Pearson v. State Social Welfare Bd.

• Citation: 5 Cal.Rptr. 553,54 Cal.2d 184,353 P.2d 33
• Court: United States State Supreme Court (California)
• Decision Date: 20 May 1960
• Parties: , 353 P.2d 33 Tyson A. PEARSON et al. Respondents, v. STATE SOCIAL WELFARE BOARD, Appellant. L. A. 25741.

Page 553

5 Cal.Rptr. 553

54 Cal.2d 184, 353 P.2d 33

Tyson A. PEARSON et al. Respondents, v. STATE SOCIAL WELFARE BOARD, Appellant.

L. A. 25741.

Supreme Court of California, in Bank.

May 20, 1960.

Stanley Mosk, Atty. Gen., B. Abbott Goldberg, Asst. Atty. Gen., Herschel T. Elkins, Deputy Atty. Gen., and Rudolf H. Michaels, Sacramento, for appellant.

Harold W. Kennedy, County Counsel, Robert C. Lynch and Alister McAlister, Deputy County Counsel, Los Angeles, as amici curiae on behalf of appellant.

Abe Mutchnik, Robert W. Kenny and Davis S. Smith, Los Angeles, for respondents.

WHITE, Justice.

The Los Angeles County Bureau of Public Assistance terminated the old-age assistance payments of respondents Tyson A. Pearson and Ida C. Pearson effective August 31, 1957, because of their alleged failure to comply with regulations of the appellant State Social Welfare Board. The action of the county board was affirmed on appeal by the state board and request for rehearing by the state board was denied. The Pearsons then commenced this action in the superior court, pursuant to section 104.2 ¹ of the Welfare and Institutions Code, to review questions of law. From an adverse judgment of that court the state board has appealed.

The narrow issue presented is the validity of Regulations A-133.10 and A-133.40 of the state board, prescribing the circumstances when resources owned by applicants for or recipients of old-age assistance may be required to be utilized through the sale thereof, as measured by the provisions of section 2164 of the Welfare and Institutions Code. (Unless otherwise noted all references in this opinion are to that code.)

Section 2164 provides that: 'No aid under this chapter shall be granted or paid to any person who owns real property the assessed value of which as assessed by the county assessor, less all encumbrances thereon of record, exceeds five thousand dollars ($5,000). Real property owned but not occupied as a home by an applicant or recipient shall be utilized to provide for the needs of the applicant or recipient.' (Emphasis added.)

A broader issue on this appeal, necessary to a determination of the legislative intent in enacting section 2164, is the determination of the interrelation of this section with other pertinent provisions of the state Old Age Security Law (§ 2000 et seq.) and with pertinent provisions of the Old-Age Assistance provisions of the federal Social Security Act (49 Stat. 620 (1935), 42 U.S.C.A. § 301 et seq.). This court takes judicial notice of the public policy of this state to establish and to maintain conformity between the state law and the requirements of the federal act for the receipt of grants-in-aid in support of the state public assistance program. The issues presented herein affect not only the federally-approved state plan with reference to the needy aged but also affect the provisions relating to the needy blind and aid to needy children, matters which are of tremendous financial and social consequence to this state.

We have concluded that the record of the proceedings before the state board, filed herein as its return to the petition for review, shows no abuse of discretion in applying Regulations A-133.10 and A-133.40 to the Pearsons. If these regulations are otherwise valid and according to law, the failure of the Pearsons' to comply therewith supports the curtailment of their old-age assistance payments.

Regulation A-133.10 defines 'Utilization' as follows:

'Real property is utilized when it is making a reasonable contribution toward current needs, when a plan for its use supports a conclusion that it will so contribute in the immediate future, or when it is sold for an amount consistent with its current market value and the plan and terms of sale are consistent with the requirements of reasonable contribution toward current needs. (Emphasis added)

'Sale is not a reasonable plan of utilization if:

'1. The property is a multiple dwelling, one unit of which is used as the recipient's home, or

'2. The net proceeds the recipient could reasonably expect to realize from the sale, together with other personal property, would not exceed $1,200 (or the combined holdings of the couple so determined would not exceed $2,000 if the owner is living with a spouse who is also a recipient).'

Regulation A-133.40 states the requirements of recipient action toward utilization as follows:

'The recipient is given a reasonable period in which to initiate a plan for utilization of property not already being utilized in some acceptable way * * * this period is three months from the date the recipient was advised of the utilization requirement * * * the period may be extended if circumstances beyond his control prevent the owner from proceeding with his plan. When a recipient has made no effort to utilize his property by the expiration of a reasonable period, ineligibility results.

'An applicant or recipient who refuses to consider development of a plan for utilization becomes ineligible immediately.

'Until an acceptable method of utilization is found, all reasonable methods must be attempted and the recipient is given one year (including the initial three-month period) in which to develop such an acceptable method of utilization. This period may be extended if there are extenuating circumstances which support a conclusion that a successful method of utilization can and will be developed within six months following expiration of the one-year period.'

The Pearsons are husband and wife, now aged respectively 82 and 79 years. In 1957 they were recipients of old-age assistance as needy aged residents of Los Angeles County pursuant to provisions of county, state and federal law. For over 34 years they have owned three parcels of property aggregating 1,000 acres of unimproved desert land near Victorville in San Bernardino County. During most of this time their land has had little, if any, income-producing or market worth. In recent years, however, there has been a shift of land usage from desert grazing to prospective residential use, due to the location of aircraft plants and air force bases and also due to plans for a Feather River Project which would provide water to the area. It is economically unfeasible under present conditions to develop the water underlying the property for agricultural purposes.

In January 1957 when the Pearsons made their annual affirmation of eligibility at the office of the county board they were advised of the law requiring that real property be utilized to meet the needs of old age security ² and were told that there would be a period of three months allowed them to make a plan for utilization. They were told that every effort must be made to sell the property at a reasonable amount and that the property should be listed with at least three real estate brokers. On several occasions Mr. Pearson advised the county board that he had listed the property with three real estate brokers at Victorville, naming them. Upon inquiry by the county board, two of these brokers replied that the property had not been listed with them but that they would be glad to list it. The third did not reply. Prior thereto the county had received estimates of market value of the Pearson property from these brokers, ranging from an estimate of $65 an acre by Mr. E. S. Goble, $100 an acre by Mr. Paul Herre, and $125 to $150 an acre by Mr. Wheeler Sells, or an average estimate of $96 per acre. The county, being unable to verify that the Pearsons were making a reasonable effort to utilize their real property not used as a home discontinued their assistance payments effective August 31, 1957.

At a hearing before the referee of the state board on appeal Mr. Pearson admitted that Mr. Goble and offered to list the property at $60 to $65 an acre, and that he had refused an offer of $300 an acre from another party because the deferred payment plan offered was not acceptable. He had negotiated with various brokers for the sale of this property but was unwilling to enter into a written agreement for the sale of the property at a stated price or to enter into a written agreement for the payment of a stated commission. He was of the opinion that he and his wife should get at least $200 an acre for the land, indicating, however, that they might accept less. He stated that if $96 an acre was a legitimate figure this might be acceptable but he did not think that these realtors were putting their best price on the land. He informed the county board that he and his wife were willing to give an exclusive listing at $200 an acre to a broker whose name he preferred not to disclose. Subsequent to the hearing he advised that they had made such a listing.

The county board felt that the failure of the Pearsons to make a formal listing at a given price per acre with three recognized brokers indicated that they were not making a bona fide effort to carry out a plan of utilization of this property. The Pearsons felt that they had in effect listed the property for sale because they had talked about it to brokers generally and had discussed the amount of money they had hoped to receive from the net proceeds of sale. The state board agreed with the county that a listing at $200 an acre was not a realistic compliance with the utilization requirements of the state board's regulations, because the price was almost double the market value established by the appraisals of three reputable real estate brokers and the conditions and restrictions laid down by the Pearsons precluded a sale. It also agreed with the county that the Pearsons were not 'needy' individuals when they owned property with an estimated market value of $96,000; that the continuing of old age security payments to them was not consistent with the legal requirement that aid be paid only to needy individuals, as set forth in sections 19 and 2001, and that holding this land for speculative purposes was not consistent with a bona...