Opinion
B189022
12-5-2006
UTILITY AUDIT COMPANY, INC., et al., Plaintiffs and Appellants, v. CITY OF LOS ANGELES, Defendant and Appellant. AMES CONSTRUCTION et al., Plaintiffs and Respondents, v. CITY OF LOS ANGELES, Defendant and Appellant. DANIEL K. WHANG et al., Plaintiffs and Respondents, v. CITY OF LOS ANGELES, Defendant and Appellant.
Elena Reyes for Plaintiffs and Appellants. Rockard J. Delgadillo, City Attorney, Michael L. Claessens, and Laurie Rittenberg, Assistant City Attorneys, for Defendant and Appellant. No appearance for Plaintiffs and Respondents.
Defendant and appellant the City of Los Angeles (City) appeals from judgments entered against it in three related cases tried in sequential bench trials. The trial court ordered the City to pay interest on sewer service overcharge refunds provided to multiple claimants. The City challenges the trial courts findings that the claims for interest were timely because they were subsumed within the earlier refund claims, that the subsequent lawsuits and certain claims were timely filed, and that interest is owed on the full refund amounts at a rate of 10 percent per annum. The trial court further ruled one lawsuit was untimely as to two claimants, and those claimants have cross-appealed.
We affirm in part and reverse in part. We affirm the trial courts determination that each refund claim included an inherent and subsumed claim for interest. We likewise affirm its findings that claimants are entitled to receive interest on the full amount of their refunds, that it would be inequitable to apply the limitations period to restrict the recovery available to certain claimants, and that the claims presented and the lawsuit filed by certain claimants were timely. We reverse the trial courts interest rate determination and hold that the interest must be calculated at 7 percent per annum pursuant to the California Constitution and Civil Code section 3287, subdivision (a).
On the cross-appeal, we reverse the trial courts determination that the limitations period in Government Code section 945.6 barred the lawsuit as to two claimants; we find that the Citys interrelated administrative process sufficiently tolled the limitations period.
FACTUAL AND PROCEDURAL BACKGROUND
In large part, these background facts are taken from Utility Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 953-954 (Utility Audit).
Beginning in 1972, the City improperly assessed sewer service charges against two types of property owners. One group did not use the Citys sewer system at all and relied wholly on septic tanks or Los Angeles County (County) services (the S.B. 1821 claimants); the other used City sewer lines only to transport sewage to County treatment facilities and should have only been charged 15 percent of the standard sewer fee rather than the full amount (the CSD claimants). (Utility Audit, supra, 112 Cal.App.4th at p. 953.)
We adopt the parties shorthand identification of each group. "S.B. 1821" refers to Senate Bill 1821, while "CSD" refers to the County Sanitation District.
The problem received attention at the state and local levels. Following the introduction of Senate Bill 1821 in 1990, the Legislature enacted Government Code section 53082 (section 53082), which requires that "[b]y July 1, 1991, local agencies shall refund any sewer service fees collected for which no services were delivered." (Gov. Code, § 53082, subd. (a).) The statute further provides: "[W]here a person paid fees . . . and is still residing at the same location, it shall be the responsibility of the local agency, upon determination that the premises is not connected to the sewer system, to return fees in their entirety, regardless of the amount of time the fees were wrongly collected." (Gov. Code, § 53082, subd. (c).) According to subdivision (e) of the statute: "No statute of limitations shall apply to claims for fees paid before January 1, 1992. For fees paid on or after January 1, 1992, claims shall be filed within 180 days of the date of payment." (Gov. Code, § 53082, subd. (e).) The statute does not address the question of whether interest must be paid on the returned funds. (Utility Audit, supra, 112 Cal.App.4th at pp. 953-954.)
Beginning in 1995, Utility Audit Company (Utility) began filing claims seeking both refunds and interest for sewer service overcharges. Utility is in the business of identifying overcharges by California utilities and representing claimants to obtain proper rates and/or refunds. Initially, the City denied any refund to the CSD claimants and limited the refund to the S.B. 1821 claimants by refusing to refund any amounts paid between January 1, 1992 and 180 days beyond the claim filing date. In 1996, however, the City adopted a policy of refunding the entire amount of the overpayment to the CSD claimants—without regard to any limitations period—by crediting their utility bills. (Utility Audit, supra, 112 Cal.App.4th at p. 954.)
Because many claims remained stalled in the Citys administrative process, Utility filed a consolidated administrative appeal (Consolidated Appeal) with the Board of Public Works in February 1998. Following several levels of committee reports and investigations, the full City Council heard the matter in May 1999 and thereafter adopted a policy that provided for cash refunds to customers and waived the cut-off claim period for the S.B. 1821 claimants. The City limited the refunds to actual overpayments made, without interest. (Utility Audit, supra, 112 Cal.App.4th at p. 954.)
Claimants Seek Interest on Refunds.
The Ames Claimants.
Starting in 1995, Utility initially filed claims on behalf of a number of claimants (the Ames claimants) who had been overcharged for sewer services by both the City and the County. The Ames claimants had not received any specific notice of overcharge from the City. Later, in October 1999, Utility filed a petition for writ of mandate in the trial court seeking to recover interest on the refunds. The trial court entered judgment in favor of the City after sustaining the Citys demurrer without leave to amend on the basis that Utility failed to show it was authorized to maintain the proceedings on behalf of the claimants identified in the complaint.
After receiving an "Assignment of Claim" from each claimant, Utility filed a second action in May 2000 to recover interest on the refunds. The trial court granted Utilitys motion for summary judgment and awarded $1.3 million against the City. In an unpublished decision, we reversed, holding that the doctrine of collateral estoppel barred Utility from maintaining the action. (Utility Audit Company, Inc. v. City of Los Angeles (Mar. 27, 2002, B148684 [nonpub. opn.].)
In August 2002, the Ames claimants on their own behalf filed a complaint against the City for declaratory relief and for recovery of interest on money had and received. The trial court granted the Citys motion for judgment on the pleadings on the grounds that the plaintiffs lacked standing and that the statute of limitations barred their claims. In an unpublished decision, we reversed. (Ames Construction v. City of Los Angeles (June 21, 2004, B168186 [nonpub. opn.].) We concluded that the plaintiffs should have been granted leave to amend the complaint to allege standing and that the limitations period was equitably tolled while the prior actions brought by Utility were pending.
Utility Audit Company.
On January 17, 2001, Utility filed a verified complaint against the City for declaratory relief and for recovery of interest on money had and received. It filed a first amended complaint in March 2001 alleging that the City had rejected 20 claims for interest on sewer overcharge refund amounts and that it was the assignee of those claims. The City answered, admitting that it "inadvertently and mistakenly collected sewer fees from some residents in the Los Angeles area since 1972," but denying that it was indebted to Utility for interest from the date that the claimants monies were wrongfully collected. In July 2002, Utility filed a similar action against the City on behalf of 12 additional claimants, which was consolidated with the earlier action.
The trial court granted Utilitys motion for summary judgment and entered judgment in the amount of $848,407.85, which assumed a 10 percent interest rate on the full refund amount without regard to claims filing or limitations periods. In a published decision, Utility Audit, supra, 112 Cal.App.4th 950, we reversed. Addressing the bases for the Citys liability, "[w]e h[e]ld that an award of interest is consistent with the intent of Government Code section 53082, to refund wrongfully assessed sewer service fees, and section 3287 of the Civil Code supports the award of interest." (Utility Audit, supra, at p. 959.) With respect to claims filing and limitations periods, we further held that the City did not waive its ability to apply relevant limitations and claims filing periods to the claims for interest. (Id. at p. 960.) More specifically, we stated: "Those claimants governed by section 53082 (i.e., those who received no sewer services from the City), are therefore entitled to the refund of payments made prior to January 1, 1992, including interest. For payments made thereafter, those claimants are limited to the recovery of payments made 180 days prior to the date of claim, plus interest." (Id. at p. 961.)
Turning to the issue of accrual, we determined that, as to claimants who received no sewer service (the S.B. 1821 claimants), their claims accrued when they made their overpayment. According to section 53082, those claimants were required to file their claims within 180 days of the overpayment, though the Citys evidence tended to show that refunds exceeded the 180-day period. (Utility Audit, supra, 112 Cal.App.4th at pp. 961-962.) As to claimants who received sewer transport (the CSD claimants), we concluded that even though the discovery rule could apply to delay accrual of their claims beyond the time when the overpayment was made, a triable issue of fact existed as to the time of accrual because "Utility failed to conclusively show that the claims arose at dates later then the time of the overpayments." (Id. at p. 962.) We finally found that summary judgment was improper because the City raised a triable issue of fact concerning the number of claimants who could rely on their participation in an administrative process to toll the running of the applicable limitations period. (Id. at p. 963.)
The Whang Claimants.
In July 2003, a few months before the Utility Audit decision was filed, another group of claimants (the Whang claimants) filed a complaint against the City for declaratory relief and for recovery of interest on money had and received. All the Whang claimants are CSD claimants. None of the Whang claimants participated in the Consolidated Appeal. In 2001 and 2002, with one exception each of the Whang claimants received a formal notice of overcharge from the City, which notified of the sewer service fee overcharge and enclosed a refund claim form. The Citys form did not include an entry for recovery of interest. Each of the Whang claimants submitted a separate claim (prepared by Utility) for interest on the principal amount of their sewer overcharge refund which the City then denied. The Whang claimants did not appeal the denial to the Board of Public Works or any other entity.
In January 2005, the trial court issued an order denying the Citys motion for summary judgment, finding triable issues of fact as to when the claimants were on notice of their right to file claims for refund of sewer fees. The order further stated: "The entitlement to interest on those fees is not a separate cause of action or legal theory such that i[t] would give rise to the necessity for a separate claim, and it was thus subsumed within the claims for refund of the fees. [¶] The date upon which the right to seek a claim for refund of fees is therefore the same date upon which the right to seek interest accrued. Such date will have to be resolved by a jury as to each claimant. [¶] In addition, the Court does not find that the claims are limited to those payments and interest accrued within one (1) year of the date of each claim. The discovery rule would apply here so that the `claim would not accrue until the claimant knew or had reason to know of it, and the claim would include the entire amount of the overpayment in fees and the interest accrued thereon."
Trial.
Before trial, all parties submitted trial briefs outlining the issues to be adjudicated. The issues included whether the statute of limitations was tolled as to claimants who did not participate in the Consolidated Appeal; whether a claim for interest is subsumed within a claim for a refund; whether interest could be awarded to the CSD claimants for a period exceeding one year before their claim was made; and whether the applicable rate of interest was 7 or 10 percent.
For the purposes of trial, the parties stipulated to several facts: (1) Each underlying claimant filed a claim for a full refund. Some of the Ames claimants included a claim for interest on their refund claims, some filed a separate claim for interest and some did not request interest at all. The Utility claims included a claim for interest on the refund claim. The Whang claimants each filed a separate claim for interest. The City paid each refund claim in full without interest. (2) Each claimant was aware of his or her right to file a claim for refund when or immediately before filing the claim for refund. (3) Schedules prepared by City employee Lisa Mowery accurately reflected each customer, property address, date of refund request, date of interest request, refund amount and date of payment. (4) As to plaintiffs who participated in the Consolidated Appeal, their causes of action accrued and their claims for interest were deemed filed on May 19, 1999. (5) As to plaintiffs who did not participate in the Consolidated Appeal, their causes of action for interest accrued when they filed their claims for interest on the sewer fee refund amount. (6) The Whang claimants filed their lawsuit within six months of the date of the denial of their claims for interest. The parties also stipulated as to the identity of claimants who participated in the Consolidated Appeal.
Bench trials commenced on July 14, 2005. The parties submitted closing briefs after two days of testimony and argument. They further submitted proposed statements of decision, and the trial court considered objections and clarifications filed by all parties following the issuance of tentative statements of decision.
The trial court filed its final statements of decision on December 2, 2005. As to the Ames claimants, the trial court found that any claim for interest complied with Government Code section 911.2 because each claim for a refund of sewer service charges included an inherent and subsumed claim for interest; all lawsuits were timely filed; and the City owed interest on all refund amounts paid and owing to both the S.B. 1821 and the CSD claimants. As to Utility, the trial court found that all lawsuits were timely filed with the exception of those relating to claimants Mike Fouladian and Pacific Electricord, and that the City owed interest on the full refund amount for each claim, less the "gap period"—the period after January 1, 1992 and 180 days beyond the claim date—for the S.B. 1821 claims. As to the Whang claimants, the trial court ruled as it did with respect to the Ames claimants that any claim for interest was inherently subsumed within a claim for a refund, and that the claims therefore complied with Government Code section 911.2; all lawsuits were timely filed; and the City owed interest on the full refund amounts. Finally, as to all cases, the trial court found that a 10 percent interest rate applied.
Judgments were entered in November 2005 and January 2006, and the Citys appeals followed. Utility also filed a cross-appeal concerning the trial courts finding that the statute of limitations barred two claimants lawsuit.
DISCUSSION
The Citys three appeals raise issues both common among all cases and unique to the Ames claimants and the Whang claimants. We address the issues common to all cases first. Briefly, we affirm the trial courts conclusion that each claim for a refund of sewer service charges included an inherent claim for interest pursuant to Civil Code section 3287 and that the CSD claimants should receive interest on the full amount of their refunds. As to the Ames claimants, we affirm its conclusion that it would be inequitable to limit their recovery to the period of 180 days preceding their claims. As to the Whang claimants, we affirm the trial courts determination that the claims and lawsuit were timely.
We reverse the trial courts determination that the appropriate rate of interest is 10 percent under Civil Code section 3289. The proper prejudgment interest rate is 7 percent. (Cal. Const., art. XV, § 1; Civ. Code, § 3287, subd. (a).) Finally, we also reverse the trial courts ruling that two claimants filed their lawsuit beyond the time permitted by Government Code section 945.6.
I. Issues Affecting All Parties.
A. A Claim for Interest Is Inherent in a Claim for a Refund.
In concluding that each claimant submitted a timely claim for interest in compliance with the Tort Claims Act (Gov. Code, § 810 et seq.), the trial court reasoned that "[e]ach claim for refund of sewer service charges (`SSC) included the inherent and subsumed claim for interest; therefore each claim included a right to interest and each such claim was in compliance with Gov. Code § 911.2." It found that, as a matter of law, "[a] claim for interest is `embraced within a claim for damages and as such is properly made as part of the damage claim." The City contends only that this conclusion is contrary to the intent of the Tort Claims Act; it does not challenge any of the trial courts underlying factual findings. When we are confronted with a question of law based on undisputed facts, our review is de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799.)
Although the trial courts statement of decision in the Utility matter did not address this issue, Utility raises the matter on appeal in connection with its argument that the Tort Claims Act bars it from paying more than one years worth of back interest. (See section I.C., post.)
We recently discussed the requirements of the Tort Claims Act in V.C. v. Los Angeles Unified School Dist. (2006) 139 Cal.App.4th 499, 507: "According to Government Code section 815, subdivision (a), all governmental liability is governed by statute. (Gov. Code, § 815, subd. (a); Creason v. Department of Health Services (1998) 18 Cal.4th 623, 630[-631] [`The California Tort Claims Act provides that a public entity is not liable for injury arising from an act or omission except as provided by statute].) . . . [¶] Government Code section 900 et seq., part of the Tort Claims Act, `prescribes the manner in which public entities may be sued. (Chalmers v. County of Los Angeles (1985) 175 Cal.App.3d 461, 464.) Government Code section 945.4 provides that `"no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with . . . [Government Code] Section 910 . . . until a written claim therefor[e] has been presented to the public entity and has been acted upon by the [public entitys] board, or has been deemed to have been rejected by the board . . . ." (Stockett v. Association of Cal. Water Agencies Joint Powers Ins. Authority (2004) 34 Cal.4th 441, 445 (Stockett).) The purposes of the claim filing requirement are: `(1) to give notice to the public entity so it will have a timely opportunity to investigate the claim and determine the facts; and (2) to give the public entity an opportunity to settle meritorious claims thereby avoiding unnecessary lawsuits. (San Diego Unified Port Dist. v. Superior Court (1988) 197 Cal.App.3d 843, 847; accord, Stockett, supra, at p. 446.)"
The parties stipulated to the timeliness of the refund claims, agreeing that each claimant became aware of the right to file a claim for refund immediately before doing so. It is therefore undisputed that the refund claims were filed within the time limit prescribed by Government Code section 911.2, which requires that claims other than those "for death or for injury to person or to personal property or growing crops" be presented not later than one year after the accrual of the cause of action. (Gov. Code, § 911.2, subd. (a.).) What the City disputes is the trial courts legal conclusion that the refund claims inherently included a claim for interest, arguing that such a conclusion thwarts the notice purpose of the claims filing requirement.
We find no support for the Citys argument. To the contrary, Government Code section 910, which governs the content of a claim made pursuant to Government Code section 911.2, requires that the claim show "[a] general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim." (Gov. Code, § 910, subd. (d).) As a matter of law, the Citys "indebtedness" for the amount of the sewer service overcharge includes interest for the time that such money was wrongfully withheld.
Civil Code section 3287, subdivision (a) provides: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state." In 1955 and 1959, the Legislature amended this statute to extend its application to public entities and it represents an exception to the general rule that interest cannot be recovered against a state or municipality. (Sanders v. City of Los Angeles (1970) 3 Cal.3d 252, 262; Lewis C. Nelson & Sons, Inc. v. Clovis Unified School Dist. (2001) 90 Cal.App.4th 64, 67-68 (Lewis C. Nelson); see also City of Pasadena v. County of L. A. (1965) 235 Cal.App.2d 153, 160 ["By virtue of section 3287 of the Civil Code, a county is liable, as is any other debtor, for interest from the day an obligation becomes due"].) Thus, where damages are certain or their amount is ascertainable, prejudgment interest under subdivision (a) of Civil Code section 3287 is a matter of right. (Lewis C. Nelson, supra, at p. 70; Levy-Zentner Co. v. Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 798.)
For this reason, there is no requirement that a plaintiff separately pray for interest in a complaint or otherwise put the defendant on notice that prejudgment interest will be sought pursuant to Civil Code section 3287, subdivision (a). (See Sanders v. City of Los Angeles, supra, 3 Cal.3d at p. 263 ["In a contested action interest may be awarded, if the plaintiff is entitled thereto, even though the complaint contains no prayer for interest"].) As aptly explained in Sears, Roebuck & Co. v. Blade (1956) 139 Cal.App.2d 580, 596, "in a contested action on a money claim which can be made certain by calculation, the matter of interest for the withholding of the money is `embraced within the issue [citation] and the appropriate interest may be allowed even though not prayed for or the prayer is for less interest than the evidence shows the plaintiff to be entitled." (Accord, Todd Shipyards Corp. v. City of Los Angeles (1982) 130 Cal.App.3d 222, 226 [where City conceded that it had wrongfully collected taxes, "[o]nce the wrongfulness of the tax was ascertained, the right to recovery was established, and the amount of interest became solely a mechanical application of arithmetic"].) Moreover, because the issue of interest is embraced within the substantive claim, "no evidence is necessary to establish a plaintiffs right to the legal rate of interest as damages for the wrongful detention of his money." (Sears, Roebuck & Co. v. Blade, supra, at p. 595.)
Though the foregoing cases do not address whether a specific request for interest must be made in a claim presented pursuant to Government Code section 911.2, we find no basis to depart from the reasoning of the cases holding there is no necessity to pray for or present evidence concerning interest awarded under Civil Code section 3287. With respect to the Citys contention that a claim is different than a pleading and should include a specific request for interest to afford the City adequate notice, the Lewis C. Nelson court indicated that the mandatory language of Civil Code section 3287, subdivision (a) sufficiently apprises a public entity of its obligation to pay prejudgment interest on a liquidated claim. (Lewis C. Nelson, supra, 90 Cal.App.4th at p. 68.) Further suggesting that a government claim need not include a request for interest, the court in that case held that a trial court may exercise its discretion to award prejudgment interest against a public entity on an unliquidated claim pursuant to Civil Code section 3287, subdivision (b); it reached this conclusion without considering whether the claim had included a request for interest. (Lewis C. Nelson, supra, at pp. 72-73.)
By reason of Civil Code section 3287 and the cases interpreting it, the claimants need not have included a separate request for interest in their claims in order to provide the City with notice that they were seeking interest. Because each claim for a refund of sewer service overcharges included "the inherent and subsumed claim for interest," we agree with the trial courts conclusion that all claims satisfied the requirements of the Tort Claims Act.
Our conclusion applies with equal force to Frank Colleto Ford, one of the Ames claimants, who did not participate in the Consolidated Appeal but filed his refund claim on November 12, 1999 without including a specific request for interest.
B. The Proper Interest Rate is 7 Percent.
The trial court found that, pursuant to Civil Code section 3289, the City was obligated to pay prejudgment interest at a rate of 10 percent. According to Civil Code section 3289, subdivision (b), where a contract entered into after January 1, 1986 does not state a legal rate of interest, "the obligation shall bear interest at a rate of 10 percent per annum after a breach." The trial court found this provision applicable, reasoning that the assessment of sewer service charges constituted an implied-in-law contract and that an action on money had and received is a legal remedy based on a contractual theory of recovery. The City contends this was error because, as a public entity, it cannot be held liable for breach of an implied-in-law contract and, thus, the proper rate of interest is 7 percent. (See Cal. Const., art. XV, § 1; Civ. Code, § 3287, subd. (a).) Whether the proper interest rate was applied is a question of law which we review de novo. (See Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 691.)
In Utility Audit, supra, 112 Cal.App.4th at page 957, "[w]e conclude[d] that section 3287 of the Civil Code authorizes the recovery of interest on the refund amounts." Civil Code section 3287, subdivision (a) does not specify a rate of interest. When there is no other applicable statute, the general interest rate for judgments provided by the California Constitution applies: "In the absence of any legislative act to the contrary, the rate of prejudgment interest is 7 percent." (Pacific-Southern Mortgage Trust Co. v. Insurance Co. of North America (1985) 166 Cal.App.3d 703, 716, citing Cal. Const., art. XV, § 1.) Thus, our holding in Utility Audit sanctioned a 7 percent interest rate: "We hold that an award of interest is consistent with the intent of Government Code section 53082, to refund wrongfully assessed sewer service fees, and section 3287 of the Civil Code supports the award of interest." (Utility Audit, supra, at p. 959.)
In another portion of that decision, however, we addressed whether governmental immunity barred the Utility complaints cause of action for money had and received. (Utility Audit, supra, 112 Cal.App.4th at pp. 957-958.) As we recognized, California law requires "all government tort liability must be based upon statute. (Gov. Code, § 815; County of Los Angeles v. Superior Court (2002) 102 Cal.App.4th 627, 637.)" (Utility Audit, supra, at pp. 957-958.) Further, "[s]ection 814 of the Government Code allows for liability based upon `contract or the right to obtain relief other than money or damages against a public entity." (Id. at p. 958.) Rejecting the Citys contention that it was immune from liability on the cause of action for money had and received because it was a common count that lacked any statutory or contractual basis, we stated: "A claim for refund of overcharges, without more, appears to be based upon breach of a contractual duty. In addition, Utility provided statutory basis for the recovery, Civil Code section 3287." (Ibid.)
In their trial briefs, all claimants capitalized on the apparent suggestion that their claim involved a breach of contract, arguing that the court of appeal had previously characterized this action as a contract action. But before trial, the parties stipulated that "[t]he City of Los Angeles has never had any written contract with any plaintiff, claimant, or Utility Audit Company, as to Sewer Service Charges." Nonetheless, the trial court found that the 10 percent rate provided by Civil Code section 3289 was appropriate because "[t]he situation herein by which the [sewer service charges are] assessed, and the action herein, is based on an implied in law contract."
We find no lawful basis for the imposition of a 10 percent interest rate. "A public entity cannot be held liable on an implied-in-law or quasi-contract theory. (Miller v. McKinnon (1942) 20 Cal.2d 83, 87; Lundeen Coatings Corp. v. Department of Water & Power (1991) 232 Cal.App.3d 816, 831, fn. 9.)" (Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094.) Indeed, we questioned the propriety of the 10 percent interest rate previously imposed by the trial court in Utility Audit, commenting: "The parties have not contended on appeal that interest, if any, should be calculated at a rate other than 10 percent." (Utility Audit, supra, 112 Cal.App.4th at p. 955, fn. 1.) We find the Citys contention that the proper interest rate is 7 percent meritorious and consistent with our prior conclusion that Civil Code section 3287 provides the statutory basis for imposing liability for interest against the City. (See Utility Audit, supra, at pp. 958-959.)
C. The City Owes Interest to the CSD Claimants on the Full Refund Amounts.
With respect to the CSD claimants—i.e., those who overpaid for sewer services and are not governed by section 53082 because they received some level of City sewer services—the trial court found that "the total amount of each claim for refund and for interest is fully within the time frame requirements of Gov. Code § 911.2. The Defendant shall pay interest on the full refund amount for each claim." As the factual basis for its conclusion, the trial court cited stipulated facts that the claimants "did not discover the mistakes and misrepresentations related to the [sewer service charges] until just prior to their filing of the claims," and reasoned that the limitations period for recovery of any sewer service overcharges did not commence until such discovery. It further found that the provisions of Government Code section 911.2 did not limit the extent of the recovery available to the claimants because that statute "provides a limitation only as to when to file a claim as related to the accrual of the cause of action."
The City challenges this ruling, contending that Government Code section 911.2 requires that the extent of its interest obligation be limited to one year period prior to the date each claim was filed. "The proper interpretation of a statute and its application to undisputed facts are questions of law subject to this courts independent review." (Casden v. Superior Court (2006) 140 Cal.App.4th 417, 422, fn. omitted, citing Smith v. Rae-Venter Law Group (2002) 29 Cal.4th 345, 357.) We find no merit to the Citys contention.
Government Code section 911.2 provides that, before bringing their action against the City, the claimants were required to present written claims "not later than one year after the accrual of the cause of action." (Gov. Code, § 911.2, subd. (a.); see also Gov. Code, § 945.4; Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1776-1777.) Government Code section 901 defines the date of accrual, providing in relevant part that the cause of action to which a claim relates accrues on "the date upon which the cause of action would be deemed to have accrued within the meaning of the statute of limitations which would be applicable thereto." (Accord John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, 444, fn. 3 ["A cause of action accrues for purposes of the filing requirements of the Tort Claims Act on the same date a similar action against a nonpublic entity would be deemed to accrue for purposes of applying the relevant statute of limitations"].)
Here, the trial court was faced with the relatively unique situation of the parties having stipulated to the date of accrual. More specifically, the parties stipulated that each claimant was aware of his or her right to file a claim for refund when or immediately before filing the refund claim and that the causes of action brought by claimants who participated in the Consolidated Appeal accrued and their claims for interest were deemed filed on May 19, 1999. Given these stipulated facts, the trial court properly found that each claim for refund was timely filed.
We note that the evidence at trial was consistent with this stipulation, as the evidence showed that the City did not begin sending overcharge notices to CSD claimants until 2001. (See, e.g., Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 ["An important exception to the general rule of accrual is the `discovery rule, which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action"].)
In addition, the trial court properly required that interest be paid on the full refund amounts. In analogous situations where plaintiffs received an award of prejudgment interest on tax refunds, courts have held that interest must be paid from the date of the overpayment, not the date of the refund claim. (E.g., Roscoe Terrace v. City of Los Angeles (1985) 170 Cal.App.3d 559, 570 ["prejudgment interest on any refund due commenced to run on the date of overpayment of the tax"]; ITT Gilfillan, Inc. v. City of Los Angeles (1982) 136 Cal.App.3d 581, 585 ["interest starts running on the day that the respective payments were wrongfully collected"]; Todd Shipyards Corp. v. City of Los Angeles, supra, 130 Cal.App.3d at p. 226 [same].)
We find no support for the Citys assertion that interest should be paid only for the one-year period prior to the filing of each claim. The City relies on a paragraph in the Utility Audit decision discussing whether certain claims were timely filed. (SeeUtility Audit, supra, 112 Cal.App.4th at pp. 960-961.) There, we noted that "claims arising more than one year prior to presentation of the claim or more than two years prior to suit are barred. [Citation.] Because the claims involve a continuing wrong, with a new claim arising with each overpayment, the provisions effectively limit each claim to one year. [Citations.]" (Ibid., fn. omitted.) That paragraph addressed the impact of statutes of limitations and claim periods on the claimants potential recovery. (Ibid., citing Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 460 [past due pension payments were barred by the three-year statute of limitations applying to statutory obligations]; Baillargeon v. Department of Water & Power (1977) 69 Cal.App.3d 670, 682-683 [action against public entity barred unless claim presented within one year of date of cause of action accrued].) The running of the applicable limitations or claims filing period—not the commencement of the accrual date—may serve to limit a plaintiffs recovery. (See V.C. v. Los Angeles Unified School Dist., supra, 139 Cal.App.4th at pp. 509, 510 [distinguishing between accrual dates and limitations periods, explaining that "`statutes of limitation do not begin to run until a cause of action accrues"].) Here, because the parties stipulated that the CSD claimants claims accrued at the time or immediately before they presented their claims, the limitations and claims periods had just begun to run and could not have served as a bar or limit to recovery.
The trial court properly concluded that the claims were timely under Government Code section 911.2, as they were filed within one year of the stipulated accrual dates. Further, it properly required the City to pay interest to the CSD claimants on the full amount of the refund claims.
II. Issue Affecting the Ames Claimants: Substantial Evidence Supports the Trial Courts Finding That It Would Be Inequitable to Apply the Limitations Period in Section 53082 to Limit the Interest Recovered by the S.B. 1821 Claimants.
Section 53082 governs the S.B. 1821 claimants who never received sewer service from the City. (Utility Audit, supra, 112 Cal.App.4th at p. 961, fn. 4.) In relevant part, that statute requires: "By July 1, 1991, local agencies shall refund any sewer service fees collected for which no services were delivered. [¶] . . . [¶] No statute of limitations shall apply to claims for fees paid before January 1, 1992. For fees paid on or after January 1, 1992, claims shall be filed within 180 days of the date of payment." (Gov. Code, § 53082, subds. (a) & (e).) Construing the plain language of section 53082, we held in Utility Audit that the statute limited the recovery available to the S.B. 1821 claimants in that matter: "Those claimants governed by section 53082 . . . are therefore entitled to the refund of payments made prior to January 1, 1992, including interest. For payments made thereafter, those claimants are limited to the recovery of payments made 180 days prior to the date of claim, plus interest." (Utility Audit, supra, at p. 961.) We further held that the S.B. 1821 claimants "claims accrued when the overpayment was made." (Utility Audit, supra, at p. 962.)
In its statement of decision in the Utility matter, the trial court applied this holding, finding: "Pursuant to the Court of Appeal decision in this case, interest is owing on the full amount of refund, less the Gap Period, for the SB 1821 claims." In other words, the S.B. 1821 claimants in the Utility matter are precluded from receiving interest for any period after January 1, 1992 and more than 180 days prior to any claim. Neither Utility nor the City challenges this conclusion on appeal, and we therefore need not address it. (E.g., Jones v. Superior Court (1994) 26 Cal.App.4th 92, 99 ["Issues do not have a life of their own: if they are not raised or supported by argument or citation to authority, we consider the issues waived"].)
The trial court and the parties consistently defined the "Gap Period" as the noncovered period between January 1, 1992 and 180 days prior to any claim for refund made after that date.
With respect to the S.B. 1821 claimants in the Ames matter, the trial court reached a different conclusion. There, the trial court made the following factual findings: "[T]he 180 day `statute of limitations in Gov. Code Sec. 53082 was predicated on the understanding that the City was to identify and refund `any sewer service fees collected for which no services were delivered by July 1, 1991. The City did not make such refunds nor did it provide notice to the Plaintiffs herein as to the overassessment. . . . By January 1, 1992, the Plaintiffs herein still had no reason to suspect or know that they were being overcharged. . . . These Plaintiffs only became aware of the overcharges just prior to their filing of claims for refund." The court further found that the parties stipulating to the timeliness of the refund claims—and hence the inherent claims for interest—further removed from consideration the issue of whether the claimants should have been on notice prior to the time they filed their claims. On the basis of these factual findings, the trial court concluded: "The fact that the Plaintiffs could not have reasonably ascertained in 1991 and 1992 that they were being overcharged, makes the claim limitation on these Plaintiffs post-January 1, 1992 claims inequitable and unlawful in its application." It distinguished the contrary holding in Utility Audit on the ground that the court there "was not presented with the factual stipulations agreed to here, and found that there were triable issues of fact as to the application of the discovery rule and that plaintiffs had not shown conclusively that the claims at issue arose after the time of overpayment. Thus, it is not clear to this Court that the issue of the `gap period was fully resolved in that prior appeal."
Essentially, the trial court held that the City was equitably estopped to apply the 180-day limitation period. "[T]he doctrine of equitable estoppel . . . is an accepted jurisprudential technique of long-standing for avoiding the effect of the running of the statute of limitations when the delay in instituting proceedings has resulted from some breach of duty or other conduct on the part of the party asserting the statute." (Hurwitz v. Workers Comp. Appeals Bd. (1979) 97 Cal.App.3d 854, 872.) The City contends that there was no basis for the trial court to apply this doctrine in order to depart from the holding in Utility Audit. It asserts that the evidence showed its conduct did not result in any delay, as it attempted to notify claimants of possible overpayments as early as 1986. It further asserts that the stipulation concerning the timeliness of the refund claims was never intended to serve as a factual basis for the payment of interest during what the parties characterize as the "gap period." "The determination of whether a defendants conduct is sufficient to invoke the doctrine [of equitable estoppel] is a factual question entrusted to the trial courts discretion. [Citation.] The issue is whether, viewing the evidence and all the inferences therefrom in the light most favorable to the defendants, there was substantial evidence upon which the court could reasonably have found as it did. [Citation.]" (Cuadros v. Superior Court (1992) 6 Cal.App.4th 671, 675.)
"`Four elements must ordinarily be proved to establish an equitable estoppel: (1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; and, (4) he must rely upon the conduct to his injury." (DRG/Beverly Hills, Ltd. v. Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 59.) Absent a strong countervailing public policy, the doctrine of equitable estoppel may be applied against a public entity in the same manner it is applied against a private party. (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 496-497; Ard v. County of Contra Costa (2001) 93 Cal.App.4th 339, 346-347.)
Despite the fact that affirming the trial courts findings puts the Utility CSD claimants and the Ames CSD claimants in different positions regarding their gap period recovery, we conclude that substantial evidence supports the trial courts conclusion that the City is equitably estopped to rely on the 180-day limitations period in section 53082 as to the Ames claimants. The evidence showed that for several years after the enactment of section 53082, the City neither took affirmative steps to provide the required refunds to the CSD claimants nor even made efforts to notify the CSD claimants that they were being erroneously charged. The Citys bill inserts provided from the mid to late 1980s were inadequate to alert the CSD claimants of the overcharge. They merely directed customers to contact the City if they were not connected to the Citys sewer system, but did not provide any information as to how those customers were to ascertain whether or not they were connected. Rather, it was not until 2001 that the City sent specific notices to claimants alerting them to the possibility that they had been erroneously charged by the City. City employee Lisa Mowery testified that before the 2001 notifications, to discover the erroneous charge a CSD claimant would have had to look at the notice of information included in his monthly water bill which directed him to look at his property tax bill, and then look at his property tax bill to see that he was being charged by the County Sanitation District for water service, look at his Department of Water and Power bill to see that he was also being charged by the City for water service, and then contact the City to see whether he was being properly charged by both entities.
This evidence satisfied the requisite elements of equitable estoppel. The City presented no evidence to suggest that it was unaware of the requirements of section 53082 at the time the statute was enacted; the City failed to comply with the mandate of that provision to refund overcharges by July 1, 1991; the claimants did not receive either notice of their overpayment or refunds until several years after the enactment of the statute; and the 180-day limitation period would have been moot if the CSD claimants had received the refund contemplated by the statute.
We have not relied on the parties stipulation regarding the timeliness of the refund claims as evidence of lack of notice. The record reveals substantial evidence of lack of notice in the form of the Citys failure to provide notice, as well as the cumbersome and unrealistic efforts that a claimant would have had to undertake to conduct an independent inquiry.
We recognize that generally "[a]pplication of equitable estoppel against the assertion of a limitations defense typically arises through some misleading affirmative conduct on the part of a defendant." (Spray, Gould & Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal.App.4th 1260, 1268.) Here, the estoppel finding was not premised on any affirmative conduct on the part of the City, but rather, on the Citys failure to act in compliance with section 53082. But an estoppel may arise from silence where there is a duty to speak. (Spray, Gould & Bowers v. Associated Internat. Ins. Co., supra, at pp. 1268-1269; Elliano v. Assurance Co. of America (1970) 3 Cal.App.3d 446, 451.) The court in Spray, Gould & Bowers applied this principle to find that an insurers duty to speak arose from a regulation issued by the California Insurance Commissioner requiring insurers "to `disclose to a claimant insured all policy `time limits . . . that may apply to the claim" and held that the insurers failure to comply with this regulation equitably estopped it from relying on the policys claims limitations period. (Spray, Gould & Bowers v. Associated Internat. Ins. Co., supra, at pp. 1265, 1269.) Similarly, the Citys failure to comply with the July 1, 1991 refund obligation in section 53082 enacted for the benefit of the CSD claimants equitably estops it from relying on the 180-day limitations period provided for its benefit.
"[A] public entity cannot frustrate a claimants ability to comply with the statutes enacted for its benefit and then assert noncompliance as a defense. [Citation.]" (Christopher P. v. Mojave Unified School Dist. (1993) 19 Cal.App.4th 165, 172.) Substantial evidence supports the trial courts finding that it would be inequitable to apply the 180-day limitation period in section 53082 to bar recovery by the Ames CSD claimants for the gap period.
III. Issues Affecting the Whang Claimants.
A. Procedural Posture of the Whang Claimants.
The Whang claimants—all of whom are CSD claimants—did not participate in the Consolidated Appeal. Rather, with one exception not pertinent here, each received a notice from the City indicating a property review revealed that sewer service charges previously imposed should have been calculated at a reduced rate of 15 percent of the otherwise applicable amount. The notice further stated: "In order for you to receive a refund/adjustment of the [sewer service charges] from the water sign-on date to the date of [the] rate change to 15%, it will be necessary for you to complete a claim for refund (copy enclosed) certifying under penalty of perjury your eligibility to receive this refund." Each of the Whang claimants submitted a refund request using the enclosed form, which did not provide an entry for recovery of interest. After the City processed the refund requests and the Whang claimants received their refunds, which did not include an amount for interest, the Whang claimants submitted separate claims for interest with the City. Each claimant received a written denial of the interest claim from the City; the denials did not assert that the claims were untimely. The Whang claimants filed their lawsuit in July 2003, within six months of the date of the Citys written denials.
At trial, the City challenged the timeliness of both the separate claims for interest and the lawsuit. More specifically, it asserted that the interest claims were untimely because they were filed more than one year after the Whang claimants cause of action seeking interest accrued. (See Gov. Code, § 911.2, subd. (a).) Similarly, with respect to the lawsuit, the City asserted that it was untimely because it was filed more than two years after accrual. (See Gov. Code, § 945.6, subd. (a)(2).)
In its statement of decision, the trial court rejected both contentions. It ruled that the claims for interest were timely under two separate theories. It found that the interest claims inherently subsumed within the refund claims were timely because they were presented within one year of when the parties stipulated that the Whang claimants were on notice of their right to file a refund claim—in other words, within one year of the date of accrual. (Gov. Code, § 911.2, subd. (a).) Alternatively, it found that even if the initial refund claims did not inherently include claims for interest, the City waived any challenge to the Whang claimants separate interest claims by failing to assert that they were untimely pursuant to Government Code section 910.8 or 911.3.
The trial court further ruled that the lawsuit was timely as to all Whang claimants, again premising its decision on two separate theories. First, it addressed timeliness as related to the initial refund claims. Because the City did not provide written notice denying those claims, the Whang claimants had two years from the date of accrual of their cause of action to file their lawsuit. (Gov. Code, § 945.6, subd. (a)(2).) The trial court found that the two-year period was tolled while the City was processing the refund claims, as it was not until the Whang claimants actually received their refund checks that it became clear the City did not deem the refund claim to include a claim for interest. It determined that the lawsuit was timely filed within two years of the date that each claimant received a refund check. Alternatively, addressing timeliness as related to the separate claims for interest, it found that the lawsuit was timely filed within six months of the Whang claimants receiving written notice denying those claims. (Gov. Code, § 945.6, subd. (a)(1).)
B. The Claims and Lawsuit Were Timely.
On appeal, the City challenges each of the trial courts timeliness findings. As to the claims, it asserts that the initial refund claims should not be construed as claims for interest and that it did not waive and could not as a matter of law have waived the timeliness of the separate interest claims. With respect to the lawsuit, the City contends that its "routine processing" was insufficient to toll any limitations period that began to run at the time of the initial claims. Alternatively, it asserts that tolling does not save the action because any administrative process concluded when the Whang claimants received notices of their refund amount.
Where the relevant facts are not in dispute, the effect of the statute of limitations may be decided as a question of law. (International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611.) However, where the facts are disputed and thus subject to resolution by the trial court, an appellate court reviews those rulings under the substantial evidence standard of review, which provides that the trial courts resolution of disputed factual issues must be affirmed if supported by substantial evidence. (Winogard v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632; see also Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112 [resolution of statute of limitations issue is normally a question of fact unless facts are uncontradicted].)
Pursuant to these standards, we affirm the trial courts timeliness findings on each of the initial grounds relied on by the trial court. That is, the interest claims were timely because they were subsumed within the refund claims, and the lawsuit was timely because the two-year period under Government Code section 945.6, subdivision (a)(2) was tolled during the administrative processing of those claims—a process that concluded upon payment of the refunds.
1. Timely claims for interest were inherent in the refund claims.
Our previous conclusion that each claim for a refund of sewer service overcharges included an inherent and subsumed claim for interest disposes of the Citys challenge to the timeliness of the interest claims. (See section I.A., ante.) The parties stipulated that the refund claims were timely filed. Because each of those claims is deemed, as a matter of law, to include a claim for interest under Civil Code section 3287, subdivision (a), the initial claims for interest were likewise timely.
Though it does not alter the outcome of this matter, we note that the separate claims for interest—most of which were filed in late 2002—were untimely. The Whang claimants had one year after the accrual of their cause of action to present a claim. (Gov. Code, § 911.2, subd. (a)(2).) They received specific notices of overcharge from the City between January and August 2001, and stipulated that they were on notice of their right to file a refund claim at the time they received those notices. For limitations purposes, a cause of action accrues when one has notice or information of circumstances that would put a reasonable person on inquiry, even though he does not know the specific facts necessary to establish the cause of action. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 389; accord Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1150.) Thus, the Whang claimants cause of action seeking a refund and interest thereon accrued at the time they received their notices of overcharge. Because they filed their separate claims for interest more than one year after the date of the last notice, those claims were untimely.
Recognizing this, the trial court concluded that the City had waived its ability to challenge the claims timeliness by failing to raise that issue in the claim denials. But neither Government Code section 910.8 nor section 911.3 supported the trial courts waiver finding. Government Code section 910.8 addresses only deficiencies relating to the content of the claim—not its timeliness—providing in relevant part: "If in the opinion of the board or the person designated by it, a claim as presented fails to comply substantially with the requirements of Sections 910 and 910.2, or with the requirements of a form provided under Section 910.4 if a claim is presented pursuant thereto, the board or the person may, at any time within 20 days after the claim is presented, give written notice of its insufficiency, stating with particularity the defects or omissions therein." (Gov. Code, § 910.8.) Importantly, none of the statutes referenced in Government Code section 910.8 involves the time within which a claim must be submitted. (See Gov. Code, §§ 910 [specifying claims required contents], 910.2 [requiring signature on claim], 910.4 [requiring the provision of forms specifying claim requirements].)
Government Code section 911.3, on the other hand, specifically requires a public entity to provide written notice of a claims untimeliness, but applies only to claims which must be brought within six months after accrual of a cause of action. That statute provides in relevant part: "(a) When a claim that is required by Section 911.2 to be presented not later than six months after accrual of the cause of action is presented after such time . . ., the board or other person designated by it may, at any time within 45 days after the claim is presented, give written notice to the person presenting the claim that the claim was not filed timely and that it is being returned without further action. . . . [¶] . . . [¶] (b) Any defense as to the time limit for presenting a claim described in subdivision (a) is waived by failure to give the notice set forth in subdivision (a) within 45 days after the claim is presented . . . ." (Gov. Code, § 911.3, subds. (a) & (b).) By its own terms, Government Code section 911.3 applies only to claims subject to the six-month presentation requirement and not to the claims brought here which are subject to a one-year presentation requirement. (See Gov. Code, § 911.2, subd. (a).)
Accordingly, the trial court erred when it concluded that the City had waived any challenge to the timeliness of the separate interest claims by failing to assert such a deficiency in its claim denials. Nonetheless, since the separate interest claims are not the operative claims, this error does not require reversal of the trial courts timeliness finding.
2. The Whang claimants timely filed their lawsuit after the completion of the Citys administrative process.
Government Code section 945.6 requires that "any suit brought against a public entity on a cause of action for which a claim is required to be presented . . . must be commenced: [¶] (1) If written notice is given in accordance with Section 913, not later than six months after the date such notice is personally delivered or deposited in the mail. [¶] (2) If written notice is not given in accordance with Section 913, within two years from the accrual of the cause of action." (Gov. Code, § 945.6, subd. (a).) Here, it is undisputed that the City did not provide any written notice rejecting the Whang claimants refund and inherent interest claims. Thus, the two-year period from accrual set forth in Government Code section 945.6, subdivision (a) applies.
The City did provide written denials of the separate interest claims and the parties stipulated that lawsuit was filed within six months of those denials. However, because we have concluded that the separate interest claims were untimely, we must address the timeliness of the lawsuit in relationship to the timely refund and inherent interest claims.
As indicated above, the Whang claimants causes of action accrued at the time they received their notices of overcharge between January and August 2001. Because they did not file their lawsuit until July 2003, most of the Whang claimants are outside the two-year period between accrual and the filing of their lawsuit. The trial court, however, concluded that the two-year period was tolled during the time that the City was processing the refund claims, and found that the lawsuit was timely because it was filed within two years of when that process ended. We agree.
"Limitations periods are tolled during the pendency of interrelated administrative proceedings in cases where the proceedings may be dispositive of an essential element of the cause of action. (See Olson v. County of Sacramento (1974) 38 Cal.App.3d 958, 965.)" (Utility Audit, supra, 112 Cal.App.4th at pp. 962-963; see also Dillon v. Board of Pension Commrs. (1941) 18 Cal.2d 427, 431 [on a widows cause of action to recover pension payments, the court found that "[t]he running of the statute of limitations, therefore, is tolled during the period of the [pension] boards deliberations, that is, from the time the claim is filed until the boards decision is rendered"]; Myers v. County of Orange (1970) 6 Cal.App.3d 626, 634 ["When an injured person has several legal remedies and, reasonably and in good faith, pursues one designed to lessen the extent of the injury or damages, the statute of limitations does not run on the other while he is thus pursuing the one"].) In Utility Audit, we applied these principles to conclude that the limitations period was tolled during the pendency of the Consolidated Appeal. (Utility Audit, supra, at pp. 962-963; cf. Gov. Code, § 945.4 [no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented until a written claim has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board].)
The Whang claimants did not participate in the Consolidated Appeal. Nonetheless, there was substantial evidence to support the trial courts conclusion that the Whang claimants participation in the Citys review process of their refund claims was sufficient to toll the limitations period. The evidence showed that the City performed several steps in order to complete the processing of each refund claim; each step was necessary to the completion of the process. The City initiated the refund process by sending notices of overcharge to the Whang claimants. Most notices indicated that the refunds were being processed through the Board of Public Works (Board). City employee Lisa Mowery explained the reason for this was that any refund relating to a period exceeding one year could not be processed through the City Sanitation Department and required Board approval. The City also provided claim forms to the Whang claimants either with the notices of overcharge or enclosed with a separate letter. The City processed those claims and forwarded the Department of Public Works Commissioners (Commissioner) recommendation to each claimant, together with a notice of hearing. Because the Whang claimants waived their right to any hearing on the matter, the Commissioners recommendations were placed on the Board agenda and summarily approved by the Board.
As explained in Olson v. County of Sacramento (1974) 38 Cal.App.3d 958, no comprehensive general rule has emerged to answer the question of when statutes of limitation begin to run or are tolled during the pendency of interrelated administrative proceedings. (Id. at pp. 960-961.) Rather, "[i]n each case, the answer depends on the interrelationship between the administrative proceeding and the independent cause of action." (Id. at p. 961.) Here, the Citys processing of the Whang claimants refund claims and any causes of action seeking interest on those refunds were inextricably related. Indeed, the Whang claimants had no cause of action for interest until the Board issued their refunds without the payment of interest. These circumstances are no different than those in Dillon v. Board of Pension Commrs., supra, 18 Cal.2d 427, where the court explained that the limitations period on a cause of action seeking back pension payments was tolled between the time the plaintiff filed a claim with the pension board and the boards decision. (Id. at p. 431.)
We are not persuaded by the Citys contention that the Citys routine processing did not rise to the level of an interrelated administrative proceeding sufficient to toll the limitations period. Rejecting a similar contention—that the plaintiff should have concurrently pursued administrative and judicial remedies—the court in Olson v. County of Sacramento, supra, 38 Cal.App.3d 958 outlined the "sound legal and practical policy considerations against such a practice. [¶] The judicial policy underlying the decisions which toll statutes of limitations during the pendency of interrelated administrative proceedings in cases where the latter may be dispositive of an essential element of a legal cause of action is founded on the need for harmony and the avoidance of chaos in the administration of justice. It avoids a multiplicity of actions in cases having common elements of law or fact or both. It does not pressure litigants concurrently to seek redress in two separate forums with the attendant danger of conflicting decisions on the same issue. It relieves litigants of the pressure to outrace each other in seeking an adjudication of one or the other of the legal proceedings in a forum where he may believe he has a greater chance of prevailing." (Id. at p. 965.) Regardless of whether we characterize the Citys claim processing as routine or formal, it would subvert each of the foregoing policy considerations to require the Whang claimants to pursue their administrative claims and a lawsuit simultaneously. "The orderly administration of justice is best served by tolling the statute of limitations on independent actions at law until the final determination of the interrelated administrative proceeding." (Ibid.)
Nor are we persuaded by the Citys alternative contention that any administrative proceeding ended when the Whang claimants received the Commissioners recommendations, which occurred more than two years before they filed their lawsuit. Between May and August 2001, the City notified the Whang claimants of the date that their matters would be heard by the Board and enclosed the Commissioners recommendations, which generally provided that the recommendation was to implement a credit to the claimants account in a specified amount and advised of "the date and time that this matter will be considered by the Board." The recommendations did not indicate whether or not interest would be paid. Given the advisory nature of the Commissioners recommendation, we conclude that the evidence supports the trial courts finding that the Citys administrative processing continued—and hence the limitations period was tolled—until payment of the refund amounts. The Whang claimants timely filed their lawsuit within two years of receipt of those refunds. (Gov. Code, § 954.6, subd. (a)(2).)
IV. Utility Audits Cross-Appeal.
A. Factual Background.
Two of the Utility claimants—Mike Fouladian and Pacific Electricord—did not participate on the Consolidated Appeal. The parties stipulated that the causes of action brought by claimants who did not participate in the Consolidated Appeal accrued on the date they filed their request for a refund of sewer service fees. Mike Fouladian and Pacific Electricord submitted their requests for a sewer service fee refund plus interest on January 11 and January 6, 1999, respectively. The City processed those claims in the same manner that it processed the claims of other claimants, like the Whang claimants, who did not participate in the Consolidated Appeal. The City issued a refund without interest to Mike Fouladian on September 15, 1999 and to Pacific Electricord on April 7, 1999. Neither appealed the Citys determination of those refund amounts to the Board or any other administrative body. They were both named claimants in the Utility matter filed against the City on January 17, 2001.
In response to the Citys assertion that the two-year limitations period contained Government Code section 945.6 barred their lawsuit, Mike Fouladian and Pacific Electricord contended that the limitations period was tolled while the City was processing their refund claims. The trial court ruled that the lawsuit was untimely, as it was filed more than two years after accrual of their causes of action. It further ruled that the limitations period was not tolled because Mike Fouladian and Pacific Electricord neither participated in the Consolidated Appeal nor otherwise appealed the Citys denial of their interest claims.
B. The Lawsuit was Timely Filed.
Cross-appellants Mike Fouladian and Pacific Electricord do not challenge any of the facts that formed the basis for the trial courts decision that the two-year limitations period ran and was not tolled. We independently review the application of the relevant statute of limitations to uncontroverted facts. (International Engine Parts, Inc. v. Feddersen & Co., supra, 9 Cal.4th at p. 611; Martino v. Workers Comp. Appeals Bd. (2002) 103 Cal.App.4th 485, 489.) We find no reason to distinguish between Mike Fouladian and Pacific Electricord on the one hand and the Whang claimants on the other. All claimants participated in an administrative process that resolved their claims. None of those claimants participated in any type of administrative appeal. We conclude that the two-year limitations period set forth in Government Code section 945.6 was tolled during the pendency of the Citys administrative process that involved an investigation and resolution of the claimants refund claims.
As we discussed above, (see section III.B., ante), courts consistently hold that limitations periods are tolled during the pendency of interrelated administrative proceedings that may dispose of an essential element of a subsequent cause of action. (Utility Audit, supra, 112 Cal.App.4th at pp. 962-963; Olson v. County of Sacramento, supra, 38 Cal.App.4th at p. 965; see also Elkins v. Derby (1974) 12 Cal.3d 410, 414 ["It has long been settled in this and other jurisdictions that whenever the exhaustion of administrative remedies is a prerequisite to the initiation of a civil action, the running of the limitations period is tolled during the time consumed by the administrative proceeding"]; Wright v. State of California (2004) 122 Cal.App.4th 659, 671 ["since a litigant must exhaust administrative remedies before filing a court action, we exclude the time consumed by the administrative proceeding from the time limits that apply to pursuing the court action"].) The question of whether an administrative proceeding tolls the limitations period is answered on a case by case basis and is dependent "on the interrelationship between the administrative proceeding and the independent cause of action." (Olson v. County of Sacramento, supra, at p. 961.)
City employee Lisa Mowery testified that City used the "same processing method" to handle the claims submitted by the Whang claimants as well as those submitted by Mike Fouladian and Pacific Electricord. Because the claims by Mike Fouladian and Pacific Electricord sought refunds that exceeded a one-year period, they required Board approval. The only difference in processing was that the City initiated the Whang claimants refund process, while Mike Fouladian and Pacific Electricord initiated their refund process by submitting specific requests for refunds plus interest. This single difference does not affect our prior conclusion that the Citys processing of the refund claims constituted an interrelated administrative proceeding sufficient to toll the limitations period. Indeed, until Mike Fouladian and Pacific Electricord received their refunds from the City without interest, it would have been duplicative and contrary to the orderly administration of justice for them to pursue legal action against the City. (See Elkins v. Derby, supra, 12 Cal.3d at p. 414 ["the running of the limitations period is tolled `[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one"]; Baillargeon v. Department of Water & Power, supra, 69 Cal.App.3d at pp. 683 [limitations period tolled while the plaintiff pursued a remedy through workers compensation, as until it was determined whether her injury was work-related or non-work-related, "she could not know the extent and the type of benefits she could claim were payable by defendants"].)
As before, we reject the Citys argument that its processing did not rise to the level of formality required for an administrative proceeding to toll the limitations period. The sound policy considerations outlined in Olson v. County of Sacramento are served by a determination that the limitations period should be tolled during the Citys internal investigation until it makes a refund determination. (See Olson v. County of Sacramento, supra, 38 Cal.App.3d at p. 965; see also Wright v. State of California, supra, 122 Cal.App.4th at p. 671 [excluding the time consumed by an administrative proceeding from the limitations period "serves the orderly administration of justice"].) We also disagree with the Citys characterization of our decision in Utility Audit as holding that, other than the claimants who participated in the Consolidated Appeal, "the claims of others relying on tolling are barred." (Utility Audit, supra, 112 Cal.App.4th at p. 963.) Taken in context, that statement was prefaced by "[t]he City put on evidence tending to show . . . ." (Ibid.) At trial, however, the evidence showed that other claimants did participate in an administrative process and established the scope and extent of that process.
In sum, the reasons that support tolling the limitations period for the Whang claimants equally support tolling the limitations period for Mike Fouladian and Pacific Electricord during the time the City was processing their claims. Thus, the applicable statute of limitations should be tolled between January 11 and September 15, 1999 for Mike Fouladian, and between January 6 and April 7, 1999 for Pacific Electricord. Given the stipulation regarding accrual at the time of claim filing, we conclude that Mike Fouladian and Pacific Electricord filed their January 17, 2001 action within the two-year limitations period provided by Government Code section 945.6, and reverse the trial courts decision finding the action time-barred as to those claimants.
DISPOSITION
We reverse the trial courts 10 percent interest rate calculation and its barring the lawsuit of claimants Mike Fouladian and Pacific Electricord. In all other respects, the judgment is affirmed. The matter is remanded with directions to reinstate Mike Fouladians and Pacific Electricords lawsuit and to recalculate interest owing at a rate of 7 percent. Parties to bear their own costs on appeal.
We concur:
BOREN, P. J.
CHAVEZ, J.