California Fed. Savings & Loan Assn. v. City of Los Angeles

• Decision Date: 05 October 1995
• Docket Number: No. S043694,S043694
• Citation: 902 P.2d 297,45 Cal.Rptr.2d 279,11 Cal.4th 342
• Parties: , 902 P.2d 297, 95 Cal. Daily Op. Serv. 7886, 95 Daily Journal D.A.R. 13,496 CALIFORNIA FEDERAL SAVINGS and LOAN ASSOCIATION et al., Plaintiffs and Appellants, v. CITY OF LOS ANGELES, Defendant and Respondent.
• Court: California Supreme Court

Page 279

45 Cal.Rptr.2d 279

11 Cal.4th 342, 902 P.2d 297, 95 Cal. Daily Op. Serv. 7886,

95 Daily Journal D.A.R. 13,496

CALIFORNIA FEDERAL SAVINGS and LOAN ASSOCIATION et al., Plaintiffs and Appellants, v. CITY OF LOS ANGELES, Defendant and Respondent.

No. S043694.

Supreme Court of California.

Oct. 5, 1995.

Rogers & Wells, Los Angeles, Dickson, Carlson & Campillo, Aaron M. Peck, Santa Monica, Donald R. Brown and Jennifer L. Sokol, Los Angeles, for plaintiffs and appellants.

James K. Hahn, City Attorney, Thomas C. Bonaventura, Chief Assistant City Attorney, Richard A. Dawson, Assistant City Attorney, and Dion O'Connell, Deputy City Attorney, for defendant and respondent.

Rutan & Tucker, Elizabeth Hanna and Hans Van Ligten, Costa Mesa, as amici curiae on behalf of defendant and respondent.

MOSK, Justice.

In this case, we address a conflict in the Courts of Appeal on a recurring issue of substantial fiscal significance to California public entities: does interest on a judgment against a local public entity accrue at the postjudgment interest rate of 10 percent per annum prescribed by section 685.010, subdivision (a), of title 9 of part 2 of the Code of Civil Procedure, or at the rate of 7 percent per annum, pursuant to article XV, section 1, of the California Constitution?

We conclude that section 970.1, subdivision (b), of division 3.6 of title 1 of the Government Code, which provides that "[a] judgment ... is not enforceable under Title 9," exempts local public entities from title 9 of the Code of Civil Procedure. Division 3.6 does not, however, itself set a rate of postjudgment interest for claims against the state or local public entities. Accordingly, pursuant to article XV, section 1, of the California Constitution, "[i]n the absence of the setting of such rate by the Legislature," the applicable rate of postjudgment interest to be paid by local public entities is 7 percent per annum. The judgment of the Court of Appeal holding otherwise is reversed.

I.

In August 1983 California Federal Savings and Loan Association (California Federal) sought a refund from the City of Los Angeles (the City) of business license taxes and interest, alleging that Revenue and Taxation Code section 23182, as amended, nullified the City's power to levy the business license tax against it.

The trial court ruled that California Federal should recover business taxes paid for the years 1982, 1983, and 1984. It also ordered the City to pay postjudgment interest "as allowed by law until paid," but did not specify the rate of that interest. The City appealed and we ultimately affirmed the judgment. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 283 Cal.Rptr. 569, 812 P.2d 916.)

Thereafter, the trial court heard a motion regarding the applicable rate of interest. Following San Francisco Unified School Dist. v. San Francisco Classroom Teachers Assn. (1990) 222 Cal.App.3d 146, 272 Cal.Rptr. 38, it ruled that the judgment against the City would accrue interest at a rate of 7 percent per annum.

The Court of Appeal disagreed, reasoning that although "[u]pon reading Government Code section 970.1, subdivision (b), it might appear that its meaning is clear," the provision is nonetheless "not reasonably free from ambiguity and uncertainty." It concluded that the Government Code refers to and makes inapplicable only the portion of title 9 of the Code of Civil Procedure that contains the "mechanics of enforcing ... judgment[s]"--i.e., division 2, of which section 695.050, providing for enforcement of money judgments is a part--and not the other divisions of the Code of Civil Procedure, including division 1, of which section 685.010 is a part. Accordingly the Court of Appeal modified the order awarding postjudgment interest to provide that the judgment shall bear interest at a rate of 10 percent per annum. We granted review.

II.

This case requires us to determine the interaction among Government Code section 970.1, subdivision (b), Code of Civil Procedure section 685.010, subdivision (a), and article XV, section 1 of the California Constitution. A brief chronology of these provisions is as follows.

In 1963, the Legislature added division 3.6 (commencing with section 810) to title 1 of the Government Code. (Stats.1963, chs. 1681, p. 3266 & 1715, p. 3372.) Known as the Tort Claims Act, it enacted a comprehensive scheme for claims and actions against public entities and public employees.

In 1976, former article XX of the Constitution, which provided for a 7 percent per annum interest rate on a judgment rendered in any court of the state, was reenacted as part of the article XV, section 1, of the California Constitution. In 1978, the latter provision was amended to provide: "The rate of interest upon a judgment rendered in any court of this State shall be set by the Legislature at not more than 10 percent per annum. Such rate may be variable and based upon interest rates charged by federal agencies or economic indicators, or both. [p] In the absence of the setting of such rate by the Legislature, the rate of interest on any judgment rendered in any court of the state shall be 7 percent per annum." (Cal. Const., art. XV, § 1.)

In 1980, section 970.1, subdivision (b) was added to Division 3.6 of the Government Code. It provided: "A judgment is not enforceable under Title 9 (commencing with Section 681) of Part 2 of the Code of Civil Procedure but is enforceable under this article." (Stats.1980, ch. 215, § 19, p. 453.)

In 1982, section 685.010 was added to division 1 of title 9 (commencing with section 681) of the Code of Civil Procedure. It provided in relevant part that "(a) Interest accrues at the rate of 10 percent per annum on the amount of a judgment remaining unsatisfied." (Stats.1982, ch. 150, § 3, p. 495.) In the same year, the Legislature repealed title 9 (commencing with section 681) and added title 9 (commencing with section 680.010) of part 2 of the Code of Civil Procedure. ¹ The relevant portion of Code of Civil Procedure section 685.010 now provides: "(a) Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied." (Stats.1982, ch. 1364, § 2, p. 5080.) At the same time, Government Code section 970.1, subdivision (b), was amended to provide: "A judgment, whether or not final, is not enforceable under Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure but is enforceable under this article after it becomes final." (Stats.1982, ch. 497, § 95, p. 2192.) ²

III.

The City contends that as a local public entity it is exempted under the Government Code from the application of Code of Civil Procedure section 685.010, subdivision (a); it is therefore required to pay postjudgment interest not at the 10 percent per annum prescribed therein, but at the lower constitutional interest rate of 7 percent. (Cal. Const., art. XV, § 1.)

We agree. Government Code section 970.1, subdivision (b), provides that a judgment against a local public entity is "not enforceable under Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure." Given their ordinary meaning, the words of the enactment are neither ambiguous nor uncertain.

The provision plainly and expressly exempts local public entities from the application of title 9 of the Code of Civil Procedure as a whole, including therefore section 685.010. Whenever the Legislature refers in a statute to a title (or article, chapter, part, or division) without further specifying a particular section therein, it plainly intends to refer to it in its entirety. In addition, the word "enforce" is defined as to "give effect to"; "enforceable" is defined as "capable of being enforced," i.e., capable of being given effect to. (Webster's New Internat.Dict. (3d ed. 1961) p. 751.) We accordingly understand the phrase "not enforceable under Title 9" to mean that a judgment against a local public entity cannot be given effect under the provisions of title 9.

In rejecting the Court of Appeal's conclusion that the language of the statute is ambiguous, we approve a number of recent decisions by other Courts of Appeal that have construed the Government Code as exempting public entities from the 10 percent postjudgment interest rate set by the Code of Civil Procedure. (San Francisco Unified School Dist. v. San Francisco Classroom Teachers Assn., supra, 222 Cal.App.3d 146, 151, 272 Cal.Rptr. 38 ["plain language" of Government Code section 970.1, subdivision (b), exempts local public entities from 10 percent interest rate of the Code of Civil Procedure]; Union Pacific Railroad Co. v. State Bd. of Equalization (1991) 231 Cal.App.3d 983, 1007, 282 Cal.Rptr. 745 ["Government Code section 970.1 ... provides that Code of Civil Procedure section 685.010 is inapplicable to money judgments ...; instead the constitutional rate of 7 percent applies."]; Scott v. County of Los Angeles (1994) 27 Cal.App.4th 125, 155, 32 Cal.Rptr.2d 643 ["... Government Code section 970.1, subdivision (b), limits the rate of interest on the County's share of the judgment to 7 percent."]; cf. Barkley v. City of Blue Lake (1993) 18 Cal.App.4th 1745, 1750, 23 Cal.Rptr.2d 315 ["Title 9 ... governs the enforcement of judgments against private parties."].)

Although the Government Code exempts local public entities from the requirements of the Code of Civil Procedure, it does not itself set a postjudgment interest rate for money judgments against local public entities. "The most logical inference from the fact that the Tort Claims Act as adopted in 1963 made no reference to the liability of either state or local governments for interest on judgments is that the Legislature assumed such liability to be constitutionally imposed." (Harland v. State of California (1979) 99 Cal.App.3d 839, 847, 160 Cal.Rptr. 613.) Accordingly, article XV, section 1, of the Constitution mandates that such interest be...