Hafey v. City of Berkeley

Citations: 329 P.2d 711; 163 Cal. App. 2d 474Docket: Docket Nos. 18061, 18062, 18063

Court: California Court of Appeal; September 12, 1958; California; State Appellate Court

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The Court of Appeals of California addressed consolidated cases involving retired members of the police and fire departments of the City of Berkeley, who sought increased retirement pension allowances under the city's retirement ordinances. The plaintiffs, including widows of deceased officers, claimed entitlement to pensions exceeding their current amounts. The court ruled in favor of the respondents, ordering the city to pay additional pension amounts and affirming their rights to similar future payments.

The ordinances stipulate that pensions are based on a percentage (one-half or two-thirds) of the average salary of the rank held during the three years before retirement. Past rulings established that if the rank's salary increases post-retirement, the pension also increases accordingly. However, the ordinances were amended in 1944 to fix pensions based on the average salary of the last three years prior to retirement, but this amendment does not apply to employees who were already in service before its effective date.

All plaintiffs were employed before June 16, 1944, and it was agreed that their pensions would be adjusted based on any future pay increases. The core issue was the pension amount each retired employee was entitled to receive from retirement until the rank's first salary increase. Appellants argued that the pension should reflect the average salary from the last three years before retirement, while respondents contended that it should be based on the salary at the time of retirement for the average rank held during the preceding three years. The plaintiffs’ interpretation would yield higher pension amounts until the rank's first post-retirement salary increase, as confirmed by references to prior case law.

The court clarified that the three-year period under consideration is used solely to determine rank, not average salary. In the case of respondent Davis, his pension was calculated based on the time served in each rank prior to retirement, taking into account 19.5 months as assistant chief and 16.5 months as deputy chief. His pension base would be adjusted for any future salary increases for those ranks, maintaining this proportionality. The appellants argued for a different interpretation, suggesting that the three-year average should only apply from retirement to the first salary increase. However, the court found this position inconsistent with previous rulings, specifically the Terry decision, which confirmed that the three-year period pertains to rank rather than salary. As a result, the current salary of the rank at retirement determines the pension amount. The court emphasized that pension provisions must be liberally construed in favor of the applicant. Regarding four widows of deceased department members, the appellants contended that their pension rights were defined by the ordinance in effect at their husbands' retirement and did not vest until their deaths. However, the Supreme Court ruled that amendments cannot restrict the pensions of widows whose husbands served prior to those amendments, thereby rejecting the appellants' argument.

Appellants argue that prior to the 1944 amendments, a widow's pension was fixed based on her husband's pension at his death and should not change with subsequent salary increases. They cite an ordinance stating a widow's pension is a proportion of the average salary upon which her husband's pension was based. The court disagrees, referencing the Supreme Court's ruling in Eichelberger v. City of Berkeley, which established that pensions during 1939-44 should reflect current salaries rather than those at retirement. The court finds no intent in the ordinance to differentiate between the widow of a fireman who died in duty and the widow of an employee who retired before death. The use of past tense in the ordinance does not limit the widow's pension to her husband's last retirement salary but acknowledges that his retirement allowance ended at death. The widow's pension is therefore a proportion of the fluctuating salary linked to her husband’s role. Additionally, the court ruled that awarding interest before judgment was incorrect. The judgments are modified to remove the interest allowance, and as modified, are affirmed without costs to any party. Concurrences from Kaufman, P.J. and Dooling, J. are noted, along with the denial of a rehearing on September 22, 1958, and subsequent modifications to the opinion and judgment.