LYONS v. HOOVER (1952)

This is an appeal by Margaret Lyons from a judgment denying her petition for a writ of mandate against A. O. Hoover, as Controller of the City of Sacramento, because of his refusal to pay her the sum of $2,481.87 as reimbursement for overdeduction from pension payments due her as the surviving widow of a former member of the fire department of said city and to issue future warrants without deduction.

There is no dispute as to the facts, and, stated in chronological order, they are as follows:

Prior to September 4, 1941, appellant's deceased husband, James L. Lyons, was a member of the Fire Department of the City of Sacramento and a member of the Retirement System.

On September 4, 1941, Lyons retired and received, under the provisions of section 173(c) of the City Charter of Sacramento, a pension allowance of $112.50 per month. (Allowance for a person with 20 years of service or more who becomes disabled but not in line of duty.)

On August 15, 1942, James Lyons died and under section 173(d) of the Charter, appellant, as his widow was entitled to receive two-thirds of the $112.50 monthly retirement allowance paid to Lyons during his lifetime; i. e., $75 per month.

On August 25, 1942, appellant filed a claim with the Industrial Accident Commission founded on the claim that her husband's death was due to injuries sustained in the course of his employment as a city employee.

On April 29, 1943, the Industrial Accident Commission made an award in the sum of $5,910.71 in favor of appellant and her three minor children.

On June 4, 1943, the City Council of Sacramento adopted Resolution No. 211 authorizing reduction of the pension allowance being paid to the appellant in the amount of the city's contributions at the rate of $71.31 per month until the amount of the payments withheld should equal the total of compensation award.

On June 30, 1943, the Retirement Board adopted a resolution conforming to the action of the City Council reducing petitioner's retirement allowance by $71.31 per month; the sum of $3.69 to be paid monthly to appellant.

On May 10, 1947, appellant filed a petition with the Retirement Board to have pension allowance recomputed.

On January 27, 1948 appellant filed a supplementary petition to the May 10, 1947 petition, requesting that the amount of contributions to be withheld from pension payments be restricted to $1,440.18 or one-quarter of the Industrial Accident Commission award since the award was in favor of herself and the three minor children.

On February 19, 1948, the Retirement Board adopted a resolution authorizing a refund of $2,481.87 to Mrs. Lyons and requiring that the pension allowance after February 1, 1948 be in the sum of $75 per month.

The Controller refused to comply with this last designated action of the Board or to draw warrants therefor, and upon such refusal appellant filed the present action seeking a writ of mandate to compel the issuance of the warrants.

At the conclusion of the hearing the trial court found that the Board had no power to make its order of February 19, 1948, refunding to petitioner the amount previously deducted from the compensation award of the Industrial Accident Commission in excess of her one-quarter share thereof; that the act of the City Council of June 4, 1943, reducing the pension payment to her by the sum of $71.31 until the entire compensation award had been off-set, was a valid act within the provisions of the City Charter, and that the respondent Hoover properly refused to draw his warrant in favor of petitioner in the sum of $2,481.87.

It appears from the memorandum opinion of the trial court that the principal basis for its judgment denying petitioner any relief was the particular language used in the first paragraph of section 173(j) of the Charter. Said section reads as follows:

‘(j) That portion of any allowance payable because of the death or retirement of any such employee which is provided by contributions of the City shall be reduced, in the manner fixed by the City Council, by the amount of any benefits payable to or on account of such person, under the Workmen's Compensation, Insurance and Safety Law of the State of California.

‘It is the express intent that payments under said Workmen's Compensation Insurance and Safety Law shall be a deductible credit against any allowance under the Retirement System which is provided by contributions of the City payable to or on account of the death of any such person; that double payments in whole or in part, at the expense of the taxpayers, shall not be permitted.’

Section 168 of the Charter provides in part:

‘The Retirement Board shall be the sole authority and judge under such general ordinances as may be adopted by the City Council to determine when members may receive and may continue to receive benefits of any sort under the retirement system, and shall have exclusive control of the administration and investment of such fund or funds as may be established, provided that all investments shall be of the character legal for insurance companies in California.’

It is petitioner's first contention that the trial court erred in concluding that section 173(j) gave to the City Council sole jurisdiction and power to determine the question of refund, that to the contrary the Retirement Board continued to act as provided in said section 168, and that the jurisdiction, if any, given by said section 173(j) related solely to the ‘manner’ by which deductions would be made as distinguished from the amount of the deduction.

Thus, it would appear that the administrative policy of the retirement system as established under the provisions of section 168, the City Council was given the authority to prescribe ‘general ordinances' applicable to all cases, but these ordinances would be applied to specific cases under the ‘sole authority’ of the Retirement Board. In other words the Retirement Board was made the only administrative agency or body involved in the administration of the retirement system but in the exercise of this function its activities could be controlled by ‘general ordinances' passed by the City Council prescribing the policy under which it would operate.

Section 173(j) does not appear to change this administrative policy. Said section merely gives the City Council the power to prescribe rules to guide the Retirement Board in making its determination of the amounts to be deducted in any particular case coming within the provisions of the section, a power the City Council would probably have had even without this specific grant, due to their ‘general ordinance’ powers under section 168. This interpretation is harmonious with the interpretation suggested as proper prior to the amendment. See Vero v. City of Sacramento E. R. System, 41 Cal.App.2d 482, 107 P.2d 82. Although we have discussed at length the phrase ‘in the manner fixed by the City Council’ we find nothing therein which would change this interpretation.

Turning now to what was done in the instant case: It would appear that the City Council did not operate within the authority granted it by section 173(j), since instead of prescribing a rule for the Retirement Board to follow in making its determination of the amount to be deducted from a pension allowance in a case coming within that section, the City Council acted by setting the specific amount to be deducted, a matter solely within the administrative function of the Retirement Board.

However, whether or not the City Council exceeded its authority in this respect is not now relevant because the deductions have been made and the point now before this court is the petitioner's right to receive a return of the amount deducted over and above that authorized by section 173(j).

Since the petitioner has agreed to the deduction by the city of her portion of the award, any discussion of the right of the city so to do is likewise immaterial. Thus there remains but one question, the right of the city to deduct from the pension payable to petitioner the portion of the compensation award payable to the children.

Under the provisions of that award there was awarded to ‘Margaret Lyons, Marguerite Lyons, Kenneth Lyons and Edward C. Lyons, against City of Sacramento, of a death benefit and burial expense and disability indemnity in the total sum of $5,910.71.’

Under the provisions of Labor Code, § 4703, ‘If there is more than one person wholly dependent for support upon a deceased employee, the death benefit shall be divided equally among them.’

In the case of Vero v. City of Sacramento E. R. System, supra, a like contention was raised, and this court in answer thereto said, 41 Cal.App.2d at page 490, 107 P.2d at page 86:

‘Even if it be conceded that the board had the power to deduct the industrial award from the widow's pension, only one-half of the award could be affected, for one-half of the award goes to the minor child (Sec. 4703, Labor Code, St.1937, p. 285), and the death allowance under the charter is solely to the wife.’

Even assuming that what has been heretofore said to be true, the case does not necessarily turn upon the disputed provisions in question. In any event the right of the city to make deductions from Mrs. Lyon's pension is controlled by well established general principles of law wholly separate and apart from any procedural approach.

Respondent, in support of the decision of the trial court argues that the extent of the deduction which could be made under section 173(j) is limited only by the amount of the compensation award ‘irrespective to whom the compensation is paid.’ It is further argued that by the phrase ‘benefits payable to or on account of such person under Workmen's Compensation Insurance,’ no distinction is made concerning the recipient thereof, and hence whether it be an award to the employee or to some third person the whole thereof may be deducted by the city.

Paraphrasing the language used by the court in McKeag v. Board of Pension Commissioners, 21 Cal.2d 386, 390, 132 P.2d 198, the language of section 173(j) should not be interpreted narrowly, ‘Rather, a liberal construction is to be given, in accordance with the rule ordinarily used in construing pension legislation,’ and we might add such a construction as will preserve, if possible, the constitutionality of the statute.

In light of the above rules it would appear that the argument of respondent cannot be upheld. The construction for which it argues is not consistent with the stated purposes of the act, is repugnant to the rule of liberal construction and would certainly raise questions as to the constitutionality of the act.

As previously noted the ‘express intention’ of the charter provision was that compensation payments should be a deductible credit against pension allowance thereby prohibiting ‘double panyments * * * at the expense of the taxpayers.’ The pension payable to Mrs. Lyons by virtue of section 173(d) of the Charter was payable solely to her. Her children were entitled to none of the amount so payable. She received only one-fourth of the death benefits payable by virtue of the Industrial Accident Commission award. The children received the remaining three-fourths. The compensation award was something wholly separate and apart from the pension, and hence the portion of the award payable to the children could in no sense be considered as a double payment to the plaintiff. Such a conclusion is entirely in accord with the stated poly of the pension act.

Also it must be admitted that the pension plan of the city, among other things, provided for the widow of city employees as a general class. Respondent, however, would so construe the statute as to destroy its uniformity of operation within the class by distinguishing between the members thereof. Such a construction would negative its constitutionality. We find no basis for such an interpretation.

‘A statute is not general or uniform, and it makes an improper discrimination if it confers particular privileges or improses peculiar restrictions or disabilities upon a class arbitrarily selected from a larger number of persons, all of whom stand in the same relation to the privileges granted or burdens imposed, and between whom and the persons not so favored or burdened no reasonable distinction or substantial difference can be found justifying the inclusion of one and the exclusion of the other.’ (5 Cal.Jur. p. 825.)

While it cannot be doubted that the pension plan of the city could be modified, that is not to say that under the guise of modification all of one's rights thereunder could be abrogated.

‘The right of the widow of a public employee to a pension benefit ‘became vested while the statute under which she claims was in full force, and it was not competent for the legislature, or any other authority, to deprive her of that vested right.’' Kern v. City of Long Beach, 29 Cal.2d 848, 849, 179 P.2d 799, 801.

For the foregoing reason the judgment is reversed and the cause is remanded to the trial court with instructions to enter judgment is accordance with the views herein expressed.

PER CURIAM.