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JOHN M. SKONBERG, Ba rNo 069409RICHARD H. RAHM, Ba rNo . 130728JOSHUA D. KIENITZ, Bar No. 244903LITTLER M ENDELSONA Professional Corporation650 California Street20th FloorSan Francisco, CA 94108.269 3Telephone: 415.433.1940Fax No.: 415.399.8490K. WILLIAM CURTISChief Counsel, Bar No . 095753WARREN C. STRACENERDeputy Chief Counsel, BarNo. 127921JAMES SPURLINGAssistant Chief Counsel, BarNo. 109432Department of Personnel Adm inistrationState of Califomia1515 S Street, North Building, Suite 400Sacramento, CA 95811-724 3Telephone: (916)324-0512Facsimile: (916)323-4723E-mail- curtstracener(dpa.ca.govAttorneys for PlaintiffsSTATE OF CALIFORNIA, CALIFORNIADEPARTMENT OF CORRECTIONS ANDREHABILITATION, DEPARTMENT OFPERSONNEL ADMINISTRATION, ANDDEPARTMENT OF MENTAL HEALTH

SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

CaseNo. 34-2010-00075552HE STATE OF CALIFORNIA,CALIFORNIA DEPARTMENT OFCORRECTIONS ANDREHABILITATION, DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OF MENTAL HEALTH,Plaintiffs,

CALIFORNIA CORRECTIONAL PEACEOFFICERS ASSOCIATION,Defendant.

PLAINTIFFS ' OPPOSITION TO EXPARTE APPLICA TION FO R AN ORDERSTAYING PROCEEDINGS;DECLARATION OF RICHARD H. RAHMI N S U P P O R T T H E R E O FDate:TimePlace-Judge.

December 3, 20109 0 0 a mDept. 53Hon Kevin R CulhaneExempt from Fees (Gov. Code 6103)

E t ii OH Ai C c o i i n o N?Olh FloorCA 94108 2693

415 433 1940 STATE'S OPPOSITION TO CCPOA'S EX PARTE APPLICATION

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N J > l C O d P O R k l l O N6 5 0 C a l i l o m i a S l i i e i20 th f loo rCA 94108 2693415 433 1940

I.II

III.

IV.

TABLE OF CONTENTS

INTRODUCTIONFACTUAL AND PROCEDURAL BACKGROUNDA. This Court Previously Ruled On CC PO A's Argument That It Does Not HaveJurisdiction To Hear The State's UPL Complaint ?!B. CCPO A Files A Cross-Petition That Alleges, Contrary To The A llegations OfThe FA C, That The State Has Alleged A Violation Of The Expired MOU .CCPO A'S EX PARTE APPLICATION FO ^ A STAY OF DISCOVERY SHOULDBE DENIEDA. CCPO A Fails To Demonstrate That Its Cross-Petition Con cems A"Controversy Which Is An Issue In The Action "B. CCPOA Cannot Otherwise Demonstrate Good Cause Because Its Cross-Petition Is Nothing M ore Than An Attempt To Have Th is Court ReconsiderIts Previous Ruling On Its Demuner ..CONCLUSION

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STAT E'S OPPOSITION TO CCPOA'S EX PARTE APPLICATION

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I . INTRODUCTIONDefendant Califomia Correctional Peace Officers Association ("CCPOA") purports

to file an ex parte application for a stay of all discovery pursuant to Code of Civil Procedure section1281.4, claiming that this Court has no jurisdiction to hear the claims of Plaintiff State ofC aliforn iaand its related entities (the "State") because such claims must be arbitrated pursuant to an expiredMem orandum of Understanding ("MOU") between the parties. CCPO A argued the very same issuein its demuner to the State's breach-of-contract complaint, which this Court ovenuled becausenowhere in that complaint does the State allege a breach ' of the MO U. Nevertheless, after theCourt's ruling, CCPOA filed a Cross-Petition, again making the same argument as it made in itsdem uner, that the State's claims must be arbitrated pursuant to the expired MOU As such,CCPOA's Cross-Petition is really nothing more than a motion for reconsideration of this Court'sprevious decision and ca nnot be the basis of an ex pa rt e app lication for a stay. Indeed, althoughCCPOA claims that this Court should stay the State's discovery because whether its claims aregoverned by the MOU is a "controversy which is an issue in the action," nowhere in its ex parteapplication can it point to any allegation in the State's complaint that CCPOA violated the MOUBecause CCPOA offers nothing in addition to its previous arguments before this Court, its ex parteapplication for a stay should be denied.I I . FACTUAL AND PROCEDURAL BAC KGRO UND

A. This Co urt Previously Ruled On CC PO A's Argu me nt Th at I t Does Not HaveJur isdict ion To Hear The State ' s UPL Co mplaint .Plaintiff State filed its complaint against Defendant CCPOA for a breach ofthe Union

Paid Leave Agreement ("UPL Agreement"), which the parties entered into on November 7, 2007 'See FAC Yi 5-6. The agreem ent provides that the State would c ontinu e to pay public funds for thefull salary and benefits of CCPOA-represented employees who were released on Union Paid Leaveon condition that CCPOA agreed to pay all past and future U PL debts. Id In particular, the UPL

!Oih Flooici ico CA 9410S 3693115 433 1940

' Because the Court sustained CCPOA's demurrers, with leave to amend, as to it two equitable causes of action,citations are to the State's First Amended Complaint ("FAC"), attached as Exhibit A to the Declaration of Richard HRahm ("Rahm Decl")

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650 California Sti sai!Oih F loo iCA 94106 3693415 433 1940

Agreement provides that the State will invoice CCPOA for UPL , and that "Payment will normally bemade by CCPOA within thirty (30) business days after receipt oft he invoice." FA C '^ 6 , Exh B(UPL Agreement) atTI 17. The State began sending out invoices for UPL in2008 (two years afterthe expiration ofthe MOU), which covered UPL that the State had paid for CCPOA from 2005. SeeFA C TI 8. After CC POA ran up debts under the UPL Agreement to approximately $4 million, theState filed acomplaint in this Court for, inter aha, breach of contract based on the invoices sent outfrom 2008 pursuant to the UPL Agreement. Id

CCPOA demuned to the complaint, largely arguing that this Court had no jurisdictionbecause the claims fall under aMOU that expired in2006. See Dem uner (Rahm Dec l, Exh B at-4:14-6:2). Specifically, C CPOA argued that because the expired M OU had a similar provision forUPL, the State 's "lawsuit involves a dispute about 'the interpretation, application or enforcement' ofMOU section 10.14 " In its Opposition, the State pointed out that nowhere in the complaint did itallege abreach oft he MO U. See Rahm Decl., Exh. C at 5:18-6:16 Nor could it. The State allegedthat CCPOA breached the UPL Agreement because that agreement required payment of invoiceswithin thirty days, and such invoices were not even sent to CCPOA until 2008 See FAC TI 8 Assuch, no breach by CC POA could have taken place before the MO U expired. In its Reply, CCPOAargued that it was not "clear" that the State was suing only under the UPL Agreement. See RahmDeclaration, Exh. D at 2:1-4:3.

The Court ovenuled CCPOA's argument that the State had alleged a cause of actionfor a violation of the MOU. See Rahm D ecl. TI 4. However, the Court sustained with leave to amendCCPOA's demuner tothe State's implied contract and bad faith causes of action Id When theState filed its First Amended Complaint ("FAC") to amend its equitable causes of action, it took theopportunity - although the Court did not require it to do so - to further clarify tha t it was not allegingany cause of action under the MOU . See FAC TITI9-13 (Rahm D ecl., Exh. A).

B. CC PO A Files A Cross-Petition Th at Alleges, Co ntra ry To The Allegations OfTh e FAC , Th at Th e State Has Alleged A Violation Of The Expired MO U.Instead of filing ananswer to the State's FAC, CCPOA filed a Cross-Petition and

then a First Amen ded C ross-Petition ("Cross-Petition") See Rahm Decl Ti 5 In that Cross-Petition,2.

STATE'S OPPOSITION TO CCPOA'S Y/'/i/?7'; APPLICATION

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IIlDHItl C0(>ORTION50 Cih lom is S l i ie l20ih Floo'CA 9410S 2693415 433 1940

CCPOA alleges that "Adispute has arisen between the parties conceming CCPOA's obligationsunder the MOU to reimburse the State for UPL time as defined in section 10.14 ofthe MOU."Cross-Petition at TI 13. Nowhere is there any citation to the State's FAC or even to the UPLAgreem ent. In its Verified R esponse to the Cross-Petition, the State again clarified that "the breachof obligafion upon which the State brings the present litigafion arose, inter aha, from the Union PaidLeave Agreement ("UPLAgreement") and not the expired 2001-2006 Memorandum ofUnderstanding ("M OU ")." Rahm Decl., Exh. E at 1:2-16.

Since CCPOA chose not todemur to the FAC, the State noticed the deposition ofCC PO A's Person M ost Knowledgeable with respect to the issues in the FAC . See Rahm Decl. TI 5Because CCPOA's understanding ofthe UPL provisions in the expired MOU could be relevant tothe parties intentions in drafting the provisions ofthe UPL Agreement, the State included it as one ofits PMK topics. See Declaration of Jonathan Yank in Support of Ex Parte Application ("YankDecl."), Exh. A at5-1-2. Non e oft he State's discovery seeks information about any alleged breachofthe MOU. See Rahm Decl. TI 5.I I I . CC POA 'S EX PARTE APPLICATION FOR A STAY OF DISCOVERY SHOULD BEDENIED.

A. CC PO A Fails To Dem onstrate Th at I ts Cross-Petition Conc erns A "Co ntroversyWh ich Is An Issue In The Action."CCPO A purports to have filed an ex pa rte application for a stay pursuant to Code of

Civil Procedure section 128 1, which states in relevant part, that if a petition has been filed thatconcems the arbitration of "a controversy which is an issue involved in an action or proceedingpending before a court of this State," the court shall stay that proceeding until the petition is ruledupon. See Code Civ. Pro. 1281.4. In this respect, CCPOA asserts in its Cross-Petition that theState's FAC involves such a controversy See Cross-Petition TI 13. Yet, nowhere does the Cross-Petition even reference the allegations in the FAC or the UPL Agreement, and nowhere in the FACdoes the State allege a cause of action for breach ofth e MO U.

As noted above, the UPLAgreement specifically provides that CCPOA shallreimburse the State for UPL provided to CCPOA "within thirty (30) business days after receipt ofthe invoice." UPL Agreement TI 16 (Rahm D ecl., Exh. A). As such, the only way that the State can

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allege a breach of contract under the UPL Agreement is to allege that CCPOA failed topay theinvoices within thirty days. Id In this respect, "a cause of action for breach of contract accrues atthe fime oft he breach." Reichert v Gene ral Ins Co., 68 Cal. 2d 822,' 831 (1968) As alleged in theFAC, the State did not even begin sending CCPOA invoices forUPL until 2008, some two yearsafter the MOU ex pired. See FAC TI 8 Acco rdingly, insofar as the only breach alleged in the FAC isof the UPL Agreement, which could only have taken place two years after the expiration of theMOU, Plaintiff cannot maintain that there is any "controversy which is an issue involved in anaction or proceeding pending before acourt ofthis State." See Code Civ. Pro. 1281 4 CCPOA istherefore not entitled to astay under section 1281.4.

B. CCPOA Cannot Otherwise Demonstrate Good Cause Because I ts Cross-PetitionIs Nothing More Than An Attempt To Have This Court Reconsider I ts PreviousRuling On I ts Demurrer .CCPOA argues that good cause exists under Code of Civil Procedure section 1281.4

but CCPOA is really just attempfing to have this Court reconsider its previous ruling, which is thatthe State's breach-of-contract action does not allege a breach of th e MO U In this regard, CCPO Ahas offered nothing in its Cross-Petition that was not in its moving and reply papers in support of itsdem uner on this issue. Likewise, none ofth e State's discovery requests concern any alleged breachoft he MO U. As such, CC PO A's Cross-Petition is for an improper purpose, and it cannot act as abasis for the extraordinary relief sought through an ex pa rte application.IV . CONCLUSION

This Court has already ruled that the State's breach-of-contract action is not based onany alleged violafion of the MOU but of the parties' subsequent UPL Agreement. As such,CC PO A's Cross-Pefition is essentially a motion to reconsider the Co urt's decision and should not actas a basis for a stay pursuan t to Code of Civil Procedure section 1281 4. The ex parte application fora stay should accordingly be denied.// /

H I > t C O K P O K M I O HCali lom ia Stiael20th FloorCA 94108 2693415 433 1940

In Its ex pa rt e application , CCPO A bu llet points four discovery req uests that concern UPL that was paidduring the MOU As discussed abov e, the parties' UPL Agreement provides that the State would invoice CCPOA for allpast UPL, regardless of when it was used See FAC ^ 6 Nowh ere in its FAC, or in any of its discovery requests, doesthe State allege or even imply that it is seeking damages based on a violation ofthe MOU

STATE'S OPPOSITION TO CCPOA'S EX PARTE APPLICATION

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EIII ONt l C on PORATION5 0 C i l i l o ' n i a S t f a t I20lh FloorCA 94108 2693415 433 1940

Dated: December 2, 2010 \U^\lX^RICHARD H. RAHM ^LITTLER MENDELSONA Professional CorporationAttorneys for PlaintiffsSTATE OF CALIFORNIA, CALIFORNIADEPARTMENT OF CORRECTIONS ANDREHABILITATION, DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OF M ENTAL HEALTH

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CORPORATIONCalilomia S iael20iri Flooi

CA 94)08 2693415 433 1940

DECLARATION OF R I C H A R D H. R A H M1. Richard H Rahm , declare the following-1 Iam an attorney at Littler M endelson, P C, attorneys of record for Plaintiffs

State of California, California Department of Conections andRehabilitation, Department ofPersonnel Administration, and Department ofMental Health (the "State") inthe above-entitledacfion. I am amember ingood standing ofthe State Bar, and I make this declarafion inopposition toPlainfiff California Con ectio nal Peace Officers Associafion 's ("C CP OA 's") ex pa rte application fora stay. Imake this declaration based on my ownpersonal knowledge and, if called asa witness, Icould andwould tesfify competently thereto.

2. Attached hereto as Exhibit A for the Co urt's convenience is a true and correctcopy ofth e State's First Amend ed Verified Com plaint ("FAC"). Exhibit B to the FAC is a true andcorrect copy ofthe Union Paid Leave Agreement ("UPL Agreement").

3. Attached hereto as Exhibit B for the Court's convenience is a true and correctcopy of CCPOA's Demuner to the State's complaint. Attached hereto as Exhibit C is a true andcorrect copy of th e State 's opposition brief to that demurrer. Attached hereto as Exhibit D is a trueand conect copy of CCPOA's reply brief in support of its demuner.

4. At the hearing on CCPOA's demurrer tothe State's complaint, the Courtovenuled CCPOA's demurrer based on the argument that the State hadalleged a cause of action fora violation ofthe MOU . However, the Court sustained with leave to amend CCPOA's demurrer tothe State's implied contract and bad faith causes of action When the State filed its First AmendedComplaint ("FAC") to amend its equitable causes of action, it took the opportunity - although theCourt did not require it to do so- to further clarify that it was not alleging any cause of action underthe MOU

5. Attached hereto as Exhibit E is a true and conect copy of the State'sResponse to CCPOA's First Amended Verified Cross Pefifion ("Cross-Petition"), which CCPOAfiled instead of answering the State's FAC. Since CCPOA chose not todemur to theFAC, the Statenoticed the deposition of CCPOA'S'Person Most Knowledgeable with respect to the issues in theFAC. Because CCPOA's understanding ofthe UPL provisions inthe expired MOU could be

STATE'S OPPOSITION TO CCPOA'S EX PARTE APPUCkTlOYi

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H i t l C O R P OR D T I OH650 Ca l i fomia S i ' t a l20lh FloorCA 94108 2693415 433 1340

relevant to the parties intentions in drafting the provisions o fth e UPL Agreement, the State includedit as one of its PMK topics. Nev ertheless, none ofth e Sta te's discovery seeks informafion about anyalleged breach ofthe MOU.

I declare under penalty ofperjury under the laws of the State ofCalifomia that theforegoing is true and conect, and that this Declaration was executed this 2nd day of December,2010, at San Francisco, Califomia.

Richard H Rahm

Firmwide 98963239 1 052714 1011

STATE'S OPPOSITION TO CCPOA'S EX PARTE APPLICATION

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UlTTLER MENOB.SON, WCl l lMl imt l l

JO H N M . S K O N B E R G , B a r N o . 069409RICHARD H. RA.EM, Bar No. 130728JOSHUA D. KIENITZ, Bar No. 244903LITTLER MENDELSONA Professional Corporafion650 Califomia Street20th Floo rSan Francisco, C A 94108.2693Telephone: 415.433.1940FaxNo.i 415.399.8490K. WILLIAM CUHTISChief Counsel, BarN o. 095753WARREl^ C. STRACENERDeputy Chief Counsel, BarNo. 127921JAMES SPURLMGAssistant Chief Counsel, Bar No. 109432Department of Personnel AdministrationState o f California.'1515 S Street Nerfi Building, Suite 400Sacramento, CA 95811-7243Telephone: (916) 324-0512Facsimile: (916)323-4723E-mail: curtstraceiier@dpa.ca.gov Attomeys for PlaintiffsSTATE OF CALIFORNIA, CALIFORMADEPARTMENT O F CORRECTIONS ANDREHABILITATION, DEPARTMENT OFPERSONNEL ADMINISTRATION, ANt>DEPARTMENT OF MENTAL HEALTH

FfLEOSuperio?- Co isri Qf CalifcsmSdsrgmente09133/21119tnmersz^ 1 __ _., DepuCasa Mom bar: '34-2010-00076552

4lS 433 1949

SUPERIOR COURT OF THE STATE OF CALIFORNIACOUKTY OF SACRAMENTO

THE STATE OF CALIFORNIA,CALIFORNIA DEPARTMENT OFCORRECTIONS AN DREH AB ILITA Tiail, DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OT MENTAL HEALTH,Plaintiffs,

CALIFORNIA COIIRECTIONAL PEA CEOFFICERS ASSOCIATION,Defendant.

CaseNo. 34-2010-00075552FIRST AMENDED VE RIFIEDCOMPLAINT FOR DAMAGES

Exempt from Fees (Gov. Code 6103)

F I R S T A M E N D E D V E I ^ F I E D C O M P L A I N T F O R D A M A G E S

mailto:curtstraceiier@dpa.ca.govmailto:curtstraceiier@dpa.ca.gov

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650 Csl i fo in ia S i rae t20lh FloorCA 9410B 2693415 433 1940

NATURE OF ACTION1. Plaintiff State of Califomia, through its agents. Plaintiffs Califomi

Department ofCorrections and Rehabilitation ("CDCR"), Department ofPersonnel Administration("DPA"), andDepartment of Mental Health ("DMH") (collectively, the "State"), entered intocontractual agreements with Defendant Califomia Conectional Peace Officers Association("CCPOA") whereby the State would release certain CCPOA membersfi-omwork, with full pay andbenefits, for the purpose of engaging in CCPOA union activities. Time off under these agreem entis refen ed to as Union Paid Leave ("UPL "). The Sta te's promise to pay for these leaves of absencehowever, has always been expressly conditioned on CCPOA's reimbursing the State for the monieit expended on such leaves. Although the State has, on numerous occasions, demandedreimbursement, CCPOA has reimbursed the State less than 5% of the approximately $4 million theState has expended on U PL.

2. Article XVI, Section 6 of the Califomia Constitution states, in relevant par"[t]he Legislature shall have no power to give or to lend, or authorize the giving or lending, ... authorize the making of any gift, of any public money or thing of value to any individual, municipaor other corporation whatever[.]" In accordance with the requirements of the CaliforniaConstitution, and pursuant to Labor Code section 1126, theState now seeks monetary damageand/or restitution for CCPOA's refusal to reimburse it for themonies it haspaid for CCPOAmembers ' UPL.

T H E P A R T I E S3. Plaintiff State is, and at all relevant times was, the employer of all California

Correctional Peace Officers, including, but not limited to. Correctional Officers^ Medical TechnicaAssistants, and affiliated supervisory employees ("Correctional Peace Officers"). Plaintiffs CD CRand DMH are, and at all relevant times were, the appointing agencies for all Correctional PeaceOfficers. Plaintiff DP A is, and at all relevant times was, the state agency designated as threpresentative ofthe Governor pursuant toGovernment Code section 3517, with the authority to

2.FIRST AMENDED VERIFIED COMPLAINT FOR DAMAGES

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negotiate memoranda of understanding ("MOUs") and other contracts with labor unions such asCCPOA, which are binding on the State.

4. Defendant CCPOA is, and at all relevant times was, an unincorporatedassociation and the exclusive andnon-exclusive representative of Correctional Peace Officersworking inCalifomia correctional facilities.

F A C T S C O M M O N TOALL CAUSES OF ACTION5. The State and CCPOA entered into anMOUwhereby, pursuant to Section

10.14, the State agreed to pay public funds for the full salary and benefits of CCPOA-representedemployees onUPL, in exchange for which, CCPOA expressly agreed toreimburse the State for thcomplete and actual cost of providing such UPLwithin 30 calendar days of receiving a billingstatement. Atme and correct copy ofSection 10.14 ofthe 2001-2006 MOU isattached as Exhibit Ato this Com plaint. After the expiration ofthe 2001-2006 MOU, the parties continued to operateconsistent with the provisions of Section 10.14, with CCPOA continuing to request that CDCR andDMH release employees for UPL, together with a request to bebilled for the UPL costs, and CDCRand DMH continuing to release such employees.

6. In the absence of a successor MOU, the parties, on or about November 72007, entered into a written agreement regarding UPL, which included, inter aha, past and futurereimbursements of UPL ("UPL Agreement"). Atme and correct copy of th e UPLAgreement iattached as Exhibit B to the Complaint. The UPL Agreement provided that the State would continueto provide UPL, in exchange for which, CCPOA would reimburse the State for the "totacompensation cost" of both unpaid past and future UPL, and that CCPOA would pay the State'UPL invoices within thirty days after it received them. "Total com pensation cost" in the UPAgreement is defined as "any cost, benefit, or obligation the State employer incurs for theseindividuals as employees of the State, including, but not limited to, all wages, payroll related costand contributions, payroll taxes, employer paid contributions toretirement, health benefits and thvalue ofany leave accmals eamed while on UPL." ^

CanpoKtTioHe S OC . I I t o r n i . S K . a l20th FloorCA 94106 2693415 433 1940 FIRST AMENDED VERIFIED COMPLAINT FOR DAMAGES

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650 Ca l i fo rn ia S i re t l20lh FloorFranc iico CA 94108 2693415 433 1940

7. The State and CCPO A initially agreed that the UPL Agreem ent would last fo12 mo nths, but the parties expressly agreed in writing to continue it imtil January 31 , 2009 . A tm eand con ect co py of that written agreement is attached hereto as Exhibit C. Thereafter, the partieorally agreed to continue to operate in accordance with the provisions of the UPL Agreement, withCCPOA continuing to request that CDCR and DMH release employees for UPL, together with anexpress request that the State bill it for the UPL costs, and CDCR and DMH continuing to releasesuch employees and invoicing CCPOA for the "total compensation costs" ofthe UPL.

8. Beginning in 2008 , the State sent invoices pursuant to the UPL Agreem ent toCC POA for the total compensation costs attributable to UPL from F ebm ary 2006 to the present. Asof Decem ber 2009, CDCR had unpaid invoices totaling $4,044 ,483.72. Consequ ently, on January28 , 2010, the State sent CCPOA a demand that, unless CCPOA paid at least $2,000,000 of theoutstanding UPL invoices and agreed to a payment schedule ofthe remaining UPL balance, the Statewould file an action against CCPOA to collect the unpaid UPL balance. The State also sent anothedemand to CCPOA on January 28, 2010, this one stating that unless CCPOA paid the last UPLinvoice for $56,789.92 (for October 2009 UPL), it would terminate the UPL Ag reement. As oMarch 30, 2010 the amoimt accmed for unpaid UPL invoices involving both C DCR and DMH total$4,052,04 6.65. UPL is currently being billed in the amoimt of approximately $56,000 per monthSubsequent to the above-referenced demand letters, CCPOA has made some payments towards itUPL balance, which we re credited towards its unpaid UPL balan ce. That balance still amou nts toover $4 million.

F IRST CAUSE OF ACTION(Breach of Express Contract)9. The State realleges and incorporates by reference each and every allegation

contained in Paragraphs 1-8 as though set forth fully herein.10. The State and CCPOA entered into the UPL Agreement in which the partie

agreed that CCPOA would reimburse the State for the actual compensation costs of CCPOA-represented employe es on UPL within thirty days of receipt of invoice. After the UPL Agreem enexpired, the parties orally agreed to operate in accordance with the provisions of the UPL

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MENDELSONiONKi CORPORATION

650 Cililoin ia Sraat20lh FloorCA 94108 2693

415 433 1S40

Agreement, such that the State would continue toprovide UPL tocertain, requested, CCPOArepresented employees to perform CCPOA business, in exchange for which, CCPOA wouldreimburse the State for the total compensation costs of the UPL within thirty days of receipt oinvoice.

11. TheState hasperformed all conditions, covenants, andpromises required by ito beperformed in accordance with the terms andconditions ofthe written UPL Agreement and thsubsequent oral agreement, including, pursuant to CCPOA's request, providing employees with UPLat a cost of approximately $4million, forwhich it has invoiced CCPO A.

12. The State demanded that CCPOA perform its obligations under the writtenUPL Agreement and the subsequent oral agreement and, inparticular, to reimburse the State for theactual compensation costs of employees onUPL. Todate, CCPO A has paid less than 5% o fthe totaamount ofthe actual compensation costs of UPL invoiced.

13. As a proximate result of CCPOA's material breach ofthe contract, the Stathas incurred damages inexcess of the minimum jurisdictional amounts of this Court, the exacamount to bedetermined at trial.

SECOND CAUSE OF A C T I O N(Breach of Implied- In-Fact Contract)

14. The State realleges and incorporates by reference each and every allegationcontained inParagraphs 3-4 as though set forth fully herein.

15. Foraperiod of at least twoyears prior to the filing of the present action, theState and CCPOA engaged in a course of conduct whereby CCPOA requested, and continues torequest, the State to release CCPOA-represented employees with full pay andbenefits for purposeof conducting CCPOA business. The State has honored these requests and has released, andcontinues to release, CCPOA-represented employees onUPL. In retum for the State releasing theseemployees onUPL, CCPOA has requested, andcontinues torequest, that the State invoice it for thactual compensation costs ofthe UPL'. This course of conduct created an implied-in-fact contract.

16. The State demanded that CCPOA perfonn its obligations under the impliedin-fact contract and, in particular, that it reimburse the State for the actual compensation costs o

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ER MENDELSONCORPORATION

650 Calilomia Sliaal20lh FloorCA 9410S 2693

415 433 1940

CCPO A-represented em ployees onUPL. Todate, CCPO A has paid less than 5% o fthe total amounofthe actual compensation costs of UPL invoiced.

17. As a proximate result ofCCPOA's material breach of the implied-in-faccontract, the State has incurred damages in excess of the minimum jurisdictional amounts of thiCourt, theexact amoimt to bedetermined at trial.

THIRD CAUSE OF A C T I O N(Breach of the Covenant of Good Fai th andFair Dealing)18. The State realleges and incorporates by reference each and every allegation

contained inParagraphs 1-8, and 10, as though set forth fully herein.19. TheState andCCPOA entered into thewritten UPL Agreement and

subsequently, into anoral agreement toextend the UPL Agreement, such that CCPOA wouldreimburse the State for the actual compensation costs of CCPOA-represented employees on UPLwithin thirty days of receipt of invoice. Califomia law recognizes an implied covenant of good faithand fair dealing in every con tract. The covenant is to the effect that neither party to thecontract wido anything deliberately todeprive the other ofthe benefits ofthe agreement.

20. TheState has performed allconditions, covenants, andpromises required by ito be performed in accordance with the terms and conditions of the contract, including, pursuant toCCPOA's request, providing CCPOA-represented employees with UPL at acost of approximately$4 million, for which it has invoiced C CPOA .

21 . The State demanded that CCPOA perform itsobligations under the UPLAgreement and, inparticular, that it reimburse the State for the actual compensation costs ofemployees on UPL. CCPOA has contended and continues to contend that the State's invoices arinaccurate and, based on this contention, has paid less than 5% of the total amount of the actuacompensation costs of UPL invoiced. Nevertheless, CCPOA has refused to engage in good faithdiscussions to resolve any alleged inaccuracies inthe invoices. By continuing to dispute thaccuracy of the invoices, by refusing to engage in good faith discussions to resolve any disputeconceming the invoices, and by using the alleged inaccuracy as an excuse not to pay the invoicesCCPOA has breached thecovenant of good faith andfair dealing.

6.FIRST AMENDED V ERIFIED COMPLAINT FOR DAMAGES

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22 . As a proximate result of CCPOA's breach of the covenant of good faith andfair dealing, the State has incurred damages in excess ofthe minimum jurisdictional amounts ofthisCourt, the exact amoun t to be determined at trial

FOURTH CAUSE OF ACTION(Unjust En richm ent - R estitution)23 The State realleges and incorporates by reference each and every allegation

contained in Paragraphs 3-4 as though set forth fully herein.24 . At CCPOA's request, the State has provided, and continues to provide,

publicly-funded UPL for certain CCPOA-represented employees so that they may perform CCPOAbusiness, based on the CCPOA's promise, and the State's expectation, that CCPOA would reimbursethe State for the actual compensation costs of the UPL. CCPO A vo luntarily accepted the benefit ofthe State's actions by requesting and accepting the services of those employees who took UPL.

25 Despite its promises to reimburse the State for the actual compensation costsof CCPOA-represented employees on UPL, and despite the fact that CCPOA continued to requestand accept the services of these employees on UPL, CCPOA failed to reimburse the State for theactual compensation costs of these employees on UPL pursuant to a course of conduct establishedbetween the State and CCPOA.

26 As a result ofth e foregoing, CCPO A has been and will be unjustiy enriched atthe expense of the State in excess of the minimum jurisdictional amounts of this Court, the exactaccount to be determined at trial

P R A Y E R F O R R E L I E FWHEREFORE, the State prays forjudgment and relief as follows:1. For actual, compensatory, and/or restitutionary damag es in an amount to be

proven at trial;

II IIII

2. For interest on such dam ages at the legal rate;

COR.oa .HON650 Ca l i lomia Sn a i l20111 Floofitco CA 94106 2693415 433 1940

7.FIRST AMENDED VERIFIED COMPLAINT FOR DAMAGES

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3. For attorneys fees and costs of suit incurred herein,4 For such further or other relief as the Court deems just and proper.

Dated: September Z^. 2010RICHARD H. RAHMLITTLER MENDELSONA Professional CorporationAttorneys for PlaintiffsSTATE OF CALIFORNIA, CALIFORNIADEPARTMENT OF CORRECTIONS ANDREHABILITATION, DEPARTMENTPERSONNEL OF ADMINISTRATION, andDEPARTMENT OF MENTAL HEALTH

rettlO NAt ColtPORATIOH650 Cal i lo r n iB SK ea l70 ih Floo iCA 94108 26934tS 433 1940

8.FIRST AMENDED VERIFIED COMPLAINT FOR DAMAGES

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VERIFICATIONI, Steve Caruso, declare:I am the Assistant Secretary of Labor Relations at the C alifornia Department of

Corrections and Rehabilitation ofthe State ofCalifornia, which is a Plaintiff in the above-entitledaction, and I have been authorized to make this verification on its behalf.

I have read the foregoing Complaint on file herein and know the contents thereof.The same is true of my own knowledge, except as to those matters which are therein stated oninformation and belief, and, as to those m atters, I believe them to be true.

I declare under penalty of perjury under the laws of the State of Califomia that theforegoing is tme and correct.

Executed at Sacramento, Califomia on this _f;;2_ day of September, 2010.%-/\.nSteve Caruso

Firmwide 97457312 1 052714 1011

LITTLER MENDELSONA Pkori i i iOHU CaiPoitTiONISO CalKofAla Sltti ll l i t l l F lMlS a n F i t n d t e a CA I I I B I 7 6 i i1)5 433 1940 FIRST AMENDED VERIFIED CPMPLAINT FOR DAMAGES

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EXHIBIT A

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""TiSSL.^

AGREEMENTBetween

STATE OF CALIFORNIAAND

CALIFORNIA CORRECTIONALPEACE OFHCERS ASSOCIATION

CoveimgBARGAINING UNIT 6

CORRECTIONS

July 1,2001TbougK

July 2, 2006

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10.14 Un ion Pa id LeaveA. CCPOA shall have the choice of requesting an unpaid leave of absence or a paid leave of absence(union leave) for a CCPOA bargaining unit officialor steward. An unpaid leave of absence may begranted by the State pursuant toth e unpaid leaveof absence provisions In this MOU A union leavemay also be granted at the discretion of the affected department head or deslgriee In accordancevirlth tbe following:1. Tbe department head or designee receives awritten request, signed by the employee andthe authorized CCPOA represen tative, two (2)weeks prior to the planned effective date ofthe leave.2. A union leave shall assure an employee theright lo his/her former position upon termin ation of the leave. The temi "former position"is defined In Government Code Section18522.3. CCPOA agrees to reimburse the affecteddepartment{s) for actual expenses related t othe affected employee's salary and benefitsfor all tha time the employee Is off on a unionleave, withm thirty (30) calendar days of receiving a billing statement.4. The affected employee shall have no right toreturn from a union leave earlier than theagreed upon date without the approval of thoemployee's Appointing A uthority.5 Except in emergencies or layoff situation s, aunion leave shall not be terminated by the department head or designee prior to the expiration date.6. Employees on a union leave shall suffer no

loss of compensation or b enefits.7. Whether or not time for a union leave iscounted tor merit purposes shall be determined by SPB and such determination shallnot be gnevable or a rbitrable.

103

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8 Employees on union leave under this provi-,sion and CCPOA shall wa/ve any and all claimsagainst the Stato for Worf

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EXHIBIT B

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.'iNov, 5. 2007 4:07PM CCPOA - Labor Department No. 6539 P. 2

Union Pa id Leave Agreemen t1 . This agreement is entered Into between California Correctional Peace Officers'Association ("CCPOA"), the Califomia Department o f Con-ectiona and Rehabilitation("CDCR"), the Department o f Mental Health ("DMH") and the Califomia Department o fPersonnel Administration ("DPA").2. The following 1 3 named union officials who have been on long term union leave fromtheir posit ions with CDC R m ay remain off work o n UPL while in their oflicial capacitieswith CCPOA.

Kevin RaymondPerry SpetliJim MartinDon (Joe) BaumanLance CorcoranRaul (RC) GarciaMilce JimenezIVIarty A rolanStephen WallcerChuck AlexanderChuok HeltonLouie AdameLen McLeod

3. None o f the above union officials shall be required t o submit a n attendance fonn to theState provided t h e tenms oft his agreement are met. CCP OA m ay replace any individuallisted in paragraph 2 with another Unit 6 member. However, once removed, th e unionofficial cannot b e placed back on th e list for a minimum o f 120 days and is not entitled toany short- temi re lease.4. An y e n ^ lo y e e o n UPL will continue to be paid as if working for the State and CCPOAagrees to reimburse th e State for the "total conqsensation cosf fo r each individualIdentified in paragraph 2, or a substitute, who is on long ten n UPL. "Total compensation'includes any cost, benelit or obligation the State employer incurs fo r these individuals asemployees ofthe State, Including, but not limited to, all wages, payroll related costs andcontributions, payroll taxes, employer paid contributions to retirement, health benefits,and the value o f any leave accruals eamed while on UPL.5. The individuals o n long-term UPL wiil continue to accrue State sen/ice credit fo r purposesof State and Barga ining Unit 6 seniority with no loss o f compensat ion or benefits.6. Each official o n long-term UPL will be placed in a "Saturday/Sunday/Hoiiday OfTschedule a t his/her respective institution.7. In the eve nl any person who is on long-temi UPL under this agreenr^nt must return towork with CDCR, that person shall be entitled to "bid" (i.e., exercise a right o f "superseniority") t o any rank and file position at the institution he/she was released fi-om. The Ii

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Nov. .5. 2007 4:07PM CCPOA - labo r Department No. 6539 P. 3

retuming un ion m ember sha ll have a right to return to his/her forme r position with CDCRupon temnination of th leave. The term "fom ier position" is define d in Governnnent CodeSection 18522, as that section reads on the date ofthis agreem ent. However, "formerposition" shall not mean a position with the identical position number that the em ployeeoccupied before he/she went on leave.

8. CCPOA must subm it a letter or memorandum to CDCR's Office of Labor Relationsstating the period of time union oflicials on UPL intend to be on long-term union paidleave. The duration of long-term union paid leave may not exceed the duration o fthisagreement.9. CCPOA also agrees to reimburse the State for the "total compensation c os f fbr unionmembers and officials wh o are released on UPL on a short-term basis for union andrepresentational activities.10. CCPOA may utilize RTB instead of UPL for activists on either short-tenn or long-termunion leave, consistent with the terms ofth e RTB settlement agreement in CCPOA vState Sacramento Superior Court No. 05AS05470, so long as sufficient balances exist inthe bank.11 . Short-temi U PL is de fined as a request for leave of 30 days or less.12. Ail requests for short-term UPL w iil nomnally be made to CD CR's Office o f LaborRelations at least 48 hours in advance of th e requested date off. CDC R Labor Relationsmust approve suc h requests, if CCPOA requests UPL for chapter presidents of arecurring type, such a s time off one day per week, the ch apter pres ident s hall submit amonthly sc hed ule to Oie designated management official at his/her ins titution reflectingthe proposed dates of leave.13. In considering short term UPL requests, CDCR, may take into a ccount, among otherthings, the number of union officials already off on UPL from the institution, existingvacancies at the institution, and work load at tiie institution, if the union member who isreleased on short term UPL is actually filled behind as an overtime assignment, CCPOAagrees to reimburse the State at the overtime rate on hourly salary only (i.e., the costs ofbenefits will not be charged at an overtime rate)' The State agrees to provide CCPOAwith documentation showing that such a position was a ctually filled using overtime.Requests for short-temn UPL shall not be unreasonably denied.14. individuals who take short-temn UPL shall complete and subm it the appropriateattendance docume nt requested by the designated manageme nt official at his/herinstitution. Typ ically th is is a "998" or "634 attendance form.15. Unless this agreem ent is tenninated by one of the parties, the lerm of this agreement toprovide for UP L and asso dated reimbursement to the State will be for 12 months or untilthe Legislature approves a successor Mem orandum of Understanding ("MOU"), which

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Nov. 5. 2007 4:07PM CCPOA - Labor Department No. 6539 P. 4

ever occurs first. Either party may terminate this agreement upo n thirty (30) calendardays written notice to the other.16. CCPOA agree s to make timely payment to CDCR regarding all invoices for UPL andinvoices regarding announts due under the RTB settlement agreement (wherein CCPOA'suse of "RTB leav e" exceeds the am ount of leave in the "bank'O. Payment will nonna iiy bemade by CC POA within thirty (30) business days after receipt of the invoice.17. This agreement may aiso be terminated, officials ordered to return to work, and futureUPL denied sho uld CCPOA fail to make timely payment on UPL Invoices submitted byCDCR to CC POA . DPA or CDCR shall provide CCPOA with thirty (30) calendar dayswritten notice in the event of temnination ofthis agreement under this provision. T heparties agre e to nnake good faith efforts to resolve any dispu tes ov er Invoices or payment.18. CCPOA a nd CD CR agree that within twenty-one (21) calendar days from the date thisagreement Is sign ed, representatives from each will meet and comm ence a reconciliationofthe Release Time Bank ("RTB") balance. Further, in accord with the RTB settlementagreement regarding CCPOA v. State Sacramento Su perior Court No. 05AS05470,CCPOA w ill make payment on any amount owing to the State in the event the union hasused more leav e than it had in the bank. (See paragraph 4 o f the R TB R eformationsettlement)19. In the event an emp loyee on UPL files a Workers' Com pensation claim against the Stateof Caiifornia or any agency thereof, for an injury or injuries sustained while on a UPL,CCPOA agrees to indemnlly and hold hamnless the State ofCa lifornia or agenciesthereof, from both W orkers' Compensation liability and any cos ts of legal defenseincun-ed as a result o fth e filing of the claim.20 . Nothing in this agreement is intended nor shall be construed to modify or in any way alterthe State's last best and final offer ("LBFO") orth e temns implem ented by the Statefollowing CC POA 's rejection ofth e State's LBFO. Nothing in this agreement is intendednor shall be construed to extend or revive any temi of the parties' expired 2001-2006MOU an d this agre eme nt sh all not be used as a past practice in future negotiations for asuccessor MO U.21 . CCPOA w aives any claim that the State violated any provision of law, contract or pastpractice by requiring the union to reimburse the State for the release of union m embersor by Implementing the State's LBFO that ended various forms o f union leave. Nothing inthis agreement s hall be construed as an admission by either party or used as evidence inany pending action as o fth e date ofth is agreement, If this agreem enl is ended by theState within 180 days oft he execution ofthis agreement this waiver will also end (unless

the State's basis for ending the agreement is CCPOA's Allu re to time ly pay amountsowing under this agreement); If, however, this agreement lasts at least 180 days, then thewaiver will becom e penmanent.

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. N o v , .S. 2 0 0 7 4 ; 0 7 P M C C P O A - L a b o r D e p a r t m e n t N o . 6 5 3 9 P. 5

22. This agreement is effective October 1,2007.

Charles L. Alexander, Jr,Stata Executive V ice-Presklent,

/ C luncan Fallon, / /

CDCR Assistant^ecretary of Labor Relations

Candice Murch,Employee Relations Officer, DMH

/ A ^ ' 0 7

/ / . r-07

J i A z ^ l .

i i i lh

AAIDeputy Chtef Counsel

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EXHIBIT C

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UNION PAID LEAV EEXTENSIONThe undersigned hereby agree to extend the October 2007 Union Paid Leave Agreement (UPLAgreement) that was signed by tlie respective parties in November 2007 This extension is for allterms as outlined in ttie UPL Agreement and expires January 31, 2009

Matthew Gate, SecretaryCDCR

DPA

CCPOA agrees to the extension of the UPL Agreement but expressly DOES NOT waive the right toraise any disputes or defenses that CCPOA may have now, or in the future, as to the interpretationof this agreement

Charles AlexanderExecutive V ice-PresidentCCPOA

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45S7g910II12131415IS1718192a21222124-25262728

LITTLER MLNDELSCMA PROrdltO ltAL CORPOBOSMiS&OC.l i l o in .a S i tae ]JOih f i co tSan F'anciico CA 9 4 1 0 t S S 3

JOHN M. SKONBERG, BaxNo. 069409RICHARD H. RAHM, Bar ^ o . 130728JOSHUA D. KIENTTZ, Bar No. 244903AM Y MORGENSTERN, Bar No. 267412LITTLER MENDELSONA Professional Corporation650 Califomia Street20t ii FloorSan Francisco, CA 94108.2693Telephone: 415.433.1940Facsiinile: 415399.8490K. l ILLLAMCURTISChief Counsel, BarN o. 095753WARREN C.STRACENERDeputy Chief Counsel, Bar llo . 127921JAIMES SPURLING-Assistant Chief Counsel, BarNo. 109432Department of Perso3nnel AdministrationState ofCalifomia1515 S Street, North Euilding, Suite 400Sacramento, CA 95811-7243Telphone: 916.324.0512Facsimile: 916323.4723Atbomeys for PlaintiffsST ^TE OF CALIFD INIA, CALIFORNIADEPARTMENT OF CORRECTIONS ANDREHABILITATION", DEPARTMENT OFPERSONNEL ADmNISTEATION, andDEPARTMENT OF MENTAL HEALTH

FfLEDSupErior Court C3l CallfomSstfer^menloQSl23/2l l iQa vC a s e f umbar: Depu34-2010-00975552

SUPEMOR COURT QI^THE STATE OF CALIFORNIACOUNTS OF SACRAMENTO

THE STATE OF CALIFORNIA,CAJ.IFORNL\ DEPARTMENT OFCOILRECTIONS AMDREHABILITATION", DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OF MENTAL HEALTH,

Plaintiffs,V.

CALIFORNIA CORRECTIONAL PEACEOFPICERS ASSGCIATIOIS,Defendsuit.

CaseNo. 34-2010-00075552PROOF OF SERVICE

Complaint Filed: April 14, 2010Trial Date: None Set

34-2010-00075552PROOF OF SERVICE

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S I O M A l C o R P O R l T I O K650 Cilifotnia Suetl20ll> Floorranciico CA 9410S 2693t \ i 433 tS40

P R O O F O F S E R V I C EI am a resident of the State of Califomia, over the age of eighteen years, and not

party to the within action. My business address is 650 Califomia Street, 20th Floor, San FranciscoCalifomia 9410 8.2693 . On September 23 , 201 0,1 served the within docum ent(s):

> F I R S T A ME N D E D V E R I F I E D C O M P L A I N T F O R D A MA G E Sn AS A CO UR TE SY by facsimile transmission on that date. This document wastransmitted by using a facsimile machine that complies with Califomia Rules ofCourt Rule 2003(3), telephone number 415.399.8490. The transmission wasreported as complete and without error. The names and facsimile num bers of theperson(s) served are as set forth below.j-] by placing a true copy of the document(s) listed above for collection and mailing

following the firm's ordinary business practice in a sealed envelope with postagethereon fiilly prepaid for deposit in the United States mail at San Francisco,Califomia addressed as set forth below.Q by depositing a true copy of the same enclosed in a sealed envelope, with deliveryfees provided for, in an ovemigh t d elivery service pick up box or office designatedfor ove might delivery, and addressed as set forth below .[X ] by personally delivering (First Legal Support Services) a copy of thedocument(s) listed above to the person(s) at the address(es) set forth below.

Counsel for Defendant CCPOAGregg McLean Adam, Esq.Oriet Cohen-Supple, Esq.Natalie Leonard, Esq.Marie A. Penny, Esq.Carrol l , Burdick & McDonough LLP44 Montgomery Street, Suite 400San Francisco, CA 94104Phone- (415) 989-5900 / Fax- (415) 989-0932Email- sadam(a).cbmlaw com; ocohen(a),cbmlaw com:,nleonard(^,cbm law com; mtennv(a),cbmlaw com

I am readily familiar with the firm's practice of collection and processingcorrespondence for mailing and for shipping via ovemight delivery service. Under that practice iwould be deposited with the U.S. Postal Service or if an ovemight delivery service shipmentdeposited in an ovem ight delivery service pick-up box or office on the same day with postage or feethereon fully prepaid in the ordinary course of business.

2. 34-2010-00075552PROOF OF SERVICE

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I declare imder penalty ofperjury under the laws of the State ofCalifomia that thabove is true and correct. Executed on September 23 , 2010 , at San Francisco, Califomia.

FIRMWIDE 97155378 1 052714.1011

M.l COK.OK.TION6 50 C . l i f o t n i i S l i e . l10th f lootCA 9 . 1 0 B 2 E 9 3 |

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Gregg McLean Adam, No. 203436Oriet Cohen-Supple, No. 206781Natalie Leonard, No. 236634M arie A. Tenny, No . 262670

- '

"ece/venC A R R O L L , B U R D IC K & M c D O N O U G H LLP UA\, * . ^Attomeys at Law44 Montgomery Street, Suite 400San Francisco, CA 94104Telephone: 415.989.5900Facsimile: 415.989.0932Email: gadam(cbmlaw.comocohen@cbmlaw.comnleonard@cbmlaw.com mtenny@cbmlaw. comDaniel M. Lindsay, No. 142895C A L I F O R N I A C O R R E C T I O N A LP E A C E O F F I C E R S ' A S S O C IA T I O N755 Riverpoint D rive, Suite 200West Sacramento, CA 95605-1634Telephone: 916.372.6060Facsimile: 916.340.9372E-Mail: dan.lindsay@ccpoa.org

- " ' i / Z O n"^'' '^mu,on '

Attomeys for Defendant Califomia Correctional PeaceOfficers' AssociationSUPERIOR COU RT OF THE STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

THE STATE OF CALIFORNIA,CALIFORNIA D EPARTMENT OFCORRECTIONS ANDREHABILITATION, DEPARTMENTOF PERSONNELADMINISTRATION, andDEPARTMENT OF MENTALHEALTH,Plaintiffs,

v.CALIFORNIA CORRECTIONALPEACE OFFICER S' ASSOCIATION,

Defendant.

CBM-SF\SF479521 2C C P O A ' S M P A I N S U P P O R T O F D E MU R K

No. 34-2010-00075552D E F E N D A N T C A L I F O R N I A C O R R E C T I O N A LP E A C E O F F I C E R S ' A S S O C I A T IO N ' SM E M O R A N D U M O F P O I N T S A NDA U T H O R I T I E S I N S U P P O R T O F D E M U R R E RTO P L A I N T I F F S ' V E R I F I E D C O M P L A I N TFOR DAMAGESDate: September 7, 2010Time: 2:00Dept.: 53Judge: Hon. Loren E. McM asterReservation No. 1372668Complaint Filed: April 14, 2010Trial Date: None set

E R T O V E R I F I E D C O M P L A I N T F O R D A M A G E S

mailto:ocohen@cbmlaw.commailto:nleonard@cbmlaw.commailto:dan.lindsay@ccpoa.orgmailto:dan.lindsay@ccpoa.orgmailto:nleonard@cbmlaw.commailto:ocohen@cbmlaw.com

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I INTII PEIIII L E (

A.B.

c.D.

E.

F.IV COI

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T A B L E O F C O N T E N T S

RODucTioN AND SUMMAR Y OF A R G U M E N TI T I N E N T F A C I U A L ALLEGATIONS IN THE C OMPLAINTJAL ARGUMENTS

This Demurrer is the Appropriate Means to Challenge the LegalSufficiency of Plaintiffs' Improperly Pled ComplaintThis Court Has No Jurisdiction Over the MOU-Based ClaimsThe Court Should Sustain the Dem urrer to the First Cause of Action onthe Additional Grounds tha t the State Fails to Specify W hether theExpress C ontract Was Written or Oral, or Imphed -in-Fact, and the Causeof Action is Impemiissibly UncertainThe Court Should Sustain the Demurrer to the Second Cause of Actionfor Implied Contract on the Additional Groun ds that If a Valid E xpressMatter Cannot Exist at the Same TimeThe Court Should Sustain the Demu rrer to the Third Cause of Action forBreach of the Implied Covenant of Good Faith and Fair Dealing on theAdditional Ground that the State Failed to Adequately Plead theExistence of a ContractThe C ourt Should Sustain the Dem urer to the Fourth Cause of Action forUnjust Enrichment Because It Is Defective on Multiple AdditionalGrounds

^CLUSION

521 2 _[ _

Page1233

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6

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25

T A B L E O F A U T H O R I T I E SPage(s)

STATE C A S E SAjida Technologies, Inc. v. Roos Instruments, Inc.(2001) 87 Cal.App.4th 534 5Blank v. Kirwan(1985)39Cal .3d311 4Durell V. Sharp Healthcare(April 19, 2010 ) W L 1529322 -9Harm an v. City and County of San F rancisc o(1972) 7 Cal.3d 150 4Inte rnatio nal B illing Services, Inc. v. Emigh(2000) 84 Cal.App.4th 1175 ;.. 2, 7Kelly V. G ene ral Telephone Co.(1982) 136 Cal.App.3d 278 7Kim V. Regents of University ofCa lifornia(2000) 80 Cal.App.4th 160 2, 8Lan ce Cam per Mfg. Corp. v. Republic Indem. Co. ofAmerica(1996) 44 Car.App.4th 194 1, 8, 9Leon Hand bag Co. v. Local 213 of Leather, Luggage and H andb ag Workers(1969) 276 Cal.App.2d 240 4Mag lica v. M aglica(1998) 66 Cal.App.4th 442 6, 7Melchior v. TVew Zme Produc ts, Inc.(2003) 106 Cal.App.4th 779 2, 8Otworth V. Southem Pacific Transportation Co.(1985) 166 Cal.App .3d 452 6Satten V. Webb

23 (2002) 99 Cal.App.4th 365 524 Sublett V. He nry's Turk & Taylor LunchCal1942) 21 Cal.2d 273 6Wal-Noon Corp. v. Hill26 (1975) 45 (:al.App.3d 605 2, 8

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1 terms oft he oral or written contract. {Lance Cam per Mfg., 44 Cal.App.4th at 2032 [addressing intemally inconsistent pleading].)3 The third cause of action for breac h of the covenant of good faith and fair4 dealing fails as matter of law by not pleading a valid contract. {See sup ra, explaining5 plaintiffs ' failure to plead a valid contract in the first or second cause of action, and Kim v.6 Regents of University ofCa lifornia (2000) 80 Cal.App.4th 160, 164 ["Since the covenant7 of good faith and fair dealing is an imp lied term of a contract, the existence of a8 contractual relationship is thus a prerequisite for any action for breach of the covenant."])9 The fourth cause of action fails beca use "[tjhere is no cause of action in

10 Califom ia for unjust enrichment." {Melchior v. New Line Produ cts, Inc. (2003) 10611 Cal.App.4th 779, 793.) And plaintiffs cannot plead a claim for restitution based on a12 quasi-contract theory because it is imperm issible to do so where the same cause of action13 alleges that a valid express contract covering the same subject matter at the same time14 exists between the parties. {Wal-Noon Corp. v. Hill (1975) 45 Cal.App.3d 60 5, 61315 ["There cannot be a valid, express contract and an implied contract, each em bracing the16 same subject matter, existing at the same time."].)17 Finally, incorporating by reference the allegations of an express and implied18 in-fact contract to recover under a quas i-contract claim renders this cause of action19 uncertain, beca use it masks the true nature oft he claim and creates ambiguity.20 {International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175.)21 II22 PERTINENT FACTUAL ALLEGATIONS IN THE COMPLAINT23 On April 14, 2010, the State filed a verified complaint seeking to recover24 $4,052,046.65 purportedly owed to it by CCPOA as a result of alleged breaches of25 contracts entered into with CCP OA betwe en 2001 and 200 9. (See Verified Complaint for26 Dam ages, Exhibit A to CC PO A's Request for Judicial No tice.) Acc ording to plaintiffs'27 complaint, pursuant to these allegedly overlapping contracts, certain State employees were28 released from wo rk with fiill pay and benefits in order to engage in union activity. (See,

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1 and extent oft he cause of action." {Harman v. City and County of San Fra ncis co (1972)2 7 Cal.3d 150, 157.) A demurrer is appropriate where the grounds for objection appear on3 the face of the com plaint {Blankv. Kirwan (1985) 39 Cal.3d 311, 318; Code C iv. Proc.4 430.30.)5 Defendant demurs on four statutory grounds: (1) Code Civ. Proc. 430.10(e),6 which authorizes the Court to sustain a demu rrer to a legally defective complaint or any7 cause thereof that fails to sta te facts sufficient to cons titu te a cau se of acti on; (2) Code8 Civ. Proc. 430.10(f), which allows the Court to sustain a special demurrer where the9 pleading is un ce rta in ; (3) Code Civ. Proc . 430.10(g), which allows the Court to sustain

10 a special demurrer where it can no t be asc erta ined from the plea ding w he the r an11 alleged co ntra ct was ora l, w ritte n or implied-in-fact; and (4) Code Civ. Proc.12 430.10(a), which allows the Court to sustain a special dem urrer where the Co ur t has no13 ju ris dic tio n to adjudicate a cause of action.14 B. This Co urt Has No Jurisdict ion Over the MO U-Based Claims15 In paragraphs 3 and 5 ofthe Complaint, plaintiffs allege that defendant16 breached its obligation to reimburse the State under section 10.14 oft he 200 1-2006 M OU .17 This allegation is repeated as a component ofea ch cause of action. (Com pl. at t t 9, 14,18 18, and 23.) Pursuant to Article 6 oft he M OU , howev er, any dispute between the State19 and CCP OA over the interpretation, application or enforcement of any MO U provision20 must be resolved through the M O U 's arbitration procedure. (See Article 6 ofth e M OU,21 Exhibit B to CC PO A's Request for Judicial Notice.) Manifestly, plaintiffs' lawsuit22 involves a dispute about "the interpretation, application or enfo rcem enf of M OU section23 10.14. It is, therefore, subject to arbitration, and the Court lacks jurisdiction to decide the24 merits of a breach of contract claim which is based on the M OU . (Code Civ. Proc. 25 430.10(a) [Court "has no jurisdiction of the subject of the cause of action alleged in the26 pleading"].)27 In Leon Ha ndb ag Co. v. Local 213 of Leather, Luggage and Ha ndb ag Workers28 (1969) 276 Cal.App.2d 240, the trial court sustained the defend ant's dem urrer on the

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ground that the arbitration clause in the applicable collective bargaining agreement wasbroad enough to cover the dispute as alleged on the face ofthe plai ntiff s complaint. Itheld that, under such circumstances, the plaintiff w as required to exhaust the remedy ofarbitration or allege facts show ing waiver by the defendant o fth e right to arbitrate thedispute. The Court of Appeal agreed that the dispute was covered by the collectivebargaining agreement and therefore arbitration was the only venue for the plaintifftolitigate the dispute.

Plaintiffs may argue that the MOU h as expired. But defendant still has acontractual right to arbitrate the claim against it. In Nolde Brothers, Inc. v. Loc al No. 358Bak er & Confectionary Workers Union (1977) 430 U .S. 243 , 249, m d Litton Fin anc ial v.NLRB (1991) 501 U.S. 190, the United States Supreme Court, applying federal law, heldthat where the resolution of a claim hinges on interpretation of a collective bargainingagreemen t, a dispute is deem ed to arise under the agreement as long as the claim is basedon contractual rights contained in the agreeme nt, even ifthe agreement has since expired..(430 U .S. at 252 ["The pa rties ' obligations under their arbitration clause survived contracttermination w hen the dispute was over an obligation arguably created by the expiredagreem ent"]; 501 U.S . at 206 [post-expiration grievance arises under a contract when itinvolves facts and occurrences that arose before expiration].)

Califomia courts follow this precedent. {Ajida Technologies, Inc. v. Roos20 Instruments, Inc. (2001) 87 Cal.App.4th 534, 546 ["in interpreting collective bargaining21 agreem ents, the United States Supreme Court has determined that the partie s' obligations

f22 unde r their arbitration clause survived contract termination when the dispute was over an23 obligation arguably created by the expired agreemen t" citing Nolde and Litton}.)24 The M OU -based claims underlie and are incorporated into each cause of25 action. Conseq uently, the Court should sustain the demurrer to each cause of action26 withou t leave to amend because it lacks jurisdiction to adjudicate the merits ofa ny legally27 valid M OU -based claims that the parties agreed to arbitrate. C CPO A intends to mov e to28 com pel arbitration on such claim s. {Satten v. Webb (2002) 99 Cal.App.4th 365, 376 [A

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jurisdictiona l defense appearing on the face of the complaint, or based upon judiciallynoticeable facts, is appropriately addressed by demurrer.].)

C. Th e Co urt Should Sustain the D em ur rer to the First Cau se of Actionon the Add itional Gro un ds th at the State Fails to Specifv W heth erthe Express Contract W as Writ ten or Oral , or ImpIied-m-Fact , andthe Cause of Action is Imp erm issibly Unc ertainA claim for breach of contract is subject to a demurrer if it cannot be

determined from the pleading w hether the alleged contract was oral, written, or implied byconduct. (Code Civ. Proc . 430.10(g).) A complaint pleading a breach of contract "mustindicate on its face whether the contract is written, oral, or implied by conduct." {OtworthV. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 458-459.) "Iftheaction is based on an alleged breach of a written contract, the terms m ust be set outverbatim in the body ofthe complaint or a copy ofthe written instmment must be attachedand incorporated by reference." {Id., at 459.)

Thus, for each agreem ent that was allegedly breached, the State must specifywhe ther it was w ritten, oral, or implied-in-fact. Each ofthe se types of contracts requiresdifferent p roof and has a different sta tute of limitations. For exam ple, express written andoral contracts both require proof of the material terms the parties ag reed upo n. {Otworth v.Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459.) In addition, thestatute of limitations for a written contract is four years (Code Civ. Proc. 337(1)) andtwo years for an oral contract. (Code Civ. Pro c. 339). On the other hand, an implied-in-fact contract requires proof that the partie s' conduct, ra the r than express words, formed acontractual relationship (see Maglica v. Maglica (1998) 66 Cal.App.4th 442, 456) and theapplicable statute of limitations is two years (Co de Civ. Proc. 339).Ifth e applicable statute of limitations is only two years, it wou ld m ateriallyreduce the amo unt the plaintiffs ma y be able to recover. {Sublett v. H en ry 's Turk & TaylorLunch (1942) 21 Cal.2d 273, 279 ["where a written contract is alleged and an oral contractis proved, the varianc e is material if it has resulted in misleading the ad verse party bydepriving him ofthe defense afforded by the statute of limitations"].)

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He re, paragraph 10 oft he Com plaint alleges that the express contract was"both oral[] and in writing." But plaintiffs cannot, as matter of law, plead in one cause ofaction that the contract was both w ritten and oral. (Code Civ. Proc. 430.10(g).)

Further, the first cause of action is im permissibly uncertain because the S tateincorporates by reference the allegations of an implied-in-fact contract into an expressbreach of contract cause of action. (Com plaint, t t 5, 6, 7 and 9.) A cumulative style ofpleading is a "disfavored shotgun (or 'chain letter') style of pleading ... which ofi:enmasks the tm e causes of action." {International Billing Services, Inc. v. Emigh (2000) 84Cal.App.4th 1175, 1179.) It "should be avoided as it tends to cause ambiguity and createsredun dancy ." {Kelly v. Ge neral Telephone Co. (1982) 136 Cal.App.3d 2 78, 287; Lea der v.Health Industries ofAm erica, Inc. (2001) 89 Cal.App.4th 603, 608 [the trial courtsustained defen dants' special demurrer for uncertainty to the breach of contract claimfinding that the allegations of multiple contracts w ithin a single cause of action renderedthe pleading uncertain as to the operative terms o fth e various agreem ents, and as towhether thos e agreem ents were written, verbal or implied in fact or law].)

If this is a cause of action for an express contract, incorporating the allegationsof an implied-in-fact contract causes ambigu ity and renders it uncertain. (Code Civ. Proc. 430.10(f) ["As us ed in this subdivision, 'un certa in' includes am biguous andunintelligible."].) Consequently, the Court should sustain the demurrer to the first causeof action b ecau se, as pled, it is defective. (C.C.P 430.10(e), (f), and (g).)

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101112131415161718192021 D . The Court Should Sustain the Demurrer to the Second Cause of22 Action for Implied Co ntra ct on the Ad ditional G roun ds tha t If aValid Express Contract Is Alleged to Exist, an Implied Contract on23 the Same Subject M atter Can not Exist at the Same Time24 "[A ]n implied-in-fact contract entails an actual contract, but one manifested in25 conduct rather than expressed in wo rds. The tme implied contract, then, consists of26 obligations arisingfiroma mutual agreement and intent to promise where the agreement27 and prom ise hav e not been expressed in w ord s." {Maglica v. M aglica (1998) 6628 Cal.App.4th 442, 4'56 [intemal citations omitted].)

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Here, plaintiffs impermissibly incorporate express contract allegations(complaint, t t 5-10) into a cause of action for breach of an implied-in-fact contract,comingling the two. They fail to specify whether the parties ' conduct (that purportedlyestablishes the implied-in fact contract) was something other than the express terms of acontract (oral or written). (Complaint, 11 4-1 5.) This is invalid, because "[t]here cannotbe a valid, express contract and an implied contract, each embracing the same subjectmatter, existing at the same tim e." {Wal-Noon Corp. v. H ill (1975) 45 Cal.App.3d 605,613.) Plaintiffs "must allege that the express contract is void or was rescinded in order toproceed with its implied-in-fact contract claim." {Lance Cam per Mfg. C orp. v. RepublicIndem. Co. ofAmerica (1996) 44 Cal.App.4th 194, 203.)

For the same rea sons, plaintiffs' second cause of action, like the first, is subjectto demurrer for uncertainty and ambiguity. (Code Civ. Proc. 430.10(f) and cases supra .)

E. The Co urt Should Sustain the D em urre r to the Third Cause ofAction for Breach ofthe Implied Covenant of Good Faith and FairDealing on the Additional Ground that the State Failed toAdequately Plead the Existence of a ContractPlaintiffs' third cause of actionfor violation ofthe covenant of good faith

and fair dealingcan only proceed once the existence of a contractual relationship isestablished. {Kim v. Regents of University ofCaliforn ia (2000) 80 Cal.App.4th 160, 164.)

As demonstrated supra, because the allegations in the first and second cause ofaction purporting to establish a contractual relationship are defective. Plaintiffs have failed

21 to adequa tely plead the existence of any valid contractfi-omwhich the covenant of good22 faith and fair dealing can be implied.23 F. The Co urt Should Sustain the De mu rer to the Fou rth Cause ofAction for Unjust Enrichment Because It Is Defective on Multiple24 Addit ional Gro und s25 First, "[t]here is no cause of action in Cahfom ia for unjust enrichment."26 {Melchior v. New Line Prod ucts, Inc. (2003) 106 Cal.App.4th 779, 793.) "[T]he phrase27 'Unjust En richm ent' does not describe a theory of recovery, but an effect: the result of a28 failure to ma ke restitution under circumstances where it is equitable to do so. Unjust

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enrichment is a general principle, underlying v arious legal doctrines and remedies ratherthan a remedy itself It is synonymous with restitution."^ {Id.) On that ground alone, thiscause of action fails as a matter of law.

Second, and assum ing that this claim w as pled sufficiently as a cause of actionfor restitution on a quasi-contract theory (and it is not), in paragraph 23 of the Complaint,the State incorporates by reference the express written, express oral, and implied-in-factcontract allegations in to the unjust en richm ent cause .of action. The S tate cannot so pleadas matter of law. Indeed , "[i]t is well settled that an action based on unjust enrichm'entresulting in a quasi-contract cannot lie where there exists between the parties a validexpress contract covering the same subject matter." {Lance Camper, supra, 44Cal.App.4th at 203.) Thus, plaintiffs fail to state a valid cause of action .

For the same reason s, this cause of action is also uncertain. Like the first andsecond causes of action, the State incorporates by reference the express and implied-in-fact contract allegations into a quasi-contract claim, rendering the claim intemallyinconsistent and incom prehensible. As such it is subject to a demurrer as uncertain underCodeCiv. Proc. 430.10(f).WWwwww

w

"There are several potential bases for a cause of action seeking restitution. Restitutionmay be awarded whe re the defendant obtained a benefit from the plaintiff by fraud,duress, con version, or sim ilar conduct. In such cases, the plaintiff m ay choose not to suein tort, but instead to seek restitution on a quasi-contract theory.... In such cases, w hereappropriate, the law will imply a contract (or rather, a quasi-contract), without regard tothe par ties' intent, in order to avoid unjust enrichm ent. {Durell v. Sha rp H ealth care(April 19, 2010) WL 1529322 at =^10-11 [intemal citations omitted].)CBM-SF\SF479521 2

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JOHN M. SKONBERG, BarN o. 069409RICHARD H. RAHM, Bar No. 130728JOSHUA D. KIENITZ, Bar No. 244903AMY MORGENSTERN, B arN o. 267412LITTLER MENDELSONA Professional Corporation650 Califomia Street20th FloorSan Francisco, CA 94108.2693Telephone: 415.433.1940Facsimile: 415.399.8490K. WILLIAM CURTISChief Counsel, BarNo. 095753WARREN C. STRACENERDeputy Chief Counsel, BarNo. 127921JAMES SPURLINGAssistant Chief Counsel, Bar No. 109432Department of Personnel AdministrationStateof Califomia1515 S Street, North Building, Suite 400Sacramento, CA 95811-7243Telephone: 916.324.0512Facsunile: 916.323.4723Attomeys for PlaintiffsSTATE OF CALIFORNIA, CALIFORNIADEPARTMENT OF CORRECTIONS ANDREPL^ILITA TION, DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OF MENTAL HEALTH

SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

CaseNo. 34-2010-00075552HE STATE OF CALIFORNIA,CALIFORNIA DEPARTMENT OFCORRECTIONS ANDREHABILITATION, DEPARTMENT OFPERSONNEL ADMINISTRATION, andDEPARTMENT OF MENTAL HEALTH,Plaintiffs,

V .CALIFORNIA CORRECTIONAL PEACEOFFICERS ASSOCIATION,

Defendant.

PLAIN TIFFS' OPPOSITION TODEFENDAN T'S DEMURRER TOVERIFIED COMPLAINT FOR DAMAGESDate: September 13,2010Time: 2:00 p.m.Dept.: 53Judge: Hon. Loren E. McMasterReservation No. 1372668Complaint Filed: April 14,2010Trial Date: None setExempt from Fees (Gov. Code 6103)

LITTLER MENDELSONA Pt tO K tU CI I K CoK nU t iU O H

dSOCi l i l a rma &U t20ih FloorSn Fra i tcbco CA 9410B 26934I S 433 1940 THE STATE'S OPPOSITION TO CCPOA'S DEMURRER TO VERIFIED COMPLAINT

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CORPORATION50 Calirornii Stiaat

20ih FloorCA S4108 2693415 433 1940

I .

n.

III.

IV .

T A B L E OF C O N T E N T SP A G E

INTRODUCTION 1FACTUAL ALLEGATIONS 3A. The Parties Entered Into The Written UPL Agreement, Which Superseded

The Terms Of The MOU On The Same Subject 3B. After The Written UPL Agreement Ended, The Parties Orally Agreed ToContinue ToAbide By The Terms OfThe UPL Agreement 4C. CCPO A Reimbursed The State Only Sporadically And, After CCP OARefused To Pay Even Half Of The Unpaid Balance, TheState Filed The

Present Action 4CCPOA'S GENERAL AND SPECIAL DEMURRERS SHOULD BEOVERRULED 4A. ToSustain Its Demurrers, CCPOA Must Demonstrate That The Complaint

Fails To Apprise It Of The State's Causes Of Action 4B. CCP OA's Demurrer OnJurisdictional Groimds Should BeOvermled BecauseThe State's Action IsBased OnThe Subsequent UPL Agreement And NotThe Expired M OU 5C. The Un ion's Demurrer To TheState's First Cause Of Action ForBreach ofExpress Contract Should BeOverraled 6

1. The First Cause Of Action Alleges ABreach Of The Written UPLAgreement And ASubsequent Oral Extension OfThat Agreement 62. TheState's Incorporation By Reference Of The Previous AllegationsClarifies The Complaint, And The Demurrer For Uncertainty ShouldBe Overraled 8

D. CCPOA's Demurrer To TheSecond Cause Of Action ForBreach of Implied-' In-Fact Contract Should BeOverraled Because The Express AndImpliedContracts Are Alleged InDifferent Causes OfAction 10E. CC POA 's Demurrer To The Third Cause Of Action ForBreach Of TheImplied Covenant Should BeOverruled Because TheState Has Alleged AValid Contract 12F. The Union's Demurrer ToThe Fourth Cause Of Action For UnjustEnrichment Should BeOverraled Because, AsWith The Second C ause OfAction, TheState Can Allege Altemative Theories Of Recovery 13CONCLUSION \ 14

1.THE STATE'S OPPOSITION TOCCPOA'S DEMURRER TOVERIFIED COMPLAINT

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6S0 Ca l i lo rn i i S l iao i20lh FloorCA 94106 2693415 433 1940

T A B L E O F A U T H O R I T I E SP A G E

CASESCal-West National Bank V. Superior Court,185 Cal. App . 3d 96 (1986) 8, 11 ,1 4Daar v. Yellow Cab Co.,67 Cal.2d 695 (1967) 4Day V. Ah a Bates Med ical Center,98 C al. App. 4th 243 (2002) 13FDIC V. Dintino,167 Cal. App. 4th 333 (2008) 13Hoyden v. Collins,1 CaL App. 259 (1905) 14Inte rna tion al Billing Services, Inc. v. Emigh,84 CaL App. 1175 (2000) 9, 10Jackson v County of Los Angeles,60 CaL Ap p. 4th 171 (1997) 12, 14Kajima Eng ineering an d Construction, Inc v City of Los An geles,

95 Cal. App. 4th 921 (2002) 9Kelly V. General Telephone,136 CaL Ap p. 3d 278 (1982) 9,10Khoury v. Maly 's ofCalifornia, Inc.,14 CaL Ap p. 4th 612 (1993) 5, 9, 11Kim V Regen ts ofth e Umversity ofC alifornia ,80 CaL Ap p. 4th 160 (2000) 12Lance C amper M anufacturing C orp v. Republic Indemnity Co.,44 Cal. Ap p. 4th 194 (1996) 12Leader v. Health Ind ustries ofAmerica, Inc.,89 Cal. App. 4th 603 (2001) 10Ludgate Ins. Co. v. Lockheed Martin Corp.,82 Cal. App. 4th 592 (2000) 4

1.THE STATE'S OPPOSITION TO CCPOA'S DEMURRER TO VERIFIED COMPLAINT

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650 Ca l i fo rn ia S t i t a l20th FloorCA 94108 26934)5 433 1940

T A B L E O F A U T H O R I T I E S(C O N TIN U ED )

P A G EMcBride v Boughton,123 Cal. Ap p. 4th 379 (2004) 14McG ough V. Umversity o f San Fran cisco ,214 Cal. App. 3d 1577 (1989) 11Melchior v. New Line Products, Inc.,106 Cal. Ap p. 4th 779 (2003) 13, 14Otworth V. Southern Pacific Transportation Co ,166 Cal. Ap p. 3d 452 (1985) 7, 8Pasadena Live, LLC v. City of Pasad ena ,

114 Cal. Ap p. 4th 1089 (2004) 12Perkins v. Sup Ct.,117 CaL App. 3d 1(19 81) 4Quelimane Co. v. Stewart Title Guaranty Co.,19 CaL 4th 26 (199 8) 5Rader Co. v. Stone,178 Cal. App . 3d 10 (1986) 11Reichert V. Genera l Ins. Co.,68 CaL 2d 822 (1968) 7Skelly V Richman,10 CaL App. 3d 844 (1970) 11Stolt-Nielsen SA. v. AnimalFeeds Int'l, Corp.,130 S. Ct 1758 (2010 ).... 6Wal-Noon Corp v. Hill,45 Cal. Ap p. 3d 606 (1975) 11, 12Williams v Beechnut Nutrition Corp.,185 Cal. Ap p. 3d 135 (1986) 5, 9

S T A T U T E SCal. Code Civ. Proc. 3528CaL Code Civ. Proc. 430.10(f) 5,CaL Code Civ. Proc. 430.10(g)

ii .THE STATE'S OPPOSITION TO CCPOA'S DEMURRER TO VERIFIED COMPLAINT

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T A B L E O F A U T H O R I T I E S(C O N TIN U ED )

P A G ECal. Code Civ. Proc. 452 4Cal. Lab. Code 1126 2, 6

O T H E R A U T H O R I T I E S4 W itkin, Cal. Procedure (5th ed. 2008) Pleading 402 at p. 543 7, 11Weil & Brown, Cal. Practice Guide: Califomia Civil Procedure Before Trial (Rutter,2010) 7:85-86...: ; ; 5,12

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I . INTRODUCTIONSince 2001, Defendant Califomia Correctional Peace Officers Association

("CCPOA") has had an agreement with Plaintiff State ofCalifomia (the"State") ' whereby the Stateagreed to pay public funds for the full salary and benefits of CCPOA-represented employees onUnion Paid Leave ("UPL"), in exchange for which, CCPOA agreed to reimburse the State for thecomplete cost of providing the UPL. Although the agreement originated in a 2001-2006Memorandum of Understanding ("MOU") between CCPOA and the State,^ after the MOUterminated, the parties entered into a separate, "stand-alone" written agreement in 2007, nowreferred to as the "UPLAgreement" (attached as Exhibit 2 to the Complaint), in which the Stateagreed to continue to fimd UPL for CCPOA-represented employees, provided that CCPOA agreed topay all past and future UPL debts. The UPL Agreem ent formally terminated in2009, but thepartiesorally agreed tocontinue the terms of the UPLAgreement (while they attempted toarrive at a newagreement), with CCPOA continuing to request both that theState fund UPL andthat it bill CCPOAfor the costs. Unfortunately, CCPOA has seldom paid any ofthe State's invoices, which now totato over $4 million. This money is owed to the State. Because Article XVI, Section 6 of theConstitution prohibits the making of gifts of public funds and, indeed, because State officials havean obligation to the taxpayers to collect such debts, the State now brings the present action againsCCPOA for its failure to reimburse theState as promised.

The above facts, which are pleaded in detail in the Complaint, give rise to severaseparate andaltemative theories of recovery. Although CC PO A's counsel andVice President signedth e UPLAgreement, CCPOA now demurs claiming that the alleged causes of action based on theUPL Agreement are so "uncertain" as to be"incomprehensible ." Dem. 9:12-16. It is indeedunfortunate that instead of moving forward with the litigation - let alone paying the State back themoney it owes - CCPOA has filed the present demurrer, based on hypertechnical and ill-favored

CORPORATIONCihloin i. Slit .t20lh FlooiCA 94109 2693

415 433 1940

"State" includes allofthe Plaintiffs to this action: The State ofCa lifomia, Califomia Department oCorrections and Rehabilitation, Department of Personnel Administration, and Department of Mental Health.^ The duty ofCCPOA to reimburse the State for the costs of releasing various employees toconducunion business has existed in all the MOUs with CCPOA since the 1987-88 MOU. The reference to the2001-2006 M OU is simply a reference to the last full MOU existing between theparties and isprovided fohistorical context only.

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\Z7^groimds, to continue to keep needed funds away from the State. In any event, each of CCPOA'sdemurrers fails as amatter of law and, for this reason, should be overraled.

Valid Juri sdic tion . CCPOA argues that all ofthe State's causes of action arealleged to bebased on an expired MOU, thus depriving this Court of jurisdiction. See Dem4:14-6:2. Yet, the Complaint is very clear that the State issuing on the subsequent UPLAgreement andnowhere does the State allege that it is suing for a breach ofthe MOU. See,e g, Compl. 18. The UPL Agreement is alleged to be a separate agreemen t from the MOUand Labor Code section 1126 expressly provides that an agreement between a union and anemployer may be enforced "in the courts of this State." CC PO A's jurisdictional challengethus has nobasis.

Valid Breach Of Exp ress Co ntra ct Claini. CCPOA argues that the firscause of action is improperly pleaded and"uncertain" because both anexpress w ritten and anexpress oral contract are alleged. See Dem. 6:4-7:20. However, the Complaint clearlyalleges that thewritten UPL Agreement (attached to theComplaint) continued to2009, afterwhich the parties hada non-written agreement to abide by the same terms. SeeCompl. 17The fact that the State incorporated the factual allegations into its cause of action actuallyclarifies the two separate contracts, rather than making the Complaint uncertain. CC POA 'sargument is frivolous.

Valid Breach Of Implied -In-Fact Claim . CCPOA does not dispute that theComplaint adequately alleges a claim for breach of implied-in-fact contract as an altemativeto the first cause of action. Rather, CCPOA argues that, because theState incorporated all oits previous allegations asbackground into its second cause of action, it is "uncertainwhether the State is alleging acause of action for a breach of an express contract or acauseof action for breach of an impHed-in-fact contract. See Dem. 7:22-8:12. Incorporation byreference for informational purposes is an accepted practice, and CCPOA cannot seriouslyargue, as ademurrer based on"uncertainty" demand s, that it isunable torespond to the causeof action.

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Valid Breach Of The Implied Covena nt Claim. CCPOA challenges theComplaint's third cause of action for breach of the implied covenant of good faith and fairdealing solely onthe basis that it does notbelieve that the State has previously alleged avalidcause of action. SeeDem . 8:14-22. Because the State's first cause of action alleges a validbreach-of-contract claim, theState's breach of implied covenant claim is also valid.

Valid Un just En ric hm en t Claim . CCPOA first argues that the State cannotbring its fourth cause of action for "unjust enrichmenf' because it should have been titled"restitution," even though it acknowledges that courts use "unjust enrichment" and"restitution" synonymously. See Dem. 8:23-9:3. CCP OA next argues, again, that becausethe State incorporated the previous allegations "by reference," technically the State haspleaded equitable and non-equitable claims in the came cause of action. See Dem. 9:4-16.The argument is fatuous as itis clear from the allegations that the State is pleading aclaimfor restitution as anequitable altemative to its legal causes of action.

I I . F A C T U A L A L L E G A T I O N SA. ThePar t ies Entered Into The Writ ten UPL Agreement , Which Superseded TheT e r m s OfT he MO U On TheSame Subject.

The S tate alleges inthe Complaint that itentered into anMOU with CCPOA w herebythe State agreed to pay for the full salary andbenefits of CCPO A-represented employees whowereon UPL, provided that CCPOA reimburse the State for thecomplete cost of funding theUPL within30 days of receiving abilling statement. SeeCompl. 15, Exh. 1. The MOU expired in2006 and, ithe absence of a successor agreement, the parties entered into anew written stand-alone agreemengoveming UPL onNovember 7, 2007, superseding theMO U, whereby the State agreed to continuefunding UPL pursuant to thesame terms, provided that CCPOA agreed to reimburse theState for the"total compensation cost" of both unpaid past andfuture UPL. SeeCompl. t 6, Exh. 2.

Pursuant to the UPLAgreement, CCPOA requested that the State release employeesfor UPL, together with a request that theState bill CCPOA for theUPL costs. SeeCompl. t 7. TheState, for its part, complied by releasing employees and funding their UPL. Ibid. Beginning in2008, the State sent CCPOA invoices for the total compensation costs attributable toUPL, pursuan

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A complaint will not be deemed impermissibly uncertain unless it is "ambiguous andunintelligible." Code Civ. Proc. 430.10(f). Courts disfavor demurrers based on "uncertaintybec