Court Opinion

ID: 9567055
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:47:50.808167+00
Date Added: 2024-06-11T09:52:37.139912
License: Public Domain

CARTER, J.
I dissent.
The judicial history of this case should be of interest to the public as well as to practicing attorneys. Miss Tren filed a petition for a writ of mandate to compel payment to her by the controller and treasurer of the State of California of compensation for overtime promised her by her employer, Lieutenant Governor Knight, now Governor of the state. Her petition was granted by the trial court and affirmed by the District Court of Appeal. ((Cal.App.) 240 P.2d 32.) This court granted the state’s petition for hearing and rendered its first decision on April 3, 1953. That decision, which reversed the trial court, held that the contract entered into between Miss Treu and her employer was invalid for lack of approval by the Department of Finance. Mr. Justice Schauer and I filed separate dissenting opinions. On May 1, 1953, this court granted a rehearing with Chief Justice Gibson, Justices Shenk, Schauer and me voting therefor.
The present opinion holds, in accordance with my former dissent, that the evidence presented is sufficient to show a tacit or implied approval by the department of finance of the contract entered into between Miss Tren and her employer, the then lieiitenant governor. In direct conflict with the former .opinion, it is now held by a majority of this court that “conflicting inferences could be drawn as to whether or not the Department of Finance has approved Miss Treu’s claim. The issue is essential to a determination of this proceeding.” In the former opinion, the majority did not even recognize that there was any evidence tending to show an approval by the department. The record is the same now as it was then. However, the majority now reverse on the ground that the trial court made no finding as to departmental approval or lack thereof. With this I cannot agree.
*614Florenz Treu, petitioner below, was a former employee of the former lieutenant governor. She was appointed secretary on March 1st, 1947, and served in that position until March 1st, 1948, when she was appointed to the position of executive secretary. On August 1st, 1949, she terminated her employment with the lieutenant governor. She was exempt, during her tenure in both positions, from civil service and its requirements. After the termination of her employment, she brought mandate proceedings in the Superior Court of Sacramento County against the state controller and state treasurer to compel them to allow a claim filed by her against the state in the sum of $3,076.53. This sum represented the cash value of compensating time off which she alleged had been promised her for overtime worked while she was employed by the lieutenant governor but which had not been received by her prior to her separation. The state appeals from a judgment directing that the claim be paid.
Section 12101 of the Government Code provides that “The Lieutenant Governor may appoint and, subject to the approval of the Director of Finance, fix the salaries of one secretary and such clerical assistants as the Lieutenant Governor deems necessary for his office.” During the time Miss Treu worked for the lieutenant governor, her salary was fixed with the approval'of the Department of Finance on a monthly basis in amounts which progressively increased from $275 per month to $436 per month. This salary has all been paid. Regular hours of work were established by the lieutenant governor as follows: 9 a. m. to 5 :30 p. m., Mondays through Fridays, and 9 a. m. to 12 noon on Saturdays. Miss Treu kept a record showing the extra hours she worked and these were recorded on the monthly attendance report forms. The extra hours were authorized to be worked by the lieutenant governor and were supported by Authorization for Overtime Form 682. After separation from her employment without having been paid for the overtime work and without having received compensating time off, Miss Treu prepared a claim for payment which was approved by the State Personnel Board and, when later presented to the state controller was by him rejected. Thereafter these proceedings were commenced.
The state first contends that the finding of the trial court that Miss Treu was promised compensating time off for overtime work is not supported by the evidence. It is argued that the promise made to Miss Treu was not for com*615pensating time off but for a cash payment in lieu thereof. This argument has merit. The record shows that Miss Treu was told by the lieutenant governor that due to the pressure of work it would be impossible for her to take time off but that she would be paid fo£ her overtime work. This testimony was substantiated by a letter from the lieutenant governor to the Department of Finance. The state contends that this constitutes a failure of proof and cites, as authority, Gillin v. Hopkins, 28 Cal.App. 579 [153 P. 724], wherein it was held that evidence of a contract to accept payment in stock constituted failure of proof of a cause of action upon an agreement to pay a designated sum .of money. It is provided, however, in section 469 of the Code of Civil Procedure, that no variance between the allegation in a pleading and the proof is to be deemed material unless it has actually misled the adverse party to his prejudice in maintaining his action or defense on the merits. Miss Treu’s petition alleged that she was entitled to be paid in cash for overtime work and the state could not have been misled inasmuch as it introduced evidence tending to prove that no contract made with Miss Treu for payment for overtime work had been approved by the Department of Finance. We said in Hayes v. Richfield Oil Corp., 38 Cal.2d 375, 382 [240 P.2d 580], that “[a] variance between the allegations of a pleading and the proof will not be deemed material unless it has actually misled the adverse party to his prejudice in maintaining his action or defense on the merits, and a variation may be disregarded where the action has been as fully and fairly tried on the merits as though the variance had not existed.” And in Chelini v. Nieri, 32 Cal.2d 480, 486 [196 P.2d 915], we said: “that a variance is immaterial-and may be disregarded where the case was as fully and fairly tried upon the merits as though the variance had not existed. ’ ’ In view of the pleading heretofore referred to and the proof adduced by both parties, it is at once apparent that the state was not misled to its prejudice. Further, the evidence is more than sufficient to show that Miss Treu was promised compensation for overtime work by the lieutenant governor.
The state argues, however, that no such contract is valid unless approved by the Department of Finance as required by the provisions of section 18004 of the Government Code (as the section read at the time she began work). That section provides that “Unless the Legislature specifically pro*616vides that approval of the Department of Finance is not required, whenever any State agency [in which the office of Lieutenant Governor is included, Gov. Code, § 11000] . . . fixes the salary or compensation of an employee . . . which salary is payable in whole or in part out of State funds, the salary is subject to the approval of the Department of Finance before it becomes effective and payable.”
It may be taken for granted that the words “salary” and “compensation” are synonymous for the purpose of this discussion. (Martin v. County of Santa Barbara, 105 Cal. 208, 212 [38 P. 687].)
In State v. Brotherhood of B. Trainmen, 37 Cal.2d 412, 421, 422 [232 P.2d 857], it was held that a state agency could not bind the state for wages or salary without the approval of the Department of Finance. The question of approval by the Department of Finance was the subject of conflicting evidence. In support of the determination reached by the trier of fact that Miss Treu was entitled to compensation for overtime, the record contains a letter from the state attorney general to the Department of Finance in which he set forth seven facts upon which he felt the validity of Miss Treu’s claim rested. He wrote ‘ ‘ [w] hether or not the claim is valid under the rule of that case [Clark v. State Personnel Board, 56 Cal.App.2d 499 (133 P.2d 11) ] is dependent, in addition to the facts shown above, upon the existence of the following facts: (1) that the lieutenant governor did establish normal hours of work for the employee; (2) that he did promise the employee compensating time off for extra hours worked; (3) that this promise was made prior to the time they were worked;. (4) that the employee was authorized to and did work the extra hours claimed; (5) that she did not receive compensating time off or other compensation for these extra hours; (6) that she did not waive the overtime by failing to take compensating time off when offered, and finally (7) that the amount claimed is the cash equivalent of the uncompensated overtime.” On February 14, 1950, the letter of the attorney general was forwarded to the controller together with an interdepartmental communication signed by James Dean, director of finance, in which he referred to the attorney general’s letter stating that the “seven items which he set forth in his letter already have been substantiated, and there is available in our files the required letters and affidavits making the required substantiation.” It is argued that these communications constituted a tacit approval by the department of Miss Treu’s claim for pay*617ment for overtime. The statute (Gov. Code, § 18004) provides that the required approval by the department must only be had before the compensation promised “becomes effective and payable ’ ’ and does not provide that the approval must be had in advance of the time worked for which compensation is promised. Mr. Links, assistant director of finance, in response to a question as to whether the department had approved the claim, testified that “ [w]hat we did was merely to report to the State Controller, as we had requested him to withhold the drawing of the warrant for the payment thereof until we had substantiated the facts.” Thereafter, on February 14th, as has been hereinbefore set forth, a letter was written by the department to the controller in which it was stated “there is available in our files the required letters and affidavits making the required substantiation.” I am satisfied that it can be inferred from this evidence that the conduct of the Department of Finance amounted to an approval of the agreement for overtime pay between Miss Treu and the lieutenant governor.
The state relies upon section 13370 of the Government Code in support of its contention that “All contracts entered into by any state agency . . . for services shall not be effective unless and until approved by the Department of Finance.” This section adds nothing to the discussion heretofore had. As has been seen, the department impliedly approved Miss Treu’s claim for overtime compensation and the trial court so found. In this regard it should be noted that Miss Treu alleged in Paragraph XII all the facts necessary to show that the Department of Finance approved her claim. She alleged “That on the 14th day of February, 1950, the said James S. Dean informed the respondent, Thomas H. Kuchel, that certain facts necessary to be established to make said claim valid had been substantiated and that there was available in the files of said James S. Dean the required letters and affidavits making the required substantiation. The facts so substantiated and established are:
‘ ‘ 1. That the said Lieutenant Governor did establish normal hours of work for petitioner;
“2. That said Lieutenant Governor did promise petitioner compensating time off for extra hours worked;
‘ ‘ 3. That said promise was made prior to the time said hours were worked;
‘‘4. That petitioner was authorized to and did work the extra hours claimed;
*618“5. That petitioner did not receive compensating time off or other compensation for said extra hours prior to said date of separation;
“6. That petitioner did not waive the extra hours claimed by failure to take compensating time off for said hours when offered;
“7. The amount claimed is the cash equivalent of the uncompensated overtime. ’ ’
In addition, all the substantiating facts are alleged. The trial court found the allegations of this paragraph to be true and, in addition, found that the allegations of the answer denying the same were untrue. These findings are sufficient to establish the implied approval of the department. In holding that this is not a sufficient finding on the issue of approval by the department of finance, a majority of this court is, by a highly technical and wholly unnecessary construction thereof, depriving a working person of wages earned for work done honestly, and conscientiously in reliance upon the promise of one of the highest officers of this state. It is at once apparent from a reading of the reporter’s transcript as it relates the testimony of Mr. Links, Assistant Director of Finance, on direct and cross-examination, that the case was tried on the theory that approval by the Department of Finance was at issue.
It is next argued that where a public employee has a fixed monthly salary there can be no such thing as “extra” hours, or days, as a basis for overtime pay, and that Miss Treu’s monthly salary was the only compensation to which she was entitled. Robinson v. Dunn, 77 Cal. 473 [19 P. 878, 11 Am. St.Rep. 297], is relied upon in support of this contention. In the Robinson case, the Legislature sought to authorize additional payment for certain employees whose wages were fixed by law at $4.00 per day because these employees were obliged to work 16 hours per day rather than the hours comprising a normal working day. It was there held that the word “day” “as used in the statute, covers whatever period of the twenty-four hours the legislators choose to remain in session. . . . The services, therefore, were not ‘extra,’ but were such as the employees were bound to render.” The situation in the Robinson case is not analogous to the one under consideration. In the instant case, Miss Treu was ordered to work overtime and promised additional compensation therefor. The state’s argument that “ [t]he length of the work day and of the work week having been in the discretion of the appointing power, the *619work month for which he was paid covers whatever part of the month that the appointing power required him to work” and “ [t]he long hours, therefore, which petitioner here claims she worked were not ‘ extra, ’ but were such as she was bound to render for- her fixed monthly salary” shows that the present situation differs from that of the Robinson case. The overtime hours worked by Miss Treu were, in effect, such as would be worked by an extra employee since the appointing power—the lieutenant governor—promised her that she would receive extra compensation for that overtime work in addition to her fixed regular hours of work. The rule announced in Howard v. Lampton, 87 Cal.App.2d 449 [197 P.2d 69], and Clark v. State Personnel Board, 56 Cal.App.2d 499 [133 P.2d 11], now disapproved by the majority opinions in Martin v. Henderson and Redwine v. Henderson (40 Cal.2d 583 [255 P.2d 416]) was in full force and effect during the time Miss Treu worked for the lieutenant governor and during the time this case has been under judicial review. The disapproval of the rule that a state employee, in the absence of statutory authority, is entitled to payment for accrued overtime upon separation from service, should not be permitted to operate retroactively so as to deprive Miss Treu of a vested right. In Hildebrand v. State Bar, 36 Cal.2d 504, 514 [225 P.2d 508], this court said: “. . . it is our conclusion that the ends of justice will be served by dismissing the present proceeding without disciplinary action, thereby permitting this opinion, as the first expression of the views of this court upon the subject to serve prospectively as a guide to the members of the profession generally, rather than to serve retrospectively to the detriment of petitioners.” A note in 85 American Law Reports 262 points out that the general principle is that a decision of a court of supreme jurisdiction overruling a former decision is retrospective in its operation, and the effect is not that the former decision was bad law, but that it never was the law. It is also noted, however, that to this the courts have established the exception that, where a constitutional or statute law has received a given construction by the courts of last resort, and contracts have been made and rights acquired under and in accordance with such construction, such contracts may not be invalidated nor vested rights acquired under them impaired by a change of construction made by a subsequent decision. “The true rule in such cases is held to be to give a change of judicial construction in respect to a statute the same effect in its operation on *620contracts and existing contract rights that would be given to a legislative repeal or amendment; that is to say, make it prospective, hut not retroactive.” (Emphasis added.) (See, also, People v. Maughs, 149 Cal. 253 [86 P. 187] ; People v. Ryan, 152 Cal. 364 [92 P. 853].) Good faith and fair dealing by state officers should not only be presumed, but enforced. To hold that the disapproval of the cited eases operates retroactively deprives Miss Treu of compensation for services rendered in good faith in reliance upon not only the promise of her employer (which was impliedly approved by the Department of Finance) who held one of the highest offices in this state, but in reliance upon decisions rendered by the highest judicial tribunals of this state. Neither Miss Treu, her attorney, nor the trial court or the District Court of Appeal could have known that Howard v. Lampton, supra, and Clark y. State Personnel Board, supra, were to be disapproved in Martin v. Henderson and Redwine v. Henderson, supra. If this case was tried on the theory of the rule laid down in those cases, this court should not now penalize Miss Treu for having done so but should construe the pleadings and the findings liberally to the end that justice would be accomplished.
The final contention made by the state is that Miss Treu was paid in full for all overtime by a special salary adjustment granted her with the approval of the Department of Finance. On July 16,1947, the lieutenant governor wrote to Mr. Links of the Department of Finance that the “salaries” of his employees should be increased to certain specified amounts for the year. The trial court found that Miss Treu did not receive compensation for the-overtime hours worked. There is ample evidence in the record in support of that finding and the implication is clear that the fixed salary received by Miss Treu was to cover her fixed hours of work in view of the express promise of her employer, the lieutenant governor, to compensate her for overtime worked.
Other points raised by the state do not merit discussion inasmuch as there are really only two primary issues involved —whether or not the lieutenant governor and Miss Treu entered into a contract for the payment to her of extra compensation for overtime work and whether or not that contract was approved by the Department of Finance. On both of these issues, the trial court found in her favor and there is ample evidence in support thereof.'
For the foregoing reasons, I feel compelled to say that the present majority holding in this case results in a totally *621unnecessary miscarriage of justice and does nothing to promote respect for the fair dealing of a prominent state official who has been prevented from keeping his word which was given in sincerity and honesty in return for work conscientiously done.
I would affirm the judgment.