Richman v. Regents of Univ. of Cal.

DOUGLAS D. RICHMAN, Plaintiff and Respondent, v. REGENTS OF THE UNIVERSITY OF CALIFORNIA, Defendant and Appellant.

D076965

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

May 20, 2021

AMENDED ORDER MODIFYING OPINION AND DENYING REHEARING

NO CHANGE IN JUDGMENT

THE COURT:

It is ordered that the opinion filed on May 20, 2021 be modified as follows:

1. On page 2, at the end of the second full paragraph after the words " 'entitled to a total of 34.403 years of Service Credit,' " add the following sentence:

The Regents appeal, asserting the court erred as a matter of law in interpreting the UCRP and, in any event, Richman's claims are time-barred.

2. On page 2, the third full paragraph that begins "The upshot of the judgment" is deleted in its entirety.

3. On page 2, the fourth sentence of the last paragraph beginning with "Contrary to," the word "university" is replaced with "University of California (UC)" so that the sentence reads:

Contrary to the trial court's determination, on de novo review we conclude he was not an Eligible Employee because he lacked the requisite 50 percent or more University of California (UC) appointment during this period.

The respondent's petition for rehearing is denied.

There is no change in judgment.

O'ROURKE, Acting P. J.

Copies to: All parties

ORDER MODIFYING OPINION AND DENYING REHEARINGNO CHANGE IN JUDGMENT

THE COURT:

It is ordered that the opinion filed on May 20, 2021 be modified as follows:

1. On page 2, at the end of the second full paragraph after the words " 'entitled to a total of 34.403 years of Service Credit,' " add the following sentence:

The Regents appeal, asserting the court erred as a matter of law in interpreting the UCRP and, in any event, Richman's claims are time-barred.

2. On page 2, the third full paragraph that begins "The upshot of the judgment" is deleted in its entirety.

3. On page 2, the fourth sentence of the last paragraph beginning with "Contrary to," the word "university" is replaced with "University of California (UC)" so that the sentence reads:

Contrary to the trial court's determination, on de novo review we conclude he was not an Eligible Employee because he lacked the requisite 50 percent or more University of California (UC) appointment during this period.

The appellant's petition for rehearing is denied.

There is no change in judgment.

O'ROURKE, Acting P. J.

Copies to: All parties

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. 37-2018-00010040-CU-MC-CTL)

APPEAL from a judgment of the Superior Court of San Diego County, Ronald F. Frazier, Judge. Reversed with directions. Request for judicial notice denied.

Reed Smith and Raymond A. Cardozo for Defendant and Appellant.

Law Office of Michael A. Conger and Michael A. Conger for Plaintiff and Respondent.

For over 42 years, Douglas D. Richman, M.D. worked under a joint appointment as a Veterans Administration San Diego Healthcare System (VA) staff physician and also a member of the faculty at the University of California San Diego School of Medicine (UCSD). At retirement he received a VA pension based on 47 years of service credit, plus a University of California Retirement Plan (UCRP) pension based on 14.22 years of service credit.¹

In this declaratory relief action against the Regents of the University of California (Regents), Richman asserted he was entitled to an additional 20 years of UCRP service credit. After a bench trial, the superior court agreed and entered a judgment that Richman is "entitled to a total of 34.403 years of Service Credit."

The upshot of the judgment is that between the VA and the University of California (UC), Richman has 76.5 years of service credit for 42.5 years of employment. The Regents appeal, asserting the court erred as a matter of law in interpreting the UCRP and, in any event, Richman's claims are time-barred.

As we explain, the case is best analyzed in two parts. Part 1 involves the period from July 1976 (Richmond's date of hire) to 1992, when a UCRP policy change with respect to faculty like Richman—holding a joint VA and UC appointment—became effective. The primary issue for this period is whether Richman qualified as an "Eligible Employee" under the UCRP. Contrary to the trial court's determination, on de novo review we conclude he was not an Eligible Employee because he lacked the requisite 50 percent or more university appointment during this period.

Part 2 involves the period from 1992 to 2019. Eligibility is not in issue. Rather, the question is whether Richman earned "Covered Compensation" and if so, the amount each year. The trial court interpreted the UCRP to provide that all of Richman's university compensation was Covered Compensation. Again, on de novo review we conclude otherwise.

Accordingly, we will reverse the judgment with directions to enter judgment in favor of the Regents, making it unnecessary to consider whether Richman's claims are time-barred.

FACTUAL AND PROCEDURAL BACKGROUND

A. Richman's Joint VA and UC Appointments

The VA hospital is located on UCSD property. Beginning in the mid-1970's, the VA and UCSD embarked on something akin to a joint venture. The VA paid the salary of some UCSD medical school faculty. That faculty, in turn, provided patient care at the VA hospital, and used that clinical setting to train medical students. This became a nationwide "model" for cooperation between the VA and a medical school, what one witness characterized as a "win/win for both."

In June 1976, UCSD medical school had two open faculty positions. One was designated a "VA slot"; the other, a "university slot." Richman was then working in Boston, completing his training in infectious diseases. He had previously worked as a U.S. public health officer, where he accrued civil service retirement service credit. UC successfully recruited him and placed him in the VA slot.

Richman's joint VA/UC appointment is memorialized in two documents. The first, dated June 7, 1976, is from the VA—a "full time appointment" as a VA "staff physician, Laboratory Services" with an annual $31,309 salary at "Chief Grade, Step 1." The second, issued a week later, is from UCSD—anappointment as "Assistant Professor of Pathology and Medicine in Residence" and "member of the faculty of the School of Medicine." (Italics added in first quote.) The UC appointment was "concurrent with [the] appointment at the Veterans Administration Hospital at Chief Grade 1."

Richman did not know what "in Residence," meant—but he asked. He was told that "in residence" means his "primary salary" would come from a source other than state funds. In Richman's case, initially that source was the VA.² But by the early 1980's, "every penny of [his] university salary" came from the National Institutes of Health (NIH) grants that Richman generated.

Throughout his 42 years as a faculty member, Richman's salary was never paid using state funds. But that did not affect his opportunities for advancement. Apart from the funding source for salary, the criteria for appointment and advancement are the same for "in residence" faculty as for "ladder rank or tenured track."

B. The UCSD Clinical Department Compensation Plan

In 1972, the Regents adopted a Clinical Departments Compensation and Incentive plan (Compensation Plan) for UCSD medical school faculty. Participation in the Compensation Plan was "mandatory for all eligible faculty." Eligible faculty included those, like Richman, who had patient-care responsibility at an "affiliated hospital" (such as the VA) and who concurrently held a faculty appointment. Thus, Richman was in the Compensation Plan throughout his UC employment.

As summarized in the table below, the Compensation Plan is comprised of three distinct components: (1) base salary, which the university designates "X"; (2) additional compensation, "Y"; and (3) incentive compensation, "Z."

Designation

Type of Compensation

X

Base salary for teaching and university service. The

amount is set by academic rank (e.g., "assistant professor")

and step (e.g., "Step II") and applies across the UC system.

Y

Additional salary. A negotiated salary component based

upon money the faculty member generates through, for

example, grants.

Z

Incentive compensation. Income generated by

physician-faculty members, usually from treating patients.

Faculty who are not "clinically active" cannot earn Z.

In 1992, an additional compensation category was added, designated X Prime (X'), which is a multiplier of X and results in additional base salary. In 1996, another multiplier was added, designated Y Prime (Y').

To resolve this case it is unnecessary to explore the complexities arising from this type of compensation system—one that Richman characterizes as "Byzantine." Rather, the appeal turns on answering these questions:

(1) which of these compensation elements did Richman receive;

(2) when did he receive them; and

(3) which of these, if any, are "Covered Compensation" within the meaning of the UCRP.

But before answering these questions, a further discussion of Richman's joint VA/UC appointment is necessary to place these issues in fuller context.

C. Richman's 1976 UC Appointment

Richman's 1976 UCSD appointment letter states he would be "salaried 100% time by the Veterans Administration" and may also earn Z compensation as described in the Compensation Plan. According to the letter, the Compensation Plan was enclosed, but Richman testified he did not recall receiving it. In any event, whether enclosed or not, he never looked at it and claimed he "didn't know what base salary was."

The UC appointment letter says nothing about university-funded base salary (X compensation). The only type of university compensation mentioned...