Court: California Court of Appeal; January 6, 1958; California; State Appellate Court
In the case County of San Bernardino v. Roscoe Sapp, the plaintiff alleged that Walter Penn Sapp owed $3,336 for money received, with the defense asserting a statute of limitations claim. Following Sapp's death, his estate's executor was substituted as the defendant. An amended complaint included details of the debt, a creditor's claim filed during probate, and its rejection.
The parties stipulated that Sapp had received Old Age Security aid since 1939, but from April 7, 1950, he possessed personal property exceeding legal limits, having sold land for a significant profit. Despite owning additional income-producing real estate, Sapp consistently filed annual statements asserting he had no excess property, necessary to maintain his aid. The San Bernardino County tax rolls documented fluctuations in Sapp's property assessments over the years, and the Welfare Department reviewed his eligibility annually without discovering discrepancies until January 8, 1954, when a relative's tip prompted an investigation. This investigation uncovered the deed and Sapp's undisclosed property holdings. The department's eligibility checks did not involve thorough searches of property records, focusing instead on assessed valuations.
A clerk conducts 75 to 100 checks weekly, exceeding the Manual's requirements only if suspicious circumstances arise. Incorporating additional property checks would significantly increase this workload. From April 1951 to January 1954, the County Welfare Department urged Sapp to sell unused land for his support, but he continuously deferred action. A Welfare Department case worker assessed the land's value in March 1951, determining it was worth no more than $5.00 per acre. Sapp's aid was discontinued in January 1954, leading to a demand for repayment which he refused. The suit was filed on July 14, 1955, resulting in a judgment for the plaintiff for $3,336, plus interest and costs, which Sapp appealed.
Sapp contends that the action is barred by the statute of limitations, specifically section 339, subdivision 1 of the Code of Civil Procedure, for payments made more than two years prior to the lawsuit. He argues that the county should have discovered his fraud earlier and that the absence of a fraud claim in the complaint precludes its use to avoid the statute's bar. Relevant sections of the Welfare and Institutions Code require prompt investigation of aid applications and allow for annual checks of continued eligibility. The court found that the county's annual investigations and reliance on Sapp's perjury-penalty statements were reasonable and sufficient. Furthermore, the court ruled that it is inappropriate to penalize a defrauded party for not discovering fraud sooner unless their inattention was inexcusable. It was not necessary for the respondent to plead fraud to invoke it against the statute of limitations, as the complaint was based on a common count for money had and received, and the stipulated facts indicated the statute had not expired due to fraud.
The trial court correctly ruled that the claim was not barred by the statute of limitations under Code Civ. Proc. § 339, subd. 1. The appellant argued that section 103.3 of the Welfare and Institutions Code provides the exclusive method for pursuing restitution claims, referencing County of San Bernardino v. Simmons. The appellant contended (1) that the obligation arises from statute and is thus limited by § 338, subd. 1 of the Code of Civil Procedure for payments made more than three years before July 14, 1955, and (2) that a discrepancy exists between the common count pursued and the statutory basis for the claim.
Section 103.3, subd. (b) mandates that public assistance recipients report accurately and promptly, while subd. (d) requires restitution for unadjusted overpayments within two months. Subd. (e) limits the collectible amount if the recipient received aid in good faith despite exceeding property limits. The Simmons case does not apply here, as it pertains specifically to recovery from responsible relatives under section 2224, not the general restitution procedures applicable in this case.
The statute does not impose a specific procedure for recovery but allows the county to pursue "all actions necessary to secure restitution," which includes a common count for restitution. Even if the obligation were statutory, it would not be barred by § 338, subd. 1 due to fraudulent concealment preventing the statute's running. There is no variance between pleading and proof; the recipient's restitution duty stemming from a statute does not negate a common count claim. The plaintiff must show entitlement to the money and the defendant's possession, with any relevant evidence supporting the action. Additionally, any objections regarding variance were waived by not being raised at trial. The judgment was affirmed.
