The opinion
Filed 2/28/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
MARK A. BROWN,
Plaintiff and Appellant,
A145487
v.
CALIFORNIA UNEMPLOYMENT (San Francisco City & County
INSURANCE APPEALS BOARD et al., Super. Ct. No. CPF-12-512499)
Defendants and Respondents.
The question in this case is a narrow one, involving the correct rate of interest to
be applied after a court determines that unemployment benefits have been wrongfully
withheld by the Employment Development Department (EDD) and the California
Unemployment Insurance Appeals Board (Board). Appellant Mark Brown (Brown)
argues that interest should be charged at the contract rate of 10 percent from the date that
each benefit payment was due, in accordance with Civil Code section 3289, subdivision
(b).1 EDD, in contrast, asserts that the trial court correctly determined that any such
interest should be calculated at the rate of 7 percent, as authorized by article XV,
section 1, of the California Constitution and Government Code section 965.5,
subdivisions (a) and (d). We conclude that the trial court applied the incorrect interest
rate to the wrongfully withheld benefits at issue. Accordingly, we reverse for
recalculation of interest, but affirm in all other respects.
1
All further statutory references are to the Civil Code unless otherwise specified.
1
I. BACKGROUND
The underlying facts of this matter are largely undisputed.2 Brown had worked for
Bay Cities Patrol (BCP), a private security business, for almost 10 years when he was
terminated on January 2, 2012, for wearing the wrong shirt to work in violation of BCP’s
uniform policy. To accommodate Brown’s large size, BCP had previously permitted
Brown to wear same-color polo shirts that had BCP patches sewn on them, rather than a
formal uniform shirt. However, after discovering that it could order larger-size uniform
shirts from its supplier, BCP purchased a number of such shirts for Brown in late 2011.
Brown wore the new uniform shirts throughout December 2011. On January 2, 2012,
however, he improperly wore the old polo-style shirt to work, leading to his termination.
According to Brown, he had grabbed the wrong shirt by mistake and offered to return
home to change or cover the shirt with a jacket. Brown’s employer, in contrast, claims
that Brown never mentioned that he wore the shirt by mistake, but told him only that he
thought wearing the shirt wouldn’t be a problem.
When Brown applied for unemployment benefits, EDD initially determined that
he was eligible, stating: “[Brown] just wore his own shirt by mistake. [BCP] should
have given him warning instead of terminating him. [BCP] did not give opportunity to
[Brown] to correct this mistake. [He] was even ready to go back home and change his
shirt. Hence, [his action] does not constitute a willful misconduct.” After BCP appealed,
however, an administrative law judge concluded that Brown had “willfully breach[ed] his
duty and obligation to the employer” by wearing the wrong shirt and thus reversed
EDD’s initial eligibility determination. Brown subsequently appealed this denial of
benefits, but the Board affirmed it.
Thereafter, in September 2012, Brown filed a petition for writ of administrative
mandate, seeking to set aside the Board’s eligibility determination and arguing that his
actions in wearing the wrong shirt were insufficient to constitute misconduct for purposes
2
Although not part of our record of appeal, we take judicial notice of the
administrative record in these proceedings. (Evid. Code, §§ 452, 459.)
2
of denying him eligibility for unemployment benefits. The trial court agreed and, in May
2013, granted Brown’s writ petition, concluding that Brown had not engaged in
misconduct sufficient to disqualify him from unemployment benefits because he had
offered to go home and change shirts and he was terminated on the first instance that he
had violated his employer’s new uniform policy. As a consequence of this determination,
the trial court issued a peremptory writ of administrative mandate commanding EDD and
the Board to “immediately” award Brown “the unemployment insurance benefits that
were withheld in the administrative proceedings in this matter plus interest on those
benefits” (Writ).
In August 2013, EDD filed a return to the Writ, stating that the Board had swiftly
reversed its prior eligibility determination and that EDD had subsequently paid Brown
“all the benefits for which he has been found eligible . . . .” EDD further noted, however,
that it was requiring Brown to submit benefit certification forms for the weeks related to
the past-due benefits and that an eligibility issue had arisen with respect to a particular
three-week period that would need to be resolved before further benefits could be paid or
certification forms sent for any additional weeks. It claimed that it would continue to pay
Brown “for the weeks that [he] is eligible and for which he submits the required
certification claim forms demonstrating his continued eligibility for unemployment
benefits.”
Over a year later, in October 2014, Brown filed a motion to enforce the Writ,
claiming that EDD had unilaterally imposed improper conditions on the payment of
benefits pursuant to the Writ, had caused extended delays, and had continued to withhold
benefits and interest without justification. For example, despite several requests from
Brown’s attorney that EDD meet and confer regarding the amount of unpaid benefits as
required by the trial court, EDD did not respond. At one point, EDD bypassed Brown’s
attorney and contacted Brown directly regarding an eligibility dispute. Thereafter, it
insisted that Brown attend a “ ‘mandatory reemployment assessment appointment’ ” or
face indefinite disqualification for benefits and asked numerous questions about Brown’s
continuing efforts to obtain employment, despite the fact that Brown’s current
3
employability was irrelevant to the payment of the past-due benefits. And, at the time he
filed his enforcement action—14 months after the issuance of the Writ—EDD had, by
Brown’s calculation, still failed to pay all amounts owed to Brown. In addition to full
enforcement, Brown sought attorney’s fees under Government Code section 800 as well
as imposition of a fine and sanctions pursuant to Code of Civil Procedure sections 177.5
and 1097 based on EDD’s continued unjustifiable conduct.3
In April 2015, the trial court issued its order granting in part and denying in part
Brown’s motion to enforce the Writ (Enforcement Order). Specifically, the court
concluded that EDD did not “reasonably compl[y]” with the Writ both by unilaterally
demanding that Brown “retroactively fill out bi-weekly certifications for the entire
period” before paying him the past-due benefits and by refusing to meet and confer with
Brown’s attorney as ordered. Moreover, because EDD’s failure to comply was “without
good cause or substantial justification,” the court levied a $1,000 fine against EDD under
Code of Civil Procedure section 1097 and awarded reasonable attorney fees to Brown up
to the $7,500 maximum authorized by Government Code section 800.
In contrast, the court determined that the correct rate of interest for wrongfully
withheld unemployment benefits was not the 10-percent contract rate, as Brown argued,
but was instead 7 percent, the “generic interest rate on judgments” suggested by EDD.
Prior to the instant enforcement action, however, EDD had conceded that the appropriate
rate of interest was the 10-percent contract rate, and had paid interest to Brown based on
that rate.4 It therefore claimed that it had actually overpaid Brown. Under these
3
Government Code section 800 allows a litigant who successfully challenges a
public agency’s determination to recover attorney fees up to $7,500 “if the litigant
demonstrates that the agency acted in an arbitrary or capricious manner.” (Zuehlsdorf v.
Simi Valley Unified School Dist. (2007) 148 Cal.App.4th 249, 255; see Gov. Code,
§ 800.) Code of Civil Procedure section 1097 further provides that where a party subject
to a writ of mandate “has, without just excuse, refused or neglected to obey the writ, the
court may, upon motion, impose a fine not exceeding one thousand dollars.”
4
Specifically, EDD had instructed its staff: “Please issue interest on unpaid
benefits for the claimant (Mark A. Brown) from the time benefits were due (week ending
4
circumstances, the trial court ordered EDD to “immediately pay any unpaid amount to
[Brown] less overpayments, if any.” However, it further declared that this provision “not
be construed to reduce the amount of attorney fees or to require [Brown] to repay any
sum.”
Brown’s timely notice of appeal from the Enforcement Order now brings the
matter before this court.
II. DISCUSSION
A. Standard of Review
We recently described the correct standard of review with respect to an order
enforcing a writ of mandate as follows: In such proceedings, the validity of the
underlying writ is not before us. (Robles v. Employment Development Dept. (2015) 236
Cal.App.4th 530, 546 (Robles II).) Rather, “we review the trial court’s [e]nforcement
[o]rder entered pursuant to section 1097 of the Code of Civil Procedure. That statute
provides that if a writ is issued and persistently disobeyed, the court ‘may make any
orders necessary and proper for the complete enforcement of the writ.’ [Citations.]
Under such circumstances, at issue is whether the trial court erred either in concluding
that EDD had failed to comply with the [w]rit or in fashioning the specifics of its
[e]nforcement [o]rder. Thus, our focus is on EDD’s response to the [w]rit and the trial
court’s assessment of that response. [Citation.] Throughout this analysis, we will, of
course, consider issues of statutory interpretation de novo.” (Ibid.) One such issue
subject to our de novo review is the question of the appropriate interest rate to apply, both
prejudgment and postjudgment. (City of Clovis v. County of Fresno (2014) 222
Cal.App.4th 1469, 1477 (City of Clovis).)
In addition, when analyzing the issues before us, we are cognizant of the fact that
“ ‘[t]he fundamental purpose of California’s Unemployment Insurance Code is to reduce
the hardship of unemployment . . . .’ ” (Robles II, supra, 236 Cal.App.4th at p. 545.) In
date) until paid in 2013. Interest is payable at the statutory rate of 10% (Civil Code
Sections 3287 and 3289).”
5
this regard, “the prompt payment of benefits is the ‘ “very essence” ’ of the
unemployment compensation insurance program.” (Id. at p. 546.) Thus, on appeal, we
liberally construe the Unemployment Insurance Code “to advance the legislative
objective of reducing the hardship of unemployment.” (Robles v. Employment
Development Dept. (2012) 207 Cal.App.4th 1029, 1034 (Robles I).)
B. Interest Payable on Wrongly Denied Unemployment Benefits
We begin by delineating the aspects of this dispute to which clear rules apply.
First, it is beyond dispute that EDD was required to pay prejudgment interest on the
unemployment benefits that it erroneously refused to pay to Brown, pursuant to
section 3287, subdivision (a). (See Aguilar v. Unemployment Ins. Appeals Bd. (1990)
223 Cal.App.3d 239, 240, 245–246 (Aguilar); see also Robles I, supra, 207 Cal.App.4th
at pp. 1036–1037 [citing cases].) Prejudgment interest is awardable in a mandamus
action involving the improper denial of unemployment benefits “because the
requirements for the additional award of interest are met once the court determines the
Board wrongfully denied benefits. In order to recover section 3287(a) interest in the
mandamus action, the claimant must show: (1) an underlying monetary obligation,
(2) damages which are certain or capable of being made certain by calculation, and (3) a
right to recovery that vests on a particular day. [Citation.] The rationale for the
mandamus interest award is that a claimant who is wrongfully denied unemployment
insurance benefits by the Board must receive compensation for the egregious delay in
receiving benefits caused by the necessity of filing a mandamus action challenging the
Board’s denial.” (American Federation of Labor v. Unemployment Ins. Appeals Bd.
(1996) 13 Cal.4th 1017, 1022 (AFL); see also id. at p. 1032 [“once a court in a mandamus
action determines the Board has wrongfully withheld unemployment insurance
compensation, the claimants who appealed the Board’s action may also recover section
3287(a) prejudgment interest as an element of the damages awarded on judicial
review”].)
When calculating such prejudgment interest, “ ‘each payment of benefits . . .
should be viewed as vesting on the date it becomes due.’ ” (Aguilar, supra, 223
6
Cal.App.3d at pp. 245–246, quoting Tripp v. Swoap (1976) 17 Cal.3d 671, 683, overruled
on other grounds as stated in Fink v. Prod (1982) 31 Cal.3d 166, 180 [applying same
process in the context of wrongfully withheld welfare benefits]; see also Currie v.
Workers’ Comp. Appeals Bd. (2001) 24 Cal.4th 1109, 1115; Olson v. Cory (1983) 35
Cal.3d 390, 402 [“[i]nterest is recoverable on each salary . . . payment from the date it fell
due”].) Moreover, as Brown asserts and as EDD actually conceded below, any payments
made by EDD to Brown with respect to the benefits and interest owed applied first to any
accrued interest and then to the paying down of principal. (Big Bear Properties, Inc. v.
Gherman (1979) 95 Cal.App.3d 908, 915 (Big Bear) [“[p]artial payment of an interest-
bearing obligation after maturity must be applied first to discharge the accrued interest
after which, if the payment exceeds the interest, the surplus is applied to discharge the
principal; any portion of the principal remaining unpaid continues to draw interest”];
McConnell v. Pacific Mutual Life Ins. Co. (1962) 205 Cal.App.2d 469, 483–484 [noting
that this has been the prevailing rule throughout the United States and that it applies
“whether interest arises from an express contract or as damages”]; see also Lucky United
Properties Investment, Inc. v. Lee (2010) 185 Cal.App.4th 125, 139, citing Big Bear;
Code Civ. Proc., § 695.220.)5
Finally, “[a]bsent a statutory provision specifically governing the type of claim at
issue, the prejudgment interest rate is 7 percent under article XV, section 1 of the
California Constitution.” (Bullock v. Philip Morris USA, Inc. (2011) 198 Cal.App.4th
543, 573; Children’s Hospital & Medical Center v. Bontá (2002) 97 Cal.App.4th 740,
774–775 [finding 10 percent interest excessive because, where the right to reimbursement
from the Department of Health Services was “not based on contract, the rate of
prejudgment interest should be that fixed by article XV, section 1 of the California
Constitution; namely, 7 percent per annum”].) This is not, however, the 7 percent
5
This is not—as EDD now incorrectly asserts on appeal—an improper
compounding of interest. Rather, it is simply a rule acknowledging that interest is owed
with respect to any additional principal still outstanding after payments are received and
correctly applied. It is thus not a claim that interest should be paid on interest.
7
postjudgment interest also allowable under that same constitutional provision, as EDD
maintains on appeal and argued below. Rather, it is the default prejudgment interest rate
provided for forbearance in the payment of money. (See Bell v. Farmers Ins. Exchange
(2006) 135 Cal.App.4th 1138, 1142 (Bell).) Thus, the only question remaining with
respect to prejudgment interest is whether section 3289, subdivision (b)—which sets a
prejudgment interest rate of 10 percent for contracts which fail to “stipulate a legal rate of
interest”—is applicable in the unemployment insurance context and supplies a statutory
exception to the default rate of 7 percent.6
We conclude that a former employee’s right to unemployment benefits is
sufficiently tied to his or her employment contract to justify imposition of prejudgment
interest at the contractual rate of 10 percent. “ ‘To finance state unemployment and
disability benefits, California requires contributions from both employers and employees.
Generally, employers must annually contribute to the unemployment fund based on
wages paid to their employees.’ ” (West Hollywood Community Health & Fitness Center
v. California Unemployment Ins. Appeals Bd. (2014) 232 Cal.App.4th 12, 17.) In
addition, “[e]mployees contribute to the disability fund based on wages received” and
6
EDD argues that this interest rate dispute is moot because it has already paid
Brown the maximum allowable unemployment insurance benefit to which he is entitled,
as well as 10 percent interest on that benefit, and the trial court held that EDD could not
recoup any overpayment. Brown, however, does not concede that all required amounts
have been paid. In particular, as discussed above, he argues that the payments made by
EDD have not been properly applied first to accrued interest as required, thereby leaving
a balance due. Under these circumstances—where further relief can potentially be
granted and where the interest issues raised are likely to recur—we believe a continuing
controversy exists sufficient to support reaching the merits of Brown’s claim. (See
Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82
Cal.App.4th 473, 479 [“[a]n appeal should be dismissed as moot when the occurrence of
events renders it impossible for the appellate court to grant appellant any effective
relief”]; Building a Better Redondo, Inc. v. City of Redondo Beach (2012) 203
Cal.App.4th 852, 867 [“[w]hen an action involves a matter of continuing public interest
that is likely to recur, a court may exercise an inherent discretion to resolve that issue,
even if an event occurring during the pendency of the appeal normally would render the
matter moot”].)
8
“employers must withhold the employees’ contributions from their wages.” (Hunt
Building Corp. v. Bernick (2000) 79 Cal.App.4th 213, 219.) Thus, an employee earns the
right to participate in the unemployment insurance system through his or her labor,
receiving in return what is essentially a deferred employee benefit. Under such
circumstances, it can be argued that, when an employee performs services for his or her
employer, the unemployment insurance provisions “ ‘become a part of the contemplated
compensation for those services and so in a sense a part of the contract of employment
itself.’ ” (Kern v. City of Long Beach (1947) 29 Cal.2d 848, 852 [discussing statutory
public pension provisions]; cf. Rivera v. Patino (N.D.Cal. 1981) 524 F.Supp. 136, 144
(Rivera) [acknowledging the argument that “pension and other employee benefits are
hard won at the bargaining table, at which the employers’ potential liability for
unemployment insurance benefits is taken into account”].)
Although not directly on point, we believe that Bell, supra, 135 Cal.App.4th 1138,
lends further support to our conclusion. In that case, Division One of this District held
that the 10-percent contractual prejudgment interest rate mandated by section 3289
applied to actions for statutory overtime pay. (Bell, supra, 135 Cal.App.4th at pp. 1145–
1150.) In particular, the Bell court opined that “ ‘[t]he contract of employment must be
held to have been made in the light of, and to have incorporated, the provisions of
existing law.’ ” (Id. at p. 1147.) Thus, a violation of such statutory provisions creates a
right of action for breach of the employment contract. (Ibid.) Of course, in Bell the
statute at issue created a debt owed to the employee by the employer, rather than the
state. However, where, as here, the state has voluntarily inserted itself into the employer-
employee relationship through provision of an employment-based benefit, we believe a
similar analysis is appropriate.
Bell is also useful for its conclusion that section 218.6 of the Labor Code was
declarative of existing law—specifically, section 3289. (Bell, supra, 135 Cal.App.4th at
pp. 1145–1150.) Labor Code section 218.6 was enacted in 2000 and provides that “[i]n
any action brought for the nonpayment of wages, the court shall award interest on all due
and unpaid wages at the rate of interest specified in subdivision (b) of Section 3289 of the
9
Civil Code, which shall accrue from the date that the wages were due and payable . . . .”
For purposes of this statute, “wages” is defined as “all amounts for labor performed by
employees of every description . . . .” (Lab. Code, § 200, subd. (a).) Moreover, “[c]ourts
have recognized that ‘wages’ also include those benefits to which an employee is entitled
as a part of his or her compensation . . . .” (Murphy v. Kenneth Cole Productions, Inc.
(2007) 40 Cal.4th 1094, 1103; see also Brown v. Superior Court (2011) 199 Cal.App.4th
971, 994 [noting that, under the Labor Code, “ ‘[w]ages’ is a protean term”].) According
to the Bell court, “strong and persuasive authority favored the application of Civil Code
section 3289 even before it was expressly made applicable to unpaid wages with the
enactment of Labor Code section 218.6.” (Bell, supra, 135 Cal.App.4th at p. 1146.)
Thus, Bell stands for the proposition that section 3289’s contractual rate of interest is
broadly applicable in actions involving unpaid wages and benefits.7
Finally, given that the prompt payment of benefits is crucial to the unemployment
compensation insurance system, we believe our construction of section 3289 to include
actions for the payment of wrongfully withheld unemployment benefits is consistent with
the legislative objective of the Unemployment Insurance Act (Act)—reducing the
hardship of unemployment. (Robles II, supra, 236 Cal.App.4th at p. 546; Robles I, supra,
207 Cal.App.4th at p. 1034.) Although EDD makes light of the importance of
unemployment insurance—quipping that no one enters the employment marketplace
“because one day they might be eligible for unemployment benefits”—such benefits are
often crucial to the impacted employee. Indeed, a claimant’s right to unemployment
benefits is sufficiently fundamental and vested that the denial of such benefits is subject
to independent review by trial courts in mandate proceedings. (Cooperman v.
Unemployment Ins. Appeals Bd. (1975) 49 Cal.App.3d 1, 7 (Cooperman); see also
Pacific Legal Foundation v. Unemployment Ins. Appeals Bd. (1981) 29 Cal.3d 101, 108
7
Since we have concluded that Brown is entitled to prejudgment interest at the
rate of 10 percent pursuant to section 3289, we need not reach Brown’s additional claim
that he is also entitled to prejudgment interest at the rate of 10 percent under Labor Code
section 218.6.
10
[noting that “a dispute about an employer’s liability for unemployment benefits affects
both the claimant’s and the employer’s ‘fundamental vested rights’ ”].) An award of
interest at the contract rate is thus consistent with both the remedial purpose of the Act
and with the underlying rationale for the interest award itself—to compensate the
successful claimant “for the egregious delay in receiving benefits . . . .” (AFL, supra, 13
Cal.4th at p. 1022.)
In reaching this conclusion, we acknowledge that in Rivera, supra, 524 F.Supp.
136—the case relied upon by the trial court below—a federal district court held that
California’s “unemployment insurance program does not create contract rights which are
cognizable under the contract clause of the United States Constitution.” (Id. at p. 144.)
In support of this determination, the Rivera court correctly opined that “not every statute
creating an entitlement to public benefits or creating obligations on the part of the
government creates rights of a contractual nature.” (Id. at p. 143.) It then rejected the
notion that the unemployment insurance system creates such constitutionally protected
rights because the law confers no right to continued benefit levels, does not reflect a
bargained-for exchange between the parties involved, and does not require that
employees give any consideration in exchange for their rights to benefits. (Id. at pp. 143–
144.)
Whether we agree or disagree with the federal court’s analysis and conclusions in
Rivera, we see it as answering a different question than the one before us. We are not
here concerned with whether the entire unemployment insurance system established by
the state creates contract rights which are constitutionally protected from impairment,
such that the legislation could not be changed to the overall detriment of vested
claimants. That is a much different and broader inquiry. We hold only that once a court
has determined that such a claimant was wrongfully denied unemployment insurance
benefits in a liquidated amount under existing law, that claimant’s right to those benefits
is sufficiently tied to his or her contract of employment to support a grant of prejudgment
interest at the contractual rate of 10 percent. As one court succinctly put it when
discussing the fundamental and vested nature of such a right: “Once a claimant meets the
11
requirements of the act, he [or she] is entitled to a certain sum of money.” (Cooperman,
supra, 49 Cal.App.3d at p. 7.) Thus, our holding is a narrow one—that, under the
circumstances described above, EDD’s statutory obligations under the Act are in the
nature of a contractually enforceable promise which should be subject to the statutory
contractual rate of prejudgment interest when breached.
Before we leave our interest rate discussion, however, we must further determine
if and when Brown’s right to prejudgment interest was superseded by a judgment and
therefore converted to a right to receive postjudgment interest. (See § 3289, subd. (a)
[“[a]ny legal rate of interest stipulated by a contract remains chargeable after a breach
thereof, as before, until the contract is superseded by a verdict or other new obligation”];
Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 538–539 [the
contract rate under section 3289 applies only until the contract is superseded by a
judgment].) After that time, postjudgment interest accrues on any unpaid principal and
interest. (Big Bear, supra, 95 Cal.App.3d at pp. 914-915 [“ ‘[I]t has generally been held
that a judgment bears interest on the whole amount thereof, although such amount is
made up partly of interest on the original obligation, and even though the interest is
separately stated in the judgment. This rule is not affected by statutes which prohibit the
allowance of compound interest . . . .’ ”]; see also Westbrook v. Fairchild (1992) 7
Cal.App.4th 889, 895 [“[a]nother common situation in which interest on interest is
allowed is when prejudgment interest is incorporated in a judgment which then bears
interest”].)
Pursuant to subdivisions (a) and (c) of section 965.5 of the Government Code,
interest on a “judgment for the payment of money against the state or a state agency”
commences to accrue “180 days from the date of the final judgment or settlement.” The
rate is the constitutional rate of 7 percent. (See Cal. Const., art. XV, § 1 [“[i]n 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”]; see also California Fed.
Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 352–353; 311 South
Spring Street Co. v. Department of General Services (2009) 178 Cal.App.4th 1009, 1013,
12
fn. 1, 1015 [pursuant to section 965.5 of the Government Code, the State is exempt from
the 10-percent postjudgment interest rate set forth in Code of Civil Procedure
section 685.010, and is therefore subject to the constitutional postjudgment rate of
7 percent]; San Francisco Unified School Dist. v. San Francisco Classroom Teachers
Assn. (1990) 222 Cal.App.3d 146, 149–152 [similar result in mandate action seeking
backpay].)8 The controversy here involves whether the trial court ever issued a judgment
in this case sufficient to trigger the application of these postjudgment rules.
We conclude that, for purposes of determining when Brown’s right to prejudgment
interest must give way to his entitlement to postjudgment interest, the trial court’s Writ
and related order, issued on May 23, 2013, are the relevant judgment in these
proceedings. Pursuant to subdivision (f) of Code of Civil Procedure section 1094.5, a
court in an administrative mandamus proceeding “shall enter judgment either
commanding respondent to set aside the order or decision, or denying the writ” (italics
added). Moreover, Code of Civil Procedure section 1095 provides that “[i]f judgment be
given for the applicant, the applicant may recover the damages which . . .may be enforced
in the manner provided for money judgments generally.” Thus, although further efforts
at enforcement may subsequently have been required in this case, the Writ and related
order were “the final determination of the rights of the parties” and therefore a judgment.
(Code Civ. Proc., § 577.) Indeed, and his assertion to the contrary notwithstanding, the
very fact that Brown’s damages were, at that point, “capable of being made certain by
calculation” is precisely why he was entitled to prejudgment interest pursuant to
section 3287, subdivision (a).
8
While, as asserted by EDD, recent amendments to section 3287 and Government
Code section 965.5—establishing an interest rate potentially significantly lower than the
generic 7-percent postjudgment rate for “interest on a tax or fee judgment for the
payment of moneys against the state”—may very well evince a trend towards lower
interest rates where the State is a litigant, they are completely irrelevant here, as these
proceedings do not involve payment of either a “tax” or a “fee.” (See § 3287, subd. (c)
[setting interest “at a rate equal to the weekly average one year constant maturity United
States Treasury yield,” but not to exceed 7 percent per annum]; Gov. Code, § 965.5,
subd. (d) [same]; see generally City of Clovis, supra, 222 Cal.App.4th 1469.)
13
It is clear that the trial court below did not consider the many different ways in
which various rates of interest must be applied in this case in order to determine whether
Brown has been properly awarded the “unemployment insurance benefits that were
withheld in the administrative proceedings in this matter plus interest on those benefits”
as mandated by the Writ. We therefore reverse the Enforcement Order solely with
regards to its discussion of the interest payable on the benefits at issue and remand the
matter so that further enforcement of the Writ can occur if, and only if, additional
amounts are due to Brown which remain unpaid under our analysis. Should EDD at this
point finally agree to meet and confer regarding any amounts due, the matter may
perhaps be able to be resolved without further court order.9
C. Due Process
As a final matter, Brown urges us to conclude that EDD’s conduct in requiring
retroactive certification of complicated work search requirements as a precondition to
payment of the wrongfully withheld benefits at issue violated due process. Although the
trial court did not reach this constitutional claim, Brown asks us to declare a due process
violation based on his assumption that—without our intervention—EDD will routinely
continue to impose these invalid conditions on others who successfully obtain writs of
mandate. EDD, in contrast, argues that no live controversy exists here implicating due
process, as Brown complied with EDD’s certification requirements and was paid with
interest.
It is true that this situation is somewhat distinguishable from that presented in
Robles II in that EDD did ultimately pay the bulk of the benefits and interest due to
Brown prior to the court’s Enforcement Order. Further—and importantly from a due
process standpoint—EDD appears in this case to have accepted as sufficient retroactive
certifications in which Brown indicated that he did not recall the specifics of his work
9
Given our resolution of this appeal, we deny EDD’s request for judicial notice,
filed on May 18, 2016, as the materials proffered are irrelevant to our decision.
14
search efforts.10 Thus, Brown was able to certify that he was unemployed during the
relevant timeframe and yet was able, available, and actively seeking work, without being
required to recall the details of his past efforts as a prerequisite to the payment of
benefits. (Cf. Robles II, supra, 236 Cal.App.4th at pp. 549–551.)
On the other hand, it is beyond dispute that the process chosen by EDD in this
case did not lead to “immediate” payment of the improperly withheld benefits, a fact
recognized by the trial court when it fined the agency for failure to reasonably comply
with the Writ. Most troubling, in our view, were EDD’s repeated refusal to meet and
confer, its attempt to contact Brown directly rather than through his attorney, and its
focus on irrelevant information related to Brown’s current employment situation.
Nevertheless, while we certainly do not condone the process here employed by EDD, the
agency has since had the benefit of our decision in Robles II and has been subject to fines
both in that case and in the present matter based on its utter failure to effect the
immediate payment of the wrongfully withheld benefits at issue. (See Robles II, supra,
236 Cal.App.4th at p. 545.) Under such circumstances, we will not assume that EDD will
continue in the future to refuse to meet and confer or otherwise fail to adopt a more
rational and streamlined certification and payment process for use in situations where
other claimants successfully obtain writs of mandate. We thus decline Brown’s invitation
to reach his due process argument in the context of this case.
10
Brown’s attorney declared below that, during the certification process, Brown
informed him “that he had made numerous applications, but he had not previously been
notified regarding the new instructions and did not keep records or recall the information
that EDD was requiring.” On his attorney’s advice, Brown “therefore wrote ‘I do not
recall’ on the certified claim forms where he truthfully did not recall.” EDD eventually
paid all of the claims related to these certifications.
15
III. DISPOSITION
The Enforcement Order is affirmed other than with respect to the calculation of
interest, and the matter is remanded to the trial court for further enforcement of the Writ
as may be necessary, consistent with the terms of this opinion. Brown is entitled to his
costs on appeal.
16
_________________________
REARDON, J.
We concur:
_________________________
RUVOLO, P. J.
_________________________
STREETER, J.
A145487 Brown v. California Unemployment
17
A145487/Brown v. Cal. Unemp. Ins. Appeals Bd.
Trial Court: San Francisco City & County Superior Court
Trial Judge: Ernest H. Goldsmith, J.
Counsel: Garfinkle Law Office, Garfinkle Law Firm, Gary S. Garfinkle and Maria J.
Garfinkle for Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Julie Weng-Gutierrez, Senior
Assistant Attorney General, Susan M. Carson and Cheryl L. Feiner,
Supervising Deputy Attorneys General, Dane C. Barca, Deputy
Attorney General, for Defendants and Respondents.
18