Prokop v. Brown CA2/5 ( 2014 )


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  • Filed 10/22/14 Prokop v. Brown CA2/5
    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    SECOND APPELLATE DISTRICT
    DIVISION FIVE
    JOHN PROKOP et al.,                                                  B247393
    Plaintiffs and Appellants,                                  (Los Angeles County Super. Ct.
    No. BS138805)
    v.
    EDMUND G. BROWN, JR., et al.,
    Defendants and Respondents.
    APPEAL from a judgment of the Superior Court of Los Angeles County, Luis
    Lavin, Judge. Affirmed.
    Krutcik & Georggin, James A. Krutcik, A. Nicholas Georggin, Alexandra
    Buechner, for Plaintiffs and Appellants.
    Joan A. Markoff, Chief Counsel, David J. Neill, Deputy Chief Counsel, Jennifer
    M. Garten, Labor Relations Counsel, and David D. King, Labor Relations Counsel, for
    Defendants and Respondents.
    ___________________
    Supervisory engineers employed by the State of California brought this claim
    concerning pay raises on behalf of themselves and all persons similarly situated. In the
    trial court, plaintiffs argued they were entitled to a 10.1 percent pay raise from 2008 to
    the present, as initially allocated in the 2008 Budget Act, which the Department of
    Human Resources (CalHR) failed to pay in violation of the pay parity provisions of
    Government Code section 19826.1 The court sustained the demurrers of defendant
    government officials and entered a judgment of dismissal. On appeal, plaintiffs have
    limited their claim to the contention that they are entitled to compensation appropriated
    and approved in the 2008 Budget Act. We hold the one-year statute of limitations
    contained in section 19815.8 bars plaintiffs’ claims based on the 2008 Budget Act, and
    therefore, we affirm.
    FACTS2
    Plaintiffs John Prokop, A. Samad Hamoud, Kelly Ann Holden, and Victor Zengler
    are employed by the California Department of Transportation in engineering positions
    with supervisory responsibilities. They are members of the employee organization
    Professional Engineers in California Government (PECG). Plaintiffs represent a class of
    1,000 former and current engineering supervisors excluded from collective bargaining
    under the Ralph C. Dills Act (§ 3512 et seq.). Their salaries are paid from federal or
    special funds.
    Plaintiffs are in civil service classifications designated S09, and supervisory
    positions in classifications designated U09 and E48. U09 includes rank-and-file
    1   All further statutory references are to the Government Code, unless otherwise
    stated.
    2
    The facts are drawn from plaintiffs’ amended petition, as well as documents of
    which the court and appellate court have taken judicial notice.
    2
    engineering and supervisory positions. Although they are in the same civil service
    classification, rank-and-file employees are covered by a collective bargaining agreement
    and supervisory employees have salaries set by defendants. For several years,
    engineering supervisors received the same raises as rank-and-file engineering employees.
    The Department of Personal Administration (DPA) and Governor Schwarzenegger
    proposed funding in the 2008 Budget Act for salary increases of 10.1 percent for rank-
    and-file engineers and engineering supervisors. The California Legislature and Governor
    Schwarzenegger approved the 2008 Budget Act. The 2008 Budget Act provides in
    pertinent part, “The funds appropriated in this item are for compensation increases . . . of
    employees whose compensation, or portion thereof, is chargeable to special funds, to be
    allocated by executive order by the Department of Finance . . . in accordance with salary
    and benefit schedules established by the Department of Personnel Administration.”
    (Assem. Bill No. 1781 (2007-2008 Reg. Sess.) § 2.)
    Section 4.01, subdivision (b) of the 2008 Budget Act provides, “Notwithstanding
    any other provision of law, the Director of Finance shall reduce items of appropriation in
    this act to reflect savings achieved through reforms in employee compensation, subject to
    memoranda of understanding negotiated with collective bargaining units and ratified by
    the Legislature. These reductions shall apply to all agencies and departments whose
    employees are subject to collective bargaining agreements negotiated by the Department
    of Personnel Administration or are excluded employees as defined in Section 3527 of the
    Government Code.” (Assem. Bill No. 1781 (2007-2008 Reg. Sess.) § 4.01, subd. (b).)
    The 2008 Budget Act contains appropriations for the fiscal year beginning July 1,
    2008, and ending June 30, 2009. Rank-and-file engineers in the U9 civil service
    classification received the pay raise of 10.1 percent as of July 2008. The engineering
    supervisors did not receive the pay raise. Certain supervisor positions have been earning
    less than the rank-and-file employees that they supervise.
    On June 24, 2009, PECG filed a request with the DPA seeking salary adjustments
    for all supervisory engineering classifications, including plaintiffs, as approved in the
    2008 Budget Act. PECG claimed the DPA violated the provisions of section 19826 to
    3
    pay like salaries for comparable work. PECG requested the DPA raise salaries or
    conduct a quasi-legislative hearing.
    DPA ordered a hearing pursuant to section 19826. Beginning September 9, 2009,
    several days of hearings were held before Administrative Law Judge (ALJ) Karla
    Broussard-Boyd. On June 15, 2010, ALJ Broussard-Boyd sent a letter asking PECG to
    identify specific classifications for which it claimed like salaries. The declarations PECG
    submitted did not show a prima facie case of comparable duties and did not identify
    which salary ranges should be compared. If information was not received by July 31,
    2010, the matter would be considered closed.
    On January 24, 2011, ALJ Broussard-Boyd wrote a letter to PECG reiterating that
    no information had been received on 46 of the 102 claimant classes. “Therefore, this
    memorandum shall serve as notification to the claimant class of Supervisory Engineers its
    pay parity quasi-legislative hearing will be closed if the required information is not
    received by February 4, 2011.” PECG requested an extension of time to provide the
    required documentation to February 18, 2011. Broussard-Boyd agreed, but warned that
    the file would have to be closed without a recommendation to the Director of DPA if no
    additional information was received. PECG requested a second extension until February
    28, 2011. ALJ Broussard-Boyd agreed to extend the deadline to March 4, 2011, but
    again warned that the file would be closed without a recommendation if no information
    was received by March 4, 2011. On March 9, 2011, ALJ Broussard-Boyd sent a letter
    notifying PECG that the pay parity claim had been closed. She added, “As noted in my
    earlier correspondence, the panel was without the required facts or data to make
    meaningful comparisons as required by Government Code section 19826(a) to support a
    pay parity recommendation.”
    In 2012, the Legislature created CalHR, which succeeded to all the powers and
    duties exercised by the former DPA. (§ 18502, subd.(a).)
    4
    PROCEDURAL HISTORY
    On July 31, 2012, plaintiffs filed a petition for writ of mandate and class action
    complaint for wages against defendants Edmund G. Brown, Jr., as Governor of the State
    of California, Arnold Schwarzenegger as former Governor of the State of California,
    Maeley L. Tom as President of CalHR, Debbie Endsley as former Director of the
    California DPA, Malcolm Dougherty as Director of the California Department of
    Transportation, Will Kempton as former Director of the California Department of
    Transportation, Ana Matosantos as former Director of the California Department of
    Finance, and John Chiang as State Controller of California. Plaintiffs filed an amended
    petition on October 19, 2012, for writ of mandate, failure to pay wages, breach of
    contract and declaratory relief.
    The petition alleged defendants have authority under section 19826 to establish
    and adjust salary ranges for each class and position in state service. Section 19826 relies
    on the principle that like salaries shall be paid for comparable duties. Defendants must
    ensure horizontal parity for comparable positions in the civil service system. Plaintiffs
    are in the same civil service classification as rank-and-file engineers who received salary
    increases and have positions which are sufficiently similar.
    The petition additionally alleged that after three years without an administrative
    decision, plaintiffs were seeking to adjudicate their rights in the trial court because
    continuing with the administrative process was futile. As a result of PECG’s
    administrative complaint and the administrative proceedings, limitation periods have
    been tolled since June 24, 2009. The petition sought recovery of the salary increase
    withheld every year for the past five years, an injunction enjoining defendants from
    refusing to pay salary increases approved in the 2008 Budget Act, liquidated damages,
    interest, costs and attorney fees.
    The petition alleged common questions of law and fact existed, including whether
    class members have comparable duties to rank-and-file engineers, whether defendants
    unlawfully withheld wages in violation of the Government Code, and whether there has
    5
    been a pay disparity between rank-and-file engineers and plaintiffs beginning July 1,
    2008, to the date that judgment is entered.
    The petition for writ of mandate alleged defendants have a clear, present,
    mandatory and ministerial duty to pay plaintiffs equal salaries to rank-and-file engineers
    with comparable duties. Defendants have no authority to fix salaries which violate
    section 19826. They violated this mandatory duty by refusing to pay plaintiffs the
    salaries approved in the State Budget Act. If defendants have discretion, they abused it
    by acting inconsistently with California law by refusing to pay engineering supervisors
    the wages to which they were entitled. DPA, the Governor, and the implementing
    agencies included funding in the 2008 Budget Act for raises of 10.1 percent, the
    Legislature and the Governor approved the raises as part of the 2008 Budget Act, but
    plaintiffs have not received the raises. Rank-and-file engineers have received the
    additional 10.1 percent salary since July 1, 2008. Plaintiffs sought recovery of the salary
    increase withheld every year for the past five years.
    In the cause of action for failure to pay wages, plaintiffs alleged defendants’ policy
    was to refuse to pay the salary increases despite the mandates of section 19826 to pay like
    salaries for comparable work.
    The cause of action for breach of contract alleged defendants promised to pay
    earned wages, including paying like salaries for comparable work. Defendants breached
    their employment agreements by failing to pay plaintiffs the salary increases received by
    rank-and-file engineers, who have comparable duties and responsibilities.
    The final cause of action for declaratory and injunctive relief alleged defendants
    violated and continued to violate section 19826 by refusing to pay plaintiffs like salaries
    for comparable work. Plaintiffs sought a declaration of their rights with respect to
    withholding of pay raises.
    Plaintiffs asked the court to issue a peremptory writ of mandate ordering
    defendants to raise the salaries of plaintiffs to correspond with the salary increases paid to
    the rank-and-file engineers from July 1, 2008 to the date judgment is entered in the case.
    Plaintiffs also sought an award of unpaid wages equaling 10.1 percent per year of their
    6
    salaries from July 1, 2008 to the present. They also requested a declaratory judgment
    holding defendants violated the mandatory duties imposed under California law,
    including but not limited to section 19826.
    Tom filed a motion to strike on the ground that she is employed by an entity
    unrelated to the action. Chiang filed a response to the petition. The remaining
    defendants filed demurrers and a request for judicial notice. Plaintiffs opposed the
    motion to strike by asserting the complaint would be amended to allege Tom in her
    representative capacity for the correct entity and a new defendant for the misidentified
    entity. They also opposed the demurrers, and the demurring parties filed replies.
    A hearing was held on February 7, 2013. The trial court granted the request for
    judicial notice, sustained the demurrers without leave to amend and granted the motion to
    strike without leave to amend. The court entered a judgment of dismissal on February 25,
    2013. Plaintiffs filed a timely notice of appeal from the judgment.3
    DISCUSSION
    Standard of Review
    “‘A demurrer tests the legal sufficiency of the complaint, . . .’ [Citations.] On
    appeal from an order of dismissal after an order sustaining a demurrer, our standard of
    review is de novo, i.e., we exercise our independent judgment about whether the
    complaint states a cause of action as a matter of law. [Citation.] We deem to be true all
    material facts properly pled [citation] and those facts that may be implied or inferred
    from those expressly alleged [citation][.]” (Montclair Parkowners Ass’n v. City of
    Montclair (1999) 
    76 Cal.App.4th 784
    , 709.)
    “While a decision to sustain or overrule a demurrer is subject to de novo review on
    appeal, a grant or denial of leave to amend calls for an exercise of discretion on the part
    3   Chiang has not filed a respondent’s brief on appeal.
    7
    of the trial court. [Citation.] Denial of leave to amend is reviewed for abuse of
    discretion. [Citation.] The trial court abuses its discretion in denying leave to amend
    only if the plaintiff shows a reasonable possibility of curing any defect by amendment.
    [Citation.]” (Montclair Parkowners Ass’n v. City of Montclair, supra, 76 Cal.App.4th at
    p. 709.)
    Statutory Scheme
    “The Legislature created the DPA in 1981 for the purpose of managing the
    nonmerit aspect of the state’s personnel system. [Citation.]” (Tirapelle v. Davis (1993)
    
    20 Cal.App.4th 1317
    , 1322.) “In general, the DPA has jurisdiction over the state’s
    financial relationship with its employees, including matter of salary, layoffs and
    nondisciplinary demotions. (§§ 19816, 19816.2, 19825, 19826.)” (Ibid.)
    “[S]etting employee compensation is a legislative function which, in this instance,
    the Legislature has delegated to the DPA. (Pacific Legal Foundation v. Brown [(1981)]
    29 Cal.3d [168,] 189.) The DPA can act only to the extent and in a manner consistent
    with the legislative delegation of authority. And the DPA’s exercise of this authority is
    quasi-legislative (see Lowe v. California Resources Agency (1991) 
    1 Cal.App.4th 1140
    ,
    1151-1152), and is thus subject to the ultimate authority of the Legislature to reject or
    alter such exercise of authority through appropriate legislation.” (Tirapelle v. Davis,
    supra, 20 Cal.App.4th at p. 1323, fn. 8.)
    Section 19826, subdivision (a) provides: “The department shall establish and
    adjust salary ranges for each class of position in the state civil service subject to any merit
    limits contained in Article VII of the California Constitution. The salary range shall be
    based on the principle that like salaries shall be paid for comparable duties and
    responsibilities. In establishing or changing these ranges, consideration shall be given to
    the prevailing rates for comparable service in other public employment and in private
    business. The department shall make no adjustments that require expenditures in excess
    8
    of existing appropriations that may be used for salary increase purposes. The department
    may make a change in salary range retroactive to the date of application of this change.”
    When a state agency has statutory authority to fix an employee’s salary or
    compensation paid from state funds, “the salary is subject only to the approval of the
    department before it becomes effective and payable, except as provided [for certain
    employees exempt from civil service]. The Legislature may expressly provide that
    approval of the department is not required.” (§ 19825, subd. (a).)
    “It is well established that public employees have no vested rights to particular
    levels of compensation and salaries may be modified or reduced by the proper statutory
    authority. [Citations.]” (Tirapelle v. Davis, supra, 20 Cal.App.4th at pp. 1332-1333.)
    “‘[The department] may not unilaterally decrease salaries for represented employees.’
    [Citation.]” (Professional Engineers in Cal. Government v. Schwarzenegger (2010) 
    50 Cal.4th 989
    , 1019.) However, when the Legislature reduced appropriations for state
    employee compensation in the 1991 Budget Act without explicitly directing how to
    implement the reductions, the DPA had authority to reduce the salaries of exempt and
    nonrepresented employees. (Id. at p. 1023.)
    Government Code Section 19815.8
    Plaintiffs contend the payment of compensation approved by CalHR and
    appropriated by the Legislature is a ministerial act subject to a writ of mandate. Plaintiffs
    further contend their action is not subject to the one-year statute of limitations contained
    in section 19815.8 because it is not related to any law administered by CalHR. We need
    not determine whether plaintiffs were entitled to receive the additional compensation
    appropriated in the 2008 Budget Act, because even assuming they were entitled to it,
    their action is time-barred by section 19815.8.
    Section 19815.8, subdivision (a) provides: “No action or proceeding shall be
    brought by any person having or claiming to have a cause of action or complaint or
    ground for issuance of any complaint or legal remedy for wrongs or grievances based on
    9
    or related to any law administered by the Department of Human Resources unless the
    action or proceeding is commenced and served within one year after the cause of action
    or complaint or ground for issuance of any writ or legal remedy first arose. Such a
    person shall not be compensated for the time subsequent to the date when the cause or
    ground arose unless the action or proceeding is filed and served within 90 days after the
    cause or ground arose. Where an appeal is taken from a decision of the department, the
    cause of action does not arise until the final decision of the department.”
    CalHR has the authority to establish and adjust salary ranges under section 19826,
    subdivision (a). Plaintiffs’ claim that they have not received compensation approved by
    CalHR and allocated in the 2008 Budget Act is related to a law administered by CalHR.
    Therefore, the one-year statute of limitations provided in section 19815.8 applies.
    Plaintiffs were required to initiate their action within one year of the date that they failed
    to receive the additional compensation.
    Plaintiffs contend each pay period that they did not receive proper compensation
    constituted a separate violation triggering a new statute of limitation period. (See Jones
    v. Tracy School Dist. (1980) 
    27 Cal.3d 99
    , 105-106.) “[T]he employee can recover only
    those payments which accrued within the period of the applicable statute of limitations
    preceding the filing of his complaint. [Citations.]” (Green v. Obledo (1981) 
    29 Cal.3d 126
    , 215.) The last deficient payment was the final payment under the 2008-2009
    budget. There is no allegation that subsequent budget acts allocated and appropriated
    compensation for pay raises for supervisory engineers. Plaintiffs’ complaint in 2012 was
    filed long after the one-year limitations period ran on deficient payments made under the
    2008 Budget Act. The trial court properly found the complaint barred under section
    19815.8.
    There is no issue of tolling of the statute of limitations. Plaintiffs emphatically
    state they were not parties to the proceedings before the administrative law judge. They
    argue that administrative action was not required or taken. Respondents point out that
    even if the statute of limitations were tolled during the administrative proceedings, it
    began to run no later than March 9, 2011, when the ALJ notified PECG that the matter
    10
    was closed. Plaintiffs filed this lawsuit more than one year after the administrative
    proceedings were closed.
    Plaintiffs contend the four-year statute of limitations for actions based upon a
    written contract applies in this case. However, the gravamen of the action on appeal is
    CalHR’s allocation of compensation appropriated in the 2008 Budget Act. Section
    19815.8 expressly applies to claims related to laws administered by CalHR, and plaintiffs
    have not alleged a written contract between themselves and any party promised to pay
    them additional compensation.
    DISPOSITION
    The judgment is affirmed. Respondents Edmund G. Brown, Jr., Arnold
    Schwarzenegger, Maeley L. Tom, Debbie Endsley, Malcolm Dougherty, Will Kempton,
    and Ana Matosantos are awarded their costs on appeal.
    KRIEGLER, J.
    We concur:
    TURNER, P. J.
    MOSK, J.
    11
    

Document Info

Docket Number: B247393

Filed Date: 10/22/2014

Precedential Status: Non-Precedential

Modified Date: 4/18/2021