Aguilar v. Unemployment Ins. Appeals Bd.

• Decision Date: 28 August 1990
• Docket Number: No. D010304,D010304
• Citation: 223 Cal.App.3d 239,272 Cal.Rptr. 696
• Court: California Court of Appeals Court of Appeals
• Parties: Jose AGUILAR et al., Petitioners and Respondents, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD, Respondent. EMPLOYMENT DEVELOPMENT DEPARTMENT Real Party in Interest and Appellant.

Page 696

272 Cal.Rptr. 696

223 Cal.App.3d 239

Jose AGUILAR et al., Petitioners and Respondents, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD, Respondent EMPLOYMENT DEVELOPMENT DEPARTMENT Real Party in Interest and Appellant.

No. D010304.

Court of Appeal, Fourth District, Division 1, California.

Aug. 28, 1990.

Review Denied Nov. 15, 1990.

John K. Van de Kamp, Atty. Gen., Charlton G. Holland, Asst. Atty. Gen., Anne S. Pressman and John Venegas, Deputy Attys. Gen., for real party in interest and appellant.

Robert K. Miller and M. Carmen Ramirez, for petitioners and respondents.

No appearance for respondent California Unemployment Ins. Appeals Bd.

INTRODUCTION

BENKE, Associate Justice.

In this case we hold the California Employment Development Department (EDD) must pay interest on unemployment benefits it erroneously refused to pay to a group of farmworkers. The benefits were a monetary obligation capable of being made certain and the workers' right to the benefits vested on particular days. Under

Tripp v. Swoap (1976) 17 Cal.3d 671, 682, 131 Cal.Rptr. 789, 552 P.2d 749 (Tripp v. Swoap), those are the only conditions which must exist to recover interest in a mandamus action against the state. Accordingly we affirm the judgment of the trial court granting the workers a writ of mandate directing payment of interest on the benefits withheld by EDD.

FACTUAL BACKGROUND

The facts in this case are undisputed. Petitioners and respondents are a group of farmworkers who applied for unemployment benefits in 1978. EDD denied the benefits on the grounds the workers were involved in a trade dispute and were therefore ineligible for unemployment benefits. EDD's determination was upheld by an administrative law judge, the California Unemployment Insurance Appeals Board (CUIAB) and in a superior court proceeding. However in 1985 the Court of Appeal for the First District reversed and remanded to the superior court to determine whether 81 of the claimants were eligible under Campos v. Employment Development Dept. (1982) 132 Cal.App.3d 961, 183 Cal.Rptr. 637 (Campos). ¹ The superior court in turn remanded to the CUIAB. In 1987 an administrative law judge found 28 of the 81 workers were entitled to benefits under Campos. EDD paid the unemployment benefits to the 28 workers but refused to pay any interest on the amounts owed.

The 28 workers appealed the EDD's interest determination to the CUIAB. An administrative law judge agreed with the workers and ordered EDD to pay interest on the amounts owed. Thereafter the CUIAB found no authority for payment of interest in the Unemployment Insurance Code and reversed the administrative law judge's ruling.

The 28 workers then filed a petition for a peremptory writ of mandate in the superior court. The superior court granted the writ and directed EDD to pay interest on the benefits which had been withheld. EDD filed a timely notice of appeal.

ISSUE ON APPEAL

The only issue EDD raises on appeal is its contention interest is not payable on unemployment benefits. We disagree and affirm.

DISCUSSION

In Tripp v. Swoap, supra, 17 Cal.3d 671, 131 Cal.Rptr. 789, 552 P.2d 749, the plaintiff's application for welfare benefits was improperly denied. In a mandamus proceeding the superior court ordered payment of benefits from the time of application and awarded the plaintiff prejudgment interest. The Director of the former Department of Social Welfare appealed and the Supreme Court affirmed.

In upholding the interest award, the Supreme Court noted that in providing for judicial review of benefit determinations the Legislature expressly provided, in Welfare and Institutions Code section 10962, for a waiver of filing fees and authorized payment of attorney fees and costs to successful recipients. However the Legislature made no provision for payment of interest. The Supreme Court held the Legislature's failure to expressly provide for interest did not prevent a recipient from receiving interest under Civil Code section 3287 subdivision (a). ² "In the absence of the specific provisions in [Welf. & Inst.Code] section 10962 relating to filing fees, attorney's fees, and costs, a needy person unable to bear the cost of bringing suit might be foreclosed from vindicating rights which have been conferred upon him by statute. The Legislature's inclusion of these provisions thus supports the view that the purpose of section 10962 is to ensure access to judicial review, rather than to define the extent of a recipient's recovery. Interest, on the other hand, relates to the extent of recovery inasmuch as it constitutes an element of damages. Under this construction the fact that the Legislature did not mention interest specifically does not mean that a successful recipient is precluded from receiving it. Rather, we must determine whether there is some other authority on which it should be awarded." (Tripp v. Swoap, supra, 17 Cal.3d at pp. 680-681, 131 Cal.Rptr. 789, 552 P.2d 749, fn. omitted, italics added.)

Finding no bar to interest the court turned its attention to Civil Code section 3287, subdivision (a). "Civil Code section 3287, subdivision (a), ... authorizes the recovery of interest on damages which are certain or capable of being made certain by calculation, where the right to recover has vested on a particular day. In Mass v. Board of Education [1964] 61 Cal.2d 612 [39 Cal.Rptr. 739, 394 P.2d 579], we construed this statute as providing for prejudgment interest in actions based upon a general underlying monetary obligation, including the obligation of a governmental entity determined by way of mandamus. Since Mass our courts on numerous occasions have awarded prejudgment interest in mandamus proceedings brought to recover sums of money pursuant to a statutory obligation. [Citations.]

"...

"Under section 3287, subdivision (a), as interpreted in Mass, supra, a claimant must satisfy three conditions for the recovery of interest in a mandamus action against the state: (1) There must be an underlying monetary obligation; (2) the recovery must be certain or capable of being made certain by calculation; and (3) the right to recovery must vest on a particular day." (Tripp v. Swoap, supra, 17 Cal.3d at pp. 681-682, 131 Cal.Rptr. 789, 552 P.2d 749, fn. omitted, italics added.)

Because welfare benefits are a monetary obligation of the state subject to determination by reference to fixed payment schedules and become due when an applicant has established eligibility, the court found they accrue interest under Civil Code section 3287. (Tripp v. Swoap, supra, 17 Cal.3d at pp. 682-683, 131 Cal.Rptr. 789, 552 P.2d 749.) Like Mass, the holding in Tripp v. Swoap has been relied upon in a number of contexts to support an award of interest. ³ (Marine Terminals Corp. v. Paceco, Inc. (1983) 145 Cal.App.3d 991, 995, 193 Cal.Rptr. 687 [repair costs]; E.L. White, Inc. v. City of Huntington Beach (1982) 138 Cal.App.3d 366, 377, 187 Cal.Rptr. 879 [indemnity for damages paid to tort victim]; ITT Gilfillan, Inc. v. City of Los Angeles (1982) 136 Cal.App.3d 581, 584-585, 185 Cal.Rptr. 848 [refund of business taxes]; Todd Shipyards Corp. v. City of Los Angeles (1982) 130 Cal.App.3d 222, 226-227, 181 Cal.Rptr. 652 [same]; Levy-Zentner Co. v. Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 796-797, 142 Cal.Rptr. 1 [tort action for damages to tangible property].)

Most recently in Austin v. Board of Retirement (1989) 209 Cal.App.3d 1528, 1532-1534, 258 Cal.Rptr. 106 (Austin), another district of the Court of Appeal, relying on Tripp v. Swoap, found interest was payable on an award of disability retirement benefits. As in Tripp v. Swoap, the Austin court found "there is nothing in the statutory scheme governing disability pension benefits suggesting a legislative intent to preclude recovery of interest on damages awarded as prejudgment benefits from the date such benefits became due." (Id. at p. 1533, 258 Cal.Rptr. 106.)

The result reached in Austin is consistent with the views expressed by the Supreme Court in Tripp v. Swoap and Olson v. Cory (1983) 35 Cal.3d 390, 406, 197 Cal.Rptr. 843, 673 P.2d 720 (Olson v. Cory). In particular, although unmentioned by the parties, we note the following from the opinion in Tripp v. Swoap: "Of course, the operation of section 3287, subdivision (a), is further predicated on the existence of damages. Actions to recover retroactive salary increases and wrongfully withheld pension payments have been held to constitute actions for damages. [Citations.] For purposes of section 3287, subdivision (a), we find wrongfully withheld welfare benefits analytically indistinguishable from salary increases and pension payments. Accordingly, we are of the view that the action before us is an action for damages within the meaning of that statute. [Citation.]" (Tripp v. Swoap, supra, 17 Cal.3d at p. 682, fn. 12, 131 Cal.Rptr. 789, 552 P.2d 749, italics added.) Moreover in Olson v. Cory, the court stated: "Nothing in the wording of Civil Code section 3287 suggests that the right to recover interest from the state varies in accordance with the particular fund out of which the underlying obligation was payable." (Id. at p. 406, 197 Cal.Rptr. 843, 673 P.2d 720.)

The result in Austin and the Supreme Court's unwillingness to apply Civil Code section 3287 on the basis of the type of public debt incurred are important here because EDD's major argument on appeal is that unemployment benefits do not serve the same social purpose as welfare benefits. EDD argues welfare benefits grow out of a "humanitarian" concern for the basic needs of all members of society while unemployment insurance is a scheme directed toward "economic stability." EDD contends that given the differences between the two benefit programs, the payment of interest on welfare benefits required by Tripp v. Swoap has no bearing on whether interest is also payable on unemployment benefits.

The distinction EDD has attempted...