Public Sector Case Notes

• Jurisdiction: California,United States
• Author: Scott
• Citation: Vol. 38 No. 1
• Publication year: 2024

PUBLIC SECTOR CASE NOTES

AUTHOR^*

Scott

Tiedemann

CITY EMPLOYEE FORFEITED YEARS OF CALPERS BENEFITS

Estrada v. Public Employees' Ret. Sys., 95 Cal. App. 5th 870 (2023)

In April 2016, Elaine Estrada, an accountant and payroll administrator with the city of La Habra Heights, was charged with two felony counts: misappropriation of public funds and embezzlement by a public officer. The basis for these charges was that between 2007 and 2009, Estrada had removed her payroll deductions for her dependents' health insurance coverage.

Estrada subsequently entered into an agreement under which she pled no contest to one felony count of unauthorized computer access and agreed to pay restitution to the city. If full payment was made within six months, she would also be allowed to withdraw her felony plea and plead no contest to a misdemeanor charge, with one year of probation. Estrada acknowledged that she understood these terms and that a plea of no contest would be treated as a finding of guilt "for all purposes." She entered her plea on June 28, 2017, and then complied with the agreement; her charge was reduced from a felony to a misdemeanor. After serving one year of probation, the criminal case against Estrada was dismissed in March 2019.

Meanwhile, the city submitted a forfeiture of benefits form to CalPERS stating that Estrada had been convicted of a job-related felony. CalPERS notified Estrada that because of her felony conviction, a portion of her accrued retirement benefits was subject to forfeiture under California Government Code section 7522.72, which provides that if a public employee is convicted of a felony for conduct arising out of or in the performance of official duties, the employee forfeits certain accrued retirement benefits, which "shall remain forfeited notwithstanding any reduction in sentence or expungement of the conviction." Because of her conviction, Estrada was also deemed ineligible to return to any employment covered by CalPERS or accrue further CalPERS benefits.

Estrada appealed the forfeiture determination, arguing that a misdemeanor had replaced her felony conviction. An administrative law judge (ALJ) issued a proposed decision denying the appeal. The ALJ found that Estrada forfeited benefits from September 1, 2007—the earliest date of the commission of the felony—through June 28, 2017, the date of her felony conviction. The CalPERS' Board of Administration adopted the ALJ's decision. Estrada then filed a writ petition in superior court...