Opinion
F047806
6-14-2007
JAMES TAYLOR, Plaintiff and Respondent, v. COUNTY OF TULARE, Defendant and Appellant.
Kathleen Bales-Lange, County Counsel, Kathleen A. Taylor and Judith D. Chapman, Deputy County Counsel, for Defendant and Appellant. Faunce, Singer & Oatman, Edward L. Faunce and Larry J. Roberts for Plaintiff and Respondent.
NOT TO BE PUBLISHED
The County of Tulare (County) appeals from an order directing it to reinstate employee James Taylor to the active payroll and pay him lost wages and benefits. The superior court determined that County "dismissed" Taylor "for disability" for purposes of Government Code section 31725 and, therefore, was obligated to reinstate Taylor. The superior courts understanding of section 31725 was based in part on a published opinion of this court that subsequently was reversed. In Stephens v. County of Tulare (2006) 38 Cal.4th 793 (Stephens), the California Supreme Court adopted a much narrower interpretation of section 31725 than was used in the opinion it reversed.
All subsequent statutory references are to the Government Code unless otherwise indicated.
As a result of this sequence of events, the decision of the superior court was based on an interpretation of section 31725 that is no longer good law. Accordingly, the superior courts decision cannot be upheld. Remand for further proceedings is the appropriate disposition of this appeal. First, whether Taylor was "dismissed" for purposes of section 31725 is a question of fact. Second, the superior court should decide this question of fact in the first instance using the interpretation and guidance provided by the California Supreme Court in Stephens. Third, the Stephens decision has informed the parties of the statutory interpretation applicable to their dispute; remand will give them the opportunity to develop their positions based on that new interpretation. Accordingly, we reverse and remand this matter for further proceedings.
FACTS
The facts and proceedings set forth here are limited because the basis for our decision to remand is not dependent upon a fact-intensive analysis but on a change in law effected by the California Supreme Courts interpretation of section 31725.
Taylor was hired by County as a Construction Maintenance Worker I on January 15, 1991. In 1994, Taylor became involved in a dispute with a coworker. Taylor contended that the stress caused by this dispute contributed to his developing a duodenal ulcer in 1995.
In January 1996, Taylor began a leave of absence that lasted until May 15, 1996. Taylor asserted that, after returning, he began to experience frequent vomiting. He left work again after July 2, 1996.
Countys public works department sent Taylor a letter dated July 16, 1996, that stated his "vacation, sick and CTO balances were exhausted as of 7/10/96 so you are currently `absent without pay." The letter informed Taylor that, if his "medical needs still require you to be off work, you must submit to your supervisor a fully completed leave of absence request form with all the necessary information from your doctor."
On August 2, 1996, Taylor filed a claim for workers compensation based on gastritis and stress.
The workers compensation case concerning whether Taylor was suffering from a work-related injury was settled on February 10, 2000.
Subsequent to mid-1996, controversy has surrounded Taylors medical condition, its permanence, and his ability to work with restrictions. The doctors who examined him had conflicting opinions on these issues.
On July 28, 1998, Taylor filed an application with Countys board of retirement for a service connected disability retirement based on permanent disability from knees with severe arthritis, severe diarrhea attacks, cramps, chest pain, gastritis, high blood pressure, vomiting, stress, and hearing loss.
In a proposed decision dated January 29, 2000, a referee recommended to the board of retirement that Taylors application be denied. The referees recommendation was approved by the board of retirement on May 17, 2000.
Taylor challenged the board of retirements decision to deny his application for a disability retirement by filing a petition for writ of mandate in superior court.
In February 2002, the superior court denied his petition and stated that an "independent review of the evidence establishes that the record supports the administrative hearing officers determination that Taylor is not permanently incapacitated from performing his job."
In response to the denial of his petition for writ of mandate directing the board to award him a disability retirement, Taylor demanded on April 29, 2002, to be reinstated to Countys payroll.
In a letter to Taylor dated July 19, 2002, County acknowledged the board of retirements decision that he was not disabled and directed him to return to work on July 31, 2002. The letter requested "information from you and your doctor regarding any present work restrictions ...." Taylor also was advised that County had "submitted your request for back pay, benefits, seniority, and retirement contributions to legal counsel for review and advice."
Counsel for Taylor and counsel for County communicated with one another before July 31, 2002, and Taylor did not return on that day. The position taken by Taylor and his counsel during August 2002 was that Taylor should be reinstated to active payroll and retroactively paid salary and benefits and that County should conduct its own fitness-for-duty examination. Taylor believed the results of that examination would be that he was unable to perform his duties and, as a result, County was obligated under section 31721, subdivision (a) to file its own application for disability retirement on his behalf.
Further communications between the parties resolved little, and on September 5, 2002, County sent Taylor a letter stating that he was required to submit a leave of absence request form.
Taylor submitted the leave of absence request form and his attorney advised County that Taylor had done so out of compulsion. The attorneys letter also identified the following factual dispute: Taylor "reported to work and was told by his Departmental and County representatives to go home because they had no work for him in his condition. You[, counsel for County,] advised me that you got a different story."
Further disputes regarding Taylors rights and obligations to return to work continued and were not resolved.
PROCEEDINGS
On March 20, 2003, Taylor filed a petition for writ of mandate directing County to reinstate his wages and benefits pursuant to section 31725. After the matter was briefed, a hearing on the petition was held on December 30, 2004.
The superior court filed a statement of decision on February 1, 2005, that set forth the reasons for its determination to grant the petition and issue a writ. A judgment was entered that commanded County to reinstate Taylor with back pay and benefits, "whether or not [he] is willing and/or able to return to work."
The superior court found that a dismissal occurred because County required Taylor to complete a medical leave of absence request in order to remain off work, notified Taylor that it rescinded his return to work order, and advised Taylor that it would be in contact with him as further information became available. This finding was based on the view that applicable case law required voluntary medical leaves of absence to be deemed a dismissal for purposes of section 31725.
County filed a timely notice of appeal.
DISCUSSION
The parties dispute how section 31725 should be applied to the facts of this case. That section states in full:
"Permanent incapacity for the performance of duty shall in all cases be determined by the [county] board [of retirement]. [¶] If the medical examination and other available information do not show to the satisfaction of the board that the member is incapacitated physically or mentally for the performance of his duties in the service and the members application [for a disability retirement] is denied on this ground the board shall give notice of such denial to the employer. The employer may obtain judicial review of such action of the board by filing a petition for a writ of mandate in accordance with the Code of Civil Procedure or by joining or intervening in such action filed by the member within 30 days of the mailing of such notice. If such petition is not filed or the court enters judgment denying the writ, whether on the petition of the employer or the member, and the employer has dismissed the member for disability[,] the employer shall reinstate the member to his employment effective as of the day following the effective date of the dismissal." (Italics added.)
Under section 31725, "if (1) the county board of retirement rules an applicant/employee is not permanently disabled so as to be entitled to a disability retirement, (2) the board denies the employees disability retirement application on that ground, and (3) no appeal is filed or all appeals are final, then the applicant/employee is entitled to reinstatement to his or her prior position if (4) the employing county has previously `dismissed the employee `for disability." (Stephens, supra, 38 Cal.4th at p. 801.)
In this case, the parties agree that the first three conditions exist in this case. Taylor applied for a disability retirement, the county board of retirement denied his application on the ground he was not permanently disabled, Taylor challenged the boards determination by filing a petition for writ of mandate, the superior court entered judgment denying Taylor the writ, and that judgment became final. Consequently, the only one of the four conditions contested before the superior court was whether County "dismissed [Taylor ] for disability." (§ 31725.)
A. "Dismissed" for Purposes of Section 31725
In Stephens, the California Supreme Court addressed what section 31725 meant by its use of the word "dismissed." (Stephens, supra, 38 Cal.4th at p. 802.) The court concluded that dismissed meant "the employment relationship, at the employers election, has ended." (Ibid.) In other words, "a dismissal as contemplated by section 31725 requires an employer action that results in severance of the employment relationship." (Ibid.)
The California Supreme Courts interpretation establishes that a "dismissal" has three requisite elements: (1) employer action (2) that causes (3) the employment relationship to end.
We conclude the essential elements do not include the employers specific intent to end the relationship. The California Supreme Courts use of the word "election" creates some ambiguity about whether the employers intent should be included as an essential element because "election" suggests the employer acted with the intent to end the employment relationship. Because the statutory purpose of section 31725 is to protect employees, we conclude that employees who were dismissed in practical effect by an employers actions are covered by the statute regardless of the employers intentions. Nonetheless, evidence of the employers intent is relevant to establishing the essential elements.
B. Superior Courts Decision
The superior court determined that Taylor had been dismissed for disability for purposes of section 31725, awarded him lost wages and benefits, and ordered that he be restored "to active payroll status as of April 30, 2002 and continuing indefinitely, whether or not [Taylor] is willing and/or able to return to work."
The superior court stated that case law required it "to find that even a voluntary medical leave of absence deems the employee dismissed under ... section 31725. Stephens v. County of Tulare (2004) 123 Cal.App.4th 964; Phillips v. County of Fresno (1990) 225 Cal.App.3d 1240."
This view of voluntary leaves of absence was rejected by the California Supreme Court in Stephens, supra, 38 Cal.4th 793. The California Supreme Court reversed our decision in the Stephens case and described our decision in Phillips as follows:
"Phillips does not hold that an employees voluntary decision to take leave time is the equivalent under section 31725 of being dismissed for disability. It holds only that a failure to reinstate an employee, following a period of permissive, voluntary leave, can constitute a `dismissal despite the absence of a formal termination or firing." (Stephens, supra, 38 Cal.4th at p. 808.)
Another example of differences between the superior courts analysis and the reasoning subsequently adopted by the California Supreme Court concerns the superior courts statement that Taylor was entitled to reinstatement whether or not he was willing to return to work. Under section 31725, an "employee who is neither sent away nor removed, but voluntarily absents himself or herself from the job, without more, cannot validly claim he or she was `dismissed by the employer." (Stephens, supra, 38 Cal.4th at p. 802.) Thus, Taylors willingness to return to work is relevant to determining whether he was dismissed.
Based on the interpretation of section 31725 set forth in Stephens, supra, 38 Cal.4th 793, it is clear that the principles relied upon by the superior court in deciding Taylors petition are no longer good law. Therefore, the superior courts decision must be reversed.
C. Appropriate Disposition of this Appeal
Should this court (1) decide whether Taylor was dismissed for disability or (2) remand the matter to the superior court for it to render findings of fact based on the principles set forth in Stephens, supra, 38 Cal.4th 793?
Whether an employee has been dismissed for disability for purposes of section 31725 is a question of fact. For example, in analyzing the decision in Leili v. County of Los Angeles (1983) 148 Cal.App.3d 985, the California Supreme Court accepted the determination that the employers action "removing the employee from active duty in fact constituted a dismissal." (Stephens, supra, 38 Cal.4th at p. 807, italics added.) The Stephens decisions use of the phrase "in fact" here and elsewhere leads us to conclude that whether an employers action are in effect a dismissal presents a question of fact.
Furthermore, "a failure to reinstate an employee, following a period of permissive, voluntary leave, can constitute a `dismissal despite the absence of a formal termination or firing." (Stephens, supra, 38 Cal.4th at p. 808.) The use of the word "can" in this sentence indicates that some failures to reinstate are dismissals and other failures to reinstate are not dismissals. The California Supreme Court did not create a bright line rule of law for distinguishing the two types of failures to reinstate. Therefore, whether Taylor experienced a dismissal of this type presents a question of fact.
Consequently, we conclude this matter should be remanded to the superior court so that it can make, in the first instance, the necessary findings of fact while applying the correct legal standards. (Cf. Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 714 [denial of motion to disqualify attorney reversed; matter remanded to superior court for application of correct legal test].)
Remand is appropriate because the parties have conflicting views of the facts. Resolution of these conflicts is the province of the superior court, sitting as the trier of fact. For example, Countys answer to Taylors petition "specifically denies that the statements of purported facts contained in the letter of September 11, 2002 [from Taylors counsel] are true." In addition, Countys answer asserts that it made good faith efforts to return Taylor to work, and Taylor refused to negotiate in good faith. Whether one, both, or neither party acted in good faith presents questions of fact. (See Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App.4th 1251, 1261 [whether party negotiated in good faith is question of fact]; Lipow v. Regents of University of California (1975) 54 Cal.App.3d 215, 227 [employers good faith in fulfilling meet and confer obligation was a question of fact]; cf. Civ. Code, § 1057.3, subd. (f)(2) [existence of "good faith dispute" regarding release of escrow funds shall be determined by the trier of fact].)
Another reason for remanding this matter for further proceedings is that the parties did not have notice of the current interpretation of section 31725 when they prepared their evidence and arguments for the hearing on the petition for writ of mandate. As a result, the evidence presented on remand may differ from the evidence presented at the first hearing. By remanding this matter, the parties will have an opportunity to develop the evidence that they consider relevant to applying the interpretation of section 31725 adopted by the California Supreme Court in Stephens.
II. Section 31721
On appeal, Taylor has raised arguments regarding the application of section 31721, subdivision (a) to his case. These arguments were not developed before the superior court even though (1) the petition for the writ of mandate included a reference to the responsibilities that section 31721 imposed on County and (2) Taylors memorandum of points and authorities filed on November 22, 2004, quoted section 31721 in its introduction.
The reference occurred on page four of an August 2, 2002, letter from counsel for Taylor to counsel for County. The letter, attached to the petition as exhibit 5, was incorporated by reference into the petition.
Because the arguments were not developed below, we do not consider them now but note that Taylor can present them to the superior court on remand. Because we have not reached the arguments concerning section 31721, we deny Taylors request for judicial notice filed on November 29, 2006.
III. Guidance Regarding the Three Essential Elements of a "Dismissal"
The following discussion of the three essential elements of a "dismissal" under section 31725 is intended for the guidance of the court and parties upon further proceedings. (See Estate of Hilton (1996) 44 Cal.App.4th 890, 919 [discussing whether such guidance constitutes dictum].)
A. End of the Employment Relationship
How does one know if an employment relationship has ended? The easiest category of cases involves a formal dismissal issued by the employer. The more difficult category of cases does not involve a formal dismissal but does involve "an employers action that has the same effect ...." (Stephens, supra, 38 Cal.4th at p. 807.) Accordingly, the end of the relationship "need not be accompanied by any particular formality, [but] some form of a termination is nevertheless required." (Id. at p. 806.)
One way to answer the question of when an employment relationship has ended is to look at the consequences experienced by each of the parties to the relationship. When "the relationship has ended, (1) the employer no longer has an obligation to pay salary or other forms of compensation, and (2) the employee has no basis for expectation that a position exists, will be kept open, or will be made available upon the employees offer to return to work." (Stephens, supra, 38 Cal.4th at p. 802.) The California Supreme Courts use of the conjunction "and" indicates that each enumerated fact must exist for the employment relationship to be regarded as ended. In other words, the court created a two-part test for determining whether an employment relationship has ended.
As guidance in applying the two-part test concerning the end of the employment relationship, the California Supreme Court indicated that "the statute addresses permanent, not merely temporary, absence from employment." (Stephens, supra, 38 Cal.4th at p. 802.) To illustrate this distinction between temporary absences and ended relationships, the court referred to a situation where both the employer and employee understand that the employee will return to work when the reason for the employees absence ceases. (Ibid.) This illustration appears to address the relatively simple situation where the subjective state of mind of the parties coincide. One could describe such a situation by saying that there is a meeting of the minds that the absence is temporary.
A more difficult situation exists when the understandings of the employee and employer are not the same. What happens when the employer sincerely intends to keep a position open for the employee and the employee believes the employers actions are insincere and a pretext designed to string along the employee? The California Supreme Court did not address explicitly the situation where the understandings differ. Therefore, we must interpret the language used by the court in its two-part test. The relevant language states: "the employee has no basis for expectation that a position exists ...." (Stephens, supra, 38 Cal.4th at p. 802.)
The use of the phrase "no basis for expectation" instead of "no expectation" strongly supports the inference that the California Supreme Court meant the employees understanding to be judged by what was objectively reasonable at the time based on the surrounding circumstances. By referencing the "basis" for the employees expectation rather than just the expectation, the court appears to have minimized the importance of the employees subjective state of mind and placed the focus on the facts then in existence. Such a standard is consistent with the rules generally applied to the understandings of parties to a contractual relationship. (See Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 141 [mutual understanding necessary to form a contract is determined by applying objective standard to outward manifestations and expression of the parties]; see also Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1248 [in constructive discharge context, employees action scrutinized under objective standard], overruled on another ground in Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 498.) Therefore, we conclude that a trier of fact applying the second part of the two-part test must determine whether there was a reasonable basis (objective standard) for the employees expectation that no position existed, would be kept open, or would be available on his or her return.
The two-part test for determining whether an employment relationship has ended in effect did not exist prior to the California Supreme Courts decision in Stephens. Consequently, neither the parties nor the superior court applied that test to the facts of this case. On remand, Taylor will have the opportunity to set forth his position as to (1) when each part of the two-part test was satisfied and (2) the facts that establish each part was satisfied. Presently, it appears that Taylor will develop these positions in connection with at least two different theories of dismissal—one that occurred before he applied for disability retirement and one that occurred as a result of the failure to reinstate him after the denial of his application was upheld in court.
B. Employer Action and Causation
The requisite elements of employer action and causation prevents the remedy from being extended to "employees who choose voluntarily to leave the countys employ." (Stephens, supra, 38 Cal.4th at p. 805.)
In other words, an "employee who is neither sent away nor removed, but voluntarily absents himself or herself from the job, without more, cannot validly claim he or she was `dismissed by the employer." (Stephens, supra, 38 Cal.4th at p. 802.) In such a situation, it is the employees actions, not the employers actions, that have caused the employment relationship to end. As with the California Supreme Courts illustration regarding the parties understanding about temporary absences, this statement addresses a straightforward situation. The language used also recognizes the existence of more complex situations. Specifically, the phrase "without more" implies that a voluntary absence, with more, can be a dismissal for purposes of section 31725. Accordingly, we conclude that the California Supreme Court intended to endorse the principle that an employees voluntary absence from employment can be a dismissal under section 31725 when additional circumstances are present.
The "more" referenced necessarily concerns the employers action and its connection to functionally or effectively ending the employment relationship. Simply "telling the employee to go out on sick leave until his or her medical condition abates sufficiently to enable return to the job" is not enough. (Stephens, supra, 38 Cal.4th at p. 809.)
The California Supreme Court did not attempt to describe what is enough. It did not (1) articulate a test for determining when an employers actions are such that even an employees voluntary absence constitutes a dismissal under section 31725 or (2) identify the circumstances that are relevant to determining this issue. Nevertheless, the courts discussion provides insight into at least some of the additional circumstances that are relevant.
In comparison, a test for "constructive eviction" has been created to cover situations where a landlords action causes a tenant to elect to surrender possession of the rented premises. (Veysey v. Moriyama (1921) 184 Cal. 802, 805; Kulawitz v. Pacific Woodenware & Paper Co. (1944) 25 Cal.2d 664, 670.) In addition, the doctrine of "constructive discharge" is well developed. (See Turner v. Anheuser-Busch, Inc., supra, 7 Cal.4th 1238.)
For example, one relevant circumstance is whether "the county in fact had a position available that accommodated [the employees] then documented medical restrictions." (Stephens, supra, 38 Cal.4th at p. 809.) The courts reference to "then documented medical restrictions" is significant to this case because the reports of the doctors and the positions of the parties are conflicting on this point. This conflict presents questions for the trier of fact.
We recognize that the guidance provided does not address all of the issues that (1) might arise on remand and (2) were not addressed by the California Supreme Court in Stephens, supra, 38 Cal.4th 793. To the extent that issues are presented on remand that are not addressed here or in Stephens, the superior court must resolve those issues in the first instance.
DISPOSITION
The judgment is reversed and the matter is remanded to the superior court for further proceedings consistent with this opinion. The parties shall bear their own costs on appeal.
We concur:
CORNELL, Acting P.J.
HILL, J.