Opinion

INTRODUCTION

In this case we address the meaning of the term “regular compensation” in the section of the County Employees Retirement Law of 1937 (CERL) as codified in 1947 (Gov. Code, § 31450 et seq.) that establishes the effective date of a disability retirement (Gov. Code, § 31724, hereafter section 31724).

Donna Katosh appeals from the judgment of the Sonoma County Superior Court denying her petition for writ of mandate (Code Civ. Proc., §§ 1085, 1094.5) by which she sought to compel respondents Sonoma County Employees’ Retirement Association (SCERA) and Sonoma County Employees’ Board of Retirement (Board) to designate the day following her last day of work, June 27, 2000, as her effective retirement date and to overturn a decision of the Board determining the effective date of her retirement to be October 28, 2004, the day after she exhausted her accrued sick leave. The court determined that appellant had failed to show that the Board erred in setting her retirement date because she did not exhaust her accrued sick leave until October 28, 2004, and that pursuant to section 31724, her retirement could not be effective until she did so.

Appellant contends that the Board and the court erred in construing the term “regular compensation” in section 31724 to include sick leave. We shall affirm the judgment.

BACKGROUND

The basic facts are not in dispute. Appellant worked for the Sonoma County Human Services Department as a youth supervisor. She was hired in 1989, and stopped working on June 26, 2000. On March 28, 2001, her county health insurance lapsed. On February 6, 2002, appellant filed an application for a service-connected disability retirement with SCERA. While her application was pending and for reasons not explained in the record before us, she returned to “in pay status” with the county for the two-week period ending December 9, 2002. She did not actually provide services for the county during that period, but received a payment of approximately 40 hours of sick leave previously accrued while she was working.

On July 17, 2003, respondents made a preliminary determination that appellant was not permanently incapacitated. Appellant appealed, arguing she was permanently incapacitated and that the 16-month delay in filing her disability retirement application was due to the inability to ascertain the permanency of her incapacity pursuant to section 31724. Following a hearing before an administrative law judge (ALJ), the ALJ recommended granting appellant’s application for a service-related disability retirement. The ALJ did not address the effective retirement date. On October 7, 2004, appellant requested respondents to set the effective retirement date as the last date she received “regular compensation” pursuant to the provision of section 31724 that deems the disability retirement application to have been filed on the “date following the day for which the member last received regular compensation” where “filing of the member’s application was delayed ... by inability to ascertain the permanency of the member’s incapacity ...” (§ 31724.)

In an October 19, 2004 letter to appellant’s attorney, SCERA responded to appellant’s request, explaining that appellant’s health insurance had lapsed on March 28, 2001, and that “[i]n order for her to be eligible to receive health benefits she must have active health insurance at the time she retires, i.e., her retirement date.” Appellant was in “pay status” for the pay period ending December 9, 2002, the date upon which she last received regular compensation, but did not have active health insurance at that time. The letter stated that the county would allow her to return to “in pay status” effective October 12, 2004, “and allow her to run out her sick leave and vacation to give her the 40 hours needed to reinstate her Health Insurance prior to the Board making a decision.” The letter advised that to do so she must “contact her department immediately” and request this be done. The letter also advised that “this would mean that her retirement date will be in October of 2004 and she would not receive any retroactive retirement benefits if she is granted a disability retirement. But it would increase her highest final monthly compensation calculation, as well as, give her health insurance benefits as a retiree.”

Appellant’s counsel notified SCERA that because health insurance benefits were critical to appellant, she believed she had no choice other than to follow that advice. However, she was neither withdrawing nor waiving her earlier written request that “any disability retirement allowance which is granted be made effective on the date following the day for which she last received regular compensation because of the inability to ascertain the permanency of her incapacity until after that date.”

Appellant returned to the county’s payroll for a period beginning sometime around October 12, 2004, and ending on October 27, 2004. She used a combination of sick leave and vacation time to achieve the necessary 40 hours to reactivate her health insurance.

On October 21, 2004, the Board adopted the hearing officer’s decision and granted appellant a service-connected disability retirement. However, it postponed a decision on the effective date of her retirement (presumably to allow appellant to “run out” her sick leave to reinstate her health benefits). At its meeting of November 18, 2004, the Board “confirmed its decision that sick leave is regular compensation” and set appellant’s retirement date as “the day after [her] last day on payroll, October 28, 2004.”

On January 13, 2005, appellant filed a timely petition for a writ of mandate in the superior court. She argued that the Board abused its discretion and acted contrary to law by characterizing the payment of sick leave and vacation compensation as “regular compensation” as the term is used in section 31724.

Following a hearing, the trial court denied the petition for writ of mandamus, agreeing with SCERA and with the Board that sick leave is included in regular compensation and concluding that section 31724 requires “that a successful disability retirement applicant exhaust her accrued sick leave before a disability retirement can become effective. . . . Because Petitioner did not exhaust her accrued sick leave until October 28, 2004, her retirement could not be effective until after that date.”

This timely appeal followed.

DISCUSSION

Standards of review

The parties agree that the question raised here is the interpretation and application of section 31724 to the facts. We agree the question whether “regular compensation” in section 31724 includes sick leave is a question of statutory construction. Therefore, our review of the trial court’s ruling is de novo. (In re Retirement Cases (2003) 110 Cal.App.4th 426 [ 1 Cal.Rptr.3d 790 ].) We apply our independent judgment to the trial court’s determination of questions of law. (Santa Clara Valley Transportation Authority v. Rea (2006) 140 Cal.App.4th 1303, 1313 [ 45 Cal.Rptr.3d 511 ); MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1082 [ 36 Cal.Rptr.3d 650 ].)

Settled rules of statutory construction guide our review: “ ‘ “Statutes are to be interpreted in accordance with their apparent purpose . . . .” (Kaiser Foundation Health Plan, Inc. v. Lifeguard, Inc. (1993) 18 Cal.App.4th 1753, 1762 [ 23 Cal.Rptr.2d 235 ].) First and foremost, we look for that purpose in the actual language of the statute. (Mercer v. Department of Motor Vehicles (1991) 53 Cal.3d 753, 763 [ 280 Cal.Rptr. 745 , 809 P.2d 404 ].) If the meaning is without ambiguity, doubt, or uncertainty, then the language controls. (Security Pacific National Bank v. Wozab (1990) 51 Cal.3d 991, 998 [ 275 Cal.Rptr. 201 , 800 P.2d 557 ].) If the meaning of the words is not clear, we may refer to various extrinsic aids, including the history of the statute, to determine the intent of the Legislature. (Kaiser Foundation Health Plan, Inc. v. Lifeguard, Inc., supra, 18 Cal.App.4th at p. 1762 .)’ ” (Santa Clara Valley Transportation Authority v. Rea, supra, 140 Cal.App.4th at pp. 1313-1314; see MacIsaac v. Waste Management Collection & Recycling, Inc., supra, 134 Cal.App.4th at pp. 1082-1083.)

“Any ambiguity or uncertainty in the meaning of pension legislation must be resolved in favor of the pensioner, but such construction must be consistent with the clear language and purpose of the statute. [Citations.]” (Ventura County Deputy Sheriffs’ Assn. v. Board of Retirement (1997) 16 Cal.4th 483, 490 [ 66 Cal.Rptr.2d 304 , 940 P.2d 891 ] (Ventura); accord, In re Retirement Cases, supra, 110 Cal.App.4th at p. 439 .) “ ‘[I]f neither the words of the statute nor its legislative history reveal[s] a clear meaning, we apply reason and practicality, and interpret the statute in accord with common sense and justice, and to avoid an absurd result. [Citation.]’ (In re Marriage of Campbell (2006) 136 Cal.App.4th 502, 506 [ 38 Cal.Rptr.3d 908 ].)” (Santa Clara Valley Transportation Authority v. Rea, supra, 140 Cal.App.4th at p. 1314 ; see MacIsaac v. Waste Management Collection & Recycling, Inc., supra, 134 Cal.App.4th at p. 1084 .)

“Although our review is independent, we do not necessarily disregard the [agency’s] interpretation of the law. ‘Where the meaning and legal effect of a statute is the issue, an agency’s interpretation is one among several tools available to the court. Depending on the context, it may be helpful, enlightening, even convincing. It may sometimes be of little worth. [Citation.] Considered alone and apart from the context and circumstances that produce them, agency interpretations are not binding or necessarily even authoritative. . . .’ (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7-8 [ 78 Cal.Rptr.2d 1 , 960 P.2d 1031 ].) It follows that if application of the settled rules of statutory interpretation does not clearly reveal the Legislature’s intent, the [agency’s] interpretation of the statutes in the context of this case may be helpful.” (Santa Clara Valley Transportation Authority v. Rea, supra, 140 Cal.App.4th at p. 1314 .)

Section 31724

Section 31724 provides in its entirety: “If the proof received, including any medical examination, shows to the satisfaction of the board that the member is permanently incapacitated physically or mentally for the performance of his duties in the service, it shall retire him effective on the expiration date of any leave of absence with compensation to which he shall become entitled under the provisions of Division 4 (commencing with Section 3201) of the Labor Code or effective on the occasion of the member’s consent to retirement prior to the expiration of such leave of absence with compensation. His disability retirement allowance shall be effective as of the date such application is filed with the board, but not earlier than the day following the last day for which he received regular compensation. Notwithstanding any other provision of this article, the retirement of a member who has been granted or is entitled to sick leave shall not become effective until the expiration of such sick leave with compensation unless the member consents to his retirement at an earlier date.

“When it has been demonstrated to the satisfaction of the board that the filing of the member’s application was delayed by administrative oversight or by inability to ascertain the permanency of the member’s incapacity until after the date following the day for which the member last received regular compensation, such date will be deemed to be the date the application was filed.” (§ 31724, italics & boldface added.)

Appellant contends that “regular compensation” as used in the statute does not include sick leave or vacation pay and that her last day of receiving “regular compensation” was her last day of actual work, June 26, 2000. She argues that because her delay in filing her application was due to an inability to ascertain the permanency of her incapacity, her effective retirement date should be the date following her last day of actual work as so defined. However, it is conceded that neither the Board nor the court addressed appellant’s claim that she came within the second paragraph of the statute because the filing of her application was delayed by the inability to ascertain the permanency of her incapacity. It was unnecessary to do so, given the determination that “regular compensation” includes sick leave and vacation and therefore, that the last day for which she received “regular compensation” was October 27, 2004. Consequently, the issue of inability to ascertain permanency does not come into play unless we determine that appellant has established that “regular compensation” does not include sick leave or vacation. If such were the case, remand for determination of the factual issue of whether appellant carried her burden of demonstrating the delay was caused by an inability to determine permanency would be required. We address only the issue of whether sick leave and vacation are included in the term “regular compensation” in this statute.

Plain meaning

Respondents contend that the “plain meaning” of the term “regular compensation” includes wages and salary paid for sick leave and vacation. Appellant argues, to the contrary, that the language of the statute and its legislative history indicate that sick leave is not included in regular compensation.

“The term ‘regular compensation’ is not defined, either statutorily or judicially.” (Puckett v. Orange County Bd. of Retirement (1988) 201 Cal.App.3d 1075, 1078 [ 247 Cal.Rptr. 672 ] (Puckett).) After Puckett , both the California Supreme Court and this court have addressed issues that assist in determining the question here. (See Ventura, supra, 16 Cal.4th at pp. 497-498; In re Retirement Cases, supra, 110 Cal.App.4th at pp. 438-441, 472-476.) Nevertheless, we cannot say that the “plain meaning” of the statute either includes or excludes sick leave from the term “regular compensation.” We begin with the words of the statute.

Webster’s Third New International Dictionary (2002) defines the term “regular” as: “3 a: steady or uniform in course, practice, or occurrence: not subject to unexplained or irrational variation: steadily pursued: ORDERLY, METHODICAL <~ habits> b (1): returning, recurring, or received at stated, fixed, or uniform intervals . . . .” (Id. at p. 1913.)

We are not persuaded that the use of the term “regular” to modify “compensation” suggests that the term should be equated with “actually working,” as appellant contends. Both sick leave and vacation are accrued on a regular basis and, when taken as time off, the employee receives “regular salary or wages without the necessity of performing services.” (Ventura, supra, 16 Cal.4th at p. 497 , italics added.) “Compensation” is defined in Government Code section 31460 “as ‘the remuneration paid in cash out of county or district funds, plus any amount deducted from a member’s wages for participation in a deferred compensation plan . . . but does not include the monetary value of board, lodging, fuel, laundry, or other advantages furnished to a member.’ ” (Ventura, at pp. 490-491.) “Regular compensation” would necessarily be a subset of the broader term “compensation.”

Appellant acknowledges that the first sentence of section 31724 refers to certain temporary disability benefits under the workers’ compensation law that are not at issue here. That sentence makes a disability retirement effective “on the expiration date of any leave of absence with compensation” under Division 4 of the Labor Code, or effective “on the occasion of the member’s consent to retirement prior to the expiration of such leave of absence with compensation.” (§ 31724.)

The second sentence in section 31724 provides that a “disability retirement allowance shall be effective as of the date such application is filed with the board, but not earlier than the day following the last day for which he received regular compensation.” It is the term “regular compensation” as used here that is at issue.

The third sentence of section 31724 provides; “Notwithstanding any other provision of this article, the retirement of a member who has been granted or is entitled to sick leave shall not become effective until the expiration of such sick leave with compensation unless the member consents to his retirement at an earlier date.” Appellant argues that this sentence “expressly distinguishes” “sick leave” from “regular compensation” as used in the second sentence and that there would be no reason for the Legislature to include this third sentence if “sick leave” were “regular compensation.” We disagree.

The reference to “regular compensation” in the second sentence sets the retirement allowance date as the later of the date of application or the day following the last day the employee receives “regular compensation.” This provision ensures against retirees “double-dipping” (receiving “regular compensation” at the same time they receive retirement benefits), protects the taxpayer’s funds, and simplifies administration by providing a clear command to the retirement system. (See Puckett, supra, 201 Cal.App.3d at pp. 1079-1080.) The third sentence regarding exhaustion of sick leave protects the disabled employee from being retired before having an opportunity to receive wages for accrued sick leave. It ensures that a member who is granted a disability retirement, but has not yet exhausted his or her sick leave, is provided the option of delaying the effective date of retirement so that the member can obtain the advantages of the sick leave benefits to which he or she is entitled. Advantages of doing so include: the employee continues to receive service credit during the period of sick leave; while the disability retirement benefit is only a percentage of the employee’s salary, during sick leave the employee receives full wages; and a retirement allowance is calculated at a higher rate if the employee’s salary is increased during the period of sick leave. Moreover, as in this case, the option of reinstating lapsed county health insurance is available during the sick leave period, so the employee may retain the insurance as a retiree.

Legislative history

The legislative history of this provision confirms that, in amending the statute to add the third sentence, the Legislature intended to “allow a member to use all accumulated sick leave prior to disability retirement.” (Assem. Com. on Retirement, Analysis of Assem. Bill No. 1960 (1972 Reg. Sess.) July 4, 1972; see Historical Note, 35 West’s Ann. Gov. Code (1988 ed.) foil. § 31724, p. 328.) As the bill analysis of the Assembly Committee on Retirement states: “Under present 1937 County Act Law, the practice of permitting members to use accrued sick leave prior to disability retirement varies from county to county. AB 1960 would provide that a member could not be retired for disability until after the expiration of his accrued sick leave, without the member’s consent.” (Ibid.) The analysis continues: “Sick leave benefits vary greatly from county to county. Some counties provide cash payments for accrued sick leave upon separation or upon retirement, while other counties have quite modest sick leave programs. [¶] ... AB 1960 would not affect the type of sick leave program offered by a county, but would provide that an employee is entitled to any benefits accrued at the time of retirement for disability.” (Ibid.)

Appellant contends the Board and the trial court erred in finding that section 31724 “requires” a disabled employee to “exhaust” accrued sick leave before a disability retirement can become effective. In its statement of decision, the court stated: “The statute requires that a successful disability retirement applicant exhaust her accrued sick leave before a disability retirement can become effective. . . . Because [appellant] did not exhaust her accrued sick leave until October 28, 2004, her retirement could not be effective until after that date.” As a general statement of the law that a member is required to exhaust sick leave before a disability retirement can become effective, the statement is patently erroneous. It would read out of the third sentence, the phrase “unless the member consents to his retirement at an earlier date.” (§ 31724.)

This provision of section 31724 permits a disability retirement to become effective at the employee’s option, before exhaustion of accrued leave in counties, such as Sonoma, that allow employees separated from county service by retirement for disability to opt for “payment at such employee’s base hourly rate for all unused sick leave remaining to such employee’s credit as of the time of separation . . . .” (Mem. of Understanding between the county and the Sonoma County Law Enforcement Association (MOU), § 22.6, italics added.) In re Retirement Cases, supra, 110 Cal.App.4th 426, 473 , describes such payment of accrued but unused sick leave and vacation as “termination pay.” As we have discussed, the legislative history of section 31724 recognizes that some counties provide cash payments for accrued sick leave upon separation or retirement, while others do not. The amendment of section 31724 was not intended to interfere with those practices, but to require that all counties allow the disability retiree to use accumulated sick leave prior to retirement and to prevent counties from retiring a member for disability before expiration of accrued sick leave, without the member’s consent.

Nevertheless, our recognition that the court’s statement was erroneous does not resolve the issue presented here as to whether the court and the Board correctly determined that “regular compensation” includes sick leave. In Sonoma County a disabled member covered by the MOU may “consent” to retirement before using accumulated sick leave and still recover the lump sum payment of accrued sick leave and vacation upon retirement. However, this does not mean that a member can use the sick leave and then consent to a retirement date before the sick leave was taken. Such “double-dipping” is prohibited. ( Puckett, supra, 201 Cal.App.3d at pp. 1077, 1080.)

Case law

In Ventura, supra, 16 Cal.4th 483 , the California Supreme Court addressed the question “whether various payments by the county over and above the basic salary paid to all employees in the same job classification are ‘compensation’ within the meaning of the statute which defines compensation ([Gov. Code,] § 31460), and, if so, whether those payments are also ‘compensation eamable’ ([Gov. Code,] § 31461) and thus part of a retiring employee’s ‘final compensation’ ([Gov. Code,] § 31462 or 31462.1) for purposes of calculating the amount of a pension.” (Ventura, at p. 487.) After considering the language and legislative history of the relevant provisions, the court concluded that the “Legislature did not intend to require that a county include its contributions to an employee’s deferred compensation plan in ‘compensation’ as defined in CERL.” (Ibid) However, the court also concluded that the other disputed premiums — cash payments, including “pay in lieu of annual leave accrual [and] holiday pay” — were included in final compensation. (Id. at pp. 487^188, fns. omitted.) “With the exception of overtime pay, items of ‘compensation’ paid in cash, even if not earned by all employees in the same grade or class, must be included in the ‘compensation eamable’ and ‘final compensation’ on which an employee’s pension is based.” (Id. at p. 487.)

In reaching its determination, the Supreme Court relied upon the statutory definitions of “compensation” (Gov. Code, § 31460) and “compensation eamable” (Gov. Code, § 31461). ( Ventura, supra, 16 Cal.4th at pp. 490-491.)

The Ventura court’s discussion of “annual leave” compensation is relevant here. The Supreme Court agreed with the Court of Appeal that a “longevity bonus and cashed-out accrued vacation are remuneration under [Government Code] section 31460 and, since neither is an excluded ‘advantage,’ [under the statute] both are ‘compensation.’ ” (Ventura, supra, 16 Cal.4th at p. 497 .)