Thomas B. Sawyer, Plaintiff-appellant, v. County of Sonoma and Retirement Board of the County Ofsonoma, Defendants- Appellees, 719 F.2d 1001 (9th Cir. 1983)

Thomas B. Sawyer, Santa Rosa, Cal., for plaintiff-appellant.

Caroline Kerl, Deputy County Counsel, Santa Rosa, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before CHOY and SNEED, Circuit Judges, and RAFEEDIE^* , District Judge.

RAFEEDIE, District Judge:

Appellant, a former Deputy County Counsel for the County of Sonoma (the "County"), brought this action against the County and the County Retirement Board (the "Board") seeking additional retirement benefits pursuant to 10 U.S.C. § 1336.¹  The parties filed cross motions for summary judgment and the district court granted appellees' motion, finding that appellant's claim for additional retirement benefits was barred by his failure to timely file a proper request therefor. We find no material facts are in dispute and that the district court properly concluded that appellees were entitled to summary judgment. We therefore affirm.² I

Appellant was employed as a Deputy County Counsel from July 1, 1969 to February 1, 1977. Prior to his employment with the County, appellant served in the United States Army. In March 1934, appellant was commissioned an officer of the United States Army Reserve. From December, 1940 until January, 1946, he was on active duty in the United States Army, and thereafter served in the Army Reserve until 1962. Because he completed twenty years of Reserve service, he became eligible for military retirement benefits at age sixty in June, 1972.

The County maintains a retirement program for its employees pursuant to the County Employees Retirement Law of 1937, Cal.Gov't Code Sec. 31450 et seq. (West 1968).³  In anticipation of his retirement from the County Counsel's office, appellant inquired of County and Board personnel whether he was entitled to credit for his five-plus years of prior active military service for the purpose of receiving additional retirement benefits. Under Sec. 31641.1⁴ , a county employee may accumulate credit for all years of public service⁵  for purposes of calculating retirement benefit payments so long as the employee: (1) files a written notice of election to claim the prior service and (2) makes the contributions required under Sec. 31641.2 before retirement.⁶  Appellant was advised that he was precluded from obtaining such credit because he was then eligible to receive a pension for his military service, and Sec. 31641.4 disallowed credit under those circumstances.⁷  After researching the matter independently, appellant concluded he had been correctly advised and did not apply in writing for prior service credit before leaving the County's employ.

Three and one-half years after appellant's retirement, we issued our decision in Cantwell v. County of San Mateo, 631 F.2d 631 (9th Cir. 1980), cert. denied, 450 U.S. 998, 101 S. Ct. 1703, 68 L. Ed. 2d 199 (1981). We there held that Sec. 31641.4 conflicted with 10 U.S.C. § 1336, and insofar as Sec. 31641.4 restricted an employee's right to credit for prior military service by reason of an existing pension for that service, it was invalid on supremacy principles. Post Cantwell, an employee who is eligible to receive pension benefits for prior military service may nevertheless apply for and receive credit for such service provided the request for credit complies with the applicable statutory provisions.

Relying upon Cantwell, appellant presented a written application to the Board for prior service credit and offered to make the appropriate contribution. His application was denied on the ground that it was not timely. Appellees' position then and now is that appellant failed to meet the statutory criteria for eligibility, to wit, that a written election and the required contributions be presented to the Board prior to the effective date of retirement. Appellant does not dispute that he failed to make a timely election. Rather, he contends that Cantwell does not bar his request for prior service credit because he substantially complied with the written notice requirement. He further contends that he is excused from satisfying the written election requirement on the grounds of estoppel, waiver or futility.⁸ 

II

In Cantwell, this court held that as to public employees with prior military service, federal law preempted the provision of Sec. 31641.4 that the employee is not eligible to "buy" additional pension benefits for prior public employment if he is already eligible for pension benefits from that employer. This court did not hold, however, that the federal interest in regulation of pensions affecting military personnel preempted all aspects of the California statutory scheme. At issue in Cantwell, and in the case at bar, is the effect of failing to make the written election required by Sec. 31641.1.

In Cantwell, the employee sought to add on his prior military service in order to terminate his continuing obligation to make pension fund contributions. The district court concluded that Cantwell was "eligible" to discontinue making pension fund contributions on August 17, 1974--the date he accumulated thirty years of service (including therein the credit for military service). However, Cantwell did not submit his written election to make the required contribution until November 17, 1975. The district court held that Cantwell was not bound by the written notice requirement because to so submit would have been a futile act, and he was therefore entitled to a refund for all pension contributions made after August 17, 1974.

This court reversed, holding that filing the written election to make the necessary contribution was a statutory prerequisite to obtaining credit for prior service, and that this condition applied to military service as well. Cantwell, 631 F.2d at 638. Thus, although Cantwell filed his notice of election before his retirement as required by Sec. 31641.2, we held that an employee relying on prior service credit towards the required thirty years of service was not entitled to this credit until the obligatory written notice was submitted to the Retirement Board. Consequently, Cantwell was only entitled to a refund of payments made after November 17, 1975, the date the written election was filed.

Furthermore, this court held that filing in this circumstance was not a "futile act." It is clear, regardless of when Cantwell filed his notice, that it would have been denied. However, the concept of futility includes considerations other than the interests of the applicant. In Cantwell, we recognized that written notification serves two important administrative purposes: (1) it provides official notice that the employee has prior service for which he is seeking credit, and (2) it puts the entire retirement board on official notice of the employee's intention so that it may make a thorough investigation of the prior service and compute the amount of the necessary contribution. Cantwell, 631 F.2d at 638.

Thus, Cantwell requires that credit be available for prior military service notwithstanding the employee's eligibility for military pension benefits, but Cantwell also requires adherence to the statutory prerequisites for receiving this credit.⁹  Requiring such compliance in no way defeats the policy of liberally construing public pension legislation.¹⁰  When a public body establishes its pension system, it has wide latitude in prescribing terms and conditions for employee benefits. Wallace v. Fresno, 42 Cal. 2d 180, 183, 265 P.2d 884, 886 (1954). The requirement of written notice prior to retirement is a statutory condition to obtaining credit, and when the language of a provision in pension legislation is free from ambiguity, a court may not amend or enlarge the section under the guise of liberal statutory interpretation. Todd v. McNichols, 44 Cal. App. 2d 448, 452, 112 P.2d 675 (1941). Consequently, absent a showing of compelling equitable bases for disregarding the filing requirement, it must be satisfied.

Appellant seeks to estop appellees from demanding strict compliance with the statutory prerequisites for obtaining prior service credit.¹¹  Earlier cases frequently declared that estoppel against the government is rare and should be invoked only in extraordinary circumstances. See, e.g., San Diego v. California Water and Telephone Co., 30 Cal. 2d 817, 825, 186 P.2d 124, 130 (1947). The modern rule is more flexible, and generally permits the application of estoppel against the government when the traditional elements of estoppel are present.¹² 

In Cantwell, on facts similar to these, we concluded that estoppel could not be asserted against the County. The circumstances of these cases simply do not warrant the application of estoppel, as appellant was not a victim of the government's misconduct or "misfeasance." He was correctly advised (at the time the advice was given) that he was not eligible for prior service credit. Thus, there were no "representations" that were relied upon by appellant in his ignorance. The evidence is undisputed that he knew full well the content and meaning of the statutory preconditions to receiving credit.¹³  Even if he did not, there can generally be no estoppel unless some element of culpability is attached to the party to be estopped (i.e., some misfeasance amounting to at least negligence).¹⁴  No such culpability is (or could be) alleged here, as any statements to appellant regarding his eligibility were correct at the time they were made.¹⁵ 

B. Issues of Futility, Substantial Compliance and Waiver

Appellant contends that it would have been futile to submit a written claim, in light of the knowledge that he was as a matter of law ineligible for credit. It is clear that his claim would have been rejected. However, that fact does not make the filing a futile act.¹⁶  In Cantwell, this court rejected appellant's argument, holding that the filing of a written notice serves important purposes which are only satisfied "by compliance therewith." Cantwell, 631 F.2d at 638. Appellant's filing would have been no more or less futile than would filing have been in Cantwell, but we nonetheless held that only by filing the written notice will a retirement board be properly notified of the claim that is being made.

Appellant also contends that he "substantially complied" with the written election requirement by virtue of the several oral inquiries he made concerning additional benefits. However, appellant's position in this regard raises the same objections as those raised to the futility argument. The statutory provisions requiring a written election must be fully satisfied in order to serve the purposes for which they were designed. The doctrine of substantial compliance is an equitable doctrine designed to avoid hardship in cases where the party does all that can reasonably be expected of him. However, in the context of statutory prerequisites, the doctrine can be applied only where invocation thereof would not defeat the policies of the underlying statutory provisions. Brown v. Solano County Business Development, 92 Cal. App. 3d 192, 196, 154 Cal. Rptr. 700, 702 (1979) (court holds that doctrine inapplicable in situation where the purpose of the requirements would be defeated). The purposes of the written election requirement are unsatisfied where the applicant fails to file the required notice.

In addition, the doctrine of substantial compliance can have no application in the context of a clear statutory prerequisite that is known to the party seeking to apply the doctrine. Appellant does not contend that he was unfamiliar with the writing requirement or that on the basis of statements made by clerical or other Board personnel, he believed he could take no other action to gain credit. He researched the law himself and conducted an extensive review of Board policy and procedures regarding retirement claims which indicated written application was necessary. Furthermore, no actions taken by the County prevented or in any way hindered appellant's ability to submit the written claim.¹⁷  In fact, the Board immediately accepted appellant's written application when it was finally filed. Appellant admits that concern over his interpersonal relationships actually motivated his decision to not file a written demand.

Finally, appellant seeks to be excused from the strict terms of the statutory provisions by the doctrine of waiver. He contends that the County effectively waived the written notice requirement by establishing and maintaining an office and staff that conducts preliminary investigation of eligibility on the basis of oral inquiries.

Under California law, a party is deemed to waive a right or privilege only by a clear expression that is made with full knowledge of the facts and an intent to waive, or by conduct that will warrant an inference of the relinquishment of such a right. See, e.g., White Point Co. v. Herrington, 268 Cal. App. 2d 458, 468-469, 73 Cal. Rptr. 885, 891 (1968). The mere existence of a staff office which assists retirement system members and prepares applications for them cannot be considered a waiver by the Board of the written notice provisions in Sec. 31641.1. Appellant had every opportunity to contest the staff's interpretation of Sec. 31641.4. The handling of administrative and ministerial functions by the staff did not excuse appellant from raising the matter prior to retirement by way of written letter to the Board. A written claim was precisely what the Board needed to be aware of appellant's position and fully investigate his claim.

III

We conclude, as we concluded in Cantwell, that the written notice requirement must be satisfied in order to obtain retirement credit for prior military service. The undisputed facts of this case do not support the application of estoppel, waiver, futility or substantial compliance; thus, appellant's failure to timely file his election to purchase additional benefits results in the loss of these benefits. Accordingly, the judgment below is

Affirmed.