Judge: Loren G. Freestone, Case: 37-2022-00013148-CU-WM-CTL, Date: 2023-09-08 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 07, 2023

09/08/2023  10:30:00 AM  C-64 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Loren G. Freestone

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Civil - Unlimited  Writ of Mandate Demurrer / Motion to Strike 37-2022-00013148-CU-WM-CTL LASAGA VS SAN DIEGO CITY EMPLOYEES RETIREMENT SYSTEM [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING Defendant/Respondent San Diego City Employees Retirement System's (SDCERS) demurrer to Plaintiff/Petitioner Fernando Lasaga's first amended petition for writ of mandate and complaint for declaratory and injunctive relief is SUSTAINED WITHOUT LEAVE TO AMEND.

SDCERS unopposed request for judicial notice of (1) San Diego Municipal code sections 24.0908 and 24.1401–24.1404, (2) the February 17, 2023 minute order in this matter, (3) and Ordinance O-21334 is granted.

Lasaga worked for the City of San Diego (the City) for 22 years, most recently as an Associate Traffic Engineer. In February 2021, Lasaga entered the Deferred Retirement Option Plan (DROP), allegedly not knowing that the City and his union, Municipal Employees Association (MEA), were in the process of negotiating a salary increase for all Engineering job classifications. Four months after Lasaga entered DROP, the City and MEA agreed upon a 20% special salary increase-to be implemented over the next 18 months. Lasaga alleges that had he known about the future salary increase, he would have waited to enter DROP because it would have increased his DROP benefit.

Lasaga seeks a traditional writ of mandate under Code of Civil Procedure section 1085 'commanding [SDCERS] to rescind Mr. Lasaga's enrollment in DROP.' Lasaga also seeks a declaration that 'Lasaga is allowed to withdraw from DROP' and 'an injunction directing [SDCERS] to allow [Lasaga] to rescind his DROP enrollment.' In his opposition, Lasaga recharacterizes the relief he seeks to be 'a partial recission of the agreement to enter the DROP program to include the increased 2022 benefits.' 'It is not within SDCERS' authority to expand pension benefits beyond those afforded by the authorizing legislation. This is because the granting of retirement benefits is a power resting exclusively with the City. The scope of the board's power as to benefits is limited to administering the benefits set by the City.' (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal.App.4th 69, 79–80.) The San Diego Municipal Code expressly provides that the decision to enter DROP is irrevocable. (San Diego Mun. Code, § 24.1402(b).) The only way members may end their participation in DROP before their designated DROP period ends is by voluntarily ending their employment with the City. (Id. at § 24.1403.) The San Diego Municipal Code also expressly provides that DROP benefits are calculated based on the member's final compensation in effect at the time the member enters DROP. (Id. at § Calendar No.: Event ID:  TENTATIVE RULINGS

2972110  15 CASE NUMBER: CASE TITLE:  LASAGA VS SAN DIEGO CITY EMPLOYEES RETIREMENT  37-2022-00013148-CU-WM-CTL 24.1404(c)(1).) As such, SDCERS has no authority to permit Lasaga to withdraw from DROP and remain a City employee, nor does it have authority to recalculate Lasaga's DROP benefit to include the salary increase that went into effect after he already entered the plan.

Lasaga argues that he is entitled to withdraw from DROP based on his unilateral mistake of fact regarding the salary increase. Lasaga cites no authority for the proposition that such a mistake entitles him to transmute his statutorily irrevocable decision into a revocable one, and thereafter obtain benefits beyond that which the City has authorized SDCERS to grant as part of a comprehensive retirement system. (Cf. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33, 43–44 [party could not set aside statutorily irrevocable offer at nonjudicial foreclosure sale based on unilateral mistake of fact; such relief would be inconsistent with the comprehensive statutory scheme].) Lasaga cites Krolikowski v. San Diego City Employees' Retirement System (2018) 24 Cal.App.5th 537 as support that SDCERS has authority to correct his alleged mistake. But in that case the mistake was SDCERS overpayment of retirement benefits. The court held that because SDCERS was 'not authorized to have made the overpayments by paying out an amount of benefits in excess of the amounts authorized by the City, its action in recouping those overpayments is consistent with the scope of its authority as granted by the City, rather than inconsistent as appellants contend.' (Id. at p. 559, emphasis in original.) Krolikowski therefore stands for the proposition that SDCERS cannot pay pension benefits beyond those authorized by the City, and that it has authority to correct its mistakes when doing so is consistent with the authority it has been granted by the City. It does not stand for the proposition that members may utilize their own alleged mistakes to force SDCERS to pay benefits beyond those authorized by the City.

Moreover, Lasaga does not allege that SDCERS caused or knew about his mistake. (See Grenall v. United of Omaha Life Ins. Co. (2008) 165 Cal.App.4th 188, 193–196.) As such, he must allege facts showing, among other things, that he 'did not bear the risk of the mistake.' (Id. at p. 193; accord Matson, supra, 46 Cal.App.5th at pp. 44–45; Amin v. Superior Court (2015) 237 Cal.App.4th 1392, 1402–1404.) 'A contracting party bears the risk of a mistake when the agreement so provides or when the party is aware of having only limited knowledge of the facts relating to the mistake but treats this limited knowledge as sufficient.' (Ibid.) Here, the DROP agreement is irrevocable by statute, and therefore it effectively assigns the risk of entering DROP too early/without the benefit of later salary increases on City employees. Lasaga was also aware that he had a limited knowledge of relevant facts because his union representative (Juan Baligad) and his direct supervisor (Labib Qasem)-the two key individuals whom Lasaga allegedly relied upon for material information about pay increases, retirement benefits, and the DROP program-were unavailable when he was deciding whether to enter DROP.

Lasaga knew the decision was irrevocable, and he knew he was acting on limited information. As such, Lasaga has failed to allege facts showing that he did not bear the risk of his alleged mistake.

Lasaga's alleged mistake is also not the type for which relief can be granted. '[T]here is no authority for rescission based on a mistake regarding future events.' (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 246, emphasis in original; accord Mosher v. Mayacamas Corp. (1989) 215 Cal.App.3d 1, 4–6.) Here, Lasaga does not allege that he was mistaken about his current salary at the time he entered DROP. Rather, he essentially alleges that he was mistaken at that time about what his salary would be in the future. Any such mistake does not entitle Lasaga to relief. To the extent that Lasaga attempts to frame his mistake as not knowing about negotiations between the City and MEA at the time he entered DROP (i.e., a present fact), the result is the same because it was his alleged 'failure to predict the future results of these facts, not [his] failure to know them, which was the true nature of the mistake in this case.' (Paramount, supra, 227 Cal.App.4th at p. 248–249 & fns. 26–27 [explaining that 'any failure to predict events based on human behavior can, with enough creativity, be attributed to a failure to know then-existing facts'].) Lasaga also argues that he can invoke equitable estoppel. 'Application of the doctrine of estoppel requires, at a minimum, an actionable statement-that is, an affirmative representation or act by the public entity that is intended to induce reliance by the plaintiff.' (Alameda County Deputy Sheriff's Association Calendar No.: Event ID:  TENTATIVE RULINGS

2972110  15 CASE NUMBER: CASE TITLE:  LASAGA VS SAN DIEGO CITY EMPLOYEES RETIREMENT  37-2022-00013148-CU-WM-CTL v. Alameda County Employees' Retirement Association (2020) 9 Cal.5th 1032, 1073.) Even when there is such a statement, 'principles of estoppel may not be invoked to directly contravene statutory limitations.' (Medina v. Board of Retirement (2003) 112 Cal.App.4th 864, 869–871; see also Alameda County, supra, 9 Cal.5th at p. 1074, fn. 21.) Here, Lasaga does not allege that SDCERS ever made any affirmative representations to him regarding his salary or union negotiations. As set forth above, the relief Lasaga seeks would also contravene the San Diego Municipal Code.

Thus, as a matter of law, SDCERS does not have a clear, present, and ministerial duty to rescind Lasaga's enrollment in DROP or recalculate his benefits based on the salary increase. Nor is Lasaga entitled to a declaration or injunction to that effect. The demurrer to the petition and complaint is therefore sustained.

Lasaga was previously granted leave to amend. In the event the demurrer is sustained, he requests leave to amend again. However, Lasaga does not explain what additional facts he could allege to render the claims viable. There does not appear to be a reasonable probability that the above defects can be cured by further amendment. The demurrer is therefore sustained without leave to amend.

SDCERS is directed to submit a proposed judgment of dismissal within 10 days.

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