Filed 10/22/14 Prokop v. Brown CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

JOHN PROKOP et al.,

Plaintiffs and Appellants,

v.

EDMUND G. BROWN, JR., et al.,

Defendants and Respondents. B247393

(Los Angeles County Super. Ct. No. BS138805)

APPEAL from a judgment of the Superi or Court of Los Angeles County, Luis Lavin, Judge. Affirmed. Krutcik & Georggin, James A. Krutci k, A. Nicholas Georggin, Alexandra Buechner, for Plaintiffs and Appellants. Joan A. Markoff, Chief Counsel, David J. Neill, Deputy Chief Counsel, Jennifer M. Garten, Labor Relations Counsel, and Da vid D. King, Labor Relations Counsel, for Defendants and Respondents.

___________________2 Supervisory engineers employed by the St ate of California brought this claim concerning pay raises on behalf of themselves and all persons similarly situated. In the trial court, plaintiffs argued they were entitled to a 10.1 percent pay ra ise from 2008 to the present, as initially allo cated in the 2008 Budget Ac t, which the Department of Human Resources (CalHR) failed to pay in vi olation of the pay parity provisions of

Government Code section 19826. 1 The court sustained the demurrers of defendant government officials and entere d a judgment of dismissal. On appeal, plaintiffs have

limited their claim to the cont ention that they are entitled to compensation appropriated and approved in the 2008 Budget Act. We hold the one-year st atute of limitations contained in section 19815.8 bars plaintiffs ’ claims based on the 2008 Budget Act, and therefore, we affirm.

FACTS 2

Plaintiffs John Prokop, A. Samad Hamo ud, Kelly Ann Holden, and Victor Zengler are employed by the California Department of Transportation in engineering positions with supervisory responsib ilities. They are members of the employee organization Professional Engineers in California Government (PECG). Plaintiffs represent a class of 1,000 former and current engineering supe rvisors excluded from collective bargaining under the Ralph C. Dills Act (§ 3512 et seq .). Their salaries are paid from federal or special funds.

Plaintiffs are in civil service classi fications designated S0 9, and supervisory positions in classifications designated U09 and E48. U0 9 includes rank-and-file

1 All further statutory references are to the Government Code, unless otherwise stated.

2 The facts are drawn from plaintiffs’ am ended petition, as well as documents of which the court and appellate cour t have taken judicial notice.3 engineering and supervisory positions. Alt hough they are in th e same civil service classification, rank-and-file employees are covered by a collective bargaining agreement and supervisory employees have salaries set by defendants. For several years, engineering supervisors received the same raises as rank-and-f ile engineering employees. The Department of Personal Administra tion (DPA) and Governor Schwarzenegger proposed funding in the 2008 Budget Act for salary increases of 10.1 percent for rankand-file engineers and engineering supervisor s. The California Legislature and Governor Schwarzenegger approved the 20 08 Budget Act. The 2008 Budget Act provides in pertinent part, “The funds appropriated in th is item are for compensation increases . . . of employees whose compensation, or portion ther eof, is chargeable to special funds, to be allocated by executive order by the Department of Finance . . . in ac cordance with salary

and benefit schedules estab lished by the Department of Personnel Administration.” (Assem. Bill No. 1781 (2007- 2008 Reg. Sess.) § 2.) Section 4.01, subdivision (b) of the 20 08 Budget Act provides, “Notwithstanding any other provision of law, th e Director of Finance shall re duce items of appropriation in this act to reflect savings achieved through re forms in employee comp ensation, subject to memoranda of understanding ne gotiated with collective bargaining units and ratified by the Legislature. These reductions shall a pply to all agencies and departments whose employees are subject to collective bargaining agreements negotiated by the Department

of Personnel Administration or are excluded em ployees as defined in Section 3527 of the Government Code.” (Assem. Bill No. 1781 (2 007-2008 Reg. Sess.) § 4.01, subd. (b).) The 2008 Budget Act contains appropriatio ns for the fiscal year beginning July 1, 2008, and ending June 30, 2009. Rank-and -file engineers in th e U9 civil service classification received the pay raise of 10.1 percent as of July 2008. The engineering supervisors did not receive the pay raise. Ce rtain supervisor positi ons have been earning less than the rank-and-file empl oyees that they supervise. On June 24, 2009, PECG filed a request with the DPA seeking salary adjustments for all supervisory engineering classifications , including plaintiffs, as approved in the 2008 Budget Act. PECG claimed the DPA viol ated the provisions of section 19826 to4 pay like salaries for comparab le work. PECG requested the DPA raise salaries or conduct a quasi-legislative hearing. DPA ordered a hearing pursuant to sec tion 19826. Beginning September 9, 2009, several days of hearings were held be fore Administrative Law Judge (ALJ) Karla Broussard-Boyd. On June 15 , 2010, ALJ Broussard-Boyd se nt a letter asking PECG to identify specific classifications for which it claimed like salari es. The declarations PECG submitted did not show a prima facie case of comparable duties and did not identify which salary ranges should be compared. If information was not re ceived by July 31, 2010, the matter would be considered closed. On January 24, 2011, ALJ Broussard-Boyd wrote a letter to PECG reiterating that

no information had been receive d on 46 of the 102 claimant classes. “Therefore, this

memorandum shall serve as notification to the claimant class of Supervisory Engineers its pay parity quasi-legislative hearing will be closed if the required information is not received by February 4, 2011.” PECG reques ted an extension of time to provide the required documentation to February 18, 2011. Broussard-Boyd agre ed, but warned that

the file would have to be cl osed without a recommendation to the Director of DPA if no

additional information was received. PECG requested a second extension until February 28, 2011. ALJ Broussard-Boyd agreed to extend the dead line to March 4, 2011, but again warned that the file would be closed without a recommendation if no information was received by March 4, 2011. On March 9, 2011, ALJ Broussard -Boyd sent a letter notifying PECG that the pay parity claim had been closed. She added, “As noted in my earlier correspondence, the pa nel was without the required facts or data to make meaningful comparisons as required by Govern ment Code section 19826(a) to support a pay parity recommendation.” In 2012, the Legislature created CalHR, which succeeded to all the powers and duties exercised by the former DPA. (§ 18502, subd.(a).)5 PROCEDURAL HISTORY

On July 31, 2012, plain tiffs filed a petition for writ of mandate and class action complaint for wages against defendants Edmund G. Brown, Jr., as Governor of the State of California, Arnold Schwarzenegger as form er Governor of the State of California, Maeley L. Tom as President of CalHR, De bbie Endsley as former Director of the California DPA, Malcolm Dougherty as Dire ctor of the California Department of Transportation, Will Kempton as former Di rector of the California Department of Transportation, Ana Matosantos as former Director of the California Department of Finance, and John Chiang as Stat e Controller of California. Plaintiffs filed an amended petition on October 19, 2012, fo r writ of mandate, failure to pay wages, breach of contract and declaratory relief. The petition alleged defendants have auth ority under section 19826 to establish and adjust salary ranges for each class and pos ition in state service. Section 19826 relies on the principle that like salaries shall be paid for comparable duties. Defendants must ensure horizontal parity for comparable positi ons in the civil servic e system. Plaintiffs

are in the same civil service classification as rank-and-file engineers who received salary increases and have positions wh ich are sufficiently similar. The petition additionally alle ged that after three years without an administrative decision, plaintiffs were seeking to adjudi cate their rights in the trial court because continuing with the administrative proce ss was futile. As a result of PECG’s administrative complaint and the administ rative proceedings, lim itation periods have been tolled since June 24, 2 009. The petition sought recove ry of the salary increase withheld every year for the past five year s, an injunction enjoining defendants from refusing to pay salary increases approved in the 2008 Budget Act, liquidated damages, interest, costs and attorney fees. The petition alleged common questions of la w and fact existed, including whether class members have comparable duties to rank-and-file engineers, whether defendants unlawfully withheld wages in violation of the Government Code, and whether there has6 been a pay disparity between rank-and-file en gineers and plaintiffs beginning July 1, 2008, to the date that judgment is entered. The petition for writ of mandate allege d defendants have a clear, present, mandatory and ministerial duty to pay plaintiffs equal salaries to rank-and-file engineers with comparable duties. Defendants have no authority to fix sa laries which violate section 19826. They violated this mandato ry duty by refusing to pay plaintiffs the salaries approved in the State Budget Act. If defendants have discretion, they abused it by acting inconsistently with California law by refusing to pay engineering supervisors the wages to which they were entitled. DPA, the Governor, and the implementing agencies included funding in the 2008 Budget Act for ra ises of 10.1 percent, the Legislature and the Governor approved the raises as part of the 2008 Budget Act, but plaintiffs have not received the raises. Rank-and-file engineers have received the additional 10.1 percent salary since July 1, 2008 . Plaintiffs sought re covery of the salary increase withheld every year fo r the past five years. In the cause of action for failure to pay wages, plaintiffs alleged defendants’ policy was to refuse to pay the salary increases desp ite the mandates of section 19826 to pay like salaries for comp arable work.

The cause of action for breach of contra ct alleged defendants promised to pay earned wages, including paying like salaries for comparable work. Defendants breached their employment agreements by failing to pay pl aintiffs the salary increases received by rank-and-file engineers, who have comparable duties and responsibilities. The final cause of action for declaratory and injunctive relief alleged defendants

violated and continued to violate section 19826 by refusing to pay plaintiffs like salaries for comparable work. Plain tiffs sought a declaration of their rights with respect to withholding of pay raises.

Plaintiffs asked the court to issue a peremptory writ of mandate ordering defendants to raise the salaries of plaintiffs to correspond with the sa lary increases paid to the rank-and-file engineers from Ju ly 1, 2008 to the da te judgment is entered in the case. Plaintiffs also sought an awar d of unpaid wages equaling 10. 1 percent per year of their7 salaries from July 1, 2008 to the present. They also re quested a declaratory judgment holding defendants violated the mandatory duties imposed under California law, including but not limit ed to section 19826. Tom filed a motion to strike on the grou nd that she is empl oyed by an entity unrelated to the action. Chiang filed a response to the petition. The remaining defendants filed demurrers and a request for judicial notice. Plaintiffs opposed the motion to strike by asserting the complaint would be amended to allege Tom in her representative capacity for th e correct entity and a new defe ndant for the misidentified entity. They also op posed the demurrers, and the demurring parties filed replies. A hearing was held on February 7, 2013 . The trial court granted the request for judicial notice, sustained the demurrers wit hout leave to amend and granted the motion to

strike without leave to amend. The court en tered a judgment of dismissal on February 25, 2013. Plaintiffs filed a timely no tice of appeal from the judgment. 3

DISCUSSION

Standard of Review

“‘A demurrer tests the legal sufficiency of the complaint, . . .’ [Citations.] On appeal from an order of dismissal after an order sustaining a demurrer, our standard of review is de novo, i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law. [Citation.] We deem to be true all material facts properly pled [citation] and th ose facts that may be implied or inferred from those expressly alleged [citation][.]” ( Montclair Parkowners Ass’n v. City of

Montclair (1999) 76 Cal.App.4th 784, 709.)

“While a decision to sustain or overrule a demurrer is subject to de novo review on appeal, a grant or denial of leave to amend ca lls for an exercise of discretion on the part

3 Chiang has not filed a re spondent’s brief on appeal.8 of the trial court. [Citation.] Denial of leave to amend is reviewed for abuse of discretion. [Citation.] The trial court abus es its discretion in denying leave to amend only if the plaintiff shows a reasonable possi bility of curing any de fect by amendment. [Citation.]” ( Montclair Parkowners Ass’n v. City of Montclair

, supra , 76 Cal.App.4th at p. 709.)

Statutory Scheme

“The Legislature created the DPA in 1981 for the purpose of managing the nonmerit aspect of the state’s personnel system. [Citation.]” ( Tirapelle v. Davis (1993) 20 Cal.App.4th 1317, 1322.) “In general, the DPA has jurisdiction over the state’s financial relationship with its employees, including matter of salary, layoffs and nondisciplinary demotions. (§§ 19 816, 19816.2, 19825, 19826.)” ( Ibid .) “[S]etting employee compensation is a legisl ative function which, in this instance, the Legislature has delegated to the DPA. ( Pacific Legal Foundation v. Brown [(1981)] 29 Cal.3d [168,] 189.) The DPA can act only to the extent and in a manner consistent with the legislative delegation of authority. And the DPA’s exercise of this authority is quasi-legislative (see Lowe v. California Resources Agency (1991) 1 Cal.App.4th 1140, 1151-1152), and is thus subject to the ultimat e authority of the Legislature to reject or alter such exercise of authority th rough appropriate legislation.” ( Tirapelle v. Davis

, supra , 20 Cal.App.4th at p. 1323, fn. 8.) Section 19826, subdivision (a) provides: “The depart ment shall establish and adjust salary ranges for each cl ass of position in the state civ il service subject to any merit

limits contained in Article VII of the Califor nia Constitution. The salary range shall be based on the principle that like salaries shall be paid for comparable duties and responsibilities. In establishing or changing these ranges, consideration shall be given to the prevailing rates for compar able service in other public employment and in private business. The department sh all make no adjustments that require expenditures in excess9 of existing appropriations that may be used for salary increase purposes. The department may make a change in salary range retroactive to the date of application of this change.” When a state agency has statutory authority to fix an employee’s salary or compensation paid from state funds, “the salary is subject only to the approval of the department before it becomes effective and payable, except as provided [for certain employees exempt from civil service]. Th e Legislature may expressly provide that approval of the departme nt is not required.” (§ 19825, subd. (a).) “It is well established that public empl oyees have no vested rights to particular levels of compensation and salaries may be modified or reduced by the proper statutory authority. [Citations.]” ( Tirapelle v. Davis

, supra , 20 Cal.App.4th at pp. 1332-1333.) “‘[The department] may not unilaterally decr ease salaries for represented employees.’ [Citation.]” ( Professional Engineers in Cal. Government v. Schwarzenegger (2010) 50 Cal.4th 989, 1019.) However, when the Le gislature reduced appropriations for state employee compensation in the 1991 Budget Act without explicitly directing how to implement the reductions, the DP A had authority to reduce the salaries of exempt and nonrepresented employees. ( Id. at p. 1023.)

Government Code Section 19815.8

Plaintiffs contend the payment of compensation approved by CalHR and appropriated by the Legislature is a ministerial act subject to a writ of mandate. Plaintiffs further contend their action is not subject to the one-year statute of limitations contained

in section 19815.8 becau se it is not related to any law ad ministered by CalHR. We need not determine whether plaintiffs were en titled to receive the ad ditional compensation appropriated in the 20 08 Budget Act, because even a ssuming they were entitled to it,

their action is time-bar red by section 19815.8. Section 19815.8, subdivision (a) provides : “No action or proceeding shall be brought by any person having or claiming to have a cause of action or complaint or ground for issuance of any complaint or legal remedy for wrongs or grievances based on10 or related to any law administered by the Department of Human Resources unless the action or proceeding is commenced and served within one year after the cause of action or complaint or ground for i ssuance of any writ or legal remedy first arose. Such a person shall not be compensated for the time s ubsequent to the date when the cause or ground arose unless the action or proceeding is filed and served within 90 days after the cause or ground arose. Where an appeal is taken from a decision of the department, the

cause of action does not arise until the final decision of the department.” CalHR has the authority to establish and adjust salary ranges under section 19826, subdivision (a). Plaintiffs’ cl aim that they have not rece ived compensation approved by

CalHR and allocated in the 2008 Budget Act is related to a law administered by CalHR. Therefore, the one-year statute of limitati ons provided in section 19815.8 applies. Plaintiffs were required to initiate their action within one year of the date that they failed

to receive the add itional compensation. Plaintiffs contend each pay period that they did not receive proper compensation constituted a separate violati on triggering a new statute of limitation period. (See Jones v. Tracy School Dist . (1980) 27 Cal.3d 99, 105-106.) “[T]he employee can recover only those payments which accrued within the period of the a pplicable statute of limitations preceding the filing of his co mplaint. [Citations.]” ( Green v. Obledo (1981) 29 Cal.3d 126, 215.) The last deficient payment wa s the final payment under the 2008-2009 budget. There is no allegation that subseque nt budget acts allocated and appropriated compensation for pay raises for supervisory engi neers. Plaintiffs’ complaint in 2012 was filed long after the one-year limitations period ran on deficient payments made under the 2008 Budget Act. The trial court proper ly found the complaint barred under section

19815.8. There is no issue of tolling of the statut e of limitations. Pl aintiffs emphatically state they were not parties to the proceedings before the ad ministrative law judge. They argue that administrative action was not requi red or taken. Respondents point out that

even if the statute of limitations were to lled during the administrative proceedings, it began to run no later than March 9, 2011, when the ALJ notified PECG that the matter11 was closed. Plaintiffs filed this lawsuit mo re than one year afte r the administrative proceedings were closed. Plaintiffs contend the four-year statut e of limitations for actions based upon a written contract applies in this case. Howeve r, the gravamen of the action on appeal is CalHR’s allocation of compensation appropri ated in the 2008 Budget Act. Section 19815.8 expressly applies to claims related to laws administered by CalHR, and plaintiffs have not alleged a written cont ract between themselves and any party prom ised to pay them additional compensation.

DISPOSITION

The judgment is affirmed. Respon dents Edmund G. Br own, Jr., Arnold Schwarzenegger, Maeley L. Tom, Debbie Endsley, Malcolm Dougherty, Will Kempton,

and Ana Matosantos are awar ded their costs on appeal.

KRIEGLER, J.

We concur:

TURNER, P. J.

MOSK, J.