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Dieter C. Dammeier SBN 188759 LACKIE, DAMMEIER & McGILL APC 367 North Second Avenue Upland, CA 91786 Telephone: (909) 985-4003 Facsimile: (909) 985-3299 Eleanor K. Andrews, City Clerk City of San Gabriel San Gabriel City Hall 425 S. Mission Drive San Gabriel, CA 91776 Claims of SAN GABRIEL POLICE OFFICERS') ASSOCIATION; and MARIAN ALVAREZ and ) ) all similarly situated taxpayers, ) ) Claimants, ) ) vs. ) CITY OF SAN GABRIEL, a municipality; CITY ) COUNCIL OF THE CITY OF SAN GABRIEL; ) STEVEN A. PRESTON, individually and in his ) official capacity as the City Manager of the City ) of San Gabriel ; JOHN JANOSIK, individually ) and in his official capacity as the Treasurer of the ) City of San Gabriel; and DOES 1 through 10, ) Inclusive, ) ) Defendants. ) ) ) ) TORT CLAIM — DAMAGES AND INJUNCTIVE RELIEF (Govt. Code §910)

TO THE CITY CLERK OF THE CITY OF SAN GABRIEL: You are hereby notified that the SAN GABRIEL POLICE OFFICERS' ASSOCIATION and MARIAN ALVAREZ claim damages and injunctive relief from the DEFENDANTS as follows: 1. Claimants desire all inquiries, notices and communications be sent or directed to

Dieter C. Dammeier, Esq., LACKIE, DAMMEIER & McGILL APC, 367 North Second Avenue, Upland, California, 91786, Telephone (909) 985-4003, Facsimile (909) 985-3299. 2. Claimant SAN GABRIEL POLICE OFFICERS' ASSOCIATION ("SGPOA") is

the recognized exclusive bargaining representative for those employees of the City of San

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Gabriel with the job classification of Police Officer. The SGPOA can sue and be sued in its name.

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3.

Claimant MARIAN ALVAREZ and all similarly situated taxpayers brings this

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claim on behalf of herself and all other similarly situated residents and taxpayers of the City of San Gabriel. She is a resident of the City of San Gabriel, residing at 602 E. Main Street, San Gabriel, CA 91776, and is liable or has been liable within one year of the filing of this claim for the payment of City taxes. 4. Defendant CITY OF SAN GABRIEL ("City") is a duly constituted municipal

corporation operating under the laws of the State of California, wholly situated in the County of Los Angeles. 5. Defendant CITY COUNCIL OF THE CITY OF SAN GABRIEL ("City

Council"), the elected governing body of Defendant City, is responsible for establishing laws and policies in the conduct of City business. 6. Defendant STEVEN A. PRESTON, the appointed City Manager of Defendant

City, is responsible for the administration of all City departments, and serves as the City's chief executive to the City Council. Defendant Preston is named in both his official and individual capacity. 7. Defendant JOHN JANOSIK, the elected City Treasurer of Defendant City, is

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responsible for establishing and maintaining the procedures and controls over City revenues and expenditures. Defendant Janosik is named in both his official and individual capacity. 8. The true names and capacities of the Defendants named herein as DOES 1

through 10, whether individual, government, corporate, associate, or otherwise, are unknown to Claimants who therefore bring this claim against Defendants by such fictitious names pursuant to Code of Civil Procedure, § 474 et. seq. 9. Defendants DOES 1 through 10, were at all times alleged herein, officers or

public bodies of defendant City and in some capacity were responsible for the wrongful acts herein complained of. Claimants are informed and believe that the DOE individual Defendants

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herein are California residents and will amend this claim to show their true names and capacities once they have been ascertained.

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10.

In 1948, the people of the City of San Gabriel voted upon and enacted Ordinance

No. 540, authorizing the City to enter its employees into the "State Employees' Retirement System," and create a special tax to fund the obligations of this retirement system. (The "State Employees' Retirement System" is now known as the "Public Employees' Retirement System", or "PERS".) 11. Regarding the special tax, Ordinance No. 540 of 1948 authorized the City to: "...levy and collect annually...a special tax sufficient to raise the amount estimated...to be required to provide sufficient revenues to meet the obligations of said City to said retirement system..." (See "Exhibit A" attached hereto. Emphasis added.) 12. Based on information and belief, since the adoption of this special tax, the City

has updated the tax by enacting annual rate-setting Resolutions. 13. According to documents obtained by Plaintiffs, every rate-setting Resolution

enacted for the past eleven years, from fiscal year 2000-2001 through 2010-2011, specifically references the purpose of the tax as the "City's indebtedness to Public Employees' Retirement System as set forth in Ordinance No. 540..." (See "Exhibit B" attached hereto.) 14. Since at least fiscal year 2000-2001, and most likely beginning before that year,

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the revenue from this special tax has been placed outside the City's general fund and into the City's designated "Retirement Fund." 15. Despite this specified purpose for the revenues generated from this special tax,

documents obtained by Plaintiffs show that the funds instead are being, and have been, diverted towards and used for purposes other than the City's indebtedness to PERS. 16. Specifically, documents show that at least $5,714,280 from the City's Retirement

Fund has been diverted to fund numerous benefits for City staff personnel, including deferred compensation accounts and retiree medical accounts. (See Exhibit C attached hereto.)

3 TORT CLAIM

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17.

In addition, based on information and belief, interest received from the special tax

revenue was diverted to the City's General Fund to assist in paying for City Staff compensation increases. 18. Based on information and belief, defendants JANOSIK and PRESTON personally

receive these benefits, and thus personally benefit from the diversions from the City Retirement Fund. 19. It is entirely possible that more than $5,714,280 has been impermissibly diverted

from the City's Retirement Fund; the documents obtained by Plaintiffs only extend back to fiscal year 2000-2001. 20. As a result of these diversions, the Retirement Fund has been depleted to a point

where its continued solvency is in jeopardy, and as such the City's responsibility to fund its PERS obligations are creating a fiscal crisis endangering the well-being of the City as a whole. 21. In doing the things alleged herein, DEFENDANTS acted under color of state law,

and within the course and scope of employment and official duties. In doing the things alleged herein, JANOSIK and PRESTON acted as official policy makers of the City of San Gabriel. JANOSIK and PRESTON are Department Heads and Officials of the City of San Gabriel, vested with policymaking authority over actions such as the ones at issue in this claim. 23. In doing the things alleged to have been done, Defendants unlawfully diverted

special tax revenue from the City's Retirement Fund towards purposes not specified in enactment of the special tax, in violation of California Government Code § 53724. 24. CCP § 526a provides in relevant part that a "taxpayer's suit", "...to obtain a

judgment, restraining and preventing any illegal expenditure of...(the) funds...of a county, town, city...may be maintained against any officer thereof, or any agent, or other person, acting in its behalf, either by a citizen resident therein, or by a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax therein." 25. Defendants diversion of funds from the specified purposes of the special tax is

unlawful, as it is made in violation of Gov. Code § 53724. Gov . Code § 53724 provides in relevant part that revenues from a special tax may be "used only for the purpose or service for

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which it was imposed, and for no other purpose whatsoever." (Emphasis added.) The tax imposed pursuant to Ordinance No. 540 is a special tax, because it is a tax "levied to fund a specific governmental project or program." Rider v. County of San Diego, 1 Ca1.4th 1, 15 (1991). (Also see Gov. Code § 53721: "Special taxes are taxes imposed for specific purposes.") 26. Claimants also claim damages individually from Defendants JANOSIK and

PRESTON, in the form of reimbursement into the City's General Fund all unlawfully diverted money, as their unlawful acts herein described were done in an absence of "due care." Dated: January 3, 2012 Respectfully Submitted, L C E, DAM ER & McGILL APC
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Dieter C. Dammeier Attorney for Claimants, SAN GABRIEL POLICE OFFICERS' ASSOCIATION, and MARIAN ALVAREZ

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TORT CLAIM

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PROOF OF SERVICE I declare that I am over the age of eighteen (18) and not a party to this action. My business address is 367 North Second Ave., Upland, California 91786.

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On January 3, 2012, I served the following document described as TORT CLAIM — DAMAGES AND INJUNCTIVE RELIEF on the interested parties in this action by placing a true and correct copy of each document thereof, enclosed in a sealed envelope addressed as follows: Eleanor K. Andrews, City Clerk City of San Gabriel San Gabriel City Hall 425 S. Mission Drive San Gabriel, CA 91776 Facsimile: (626) 458-2830

I am readily familiar with the business practice for collection and processing of correspondence for mailing with the United States Postal Service. I know that the correspondence was deposited with the United States Postal Service on the same day this declaration was executed in the ordinary course of business. I know that the envelope was sealed and, with postage thereon fully prepaid, placed for collection and mailing on this date in the United States mail at Upland, California. By Personal Service, I caused such envelope to be delivered by hand to the above addressee(s).

(X]

By facsimile machine, I caused the above-referenced document(s) to be transmitted to the above-named persons(s) Executed on January 3, 2012, at Upland, California. By Overnight Courier, I caused the above referenced document(s) to be delivered To an overnight courier (UPS) for delivery to the above addressee(s). (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct.

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AR

JUA Z

PROOF OF SERVICE

LACKIE, DAMMEIER & MCGILL APC
367 North Second Avenue Upland, CA 91786 Telephone: 909-985-4003 Fax: 909-985-3299

FAX COVER SHEET
FACSIMILE NUMBER TRANSMITTED TO: (626) 458-2830 To: Eleanor K. Andrews, City Clerk City of San Gabriel

From: Kimberly D. Riley Date: Re: January 3, 2012
San Gabriel POA et al v. City of San Gabriel

DOCUMENTS TORT CLAIM — DAMAGES AND INJUNCTIVE RELIEF

NUMBER OF PAGES* 5

* NOT COUNTING COVER SHEET. IF YOU DO NOT RECEIVE ALL PAGES, PLEASE TELEPHONE US IMMEDIATELY AT 909-985-4003.

CONFIDENTIALITY NOTICE The documents accompanying this facsimile transmission contain confidential information belonging to the sender which is legally privileged. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the contents of this facsimile information is strictly prohibited. If you have received this facsimile in error, please immediately notify the sender by telephone to arrange for the return of the original documents.

TRANSMISSION VERIFICATION REPORT TIME : 01/03/2012 09:59 NAME : LACKIEDAMMEIERMCGILL : 9099853299 FAX : 9099854003 TEL SER.# : 000C1N784183

DATE,TIME FAX NO./NAME DURATION PAGE(S) RESULT MODE

01/03 09:57 16264582830 00:02:10 07 OK STANDARD ECM

LACKIE, DAMMEIER & MCGILL APC
367 North Second Avenue Upland, CA 91786 Telephone: 909-985-4003 Fax: 909-985-3299

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FAX COVER SHEET
FACSIMILE NUMBER TRANSMITTED TO: (626) 458-2830 To: Eleanor K. Andrews, City Clerk City of San Gabriel

From: Kimberly D. Riley Date: January 3, 2012 San Gabriel FDA et al v. City of San Gabriel NUMBER OF PAGES* 5

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DOCUMENTS TORT CLAIM — DAMAGES AND INJUNCTIVE RELIEF

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