Nasrawi v. Buck Consultants LLC
179 Cal. Rptr. 3d 813
Cal. Ct. App.2014Background
- Nasrawi, O’Neal, and Biesemeier are Stanislaus County public employees and beneficiaries of the Stanislaus County Employees Retirement Association (the Association).
- Buck Consultants LLC and Harold Loeb provided actuarial services to the Association; plaintiffs allege actuarial negligence underfunded the pension trust.
- The Association did not sue Buck/Loeb; plaintiffs allege Buck/Loeb aided and abetted breaches of fiduciary duties.
- The trial court sustained demurrers without leave to amend, leading to multiple amendments and a tolling agreement in 2009.
- The operative fifth amended complaint asserts the Association breached fiduciary duties by not suing Buck/Loeb, and Buck/Loeb aided and abetted.
- The appellate court reverses and remands, with instructions to dismiss the Association’s demurrer and allow Buck/Loeb’s demurrer to proceed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of Government Claims Act | Claim against Association not for money damages. | Act applies to all monetary demands against public entities. | Government Claims Act applies; claim must be alleged or excused. |
| 905(f) exception to claims requirement | Exception applies because of retirement system context. | Exception does not apply to tort-based claims or alleged misconduct by the Association. | Exception does not apply; relevant claims subject to claims presentation. |
| Immunity of the Association/board under § 815.2 | Association could be liable for board’s fiduciary omission. | Board actions constitute discretionary policymaking; immune. | Board decisions to pursue litigation are immune under § 820.2; Association immune. |
| Aiding and abetting liability against Buck/Loeb | Buck/Loeb knowingly aided Association’s breaches and acted with substantial encouragement. | No aiding and abetting liability absent underlying tort by a fiduciary. | Aiding and abetting claim stated; plaintiffs can pursue without independent fiduciary duties. |
Key Cases Cited
- City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal.App.4th 445 (Cal. Ct. App. 1998) (trust beneficiary claims against third parties permitted when aiding breaches)
- Davidson v. City of Westminster, 32 Cal.3d 197 (Cal. 1982) (immunity analysis separate from existence of a duty)
- Caldwell v. Montoya, 10 Cal.4th 972 (Cal. 1995) (immunity for discretionary government decisions; ministerial vs policymaking)
- Thompson v. County of Alameda, 27 Cal.3d 741 (Cal. 1980) (discretionary decisions immunized under 820.2)
- Fenton v. Groveland Community Services Dist., 135 Cal.App.3d 797 (Cal. App. 1982) (discretionary acts and immunity analysis in constitutional contexts)
- Dalton v. East Bay Mun. Utility Dist., 18 Cal.App.4th 1566 (Cal. App. 1993) (strict construction of 905(f) exception for public retirement claims)
- Canova v. Trustees of Imperial Irrigation Dist. Employee Pension Plan, 150 Cal.App.4th 1487 (Cal. App. 2007) (interpretation of 905(f) exception in pension contexts)