In a case related to Meyers v. Board of Administration for the Federated City Employees Retirement Fund(2014) ___ F.3d ____ [2014 WL 788266], Meyers also petitioned under the California Probate Code for an order removing certain trustees from the City of San Jose's Retirement Fund. As reported above, in September 2009 and April 2010, Meyers applied to the Retirement Fund for service-connected disability retirement benefits. In connection with his applications, Meyers submitted medical opinions of medical professionals who agreed that Meyers was disabled. Nonetheless, the Retirement Fund denied his applications.
Meyers claimed the Retirement Fund trustees breached their fiduciary duties by unreasonably delaying the beneficiary claim process, by refusing to consider relevant medical evidence and by "rubber-stamping" the opinion of the City's physician and disregarding other medical evidence. Meyers further alleged the Retirement Fund refused to disburse benefits because of the City's budget crisis.
The Retirement Fund opposed Meyers's petition and argued that it is a trust under California Probate Code section 82(b)(13), thus the court lacked jurisdiction. Meyers contended that Probate Code section 15003(c) allows for the application of trust law to pension trusts. The trial court disagreed and found the Retirement Fund was not a trust under the Probate Code.
Section 82 of the Probate Code defines the word "trust", and excludes from that definition "trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind." The Court also examined Article XVI, section 17, of the California Constitution which grants retirement boards of public pension systems sole and exclusive fiduciary responsibility over the assets of the pension and to ensure the prompt delivery of benefits to participants. Though Section 17 also states that the assets of a public pension or retirement system "are trust funds," the Court held that the intent behind the characterization of public pension assets as "trusts" was not to override the exclusionary language of section 82(b)(13).
Section 15003(c) provides, in pertinent part, that trust law should apply to "an entity or relationship that is excluded from the definition of trust pursuant to statutory or common law principles, by court order or rule, or by contract." Accordingly, for trust law to apply to the Retirement Fund, there must be some statutory or common law principle, court order, or contract allowing for its application. Meyers was not able to identify any such basis, therefore the Court held that section 82(b)(13) excluded the Retirement Fund and denied Meyers's petition.
Meyers v. Retirement Fund of Fed. City Employees (2014) 223 Cal.App.4th 1201