Plea v. Phoenix

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

PHOENIX LAW ENFORCEMENT ASSOCIATION, et al.,
Plaintiffs/Appellants,

v.

CITY OF PHOENIX et al., Defendants/Appellees.

No. 1 CA-CV 23-0454
FILED 08-27-2024

Appeal from the Superior Court in Maricopa County
No. CV2014-008711
CV2014-009114
CV2015-007714
The Honorable Jay R. Adleman, Judge

AFFIRMED

COUNSEL

Napier, Baillie, Wilson Bacon & Tallone PC, Phoenix
By Eric R. Wilson (argued), Michael Napier, Cassidy L. Bacon, Juliana B.
Tallone
Counsel for Plaintiffs/Appellants Phoenix Law Enforcement Association

Yen Pilch Robaina & Kresin, PLC, Phoenix
By Caroline A. Pilch (argued), Robert E. Yen
Counsel for Plaintiffs/Appellants Theresa Clark, et al.

Sherman & Howard L.L.C., Phoenix
By Matthew A. Hesketh (argued), John A. Doran, Carli J. Simkin
Counsel for Defendants/Appellees
 PLEA, et al. v. PHOENIX
Decision of the Court

MEMORANDUM DECISION

Judge Brian Y. Furuya delivered the decision of the Court, in which Presiding
Judge Anni Hill Foster and Vice Chief Judge Randall M. Howe joined.

F U R U Y A, Judge:

¶1 Plaintiffs Phoenix Law Enforcement Association (“PLEA
plaintiffs”), et al., and plaintiffs Theresa Clark (“Clark plaintiffs”), et al.,
(collectively “Plaintiffs”) appeal from the superior court’s grant of
summary judgment in favor of the City of Phoenix (“the City”). For the
following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Phoenix police officers are members of the Public Safety
Personnel Retirement System (“PSPRS”). Under Arizona Revised Statute
(“A.R.S.”) § 38-842, a retiree’s benefits are calculated in accordance with the
“average monthly benefit compensation.” The membership of the Phoenix
Law Enforcement Association (“PLEA”) consists of Phoenix police officers
who have not been promoted to the rank of sergeant. Members of the
Phoenix Police Sergeants and Lieutenants Association (“PPSLA”) are
supervisory officers.

¶3 The City and its officers engage in collective bargaining
regarding employment and compensation. Phoenix City Code (“P.C.C.”)
§§ 2-209 to -235. Agreements with PLEA and PPSLA are delineated in a
Memorandum of Understanding (“MOU”) and a Memorandum of
Agreement (“MOA”) respectively. We refer to these agreements together as
Collective Bargaining Agreements (“CBAs”). These CBAs are subject to
periodic renegotiation between the City and the unions. See P.C.C. §§ 2-
209(4), -210(11), -223, -229. If the City and unions fail to reach an agreement
during such negotiations, the City Council or Manager may impose terms
based on “the interest of the public employees, public employer, and the
public.” P.C.C. § 2-219(J), (K). Further, each provision in a CBA constitutes
a “mandatory subject of bargaining” and is subject to change or elimination
during the collective bargaining process. P.C.C. § 2-215(A).

¶4 Historically, the CBAs contained wage enhancement
provisions that allowed employees to increase their wages by converting
vacation time, sick time, and uniform allowances into additional base

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salary, provided employees satisfied certain threshold requirements. An
employee could elect to participate in any or all the wage enhancement
provisions by submitting an election form. Each subsequent CBA renewed
these provisions until 2014.

¶5 As relevant here, the 2012–2014 CBAs1 also included wage
enhancement provisions as follows:

§ 3-1D, regarding uniform allowances:

[A] unit member may elect to have their basic annual uniform
allowance converted to a bi-weekly payment for a
consecutive three year period. . . . The consecutive 3 year
period may be stopped and restarted one time for an
additional three (3) year period up to a maximum total of six
(6) years.

§ 3-4(B)(5), regarding sick leave benefits:

Once the employee elects to exercise this benefit, it must
continue for the full three (3) consecutive year period. The
employee may stop and restart this benefit one time without
further qualification up to a maximum of a total of six (6)
years.

§ 5-5(L), regarding vacation leave:

Once the election to exercise this benefit is made, it must
continue for the full three consecutive-year period. The unit
member may receive a one-time, one-year extension to the
three-year period.”

¶6 In 2014, before the 2012–2014 CBAs expired, the City began
negotiating with PLEA and PPSLA on the terms of the next contracts. When
negotiations failed to achieve a final agreement, the City imposed terms of
employment that did not include any wage enhancement provisions. The
PLEA plaintiffs and the Clark plaintiffs each sued the City to reinstate the
wage enhancement provisions, arguing breach of contract and promissory
estoppel. In 2016, Plaintiffs’ claims were consolidated and later successfully
obtained class certification. Phoenix L. Enf’t Ass’n v. City of Phoenix, No. 1

1 The wage enhancement provisions in the MOU contain substantially
similar language to the MOA regarding the most relevant issue in this case,
namely that any election “must continue for the full three-year period.”

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CA-CV 19-0813, 2021 WL 1575782, at *2 ¶ 10 (Ariz. App. Apr. 22, 2021)
(mem. decision).

¶7 Thereafter, the City moved for summary judgment on all
claims. The PLEA plaintiffs moved for partial summary judgment on the
breach of contract claim. The superior court granted the City summary
judgment on all claims and denied the PLEA plaintiffs’ motion. The court
awarded the City $220,000 of attorneys’ fees from the PLEA plaintiffs and
$180,000 of attorneys’ fees from the Clark plaintiffs. The awards reflected
more than a 25% reduction in the amounts the City requested.

¶8 We have jurisdiction over Plaintiffs’ timely appeal under
Article 6, Section 9 of the Arizona Constitution and A.R.S. §§ 12-
120.01(A)(1), -2101(A)(1).

DISCUSSION

¶9 We review the superior court’s grant of summary judgment
in favor of the City de novo, viewing the facts in the light most favorable to
Plaintiffs. See Dinsmoor v. City of Phoenix, 251 Ariz. 370, 373 ¶ 13 (2021). “The
court shall grant summary judgment if the moving party shows that there
is no genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). Summary
judgment must be granted if the facts produced in support of the non-
movant’s claim “have so little probative value, given the quantum of
evidence required, that reasonable people could not agree with the
conclusion advanced by the proponent of the claim.” Rosenberg v. Sanders, 256 Ariz. 328, 332–33 ¶ 23 (2023) (quoting Orme Sch. v. Reeves, 166 Ariz. 301,
309 (1990)).

I. The City Did Not Breach the 2012–2014 CBAs by Eliminating the
Wage Enhancement Provisions After Those CBAs Expired.

¶10 Plaintiffs argue the City breached the CBAs by eliminating
wage enhancement provisions for employees who made a timely election
during the 2012–2014 period.

A. We Are Not Bound by Previous Decisions and Rulings
Because They Were Not Decided on the Merits.

¶11 As a preliminary matter, Plaintiffs argue that granting the
City summary judgment contradicts previous judgments on the pleadings
and this court’s decision on class certification. They contend those decisions

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relied on the same essential facts and no new circumstance or change in the
law occurred since then.

¶12 Courts are not bound by a prior decision if it “did not actually
decide the issue.” Flood Control Dist. v. Paloma Inv. Ltd. P’ship, 230 Ariz. 29,
40 ¶ 31 (App. 2012) (quotation omitted); see also Quinn v. Cardenas, 256 Ariz.
77, 82–83 ¶ 18 (App. 2023) (explaining final judgment is reviewed
notwithstanding any contrary previous ruling). A motion for judgment on
the pleadings “tests the sufficiency of the complaint,” and the allegations
must be taken as true. Garibay v. Johnson in & for Cnty. of Pima, 257 Ariz. 91,
95 ¶ 5 (App. 2024) (quoting Giles v. Hill Lewis Marce, 195 Ariz. 358, 359 ¶ 2
(App. 1999)). Class certification requires analysis of the individuals of the
proposed class, the types of claims, the relationship between the relief
sought and the proposed class, and procedural concerns—not the merits of
the case. See generally Ariz. R. Civ. P. 23. Summary judgment, however,
requires finding “there is no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law.” Ariz. R. Civ. P.
56(a).

¶13 Therefore, the standard for surviving summary judgment is
different than judgment on the pleadings or class certification. Compare
Ariz. R. Civ. P. 12(b) with 56(a) and 23. Because prior decisions rendered in
the history of this consolidated case did not “actually decide the issue” on
the merits, they have no bearing on whether summary judgment was
proper. See Flood Control Dist., 230 Ariz. at 40 ¶ 31.

B. The Wage Enhancement Provisions Expired with the 2012–
2014 CBAs.

¶14 Plaintiffs argue the wage enhancement provisions survived
the expiration of the CBAs because the parties’ intent and principles of
contract interpretation suggest those provisions were intended to outlast
the main agreements.

¶15 We interpret collective bargaining agreements under
ordinary contract principles. See M & G Polymers USA, LLC v. Tackett, 574
U.S. 427, 435 (2015); see also Cheatham v. DiCiccio, 240 Ariz. 314, 323 ¶ 38
(2016) (explaining collective bargaining agreements are like other
contracts). Contract interpretation is a question of law we review de novo.
Benson v. Casa De Capri Enters., LLC, 252 Ariz. 303, 306 ¶ 9 (2022). When
interpreting contract terms, we seek to identify and enforce the parties’
intent. Terrell v. Torres, 248 Ariz. 47, 49 ¶ 14 (2020). In so doing, we construe
the provisions “according to their plain and ordinary meaning.” First Am.

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Title Ins. Co. v. Johnson Bank, 239 Ariz. 348, 350 ¶ 8 (2016). In approaching
the text, “we attempt to reconcile and give effect to all terms of the contract
to avoid any term being rendered superfluous.” Terrell, 248 Ariz. at 49 ¶ 14.

1. The Durational Clauses of the CBAs Apply to the
Wage Enhancement Provisions Absent a Clear and
Explicit Exception.

¶16 “[C]ontractual obligations will cease, in the ordinary course,
upon termination of the bargaining agreement.” Litton Fin. Printing Div., a
Div. of Litton Bus. Sys., Inc. v. N.L.R.B., 501 U.S. 190, 207 (1991). Further,
employees do not retain a right to future benefits in the absence of a formal
written contract to that effect. See Abbott v. City of Tempe, 129 Ariz. 273, 278
(App. 1981) (permitting city to limit prospective holiday and vacation
benefits not yet earned); Bennett ex rel. Ariz. State Pers. Comm’n v. Beard, 27
Ariz. App. 534, 536–37 (App. 1976) (permitting state to modify future
employment benefits). Thus, continuing any benefits beyond the extent of
the durational clause of a collective bargaining agreement requires clear
and explicit language establishing that intent. See Tackett, 574 U.S. at 442; see
also CNH Industrial N.V. v. Reese, 583 U.S. 133, 140 (2018) (requiring specific
language intended to override durational clause).

¶17 Though not aligned on all facts, Paczosa v. Cartwright
Elementary School is instructive. 222 Ariz. 73 (App. 2009). The contracts at
issue in Paczosa controlled all aspects of the employees’ employment
relationship, while the CBAs here set only compensation and benefits. But
this difference does not make Paczosa distinguishable from this case. Here,
as in Paczosa, the main issue is whether benefit provisions that specify a
term of applicability appearing to conflict with general durational clauses
outlast expiration of the contract. See id. at 76–77 ¶¶ 14–17. In Paczosa,
certain employment contracts—with a stated one-year duration—allowed
employees to “choose to receive” certain benefits “over the pay periods of
one, two, or three contract years immediately prior to termination of
employment.” Id. at 75 ¶¶ 3–4. The employees sent form notices to the
employer stating their election to receive these benefits under the
employment contract for the three-year period. Id. at 75, 78 ¶¶ 5, 23. But
when the original contract terminated, the employer altered the benefits
offered and presented the new, amended employment contract to the
employees. Id. at 75 ¶¶ 6–7. The employees refused to sign the new
employment contracts, asserting instead that they would work under the
expired contract’s terms. Id. at 76 ¶ 8. As relevant to this appeal, the
employees argued that their election to receive benefits for the three-year
term under their prior employment contract (1) prohibited the employer

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from changing the benefits terms and (2) operated to extend the life of the
prior contract to cover at least the three years of their timely benefits
election under that document. Id. at 77 ¶¶ 15, 18.

¶18 The Paczosa court declined to construe the three-year benefits
election as a separate contractual right that prevented the employer from
changing those benefits. Id. at 77 ¶ 17. It reasoned that the employees had
no legitimate expectation of employment beyond the one-year duration of
the old employment contract because the contract itself was expressly
limited to one-year and statutes precluded a longer contract term. Id. at 77
¶¶ 15–16. Nor did the employees’ election extend the one-year employment
contract into a three-year contract because the language of the contract did
not clearly admit of such an interpretation and, again, the law did not
permit such an extension. Id. at 78 ¶¶ 19–24.

¶19 Here, the 2012–2014 CBAs each contained a two-year
durational clause that expired at the beginning of July 2014. To that end, all
provisions were only “binding upon the parties for the term thereof.” Like
the employees in Paczosa, Plaintiffs signed election forms to participate in a
benefits program at a date beyond the expiration of the CBAs. And as in
Paczosa, Plaintiffs assert the three-year election language extends the wage
enhancement provisions beyond the expiration of the CBAs. But unless
clear and explicit contract language and statutes provide otherwise, a
general durational limitation in an employment contract controls, even
when the contract also provides an election of benefits covering a period
exceeding the employment contract’s term. Id. at 77–78 ¶¶ 15–24.

¶20 Plaintiffs’ counter by pointing to the CBAs’ phrase “must
continue for the full three (3) consecutive year period,” as the clause that
vests their benefits election beyond the termination of the CBAs. But the
superior court correctly interpreted this language to merely indicate that an
employee cannot opt in and out of the wage enhancement elections in some
other fashion. Although electing employees are committed to their election
for at least a period of three years, their election does not guarantee benefits
will survive the duration of the CBAs. Surrounding language provides
context supporting this interpretation. This same section of the CBAs state
that an employee “may stop and re-start this benefit one time without
further qualification up to a maximum of a total of six (6) years.” In other
words, the three-year election language defines the duration of the
employee’s election while the CBA remains in force to provide such
benefits. It does not define the duration of the CBAs themselves. See id. at
78 ¶ 21 (observing that provision allowing participants to receive benefits
for “one, two, or three contract years” does not bestow “one, two, or three-

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year contracts”). Because the CBAs do not contain any clear and express
language providing that the benefits will survive the two-year durational
clause of the CBAs, those provisions are limited to two years. See Tackett,
574 U.S. at 435; Reese, 583 U.S. at 140.

¶21 Plaintiffs argue Paczosa is distinguishable because those
contracts specified the benefits were available “for the fiscal year this
Contract is in effect.” But that language parallels language in the CBAs—
that provisions were “binding upon the parties for the term thereof.”
(Emphasis added.) The Clark Plaintiffs argue the employees in Paczosa had
one-year contracts subject to annual renewal by statute. However,
Plaintiffs’ contracts were also not indefinite, and all terms were subject to
renegotiation every three years. P.C.C. §§ 2-215(B), (C), -218(F), (G).

¶22 Applying Paczosa’s reasoning, we conclude the wage
enhancement provisions at issue here do not confer rights beyond the
CBAs’ expiration. Therefore, the two-year general durational limits of the
CBAs apply to the wage enhancement provisions and the elections of
benefits were effective only for the term of the CBAs.

2. The Parties Did Not Intend for Wage Enhancements
to Survive Beyond the 2012–2014 CBAs’ Expiration.

¶23 Plaintiffs further argue the wage enhancement provisions’
language indicates that the parties intended the election to receive such
benefits to extend beyond the CBAs’ expiration. Not so.

¶24 All provisions of the CBAs—including benefits—were
mandatory subjects of bargaining, with every provision eligible to be
changed or eliminated. See P.C.C. § 2-215. After the CBAs expired, the
parties could not agree during renegotiation and the City’s terms
exclusively governed Plaintiffs’ employment and these new terms
eliminated the wage enhancement provisions of the CBAs, as was the City’s
right under the City’s code. See P.C.C. § 2-219(J), (K). Because applicable
law subjects the CBAs to prospective amendment or elimination, rights for
future benefits derived from those transitory documents cannot be vested.
See Paczosa, 244 Ariz. at 77 ¶ 16 (citing 11 Williston on Contracts § 30:19, at
206, 211 (4th ed. 1999) (“[C]ontractual language must be interpreted in light
of existing law, the provisions of which are regarded as implied terms of
the contract, regardless of whether the agreement refers to the governing
law.”)). It is unreasonable to expect that benefits for future compensation
under those CBAs continue beyond the CBAs’ expiration merely by electing
to receive them during the CBAs’ active term. See id. Thus, the language

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regarding the election to utilize the wage enhancement provisions does not
indicate intent to confer ongoing vested rights beyond the expiration of the
CBAs.

¶25 Nevertheless, the PLEA Plaintiffs contend “the parties
intended the promise to survive” because the wage enhancement
provisions were “structured for three years . . . for the purpose of impacting
an officer’s ‘high three’[2] beyond the MOU.” Even assuming the truth of
this assertion, it does not prove the parties intended for the provisions to
survive the CBAs’ expiration. Moreover, the parties could not lawfully
agree to allow the provisions to survive regardless of the effect on the “high
three” because doing so would obstruct the future renegotiation of
mandatory subjects or fix the terms of future CBAs, all contrary to the
requirements of statute. P.C.C. § 2-215.

¶26 The PLEA plaintiffs also contend the City “removed any
uncertainty as to [its] intent to be bound for a term beyond the MOU” by
accepting election forms and paying wage enhancements. We disagree. The
City’s actions show it performed as obligated during the term of the CBAs,
but do not prove the City’s purported intent to be bound beyond the
expiration in violation of the City’s code.

¶27 Finally, the Clark plaintiffs contend the parties must have
intended wage enhancement to survive because those provisions were
historically included in previous CBAs. Even so, that fact alone does not
indicate intent to be bound in the future, such that the right becomes
presently vested vis-à-vis future agreements. Though many provisions
were doubtlessly repeated across multiple CBAs, all are still subject to
renegotiation and change during each negotiation cycle. See P.C.C. § 2-215;
see also Gilmore v. Gallego, No. CV-23-0130-PR, 2024 WL 3590669, at *4 ¶ 22
(Ariz. July 31, 2024) (observing that employees do not have a right to
hypothetical future benefits “just because [an] older MOU provided for
them) (citing Paczosa, 222 Ariz. at 77 ¶ 15); Am. Fed’n of State Cnty. & Mun.
Emps. AFL-CIO Loc. 2384 v. City of Phoenix, 249 Ariz. 105, 111–113 ¶¶ 26–32
(2020) (City’s prior promises and longtime practices did not confer vested
rights) (“AFSCME”).

¶28 Therefore, the language of the CBAs does not establish intent
to vest in employees a right to wage enhancements after the CBAs expired.

2 “High three” refers to the highest average of 36 consecutive months
of salary within the last 10 years of the officer’s service for purposes of
retirement pension calculations.

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Instead, we agree with the superior court’s finding that the wage
enhancement benefits expired with the CBAs that authorized them.

C. The Phoenix City Charter and Code Preclude any
Continuing Obligation to Pay Wage Enhancements.

¶29 Our supreme court has recognized that a city charter
effectively constitutes a “local constitution.” McMichael-Gombar v. Phoenix
Civ. Serv. Bd., 256 Ariz. 312, 316 ¶ 9 (2023) (quoting Piccioli v. City of Phoenix,
249 Ariz. 113, 118 ¶ 15 (2020)). Further, the City is not bound by alleged
contracts, promises, or longstanding practices that conflict with its
governing laws. See AFSCME, 249 Ariz. at 107, 112 ¶ 28 (explaining a city
cannot act or make promises in violation of its charter). Thus, courts have
“refused to hold binding on the City a contract that was entered into in a
manner inconsistent with charter provisions.” Johnson Int’l, Inc. v. City of
Phoenix, 192 Ariz. 466, 471 ¶ 28 (App. 1998) (citing Barron G. Collier, Inc. v.
Paddock, 37 Ariz. 194, 204 (1930)).

¶30 The City’s charter vests its officials with the authority to set
employee compensation unless otherwise established by an MOU “which
does not exceed three years in duration.” See Phoenix City Charter, Chapter
III, § 9(A). The City’s code similarly indicates that an MOU or MOA may
not exceed three years. See P.C.C. §§ 2-215(B), -232(D). In addition, the City’s
charter prohibits the City from entering into any agreement that precludes
the City’s officials from modifying employment compensation. See Phoenix
City Charter, Chapter XXV, § 14(F). If the wage enhancement provisions
were to survive beyond the duration of the CBAs, such an agreement would
violate the City’s charter and code by exceeding three years and limiting
the City’s power to modify compensation.

¶31 The PLEA plaintiffs contend there “was no violation” by
“limiting the duration to two consecutive three-year periods,” because they
have vested rights for up to an additional six years. Plaintiffs rely on Pointe
Resorts, Inc. v. Culbertson, 158 Ariz. 137 (1988), claiming the City’s charter
allows other methods of contracting. In Pointe Resorts, the City entered a
contract that complied with the charter when it was made. 158 Ariz. at 138–
40, 141–43 (Charter “expressly allowed [Council] to enter into [certain]
trade agreements”). The court addressed whether a contract that was valid
when entered was later invalidated by a new law—it did not suggest
unlawful contracts are enforceable. Id. Here, by contrast, Plaintiffs failed to
identify any alternative methods of contract formation that the City’s
charter or code provided. To the contrary, the CBAs specify they are subject

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to the Phoenix City Charter and Code, and they must be interpreted in
accordance therewith.

¶32 The City’s charter and code preclude any obligation to pay
wage enhancement beyond the CBAs’ expiration.

D. The Wage Enhancement Provisions Are Not Retirement
Benefits and Plaintiffs Did Not Have Vested Rights in
Those Provisions.

¶33 Plaintiffs argue they had vested rights in the wage
enhancements because they met the eligibility requirements and submitted
election forms to the City before the CBAs expired. They also assert the
wage enhancements are retirement benefits because the City always treated
them as pensionable compensation.

1. The Wage Enhancement Provisions Are Not
Retirement Benefits.

¶34 The Pension Clause of the Arizona Constitution protects
“public retirement benefits.” Piccioli, 249 Ariz. at 117 ¶ 11; see Ariz. Const.
art. 29, § 1(D). This protection covers the codified retirement plan and the
statutory formula for calculating retirement system benefits. Id. at 117 ¶ 12;
Fields v. Elected Offs.’ Ret. Plan, 234 Ariz. 214, 221 ¶ 33 (2014). However, it
does not protect purported benefits outside the codified plan. See AFSCME,
249 Ariz. at 107–08 ¶¶ 8–9 (rejecting claim that was not grounded in
codified retirement plan because the law “only protect[s] whatever pension
rights [members] ha[ve] under applicable law”); Cross v. Elected Offs. Ret.
Plan, 234 Ariz. 595, 599–600 ¶¶ 8–9, 13 (App. 2014) (“Whatever contract
existed between [member] and the [retirement] Plan, however, guaranteed
him only the pension due under the law, not something more.”).

¶35 In Piccioli and AFSCME, our supreme court held the City did
not impair retirement benefits by terminating compensation programs that
had no basis in the codified retirement plan. See Piccioli, 249 Ariz. at 119 ¶
23 (“Petitioners do not have contractual rights independent of the Plan.”);
AFSCME, 249 Ariz. at 112–113 ¶¶ 31–32 (explaining City’s prior promises
and longtime practices did not form a pension contract independent of
codified plan). Here, PSPRS is a statewide retirement system and Arizona
statutes define the PSPRS benefits and the formula for calculating them. See
A.R.S. § 38-845. Because the wage enhancement provisions are specifically
excluded from the definition of compensation in the PSPRS statutes, the
elimination of wage enhancement benefits did not alter anything in the
PSPRS statutes, the statutory formula, or the way PSPRS benefits are

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calculated. Id.; A.R.S. § 38-842(12).3 Moreover, the City does not have
authority to modify or supplement the PSPRS statutes or the benefits under
them. And the 2012–2014 MOA states:

Retirement benefits are governed by the provision of State
law, as set forth in the Arizona Revised Statutes, and are not
subject to the provisions of this Agreement. The Arizona
Revised Statutes should be reviewed for the specific
retirement benefits provided to police officers.

Thus, wage enhancements cannot be treated as retirement benefits because
doing so would conflict with PSPRS’s purpose to “provide a uniform,
consistent and equitable statewide program.” A.R.S. § 38-841(B); cf.
AFSCME, 249 Ariz. at 111 ¶ 23 (“[N]o logical reason exists to conclude that
voters intended to grant a lifetime windfall to members who refrained from
taking vacation. . . . [U]sing those payouts to increase pension benefits
would result in unequal treatment among members.”).

¶36 Further, “the pension protection clause protects the statutory
formula, not the inputs from the employment relationship.” Pisani v. City of
Springfield, 73 N.E.3d 129, 138–39 ¶ 31 (Ill. App. Ct. 2017).4 Even though
elimination of an input may affect the amount of the pension, such is not a
diminishment or impairment of pension benefits within the meaning of the
pension protection clause. Id. (“The pension contract was the formula, with
its variables, and no matter what numbers were plugged into the formula,
it—and therefore the pension contract—remained the same.”). The law
does not treat such benefits as vested merely because they could affect
pension calculations. See id. at 136–39 ¶¶ 26–31. Here, though the wage
enhancements may affect pension calculations if used during the “high
three,” that circumstance alone does not qualify them as retirement
benefits.

¶37 The wage enhancement provisions cannot be classified as
retirement system benefits because the wage enhancement provisions at
issue here are not included in the statutory scheme of the PSPRS. See A.R.S.
§ 38-841. Therefore, the elimination of the wage enhancements did nothing

3 Though this statute has been amended many times, the exclusion
was in place as of the time that the parties agreed to the CBAs.

4 The Arizona Supreme Court has recognized that Arizona, Illinois,
and New York share similar protections with respect to public pension
benefits. See Fields, 234 Ariz. at 220.

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to modify the statutory formula for any such payments. See Piccioli, 249
Ariz. at 118 ¶ 18; AFSCME, 249 Ariz. at 110 ¶ 19. Because the PSPRS
statutory scheme does not include wage enhancements, their elimination
did not implicate the Pension Clause. See Ariz. Const. art. 29 § 1; AFSCME,
249 Ariz. at 107 ¶ 8; Cross, 234 Ariz. at 600 ¶ 13.

2. Plaintiffs Did Not Have Vested Rights in the Wage
Enhancement Provisions.

¶38 Under Arizona law, employees do not retain any vested
rights in future compensation unless a contract expressly indicates that
right and/or the benefits were earned by services previously rendered. See
Gilmore, 2024 WL 3590669, at *4 ¶ 22; Abbott, 129 Ariz. at 279 (right to merit
increases only vests upon performance of the required services); Rengstorf
v. City of Glendale, 14 Ariz. App. 4, 6 (App. 1971) (firefighters do not retain
vested right in future pay increases); Smith v. City of Phoenix, 175 Ariz. 509,
514 (App. 1992) (city permitted to modify city code with respect to
compensation of judges).

¶39 Plaintiffs contend they acquired vested rights to the wage
enhancement benefits at issue by (1) making an election that gave them a
right to those benefits, pursuant to the CBAs, and (2) meeting the eligibility
criteria. Plaintiffs cite several cases to support their claim. But these cases
show that benefits do not extend beyond the term of a contract or future
benefits unless expressly stated within the contract. See Paczosa, 222 Ariz. at
77 ¶¶ 15–17 (no right to benefits after contracts expired); Abbott, 129 Ariz.
at 278–79 (no vesting of future contract rights was intended where
compensation is subject to change); Bennett, 27 Ariz. App. at 537 (public
entity does not impair vested rights by modifying future compensation
benefits).

¶40 Plaintiffs also rely on Godbey v. Roosevelt School District No. 66,
131 Ariz. 13 (App. 1981), arguing benefits vest when employees meet
eligibility requirements and cannot be retroactively modified by the
employer. In Godbey, a school district sought to modify the employees’ sick
leave benefits. 131 Ariz. at 14–15, 20–21. The court found employees
acquired vested rights to sick leave as they worked through the school year
as the condition of service. Id. at 21. Thus, the modification was an improper
retroactive adjustment to benefits that had vested based on past services.
Id. at 20–21. Here, by contrast, the City prospectively eliminated the wage
enhancement benefits after the CBAs expired. It did not make any
retroactive changes to compensation already earned.

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¶41 Thus, Plaintiffs have not established a vested right in the
wage enhancement provisions.

E. The Election Forms Are Not Individual Contracts but
Administrative Documents.

¶42 Plaintiffs further argue the forms the employees signed and
submitted to obtain the wage enhancements constitute valid and
enforceable contracts for wage enhancement benefits that persist after the
underlying CBAs expired. The Clark plaintiffs also assert the Contracts
Clause of the Arizona Constitution prohibits the City from unilaterally
modifying the election forms as contracts.

¶43 “An enforceable contract requires an offer, acceptance,
consideration, and sufficient specification of terms.” See State Farm Mut.
Auto. Ins. Co. v. Frank, 257 Ariz. 228, 334 ¶ 21 (App. 2024). Here, the election
forms are not contracts. Nor do they purport to be contracts. To begin, the
CBAs are fully integrated, indicating no other documents affect the terms
of employment. Moreover, the City’s charter “sets forth prerequisites to
creating contractual obligations on the City.” Johnson Int’l, 192 Ariz. at 471
n.4. “All contracts shall be drawn under the supervision of the City
Attorney, must be in writing, executed in the name of the City of Phoenix
by the Manager.” Phoenix City Charter, Chapter XIX, § 1. The City’s code
also requires all agreements regarding wages to be in the CBAs signed by
the City’s authorized representatives and approved by the Council or
Manager. P.C.C. §§ 2-209(4), -215(c), -223, -232.

¶44 Here, the election forms do not meet these requirements. As
discussed above, Plaintiffs’ reliance on Pointe Resorts is misplaced because
the City’s charter and code do not allow alternative methods of contracting
as an exception to the CBAs. 158 Ariz. at 141–43. Therefore, the election
forms are not contracts. See State Farm Mut. Auto. Ins. Co., 257 Ariz. at 334
¶ 21. Rather, they are administrative documents, lacking the components of
a contract, and do not create mutual obligations. See Paczosa, 222 Ariz. at 77
¶ 23 (an application for benefits is not an enforceable contract when it
“contains nothing to support the claim that it functioned as an ‘acceptance’
of an ‘offer’”); see also Cross, 234 Ariz. at 600 ¶ 13 (“No new contract was
formed by the administrative step of completing the retirement
paperwork.”).

¶45 Further, Plaintiffs have not set forth a supportable claim
under the Contracts Clause of the Arizona Constitution. See Ariz. Const. art.
2 § 25. A Contracts Clause violation occurs only when evidence shows that

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a governmental entity has acted in a manner that impairs existing contract
obligations. See Dobson Bay Club II DD, LLC v. La Sonrisa de Siena, LLC, 242
Ariz. 108, 116 ¶ 41 (2017). Because the wage enhancement provisions
expired with the 2012–2014 CBAs, the Contracts Clause is not implicated.
Id.

¶46 Therefore, the superior court did not err in granting the City
summary judgment on Plaintiffs’ claims for breach of contract. See
Rosenberg, 256 Ariz. at 332–33 ¶ 23 (2023).

II. Plaintiffs’ Promissory Estoppel Claim Fails.

¶47 Plaintiffs argue the City is liable for promissory estoppel
because they reasonably relied on the wage enhancement provisions.
Promissory estoppel is not a theory of contract liability, but rather an
alternative theory of liability when no contract exists between the parties.
See State ex rel. Romley v. Gaines, 205 Ariz. 138, 143 ¶ 15 (App. 2003). An
implied contract cannot exist when the parties have an express contract
covering the same subject matter. AFSCME, 249 Ariz. at 112 ¶ 28 (citing
Chanay v. Chittenden, 115 Ariz. 32, 35 (1977)).

¶48 Here, the parties had an express contract. The CBAs
exclusively governed the parties’ contractual relationship and they
contained express integration clauses. Plaintiffs’ promissory estoppel
claims are based on the wage enhancement provisions of the CBAs, breach
of which they have failed to prove. Therefore, Plaintiffs’ promissory
estoppel claim fails. See Chanay, 115 Ariz. at 35; AFSCME, 249 Ariz. at 112
¶ 28; Johnson Int’l, 192 Ariz. at 474 ¶ 49. Plaintiffs have thus shown no error.

III. The Clark Plaintiffs’ Remaining Claims Do Not Prevail.

¶49 The Clark plaintiffs argue the City failed to pay wages under
the wage enhancement clause. Because the contract was not breached, the
Clark plaintiffs have not suffered any lost wages as a result of the City’s
elimination of the wage enhancement provisions after the CBAs expired.
When the wage enhancement provisions were eliminated, the City
modified the sick leave and vacation provisions so the payments would be
made in lump sum. Accordingly, we conclude the Clark plaintiffs’ claim for
lost wages fails.

¶50 The Clark plaintiffs further contend they are entitled to
equitable/mandamus relief to preserve their entitlement to wage
enhancements. Given our determination that the wage enhancements were
lawfully eliminated upon the expiration of the 2012–2014 CBAs, the Clark

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plaintiffs have no legal or factual basis to support these claims for equitable
relief. See Ponderosa Fire Dist. v. Coconino Cnty., 235 Ariz. 597, 601–02 ¶ 19
(App. 2014) (mandamus may only compel a “purely ministerial” duty
which leaves absolutely no discretion to the public official or board).

IV. The Court Did Not Abuse Its Discretion by Awarding Attorneys’
Fees to the City.

¶51 We review the award of attorneys’ fees for an abuse of
discretion. Peterson v. City of Surprise, 244 Ariz. 247, 253 ¶ 25 (App. 2018).
We will uphold the award “as long as the record reflects a reasonable basis
for the award”; the court need not “set forth a detailed factual basis for a
fee award.” Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260, 267 ¶ 25 (App.
2004). A court’s decision whether to award fees under A.R.S. § 12-341.01(A)
is highly discretionary. Hall v. Read Devel., Inc., 229 Ariz. 277, 279 ¶ 8 (App.
2012).

¶52 “In any contested action arising out of a contract, express or
implied, the court may award the successful party reasonable attorney
fees.” A.R.S. § 12-341.01(A). To determine whether to award fees under
A.R.S. § 12-341.01(A), courts should consider the following “Warner
factors”: (1) the merits of the unsuccessful party’s claims and defenses;
(2) “whether the parties could have avoided or settled the litigation and
whether ‘the successful party’s efforts were completely superfluous in
achieving the result’”; (3) whether the fee award will cause extreme
hardship for the paying party; (4) “whether the successful party prevailed
on all relief sought”; (5) the novelty of the issues; (6) whether the claims or
defenses are issues of first impression in Arizona; and (7) “whether an
award of fees would discourage other parties with tenable claims or
defenses from litigating or defending legitimate contract issues for fear of
incurring liability for substantial amounts of attorney fees.” Orfaly, 209
Ariz. at 265–66 ¶ 19 (quoting Associated Indem. Corp. v. Warner, 143 Ariz. 567,
570 (1985)).

¶53 As a preliminary matter, the court addressed the seventh
Warner factor and concluded “the Arizona Supreme Court has rejected such
an argument in lawsuits (against a governmental entity) that particularly
arise from a contractual relationship.” The court cited Piccioli and AFSCME.
The Clark plaintiffs argue Piccioli and AFSCME do not control because
those cases did not alter the seventh Warner factor, directing courts to
“consider whether the award in any particular case would discourage other
parties with tenable claims or defenses from litigating or defending

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legitimate contract issues for fear of incurring liability for substantial
amounts of attorney’s fees.” Warner, 143 Ariz. at 570.

¶54 The city-employee plaintiffs in Piccioli and AFSCME raised
contract and constitutional claims regarding their employment contracts.
Piccioli, 249 Ariz. at 116 ¶ 7; AFSCME, 249 Ariz. at 107 ¶ 5. In those cases,
our supreme court awarded attorneys’ fees to the employer-cities because
the plaintiffs brought claims “as parties to a contract rather than as
aggrieved citizens.” Piccioli, 249 Ariz. at 119 ¶ 24; AFSCME, 249 Ariz. at 113
¶ 33. Given this precedent, the superior court did not abuse its discretion in
finding that awarding fees in this case would not risk a chilling effect.

¶55 As to the other Warner factors, the court stated it considered
all of the Warner factors, but detailed only the first four, finding: (1) though
not meritorious, Plaintiffs’ claims were “brought in good faith” and were
not frivolous; (2) no party presented evidence of “significant efforts to
resolve this case” without litigation; (3) Plaintiffs did not present any
evidence to support their claims of undue hardship; and (4) the City did not
request fees on matters for which it did not prevail.

¶56 Finally, the court explained, “these consolidated lawsuits
required the City of Phoenix to defend against a multi-million dollar claim
involving hundreds of police officers” and “this complex litigation—
stretching over more than 8 ½ years—required the City of Phoenix to
expend significant resources in its own defense.”

¶57 The Clark Plaintiffs contend the court abused its discretion
because it found three Warner factors did not support a fee award. But the
court stated it considered all factors and the context of the litigation.
Further, the court significantly reduced the award of fees from that which
was requested, demonstrating its careful consideration. The record
supports the court’s findings and conclusions. Therefore, the court did not
abuse its broad discretion in awarding reduced fees to the City. See Hall, 229
Ariz. at 279 ¶ 8.

V. Attorneys’ Fees and Costs on Appeal

¶58 On appeal, the parties request an award of their respective
attorneys’ fees and costs under A.R.S. § 12-341.01 and ARCAP 21. After
consideration and in the exercise of our discretion, we decline to award
attorneys’ fees. We award the City its costs upon compliance with Arizona
Rule of Civil Procedure 21.

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CONCLUSION
¶59 We affirm.

AMY M. WOOD • Clerk of the Court
FILED: AGFV

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