DPA Case Number 01-T-0025 - Petition To Set Aside Resignation

Final Non-Precedential Decision Adopted: February 27, 2002

By: Howard Schwartz, DPA Chief Counsel

This matter was heard before Mary C. Campisi, Administrative Law Judge (ALJ), Department of Personnel Administration (DPA) at 9:00 a.m. on December 4, 2001, and February 14 and 21, 2002, at Sacramento, California.

The appellant was present and was represented by William F. Wright, his attorney.

Gail Onodera, Labor Relations Counsel, DPA, represented the Office of Criminal Justice Planning (OCJP), respondent. Also present was Shirley C. Wang, Chief Legal Counsel, OCJP.

Evidence having been received and duly considered, the ALJ makes the following findings of fact and Proposed Decision.

On September 6, 2000, appellant and respondent executed a settlement agreement to resolve two pending actions: appellant’s unfair practices complaint, pending at the Public Employees Relations Board (PERB), and his appeal from rejection during probation, pending at the State Personnel Board (SPB).

Paragraph 5 of the settlement agreement provides that appellant be paid five (5) months of administrative time off (ATO) while he searched for other employment. If after five months, appellant had not found a position elsewhere, he was to “resign from OCJP.”

Appellant did not find other employment by February 5, 2001. Consequently, effective February 6, 2001, respondent resigned appellant, without fault, from his position with OCJP.

On March 1, 2001, appellant filed a petition (appeal) to set aside his resignation.

Respondent challenged the authority of DPA to consider appellant’s appeal on the basis that the settlement agreement, which contained the resignation clause, was executed under the jurisdiction of PERB. The ALJ found that DPA has authority to hear a petition to set aside resignation, pursuant to Government Code sections 19815.4 and 19996.1. Accordingly, it is concluded that the appeal complies with the procedural requirements of Government Code section 19996.1, and that this matter properly before DPA for adjudication.

Appellant filed a form appeal. At the first day of hearing, appellant’s counsel claimed appellant’s resignation was not freely and voluntarily given because it was obtained by reason of duress and/or mistake.

On the second day of hearing, appellant’s counsel withdrew his claim that the resignation was obtained by duress. He requested that the ALJ consider the first day’s testimony of witnesses solely to demonstrate appellant’s “state of mind” at or near the time he executed the settlement agreement.

Thereafter, appellant rested his claim on mistake. Specifically, he alleged that he did not really know what he was signing on September 6, 2000, because he did not read the entire settlement agreement prior to executing it. Also, he alleged that he did not know or understand the legal significance of the resignation clause when he did read it a few days later. He stated he believed that, upon resignation from his position with OCJP on February 6, 2001, he could be mandatorily reinstated his former position of Research Analyst II with OCJP.

Appellant testified that in August 2000, he approached his union representative and asked him to negotiate a settlement of his PERB complaint and his appeal from Rejection During Probation with respondent. His representative told him that he would do the best he could and would see if they could come up with a settlement agreement.

Appellant further testified that around the first part of September 2000, he spoke again with his representative. They discussed the “issue of administrative leave.” The representative said maybe he could get him “a leave situation.” Appellant responded that he did not mind because it would get him away from his supervisor.

On the morning of September 6, 2000, the representative called appellant and told him that they had reached an agreement and they had gotten what they wanted. He asked appellant to meet him at his office at 1:00 p.m. to sign the agreement. He emphasized that appellant needed to sign the agreement that day.

Appellant went to the representative’s office. After the representative put the pieces of the agreement into order, he explained the agreement to appellant. He told appellant, something to the effect of, “You don’t have to go back to OCJP.” Appellant did not recall the representative telling him he had to resign at the end of five months.

When questioned as to whether he had read the agreement before he signed it, appellant testified “Just the money part.”1 He claimed he did not read the full agreement until a couple of days later. At that time he read the resignation clause (Paragraph 5), which stated in part, “If after five (5) months, [appellant] has not found a position elsewhere, he will resign from OCJP.” He testified that upon reading the resignation clause, he interpreted it to mean that, if he did not have another job by the end of five months, and he did not resign, respondent would take an adverse action against him to resign him and he could return to his prior position at OCJP. He claimed confusion over the language because it used the term “resign from OCJP” not “resign from State service.”

Appellant testified that on or shortly after February 6, 2001, he found out he was resigned from State service. The way he found out was he received a check from respondent cashing out his vacation and other compensatory time off. He also received a Notice of Personnel Action dated February 6, 2001, showing his resignation from State service.

Appellant applied for 102 positions in State service during the five months that he was on paid ATO (September 6, 2000, through February 5, 2001). He applied for 330 positions after he was separated from State service. To date, he has not been offered a position in State service.

Appellant’s representative also testified. His testimony was consistent with appellant’s testimony on many points, but inconsistent on the issue of appellant’s knowledge of, and complicity with, the term providing for paid ATO followed by a resignation.

The representative testified that the first day of appellant’s PERB hearing was held on July 18, 2000. At the request of appellant, he approached respondent’s representative in August 2000, with a suggestion that they negotiate a settlement of both the PERB and SPB cases.

In fact, on August 29, after consultation with his client, he sent an e-mail to respondent’s representative proposing the following specific terms of settlement:

“...reinstate [appellant] to the position from which he was rejected, of course with back pay and reinstatement of all sick leave and vacation he may have used as a result of this case. The department may then place [appellant] on ATO for six2 months, which will allow him to search for other job opportunities. If at the end of six months he has not found a position elsewhere, he will resign from OCJP....”

He testified that the actual term regarding resignation in exchange for paid ATO came up from conversations with appellant. (It did not come from respondent.) He recalled that he and appellant discussed the option of putting him out on ATO for a period of time while he looked for a job and then resigning. One of the reasons was that appellant made it clear he did not want to return to the work site. The representative further recalled that he warned appellant at that time that it was dangerous to include an automatic resignation provision in exchange for paid ATO unless the appellant was sure he could get a position during the period of time he was on ATO.

The representative also testified that after he told appellant it was a dangerous provision, appellant responded they could probably come up with a deal if there was enough ATO time to make it worthwhile. The representative told appellant that if he did not have another State job in five months, he would be unemployed.3 Appellant stated that he was sure he would have a job.

The representative testified further, that at the time appellant came into his office to sign the final agreement, he had the agreement spread out in his office. He put the pages together and he went over each of the terms with appellant.4 When they got to the resignation clause, he again said to appellant something to the effect of, “Are you sure you want to do this? If you sign this and have no new job you will be out of a job in 5 months.”5 He stated appellant’s response was “Yes.” Afterwards, he asked appellant if he was comfortable with it and appellant said he was.

Finally, the representative testified that he told appellant that if they did not sign the document on that day, they might have difficulty getting OCJP to go along with it at a later time. As a result both the appellant and his representative signed and dated the settlement agreement containing the resignation clause. The signed agreement was then forwarded to respondent’s representative for signatures by respondent’s representative and respondent. The following persons signed the agreement on September 6, 2000: appellant, appellant’s representative, Executive Director, OCJP, the Chief Counsel, OCJP and respondent’s counsel.

Sometime in or about October 2001, appellant contacted his union to request that the union assist him in obtaining a rescission of the settlement agreement. The request was forwarded to the Legal Division of appellant’s union, California State Employees Association (CSEA).

Appellant’s representative communicated with appellant after the execution of the settlement agreement on September 6, 2000. They communicated about various things including appellant clearing out his old office. The last date they communicated is uncertain, since the representative was transitioning to a new job. Appellant’s representative did not recall that appellant expressed any concerns to him regarding the settlement agreement or its terms after he signed the agreement.

An attorney for CSEA was assigned to represent appellant before SPB in his appeal from rejection during probation. She also handled his request for rescission. According to appellant, she told him the settlement agreement could not be rescinded. However, she assisted appellant in attempts to extend appellant’s employment beyond the five months provided for by the agreement. By letter dated February 8, 2001, to respondent’s counsel, appellant’s CSEA attorney requested the following:

“I am requesting that OCJP: (1) leave [appellant’s] telephone number and voice mail connected for at least another two weeks; (2) remove, or refrain from placing, any separation documents or documents memorializing a resignation that are in [appellant’s] personnel file; and (3) should [appellant] secure other state employment in the near future, to amend the resignation date so that [appellant] does not have a break in state service.”

Respondent rejected the request. Appellant’s resignation was processed with the original February 6, 2001, date. Appellant’s CSEA attorney was of the impression that appellant fully understood the consequence of the resignation clause during the negotiations on his behalf.

 

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Government Code section 19996.1 provides that:

“No resignation shall be set aside on the ground that it was given or obtained pursuant to or by reason of mistake, fraud, duress, undue influence or that for any other reason it was not the free, voluntary and binding act of the person resigning, unless a petition to set aside is filed with the department [Personnel Administration] within 30 days after the last date upon which services to the state are rendered or the date the resignation is tendered to the appointing power whichever is later.”

The clear language of the statute requires the trier-of-fact to look to the actions of the appellant at the point of resignation to determine if that act was for any reason not free, voluntary and binding. An appellant bears the burden of persuasion and proof in requesting to set aside a resignation and return mandatorily to State service.

Appellant initially sought to set aside his resignation on the grounds that his resignation was tendered or obtained by reason of duress and/or mistake.

Civil Code section 1567 provides that an apparent consent is not “free” when obtained through duress, menace, fraud, undue influence, or mistake. Duress or menace supposes some unlawful action by a party that causes the other party to consent by fear. Odorizzi v. Bloomfield School District (1966) 246 Cal.App.2d 123, 128. Undue influence involves the taking of an unfair advantage of another. Id. at 132, citing Civil Code section 1575.

The evidence clearly establishes that respondent did not engage in any unlawful action that caused appellant to consent by fear. Appellant entered into a negotiated settlement agreement to resolve actions in two forums relating to his rejection during probation from his position at OCJP. Therefore, it was entirely appropriate for appellant’s counsel to have withdrawn the allegation of duress.

“Mistake” is generally defined in Blacks Law Dictionary (Abridged Sixth Edition, 1991) at page 693, as follows:

“Some unintentional act, omission, or error arising from ignorance, surprise, imposition, or misplaced confidence. A state of mind not in accord with reality. A mistake exists when a person, under some erroneous conviction of law or fact, does, or omits to do, some act which, but for the erroneous conviction, he would not have done or omitted. It may arise either from unconsciousness, ignorance, forgetfulness, imposition, or misplaced confidence.”

California Civil Code at Section 1576 and following similarly describes “mistake” as either a mistake of fact or a mistake of law in the context of contractual agreements between parties. A “mistake of fact” is defined as:

“... a mistake, not caused by the neglect of a legal duty on the part of the person making the mistake, and consisting in:

1. An unconscious ignorance or forgetfulness of a fact past or present, material to the contract; or,

2. Belief in the present existence of a thing material to the contract, which does not exist, or in the past existence of such a thing, which has not existed. “

A “mistake of law” is defined as:

“... a mistake ...only when it arises from:

1. A misapprehension of the law by all parties, all supposing that they knew and understood it, and all making substantially the same mistake as to the law; or,

2. A misapprehension of the law by one party, of which the others are aware at the time of contracting, but which they do not rectify.”

These Civil Code sections and the surrounding case law set forth the requirements of mistake in order to determine whether a contract can be rescinded. While the act of resignation is not tantamount to a contract, the Civil Code definitions and surrounding case law are helpful in determining whether an appellant freely consents to the act of resignation, and will be allowed to rescind the resignation. Further, in this case the resignation was part and parcel of an executed contract between the parties. Therefore, it is appropriate to determine whether appellant’s claim of mistake falls not only the general definition of “mistake” set forth in Blacks Law Dictionary or the Civil Code definition relating to contracts.

Dealing first with the general definition, it is concluded that appellant failed to establish by the preponderance of the evidence that he was under some erroneous conviction of law or fact, which would have caused him to reject the settlement agreement and the inclusive clause regarding resignation. Although appellant claimed that he did not know the clause was in the agreement until after he read it and then mistakenly believed he would be reinstated to a former position, his claim is outrageous and incredible.

The reasons are many. First, it was appellant, not respondent that broached the subject of settlement with respondent’s representative and it was appellant’s representative who initially proposed the concept of a five- or six-month paid vacation in exchange for a resignation. Second, appellant is a sophisticated individual and holds an advanced degree (juris doctorate). He admitted he spoke with his representative and provided direction and feedback during negotiations. It is not likely that he would have no knowledge or understanding of such a critical term of the settlement or that he would not read the agreement prior to actually signing it. Third, the language of the agreement, particularly the language at issue is clear. It requires appellant’s resignation from his position with the one and only appointing authority he ever had, which was OCJP. And finally, the language providing for resignation was followed by another paragraph (Paragraph 6), which prohibited appellant from ever applying for, transferring to or exercising reinstatement rights to any State civil service position within OCJP.

Dealing with the statutory definitions of mistake of fact and/or law, it is concluded that appellant did not prove either a mistake of fact or law.

Appellant’s first claim of mistake was that he did not read the portion of the agreement containing the resignation clause before he signed it and he was unaware the clause was in the agreement. This claim is considered as a claim of “mistake of fact,” in that it presupposes lack of know of an existing fact. Assuming arguendo that appellant did not know the clause was in the agreement, this claim must fail. General case law has established that one who assents to a contract may not avoid its terms on the ground that he failed to read it before he signed it. See Civil Code section 1577 and Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal. App. 4th 1791, review denied, certiorari denied, 115 S. Ct. 1694.

Appellant’s second claim of mistake was that when he read the term “If after five (5) months, [appellant] has not found a position elsewhere, he will resign from OCJP” he was led to believe that it did not require his separation from State service and that he could mandatorily reinstate to his prior position at OCJP. He also claimed, respondent was at fault for ambiguity in the clause which it could have corrected by substituting “resign from State service” for “resign from OCJP.” This claim is considered as a claim of “mistake of law” in that it involves a misunderstanding of the law by one or both parties at the time of execution of the contract. See Civil Code section 1578; Hedging Concepts, Inc. v. First Alliance Mortgage Company (1996) 41 Cal.App.4th 1410; and In re Marriage of Mansell (1989) 217 Cal.App.3d 219, 234, ftn 9. As set forth in Hedging Concepts, Inc. v First Alliance Mortgage Company, at page 1421:

“A mistake of law as defined by Civil Code section 1578 exists only when:

1) all parties think they know and understand the law but all are mistaken in the same way, or

2) when one side misunderstands the law at the time of contract and the other sides knows it, but does not rectify that misunderstanding.”

Appellant’s alleged belief that he had mandatory reinstatement rights is a mistake at law because it is contrary to the law. Taken together, Government Code section 191406 and Cal. Code Regs., tit.2, section 4467 provide that an employee separated from a position by resignation is considered “permanently” separated from State civil service subject only to permissive (not mandatory) reinstatement rights.

Assuming arguendo that appellant actually believed what he claimed, this claim must also fail because appellant’s mistake was unilateral and respondent had no knowledge of his mistaken belief. In fact, there was not one iota of evidence that respondent was aware of any but the correct reading of the law. Also, by his own testimony, appellant was not aware of the resignation clause at the time he signed the agreement, since he didn’t read the provision until a few days later.

In summary, appellant failed to demonstrate by a preponderance of the evidence that his resignation was obtained pursuant to mistake, either under the general definition of mistake or under the statutory definitions set forth at Civil Code sections 1576-1578. Therefore, the resignation is considered to be free, voluntary and binding upon appellant consistent with Government Code section 19996.1; and the appeal to set aside his resignation should be denied.

 

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that the petition to set aside resignation with the OCJP effective February 6, 2001, is denied.

 

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1. The agreement allowed appellant back pay and five months of paid ATO.

2. Upon further negotiations between the representatives, the parties settled upon five instead of six months.

3. In rebuttal testimony, appellant denied that his representative made this statement.

4. In rebuttal testimony, appellant denied that his representative made this statement.

5. In rebuttal testimony, appellant denied that his representative made this statement.

6. Section 19140 provides in relevant part: 19140. ... an appointing power may, in his or her discretion reinstate any person having probationary or permanent status who was separated from his or her position. ... by resignation, ... Reinstatement shall be made to any of the following vacant positions: (1) The class vacated or from which separated. (2) A lower class in the same series. (3) Another class to which the employee could transfer or demote in accordance with board rule.

An employee, separated from his or her former position in state service by ... by resignation ... may be reinstated at the discretion of the appointing power. However, the reinstatement is subject to the requirements of this section and shall not be to a position that is specifically subject to the employee’s reemployment list eligibility.

7. Section 444 provides in relevant part: 444. ... Permanent separations from state services shall included ... resignation....