County of San Diego v. Myers

• Court: California Court of Appeals
• Writing for the Court: WORK
• Citation: 195 Cal.Rptr. 124,147 Cal.App.3d 417
• Parties: COUNTY OF SAN DIEGO, Plaintiff and Appellant, v. Beverlee MYERS, et al., Defendants and Respondents. Civ. 26035.
• Decision Date: 26 September 1983

Page 124

195 Cal.Rptr. 124 147 Cal.App.3d 417 COUNTY OF SAN DIEGO, Plaintiff and Appellant,
v.
Beverlee MYERS, et al., Defendants and Respondents. Civ. 26035. Court of Appeal, Fourth District, Division 1, California. Sept. 26, 1983.
Hearing Denied Nov. 23, 1983.

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[147 Cal.App.3d 419] Joseph Kase, Jr., County Counsel (acting), Lloyd M. Harmon, Jr., Chief Deputy County Counsel, Phillip L. Kossy, Deputy County Counsel, San Diego, for plaintiff and appellant.

John K. Van De Kamp, Atty. Gen., Richard D. Martland, Chief Asst. Atty. Gen., Thomas E. Warriner, Asst. Atty. Gen., Elisabeth C. Brandt, Deputy Atty. Gen., for defendants and respondents.

WORK, Associate Justice.

County of San Diego (County) appeals a judgment denying its petition for writ of mandate and request for declaratory and injunctive relief seeking reimbursement from the State of California for costs incurred by County in administering and providing social services to "medically indigent" Medi-Cal recipients pursuant to statutory mandate. The County contends the trial court erred in finding the action time-barred. We conclude the trial court properly ruled and affirm the judgment.

Factual and Procedural Background

During fiscal years 1973-1974 and 1974-1975, the State reimbursed the County 100 percent of its cost in providing social services to "medically indigent" beneficiaries of the Medi-Cal program. This group included those persons not qualified for "categorical" aid but eligible for Medi-Cal because of indigency. The County was reimbursed by the State $1,633,305 for the cost of social services provided to the medically indigent during fiscal year 1973-1974, and $1,407,975 during fiscal year 1974-1975. After reviewing state and federal law, the State Department of Health decided these costs legally could not be billed to the Medi-Cal program. By letter dated August 28, 1975, the Department of Health informed all County welfare directors and County administrative officers that effective July 1, 1975, the cost of social services provided to medically indigent persons could no [147 Cal.App.3d 420] longer be claimed under the Medi-Cal program. The County received this notice in September 1975, as the matter was considered at a conference committee meeting of the Board of Supervisors (Board) on September 24, 1975. In an "all-county letter," No. 75-210, dated October 3, 1975, the State furnished the County with claim instructions specifically prohibiting reimbursement of these costs as an administrative cost of the Medi-Cal program. The State mailed the County revised claim forms eliminating space for declaring the disputed costs.

In a memorandum dated October 15, 1975, County staff recommended to the Board that litigation be instituted to prevent the funding change. The Board considered the matter on November 4, 1975, and voted to freeze all hiring of social workers until the funding matter was settled.

During the first two quarters of the 1975-1976 fiscal year, the County spent $368,008 for social services to medically indigent persons during the first quarter (July 1, 1975, through September 30, 1975) and $258,730 during the second quarter (October 1, 1975, through December 31, 1975). The County's revised first quarter claim dated November 5, 1975, was rejected December 29, 1975. The County's second quarter claim submitted January 13, 1976, was rejected April 6, 1976.

The present action was filed on December 29, 1978. The matter was tried on the merits; however, the trial court ruled the action was barred by the statute of limitations, concluding it was governed by the three-year statute within Code of Civil Procedure section 338, subdivision (1) ¹ which began to run against the County when the latter knew or should have known the State had firmly decided it would no longer honor these claims. The court found the County had actual knowledge no later than September 24, 1975, but, in any event, the County fully understood no later than November

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5, 1975, the nature of the State's decision and its consequences. In addition, the court found, given the nature of the State's policy decision and the manner it was communicated to the County, there was no available administrative remedy, nor could the...