218 Cal. App. 4th 400
Cal. Ct. App.2013Background
- FCERA used an “enhanced” disability retirement formula from 2001–2009 based on an interoffice county counsel letter, though the settlement agreement regulating Ventura II did not expressly include disability benefits.
- A 2000–2001 settlement process sought enhanced service retirement benefits via CERL amendments; the final operative agreement (2000 Oct) focused on service retirement and stated it resolved all Ventura II issues but was silent on disability retirement.
- County counsel Merritt issued a letter in 2001 advising computation of post-settlement disability benefits under an enhanced formula, which FCERA then used for NSCD retirees for years.
- In 2009 FCERA stopped using the enhanced disability formula and began paying disability retirement under CERL, waiving recovery of past overpayments.
- Appellants (retired FCERA members) sued to compel restarting the enhanced disability formula, seeking mandamus, contract reformation, breach, and Ventura-based relief.
- Trial court sustained a demurrer without leave to amend, holding the settlement agreement did not include or imply the enhanced disability formula and that the fifth Ventura-related claim was waived by the settlement’s forbearance provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement agreement impliedly includes the enhanced disability formula. | Chisom claims an implied term to pay NSCD benefits under the enhanced formula. | Settlement language is explicit and silent on disability benefits; no implied term should be inferred. | No implied term; demurrer upheld. |
| Whether Retired Employees permits implied rights to compensation from a county resolution. | Retired Employees allows implied contractual rights to health benefits. | Resolutions can create policy, not enforceable private rights; any contract rights must be clear. | Retired Employees guidance limited; not applicable to creating implied NSCD rights here. |
| Whether the fifth cause of action (Ventura-based relief) is barred by the settlement’s forbearance and release clauses. | Ventura rights should be available despite the settlement. | Settlement foreclosed all claims related to Ventura II; forbearance and releases bar the claim. | Barred by forbearance/release terms. |
| Whether the contract language requiring completeness and no unexpressed terms forecloses implied disability benefits. | Language saying no other agreements implies entitlement to embedded terms. | Clear, unambiguous language limits to express terms; implied terms would contradict the contract. | Correct; no implied disability-benefit term. |
Key Cases Cited
- Ventura County Deputy Sheriffs’ Assn. v. Board of Retirement, 16 Cal.4th 483 (Cal. 1997) (interpretation of CERL compensation and inclusion of items in ‘compensation’)
- Retired Employees Assn. of Orange County, Inc. v. County of Orange, 52 Cal.4th 1171 (Cal. 2011) (implied rights to health benefits from county resolutions; limits by § 25300)
- Requa v. Regents of University of California, 213 Cal.App.4th 213 (Cal. App. 2012) (pleading failure to show clearly permissible implied terms; distinguishable facts)
- Klein v. Chevron U.S.A., Inc., 202 Cal.App.4th 1342 (Cal. App. 2012) (contract interpretation when language is clear and explicit)
- Malmstrom v. Kaiser Aluminum & Chemical Corp., 187 Cal.App.3d 299 (Cal. App. 1986) (implied terms cannot vary express contract terms)
- Anderson v. Savin Corp., 206 Cal.App.3d 356 (Cal. App. 1988) (limits on implying terms that alter express contractual obligations)