Lucido v. Rippeto

• Court: California Court of Appeals
• Writing for the Court: SIMS
• Citation: Lucido v. Rippeto, 140 Cal.Rptr. 535, 73 Cal.App.3d 1 (Cal. App. 1977)
• Decision Date: 31 August 1977
• Parties: John LUCIDO, Plaintiff and Appellant, v. Robert RIPPETO, as Director, etc., et al., Defendants and Respondents. Civ. 39612.

Page 535

140 Cal.Rptr. 535

73 Cal.App.3d 1

John LUCIDO, Plaintiff and Appellant, v. Robert RIPPETO, as Director, etc., et al., Defendants and Respondents.

Civ. 39612.

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

Aug. 31, 1977.

Hearing Denied Nov. 3, 1977.

Carl L. McConnell, Brian W. Newcomb, Peter H. Reid, San Mateo County Legal Aid Society, Redwood City, for petitioner-appellant.

Keith C. Sorenson, Dist. Atty., by Gregory J. Antone, Deputy Dist. Atty., Redwood City, for respondents.

SIMS, Acting Presiding Justice.

Petitioner, a recipient of county general assistance (see Welf. & Inst.Code, § 17000 et seq. ¹ ), has appealed from a judgment which denied his petition for a peremptory writ of mandate ordering the payment of his claim for general assistance benefits without deductions for recoupment of overpayments due solely to county error, and denied his prayer for a declaration that the regulation referred to as GA Manual section 4--07, which purported to authorize that deduction was invalid. He contends that in the absence of any statute authorizing such recoupment, the common law rule against recoupment of welfare benefits applies; that the rule upon which the county relies is invalid because it contravenes the provisions of section 17000 (see fn. 1 above); and that the county is estopped to seek recoupment because the overpayment was caused by its own error.

On review we find that the trial court properly concluded that the rule applied was properly adopted pursuant to the provisions of sections 17000 and 17001 ² of the Welfare and Institutions Code, and was otherwise valid, that the common law rule against recoupment of benefits was inapplicable, and that the doctrine of equitable estoppel was not applicable. The judgment must be affirmed.

The facts are not disputed. On April 4, 1974, Lucido applied for general assistance (hereinafter GA) from the San Mateo County Welfare Department. During his interview with the intake worker he said that his life was insured, but that he did not know the cash surrender value of the insurance policy. (Apparently his mother paid the premiums and was the beneficiary.) The worker said that it was probably not enough to make Lucido ineligible for GA (i.e. more than $300), told him to put 'zero' after the question about insurance on the application form, said that she would investigate the matter further herself, and made a note to herself to that effect on the form. No further investigation of the matter was in fact made by the department, and Lucido did not amend the application. He received GA in April, May and June of 1974. He terminated the aid on June 30, when he moved to Santa Clara County, where he also applied for GA in July. By this time he had learned that the cash surrender value of the insurance policy was $565, and as Santa Clara had the same $300 limit as San Mateo, he was denied benefits. In August he received a check from the insurance company for $565.08, in liquidation of the policy.

On October 29, 1974, having returned to San Mateo County, Lucido reapplied for GA there. He was found eligible for the maximum aid of $121 per month, but the department, now aware of the value of the insurance policy, sought to recoup the earlier overpayments, which the department determined to be $319, the total amount of GA Lucido had received in the spring. Sections 4--06, 4--07 and 4--08 of the San Mateo County G.A. Manual provided in relevant part as follows:

'4--06 OVERPAYMENT ADJUSTMENTS ( ) Overpayment adjustment is the liquidation of an overpayment by decrease of the aid payment to an otherwise eligible recipient or by a current cash adjustment in the amount which could have been adjusted by the decrease. . . .

'4--07 ADJUSTMENT PERIOD FOR CLIENT WHO MEETS REPORTING RESPONSIBILITY ( ) 1. Income and/or Need ( ) For the recipient who met his reporting responsibility, and overpayment is due to administrative error, or reported changes in income and/or need occurred too late in the month to be reflected in the grant for the current month, the maximum adjustment period is six (6) months following the month of payment or month of discovery whichever is later. Amount of overpayment is determined for twelve (12) months prior to date of discovery. ( ) If the recipient does not have sufficient income or resources to meet his basic needs during the adjustment period, the grant shall not be decreased below the actual cost of housing or the basic housing allowance, whichever is less, plus the Food Stamp purchase price. ( ) 2. Excess Personal Property: ( ) If ineligibility due to excess personal property occurred when the recipient met his reporting responsibilities and it cannot be established that the recipient received aid in bad faith, the amount of overpayment shall be the full amount of aid received during the period of ineligibility or the highest market value of the excess personal property on any day during the total period of ineligibility, whichever is lesser. ( ) 4--08 ADMINISTRATIVE ERROR ( ) An administrative error is defined as . . . 4. Failure to grant or pay in the correct amount when all information essential for such payment was in the record.'

The department reduced Lucido's grant from $121 to $70 per month, the actual cost of his housing. A determination was made that there had been no fraud in the earlier application.

On February 6, 1975, Lucido requested a fair hearing to contest the reduction of his grant, and after the hearing on February 24, the hearing officer issued a decision on March 10. The hearing officer found that Lucido had met his reporting requirements and that the overpayment was due to agency error, but that Lucido was not in fact eligible for GA the previous April, May and June. He received a total of $319, and his excess personal property during that time was $265 (the value of the insurance policy exceeding $300). The lesser figure, $265, was found to be the amount of overpayment, which subjected his grant to adjustment for a period of six months under section 4.07.1. The hearing officer further held that Lucido's grant could not be reduced below his housing cost Plus the purchase price of food stamps. Thus, his monthly grant was increased to $85 to cover food and housing, and the county was allowed to retain $36 a month for six months to recoup part of the earlier overpayment.

Almost a year after this decision Lucido filed his petition and complaint for recovery of the reduction in his aid, and for a declaration that the adjustment provision in section 4--07 was invalid against the directors responsible for the administration of the GA program. His grounds were first, that under the common law a recipient of welfare has no obligation to repay benefits in the absence of fraud or an authorizing statute; second, that the San Mateo regulation violates the purpose of section 17000 of the Welfare and Institutions Code, which requires counties to support their indigent residents; and third, that the department was equitably estopped from recovering overpayments caused by its own mistakes. After hearing oral argument on March 3, 1976, the trial court issued findings of fact, essentially as stated above, and conclusions of law. These conclusions were basically that the regulations were valid and that the department was not estopped from applying them to Lucido. Judgment was rendered accordingly, and Lucido now appeals.

I

The trial court concluded in part as follows: '(5) The common law rule against recoupment of benefits innocently obtained is inapplicable because Welfare and Institutions Code Section 17001 authorizes the adoption of standards and regulations by the County, such as the recoupment regulation in question herein. ( ) (6) The common law rule is further inapplicable in that case law distinguishes between 'public assistance' programs, in which the rule is applicable, and 'general assistance' programs, in which it is not.'

The applicant first attacks the latter conclusion. In County of Alameda v. Janssen (1940) 16 Cal.2d 276, 106 P.2d 11, it was contended that an amendment to the law in 1939, which permitted the release of liens and cancellation of agreements taken by a county in connection with old age assistance payments, was unconstitutional because it authorized a gift of public property in violation of provisions of the state Constitution. In determining that such action could itself be a grant of aid, the court pointed out: 'In the absence of a special statute no liability rests upon an aged person to reimburse the state and county for aid legitimately obtained and granted (citations) ³, and there is no provision in section 22 of article IV requiring such liability. The legislature thus has the power to grant aid to indigent aged without imposing any lien upon their property and whenever it does so it supplements direct aid with the benefits which attend freedom from such an encumbrance. If instead it imposes a lien upon the property of recipients of aid which it subsequently releases it merely defers the benefits supplementary to direct aid which it might have conferred at the outset. In either case the benefits serve the same public purpose of aiding the indigent aged.' (16 Cal.2d at p. 283, 106 P.2d at p. 15. Accord: County of L.A. v. Security First Nat. Bank (1948) 84 Cal.App.2d 575, 578, 191 P.2d 78.)

The latter case, citing four of the six cases referred to in the Janssen case, states the rule more broadly as follows: 'It was the rule at common law that in the absence of fraud in procuring relief a recipient of charity from the state was under no obligation to repay the governmental agency disbursing such charity; nor was the estate of such pauper under obligation to make reimbursement, notwithstanding that the indigent at the time the charities were furnish owned property. (Citations.)' (84 Cal.App.2d at p. 578, 191 P.2d at p. 80.) In that case the court found there was an applicable s...