Metropolitan News-Enterprise


Thursday, April 14, 2011


Page 1


S.C. Denies Review of Ruling on Orange County Pensions




A Court of Appeal ruling upholding an agreement increasing pension benefits for Orange County sheriff’s deputies was left standing yesterday by the state Supreme Court.

The justices, at their weekly conference in San Francisco, unanimously denied review in County of Orange v. Association of Orange County Deputy Sheriffs (2011) 192 Cal.App.4th 21

Orange County claimed its 2002 agreement with the union—which applied a benefits increase for deputy sheriffs, sergeants, and district attorney investigators to all such employees who were in service on June 28 of that year, from the beginning of their service—was unconstitutional.

But Justice Jeffrey W. Johnson, of this district’s Div. One, acknowledged that the county had been placed in a difficult financial position by what it called the “ruinous fiscal irresponsibility” of its prior supervisors. “Imprudence, however, is not unconstitutional,” the jurist wrote.

The increase, which the county granted under the County Employees Retirement Law, raised the maximum benefit to “3% at 50,” meaning employees retiring at age 50 would receive an annual pension of three percent of salary times years of service. The county previously gave safety employees a maximum benefit of “2% at 50.”

Huge Liability

Facing an estimated $187 million liability based on the retroactivity of the increase, supervisors adopted a unanimous resolution three years ago, declaring that the application of the increase to pre-2002 service was unconstitutional, and instructing the county’s lawyers to seek an injunction prohibiting the pension system from continuing to pay the additional benefits.

The board voted not to seek recovery of any amounts already paid out under the enhanced benefit formula.

Los Angeles Superior Court Judge Helen Bendix denied the injunction, saying the earlier action did not violate Art. VI, Sec. 18(a) of the state Constitution, which prohibits a county from incurring any debt that it cannot pay within the same year, absent two-thirds voter approval. Nor, the judge ruled, was there a violation of Art. VI, Sec. 10 prohibiting an award of “extra compensation” to a public employee “after service has been rendered.”

The Court of Appeal agreed, saying the “unfunded actuarial accrued liability” incurred by the county does not, under precedent or existing accounting standards, constitute a debt within the meaning of Sec. 18(a). Nor does an increase in benefits to be paid to current employees as they retire in the future constitute the payment of additional compensation within the meaning of Sec. 10, Johnson wrote.

 In other conference action, the justices:

•Left standing a ruling by this district’s Court of Appeal that may enable a trust established by downtown developer Andrew Meieran to collect more than $9 million in damages and interest from former partner Barry Shy.

The two developers acquired the 1910 Higgins Building in 1998, but subsequent disagreements between them have led to years of litigation.

Div. One of the Court of Appeal ruled last Dec. 31 that Los Angeles Superior Court Judge Joanne O’Donnell erred in denying a motion to add Shy’s brother, both as an individual and as a trustee, and two Shy-run companies, to the judgment obtained by the Meieran trustee.

The panel held, among other things, that a trustee may be added to a judgment as an alter ego under Code of Civil Procedure Sec. 187.

“[W]e determine that although a trust is not subject to the alter ego doctrine because it is not a legal entity, a trustee may be added as a judgment debtor,” Mallano explained.

The case is Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486.

Depublication Denied

•Unanimously denied requests by the defendant in a Bay area libel suit and the ACLU of San Diego and Imperial Counties to depublish the opinion accompanying a First District Court of Appeal ruling that allows a founder of a Sikh temple to sue over allegations that took money from the temple and committed other misconduct.

Div. Two ruled in Grewal v. Jammu (2011) 191 Cal.App.4th 977  that the defendants’ anti-SLAPP motion was properly denied because the plaintiff met his burden of showing that he was likely to prevail on the merits.

Justice James Richman’s opinion in the case has been criticized because of his suggestion that the defendants had abused the anti-SLAPP statute and that the Legislature should consider amending the law to eliminate a defendant’s right to appeal the denial of a special motion to strike.

Since defendants rarely prevail in such appeals, the jurist argued, the availability of writ review would be a sufficient remedy for the wrongful denial of the motion and would cut down on lengthy delays in resolving cases.

•Denied an attempt by septuagenarian inmate Richard Shaputis to expedite his potential release from prison, where he has served 24 years on a 17-year-to-life sentence for killing his wife.

The Fourth District’s Div. One ruled last November in In re Shaputis, D056825, that Shaputis—whose bid for parole has now spawned four separate appeals court rulings—was entitled to reconsideration by the board.

Justice Alex McDonald, in an unpublished opinion, said evidence presented at a 2009 hearing failed to establish that Shaputis, who physically abused his wife throughout their 23-year marriage, is a current danger to society. But the Supreme Court granted review in February, and yesterday it denied the inmate’s requests to expedite review, permit the parole board to comply with the Court of Appeal’s order, and allow him to be released on bail.

The court indicated, however, that it did not contemplate granting further extensions of time for the filing of briefs.


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