Wednesday, March 1, 2017

O'Neal v. Stanislaus County Employees' Retirement Assn.

Appellants, Michael R. O’Neal, Rhonda Biesemeier, and Dennis J. Nasrawi, appeal from the trial court’s grant of summary judgment against them, as well as several related evidentiary rulings.  Appellants are members of the retirement system operated by respondent Stanislaus County Employees’ Retirement Association (StanCERA) through their retirement board (the board).  The intervener in this case, County of Stanislaus (County), is one of several employers required to fund the StanCERA retirement system.

In the aftermath of the recent recession, StanCERA implemented several changes to the actuarial calculations used to determine how to amortize unfunded liabilities within the system and chose to utilize so-called non-valuation funds, money not used to ensure the overall system was actuarially sound, to reduce or replace required employer contributions.  Appellants filed suit, arguing these actions constituted a breach of the constitutional fiduciary duties placed on the board of a county retirement system.  Specifically, appellants alleged the adoption of an amortization rate for unfunded liabilities which included a period of negative amortization violated state law and constitutional mandates.  Appellants further argued the use of non-valuation funds to reduce or replace required employer contributions did the same.



Upon cross-motions for summary judgment, the trial court concluded that none of the actions taken by the board were contrary to law and, finding no material issue of fact, determined summary judgment was properly granted to StanCERA and County.  Appellants have appealed this ruling and the related denial of their cross-motion for summary judgment.  Related to the summary judgment appeal, appellants raise several complaints with evidentiary rulings made by the trial court which led to the exclusion of appellants’ expert declarations and the introduction of evidence appellants contend should not have been considered on summary judgment.



For the following reasons we conclude the trial court correctly determined appellants were not entitled to summary judgment, but erred in determining no material issues of fact remained.  We therefore reverse the grant of summary judgment to respondents and remand for proceedings consistent with this opinion.  With respect to the evidentiary issues raised, we generally affirm the trial court, save for one issue, which has not been contested on appeal.

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