March 2, 2017

Supreme Court reduces prejudgment interest on wrongfully calculated disability retirement benefits

In Flethez v. San Bernardino County Employees Retirement Association, the Supreme Court today cuts back on the amount of prejudgment interest owed when the start date for a county employee’s disability retirement benefits is wrongfully determined.  The interest runs from the time the employee is wrongfully denied retroactive benefits, not from the date on which those benefits should have started.   The decision will apparently cost a former San Bernardino County equipment operator around 8 years worth of interest, over $130,000.

The court’s opinion, by Chief Justice Tani Cantil-Sakauye, is unanimous, but Justice Mariano-Florentino Cuéllar writes a brief concurring opinion, which Justices Kathryn Werdegar and Goodwin Liu join.  The concurrence states the court should have stated a rule for determining when a wrongful denial of retroactive benefits occurs.

The court affirms the Fourth District, Division One, Court of Appeal.  It also disapproves a 1989 decision of the Second District, Division Three.

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