Corallo v. Essex County Welfare Bd.

• Decision Date: 06 April 1976
• Parties: Nicholas CORALLO and Peter Corallo, Plaintiffs-Respondents and Cross-Appellants, v. ESSEX COUNTY WELFARE BOARD, a corporate entity of New Jersey, and Philip K. Lazaro, Director, Essex County Welfare Board, Defendants-Appellants and Cross-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 414

140 N.J.Super. 414

356 A.2d 426

Nicholas CORALLO and Peter Corallo, Plaintiffs-Respondents and Cross-Appellants, v. ESSEX COUNTY WELFARE BOARD, a corporate entity of New

Jersey, and Philip K. Lazaro, Director, Essex

County Welfare Board,

Defendants-Appellants and

Cross-Respondents.

Superior Court of New Jersey,

Appellate Division.

Submitted January 12, 1976.

Decided April 6, 1976.

Rita L. Bender, Newark, for plaintiffs-respondents and cross-appellants (Julie Kligerman on the brief).

William J. Tamburri, East Orange, for cross-respondents Essex County Welfare Bd. (Susan J. Barone, Newark, on the brief).

Before Judges FRITZ, SEIDMAN and MILMED.

PER CURIAM.

The sole remaining issue on this appeal and cross-appeal ¹ concerns the liability of the Essex County Welfare Board (board) for interest on money repaid and retained by that board under a reimbursement agreement in view of a later determination that the money should be refunded to the welfare recipient. The court below disallowed interest. We affirm.

In March 1968 one Nicholas Corallo (Nicholas) applied to the board for financial assistance based upon a need generated by physical disability. He executed an agreement to reimburse providing generally for reimbursement of the assistance grants and pledging unscheduled real and personal property as security therefor. Peter Corallo (Peter), father of Nicholas, was appointed protective payee.

In January 1969 Nicholas was awarded and paid Social Security disability benefits in the amount of $826.10 retroactive to February 1968. The board demanded reimbursement, and on April 17, 1969 Peter, acting for Nicholas, repaid the board $826. On January 10, 1973, the United States Supreme Court declared that § 207 of the Social Security Act (42 U.S.C.A. § 407) barred the State of New Jersey from reaching the federal disability payments to one situated as was Nicholas. Philpott v. Essex Cty. Welfare Board, 409 U.S. 413, 415, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973).

Peter demanded a return of his $826, apparently by a letter dated January 24, 1973. A response, dated January 31, 1973, signed by an administrative supervisor on behalf of counsel to the board, rejected the request and advised Peter that the United States Supreme Court decision prohibiting welfare reimbursement from Social Security benefits 'became effective January 10, 1973. It does not entitle your son Nicholas to any refund from this Board.'

Nicholas and Peter commenced suit for return of the $826, for interest from April 17, 1969 and for costs. The judgment below mandated the return of the money, but denied interest and costs. The appeal by the board has been dismissed. (see n. 1, Supra). The cross-appeal of the Corallos from the denial of interest is before us for determination.

It is important that we emphasize from the outset that we are not at all speaking of the retroactivity of Philpott. Had the appeal of the board been perfected it might well have been necessary to consider that issue, despite the entirely reasonable argument that Philpott itself seems to have determined it by the adjudication of the claim there involved. But the only viable issue before us concerns the disallowance of interest.

Our affirmance is reached upon a number of considerations. First, interest is not the unqualified right of the prevailing litigant. East Orange v. Palmer, 52 N.J. 329, 336, 245 A.2d 327 (1968). Instead, in matters of interest not involving contractual obligation therefor, a trial judge is invested with broad discretion to allow interest in accordance with principles of equity. Deerhurst Estates v. Meadow Homes, Inc., 64 N.J.Super. 134, 155, 165 A.2d 543 (App.Div.1960), certif. den. 34 N.J. 66, 167 A.2d 55 (1961). Certainly the very uncertain state of the law prior to Philpott ² entirely justified the denial of interest at least to the time of that decision. As far as thereafter is concerned, the exercise of discretion by the trial judge appeared bottomed on what he conceived to be a reasonable...