Corriveau v. Corriveau

the retirement had been for longevity alone. The amount, if any, by which a disability pension exceeds a longevity annuity pension belongs to retiring spouse alone, because it is based on that spouse’s disability and does not diminish the community property rights of the other spouse. (21 Cal.3d at p. 787.)

Husband’s claim that his wife’s share of the community should be subject to part of the setoff was not his only quarrel. He also had a dispute with BPC, which had been joined as a party in the dissolution proceedings. (Civ. Code, § 4363.1.) He asked that its setoff be limited to the 3 percent by which the disability benefits exceeded longevity benefits. The trial court did not decide that issue, and prevented husband from presenting evidence on the point.

The Corriveau I court held that it was error to bar this evidence. It pointed out that an element of unfairness to the husband would exist “if apportionment between the two systems is possible and appropriate .”(159 Cal.App.3d at p. 842, italics in original.) The court remanded the case for further hearing on the setoff apportionment issue.

On remand, the trial court agreed with husband, and ordered BPC to reimburse him for all funds withheld on account of its setoff in excess of the 3 percent differential. BPC appeals from that order.^[2]

Discussion

A. Right to Setoff

The Los Angeles City Charter recognizes several classifications of retirement pensions. These include retirement for longevity (§ 190.11); service-connected disability (§ 190.12); and a surviving spouse’s pension (§ 190.13).

BPC bases its claim to a setoff on section 190.15.^[3] That provision permits an offset for workers’ compensation benefits paid against every class

of pension except longevity pensions that are awarded under section 190.11. The reason for the distinction is that, of all the recognized classes of pensions, only longevity pensions are funded by employee contributions. Labor Code section 3751 prohibits financing workers’ compensation benefits from employee contributions, and a setoff against an employee-financed annuity would violate that provision. (City of Los Angeles v. Industrial Acc. Com. (Fraide) (1965) 63 Cal.2d 242 .)^[4]

A city is, of course, entitled to set off the amount of workers ’ compensation benefits paid to an employee against disability retirement due the employee, so long as its retirement law so provides and the retirement benefits are not financed by employee contributions. (Symington v. City of Albany (1971) 5 Cal.3d 23 , 29 [ 95 Cal.Rptr. 206 , 485 P.2d 270 ]; Lyons v. Workmen’s Comp. Appeals Bd. (1975) 44 Cal.App.3d 1007 , 1014, 1016 [ 119 Cal.Rptr. 159 ].)

The language of section 190.15 is clear and unambiguous in affording BPC this right to offset. (Myers v. Fire & Police Pension System (1973) 32 Cal.App.3d 725 , 729 [ 108 Cal.Rptr. 429 ].) Service connected retirement benefits under the City’s present system are entirely financed by tax revenues and earnings on the City’s contributions. (See § 190.06; Lyons v. Workmen’s Comp. Appeals Bd., supra, 44 Cal.App.3d at p. 1014; Wesley v. Board of Pension Commissioners (1981) 119 Cal.App.3d 471 , 473 [ 174 Cal.Rptr. 75 ].)

Husband claims that he is being treated unfairly because, he argues, his pension is regarded as based on longevity for purposes of recognizing his wife’s Stenquist rights, but is treated as based on disability for purposes of the BPC setoff. Corriveau I recognized some unfairness in that result, and remanded the case for determination whether an apportionment of the setoff is possible and appropriate.

The record on that issue is now fully developed. Unless we are to disregard the clear language of the City charter, an apportionment is neither possible nor appropriate. It may be that husband would have netted greater benefits if he had elected to retire for longevity rather than disability, and thereby forego the 3 percent differential in favor of foreclosing BPC’s right to offset his workers’ compensation benefits.^[5] But the choice was his, and he chose to take a disability retirement.

More fundamentally, husband’s argument mistakes an important aspect of what has occurred. His retirement was for disability, and BPC is entitled to treat it for what it is. His wife’s right to her share of the pension is not based on a legal fiction that the retirement was for longevity. Instead, as Stenquist makes clear, she is entitled to an in lieu amount based on what she would have received if he had retired on the basis of longevity. That is what she received in the dissolution order.

B. Waiver*^[6]

Conclusion

The order of the trial court directing reimbursement of the amount of BPC setoff is reversed and the trial court is directed to enter a new and different order consistent with this opinion. The case is remanded for that purpose. Husband is to bear the costs on appeal.

Hanson (Thaxton), Acting P. J., and Devich, J., concurred.

The petition of respondent husband for review by the Supreme Court was denied October 15, 1986.