines. Dr. O'Neill further opined 50 percent of Zimmon's disability was occupation related. (Labor Code, §§ 4663, 4664 [apportionment].) Dr. O'Neill concluded Zimmon would not be able to return to police work; however, Zimmon could be gainfully employed.
Labor Code section 3212 provides that the term "injury" for certain members of police departments includes "heart trouble that develops or manifests itself during a period while the member is in the service of the office, staff, department, or unit."
On April 18, 2007, a disability and rehabilitation hearing officer (the Officer) for the City issued his ruling in regard to Zimmon's disability retirement. The Officer concluded Zimmon suffered from a heart related injury (Labor Code, § 3212), and that 50 percent of the injury/disability was related to Zimmon's occupation. However, the Officer held, "there is no objective evidence that . . . Zimmon is incapacitated within the meaning of the Public Employees' Retirement Law for the performance of his usual duties as a Police Chief for the City of San Bernardino Police Department, and that . . . Zimmon is not incapacitated for performance of the usual duties of the position for other California public agencies in CalPERS. Similar positions with reasonably comparable pay, benefits and promotional opportunities with other California public agencies are available."
Zimmon requested a redetermination of the finding that he was not disabled as defined by CalPERS. A rehearing was held before the same officer on June 19, 2007. Zimmon argued that the holding from the first hearing was incorrect, because Dr. O'Neill, who was an agreed-upon examiner, had concluded Zimmon would not be able to return to police work. In the rehearing ruling, the Officer wrote that he considered Dr. O'Neill's opinion that Zimmon could not return to police work. However, the Officer concluded Dr. O'Neill's opinion did not provide a basis for a change in ruling, because it did not explain why Zimmon could not return to police work. The Officer further found that even if Zimmon's physical activities were limited, he would be able to continue working as police chief, because there are no physical activity requirements for a police chief. Therefore, the Officer concluded Zimmon was "not entitled to an industrial disability retirement because he is not substantially incapacitated to perform the usual duties of a Police Chief for the City of San Bernardino."
Based upon the foregoing findings and conclusions, the Officer held that Zimmon was not "Incapacitated within the meaning of the Public Employees' Retirement Law for the performance of his usual duties as a Police Chief for the City of San Bernardino Police Department." Additionally, the Officer held that Zimmon was "not eligible for a disability retirement because of the circumstances of his termination from employment with the City."
Approximately one year later, on July 21, 2008, an administrative law judge (the ALJ) heard the matter related to Zimmon's disability retirement. The hearing was part of the Office of Administrative Hearings for the City Council of the City of San Bernardino. The issues considered by the ALJ were (1) whether Zimmon was substantially incapacitated from performing the usual and customary duties of the police chief position; and (2) whether Zimmon was precluded from receiving an industrial disability retirement due to the circumstances of his termination.
The City asserted an employee who is no longer eligible to return to active employment for reasons unrelated to the disability is not entitled to a disability retirement, unless his right to a disability retirement matured before the employee's separation from service. The City asserted that "matured" meant the retirement board determined the employee was no longer able to perform his job duties. The City argued Zimmon was not eligible for industrial disability retirement because Zimmon was terminated from employment with the City before his right to a disability retirement matured.
Zimmon argued that the City appeared to be conceding the fact that Zimmon is incapacitated; however the City raised a "'gotcha' affirmative defense." Zimmon asserted he was not terminated for cause, and therefore, was still eligible for reinstatement. Further, Zimmon argued his disability retirement claim arose before his employment was terminated, and therefore his termination should not extinguish his right to a disability retirement because otherwise valid claims could be easily preempted.
The ALJ concluded Zimmon "proved his disability and incapacity for performance of duty 'on the basis of competent medical opinion . . . .' (Gov. Code, § 20026.)" The ALJ found that Dr. Chou's and Dr. O'Neill's opinions were the only competent medical opinions, and they both supported Zimmon's position that he was disabled. Despite Zimmon's disability, the ALJ concluded Zimmon was not eligible for disability retirement, due to Zimmon being terminated before his right to a disability retirement matured. Accordingly, the ALJ ordered that Zimmon's application for disability retirement be denied. The city council adopted the ALJ's decision.
On April 29, 2009, in the trial court, Zimmon petitioned for a writ of mandamus (Code Civ. Proc., § 1094.5) directing the City to set aside its decision denying Zimmon a disability retirement, and entering an order that Zimmon was entitled to a disability retirement. Zimmon argued the ALJ's factual conclusions were correct; however, the ALJ's legal conclusion was incorrect. Specifically, Zimmon challenged the legal conclusion that his right to a disability retirement had not matured prior to his termination. Zimmon argued the ALJ's interpretation of "matured" would allow cities to circumvent paying valid disability retirement claims by terminating people without cause.
The City responded that Zimmon's petition should be denied. The City asserted that an employee who is not eligible to return to active employment for reasons unrelated to his disability is not entitled to a disability retirement, unless the employee's right to the retirement matured before the employee's separation from service. The City argued Zimmon's right to a disability retirement had not matured prior to his termination. The City noted that "matured" meant there was an unconditional right to immediate payment, which only occurred when the pension board determined the employee was no longer capable of performing his duties. The City noted the facts that (1) Zimmon was effectively terminated on March 16, 2006, and (2) when Zimmon applied for disability retirement he was aware of his impending termination. Based on those facts, the City concluded Zimmon's right to a disability retirement had not matured at the time of his termination.
The trial court invited the parties to brief the following issue: Are there principles of equity that provide for the granting of the writ petition? In response, Zimmon argued the City had waived its claim that he was not eligible for disability retirement due to the circumstances of his termination. Zimmon asserted the argument was waived in the letter related to the severance settlement, in which the city attorney wrote, "As previously recognized, this settlement offer is for any and all contractual issues arising out of . . . Zimmon's employment agreement with the City and does not affect any pending workers' compensation and disability pension claims filed by . . . Zimmon."
Next, Zimmon argued the City was incorrect in concluding that a person needed to be able to be reinstated in order to qualify for disability retirement. Zimmon also argued he had a valid claim for disability retirement before being terminated. Next, in response to the invitation for equitable arguments, Zimmon responded that CalPERS law allowed for him to apply for disability retirement even after termination.
In the City's supplemental briefing, it argued a variety of issues: (1) the City's argument was based on settled law, and therefore principles of equity should not be considered; (2) the City did not waive its right to assert any particular legal argument; (3) Zimmon did not have a valid claim for disability retirement prior to termination, and Zimmon's argument on this topic does not relate to a principle of equity; and (4) Zimmon's argument concerning CalPERS law was not responsive to the court's question, because it did not relate to equity.
The trial court issued a lengthy written decision, concluding that the findings of the ALJ were supported by the record, and therefore there was no abuse of discretion. Additionally, the trial court concluded principles of equity did not require a contrary conclusion. As a result, the trial court denied Zimmon's writ petition.
DISCUSSION
A. CONTENTION
As set forth in the introduction, Zimmon raises a variety of arguments. We find one issue to be dispositive, and therefore, address only that issue. The issue that we focus upon is equity; specifically, we focus upon the evidence that falls within the equitable exception set forth in the case of Smith v. City of Napa (2004) 120 Cal.App.4th 194, 206-207 (Smith). In regard to this exception, Zimmon argues the trial court erred by denying his writ petition because the evidence establishes that the City found Zimmon to be incapacitated. We agree. B. STANDARD OF REVIEW
An appellate court reviewing a superior court's decision, in an administrative mandate case (Code Civ. Proc., § 1094.5), applies the substantial evidence standard regardless of what standard was applied by the superior court. (Fukuda v. City of Angels (1999) 20 Cal.4th 805, 824.) Where the superior court has exercised its independent judgment, the appellate court reviews the record to determine whether the superior court's findings (not those of the administrative agency) are supported by substantial evidence. (Bixby v. Pierno (1971) 4 Cal.3d 130, 143, fn. 10.)
Under the substantial evidence standard of review, a reviewing court "must consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the judgment. [Citations.] [¶] It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630-631.)
C. LEGAL BACKGROUND
A city may contract with the State Employees' Retirement System for purposes of providing a retirement system. (Gov. Code, § 45345.) It appears that the City of San Bernardino has such a contract. (San Bernardino Municipal Code, § 2.48.010.) The California Public Employees Retirement Law provides: "Any patrol, state safety, state industrial, state peace officer/firefighter, or local safety member incapacitated for the performance of duty as the result of an industrial disability shall be retired for disability . . . regardless of age or amount of service." (§ 21151, subd. (a).)
All further statutory references are to the Government Code unless indicated.
An "industrial disability" refers to a disability resulting from an "injury or disease arising out of and in the course of [the employee's] employment." (§ 20046.) "Disability" means an "inability to engage in any substantial gainful occupation by reason of any physical or mental impairment." (§ 20027.)
An application for disability retirement "shall be made only (a) while the member is in state service, . . . or (c) within four months after the discontinuance of the state service of the member, or while on an approved leave of absence, or (d) while the member is physically or mentally incapacitated to perform duties from the date of discontinuance of state service to the time of application or motion." (§ 21154.) When a local safety member applies for disability retirement, the governing board of the agency determines whether the member is incapacitated for the performance of duty. (§ 21154.)
A similar statute, section 31722, related to county employees' retirement, also uses the phrase "discontinuance of service." In the context of section 31722, "discontinuation" has been given its ordinary meaning, which "is termination or cessation of activity." (Weissman v. Los Angeles County Employees Retirement Assn. (1989) 211 Cal.App.3d 40, 46.) "Service" is defined as "uninterrupted employment for a period of time for which deductions are made from the member's earnable compensation." Therefore, "discontinuance of service" has been interpreted to mean "a member who has ceased to work for a salary from which deductions were made." As a result, if a person has already left work on a service retirement, but then decided to change to a disability retirement, and filed his application within the four month grace period, then he would qualify as filing within four months of "discontinuance of service," i.e., service retirement qualifies as "discontinuance of service." As a result, the pension board would be required to accept and process the person's disability application.(Ibid.)
A problem arises when section 21156 is factored into the statutory scheme, because a gap exists in the statutory framework. Section 21156 provides, in relevant part, "If the medical examination and other available information show to the satisfaction of . . . the governing body of the contracting agency employing the member, that the member in the state service is incapacitated physically or mentally for the performance of his or her duties and is eligible to retire for disability, the board shall immediately retire him or her for disability, unless the member is qualified to be retired for service and applies therefore prior to the effective date of his or her retirement for disability . . . ." The gap created by this statute is the lack of definition of what it means to be "eligible to retire for disability."
Common law has been created to fill this statutory gap. Two cases from the Third District Court of Appeal have provided common law on the topic: Haywood v. American River Fire Protection Dist. (1998) 67 Cal.App.4th 1292 (Haywood) and Smith, supra, 120 Cal.App.4th 194. In Haywood, a firefighter was frequently disciplined for failing to follow instructions. (Haywood, at pp. 1298-1299.) In 1992, the firefighter applied for workers' compensation benefits claiming that his fear of constantly being scrutinized by supervisors had caused him to suffer "psychic injury." (Id. at p. 1299.) The firefighter was evaluated by doctors. Ultimately, the firefighter was charged with jeopardizing the health and safety of the public and inexcusable neglect of duty and was terminated effective April 30, 1993. (Ibid.)
Approximately 11 months later, the firefighter applied for disability retirement. The firefighter's application was denied. (Haywood, supra, 67 Cal.App.4th at p. 1299.) At the administrative hearing, there was evidence that the firefighter was incapacitated from returning to work at the particular fire district, due to problems with his supervisors causing him depression; however, it appeared he would be able to perform the duties of a firefighter at a different fire district. (Id. at p. 1302.) On appeal, the court considered whether, in order to obtain a disability retirement, an employee had to be disabled from working at the exact last department where the employee worked, or whether an employee had to be disabled from working at any similar department in the state. (Id. at pp. 1302-1303.)
The appellate court gave a variety of reasons why the firefighter was not eligible for a disability retirement. The Third District interpreted a variety of statutes as requiring that a person may only be eligible for disability retirement if the person would be permitted to return to work if the disability were alleviated. (Haywood, supra, 67 Cal.App.4th at p. 1305.) The court concluded that since the firefighter was terminated from his job, there was no longer the potential of him being reinstated as a firefighter with the district, and therefore, it was proper to deny his application for disability retirement. (Id. at p. 1306.) Secondarily, the reviewing court noted that awarding the firefighter "disability retirement would interfere with the District's authority to discipline recalcitrant employees." Therefore, the court reasoned that the firefighter's application should be rejected so that the district's authority was not "overrid[d]e[n]." (Ibid.) In short, the court concluded, in part, that "eligible to retire for disability" meant that the person was an active employee, who would be able to return to his job if he overcame his disability. (Id. at p. 1307.)
The Smith opinion built on the Haywood opinion. In Smith, a firefighter suffered a back injury, but also had ongoing disciplinary issues with the City of Napa. (Smith, supra, 120 Cal.App.4th at p. 199.) As part of the disciplinary issues, the firefighter was required to complete certification tests in four different areas of his job. (Id. at pp. 199-200.) The firefighter made critical errors during one of the tests, and was informed that he would be dismissed effective December 15, 2000. That same day—December 15, 2000—the firefighter filed a claim for disability retirement. (Id. at p. 201.) Relying on Haywood, the City of Napa concluded the firefighter was ineligible for disability retirement due to his dismissal from his job. (Smith, at pp. 201-202.)
On appeal, the Third District Court of Appeal revisited its decision in Haywood. (Smith, supra, 120 Cal.App.4th at p. 203.) The court explained the Haywood holding as follows "if an applicant is no longer eligible for reinstatement because of a dismissal for cause, this also disqualifies the applicant for a disability retirement." (Smith, at p. 203.) The court explained, "[t]o interpret the statutes otherwise overrides the power of public agencies to discipline employees, and would reward poor employees with early retirement. [Citation.]" (Id. at pp. 203-204.)
In Smith, the Third District Court of Appeal rejected the firefighter's argument that the Haywood holding was "an 'unenacted' rule of law." (Smith, supra, 120 Cal.App.4th at p. 204.) The appellate court explained that the Haywood decision was based on an interpretation of the statutes governing disability retirement. Further, the court noted that if the Legislature did not approve of the Haywood holding, then it had five years to "scuttle" the opinion. The court concluded the lack of legislative action supported the Haywood holding. (Smith, at p. 204.)
We note it has been over 10 years since the Haywood opinion was published, and the Legislature still has not "scuttled" the law set forth in the opinion.
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In Smith, the court explained that the Haywood "holding would not apply where the cause for dismissal was the result of a disabling medical condition, or where the dismissal would be 'preemptive of an otherwise valid claim for disability retirement.' [Citation.]" (Smith, supra, 120 Cal.App.4th at p. 205.) The appellate court explained that "if an agency dismisses an employee solely for a cause unrelated to a disabling medical condition, [such a dismissal] cannot result in the forfeiture of a matured right to a pension absent express legislative direction to that effect. [Citations.] Thus, if a plaintiff were able to prove that the right to a disability retirement matured before the date of the event giving cause to dismiss, the dismissal cannot preempt the right to receive a disability pension for the duration of the disability. [Citation.] Conversely, the 'right may be lost upon occurrence of a condition subsequent such as lawful termination of employment before it matures . . . .' [Citation.]" (Id. at p. 206.)
As a result of the foregoing rules, the Smith court concluded the key issue in the case was whether the firefighter's right to a disability retirement matured before the firefighter's effective termination. (Smith, supra, 120 Cal.App.4th at p. 206.) The appellate court concluded a "vested right matures when there is an unconditional right to immediate payment." The court then concluded a duty to provide a disability pension payment only arises once the pension board has determined that the employee is no longer capable of performing his duties. In other words, a right to a pension payment is considered "matured" once the pension board approves the employee's disability retirement application. Therefore, the court reasoned that if a plaintiff were able to prove that the pension board determined the plaintiff was no longer capable of performing his duties before the date of the event giving cause to dismiss, then dismissal cannot preempt the right to receive a disability pension for the duration of the disability. Based upon this rule, the court determined that the firefighter's disability retirement claim was correctly denied, because the firefighter was terminated before the pension board made a determination about his abilities to perform his job. (Ibid.)
Nevertheless, the appellate court noted, "there may be facts under which a court, applying principles of equity, will deem an employee's right to a disability retirement to be matured and thus survive a dismissal for cause." (Smith, supra, 120 Cal.App.4th at pp. 206-207.) For example, equity might require a different result if there was undisputed evidence that a plaintiff was eligible for a disability retirement, such that a favorable decision on his claim would have been a foregone conclusion, such as in a loss of limb case. (Id. at p. 207.) The appellate court concluded equity did not require a different outcome in the firefighter's case, because the firefighter's medical evidence was equivocal. (Ibid.)
In sum, as the common law has evolved in this area, an equitable exception has arisen. The equitable exception provides that an employee who has been terminated, prior to the pension board approving his disability retirement application, may still be "eligible to retire for disability" if there is evidence that the employee's application would have been granted.
D. ANALYSIS
We now analyze Zimmon's contention that the trial court erred by denying his writ petition, because the evidence established Zimmon was incapacitated, and his application would have been granted, i.e., the equitable exception is applicable in this case. We agree.
The city council adopted the opinion of the ALJ. The ALJ concluded Zimmon "proved his disability and incapacity for performance of duty 'on the basis of competent medical opinion . . . .' (§ 20026.) In fact, the only competent medical opinions presented in the present instance, those of Dr. Chou and Dr. O'Neill, supported [Zimmon's] claimed disability and incapacity. Dr. Chou opined that, 'Due to the seriousness of this medical condition, it is my opinion that [Zimmon] is permanently unable to return to work as the Chief of Police in San Bernardino or any other Chief of Police position within the state of California [citation]. Dr. O'Neill stated that, '[Zimmon] certainly could not return to police work, considering his age of 55 and the ongoing problem of his cardiac arrhythmia.' [Citation.]" However, the ALJ concluded Zimmon did "not qualify for disability retirement due to the termination of his employment." The city council adopted the ALJ's findings.
Accordingly, the evidence in the record is that the contracting agency (the city council) that is charged with making the determination regarding Zimmon's disability, actually found Zimmon's disability qualifies him for disability retirement. Therefore, the evidence in this case goes beyond that required for the equitable exception. For the equitable exception to apply, the employee needs to show a favorable decision on his claim would have been a foregone conclusion. In this case, Zimmon actually has a finding on his claim by the City. As result, there is no doubt that a favorable decision would have been made on his claim, because there is actually a finding that he is disabled and incapacitated to perform his duties. Given the city council's decision regarding Zimmon's disability, it would be difficult to conclude that Zimmon's disability may not have qualified for a favorable finding. Accordingly, the trial court erred by concluding the equitable exception was not applicable, because the only evidence supports a finding in Zimmon's favor—there is not substantial evidence in the City's favor.
The trial court reasoned the equitable exception was not applicable in this case because "Zimmon's entitlement to disability retirement was not a foregone conclusion at the time of his termination." The trial court pointed out that the hearing officer had concluded Zimmon was not substantially incapacitated, which supported the conclusion that Zimmon's right to a disability retirement was not a foregone conclusion at the time of his termination. We presume this rule, regarding disability retirement needing to be a foregone conclusion at the time of termination, came from the Smith opinion; in particular, the portion of the opinion that reads, "Thus, if a plaintiff were able to prove that the right to a disability retirement matured before the date of the event giving cause to dismiss, the dismissal cannot preempt the right to receive a disability pension for the duration of the disability." (Smith, supra, 120 Cal.App.4th at p. 206, italics added.)
We find the trial court's reliance on the rule—about proving that a disability retirement was a foregone conclusion before being terminated—to be problematic, because the rule is discussed several paragraphs before the equitable exception. The rule is presented within the appellate court's discussion of the word "preempt" in the Haywood opinion. (Smith, supra, 120 Cal.App.4th at p. 206.) Thus, the rule does not appear directly related to the equitable exception. Further, this timing rule seems somewhat problematic given that a person can apply for disability retirement up to four months after discontinuing service; fixing the relevant chronological point at a time prior to termination seems to contradict the four-month rule. (§ 21154.)
The City appears to argue the equitable exceptions set forth in Smith were dicta, and therefore should not be considered part of the common law. Dicta is comprised of "general observations, unnecessary to the [court's] decision." (Bunch v. Coachella Valley Water Dist. (1989) 214 Cal.App.3d 203, 212 [Fourth Dist., Div. Two].) In Smith, the appellate court reasoned the plaintiff's evidence that he was eligible for a CalPERS disability retirement was equivocal, and therefore it could not be determined if a favorable decision would have been reached on his retirement claim. (Smith, supra, 120 Cal.App.4th at p. 207.) Accordingly, the Smith court applied the evidence in the case to the equitable exception rule, but found that the exception was not satisfied. The fact the exception was not satisfied does not render the exception dicta. In other words, the court did not make a simple observation about a possible equitable exception—the court applied the exception to the facts of the case, and used the rule in justifying its decision. As a result, we are not persuaded by the City's argument that the equitable exception is not part of the common law.
Next, the City argues the equitable factors are not relevant for determining whether an employee is eligible for disability retirement. We disagree. In setting forth the equitable exception, the Smith opinion reads: "Nor, for that matter, is there undisputed evidence that the plaintiff was eligible for a CalPERS disability retirement, such that a favorable decision on his claim would have been a foregone conclusion (as perhaps with a loss of limb)." (Smith, supra, 120 Cal.App.4th at p. 207, italics added.) The plain language of the opinion reflects that the exception relates to eligibility for disability retirement. Accordingly, we find the City's argument unpersuasive.
The City does not specifically explain what evidence supports the trial court's decision to not apply the equitable exception. As a result, we are not persuaded there is substantial evidence supporting the trial court's decision, because it appears the evidence in this case only supports a finding that Zimmon's application for disability retirement would have been granted on the basis of his disability.
DISPOSITION
The judgment is reversed. Appellant is awarded his costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J.
We concur: HOLLENHORST
Acting P. J.
McKINSTER
J.