In 1987, several Los Angeles County school districts entered into the Benefit & Liability Programs of California Joint Powers Agreement creating the Authority to establish, operate and maintain the members’ workers’ compensation insurance program. In 2002, Inglewood Unified School District became a member.
In 2013 Inglewood Unified provided written notice of its withdrawal from membership. The Authority and the interim state administrator of the District, signed a resolution regarding the District’s withdrawal. According to the Resolution the Authority’s governing board permitted the District to withdraw from the Authority on certain conditions.
In 2015 Inglewood filed its complaint against the Authority alleging a variety of claims, including breach of contract based on the Authority’s failure to pay funds owed to the District under the Agreement within a reasonable period of the District’s withdrawal from, or termination of, membership.
In 2016 the Authority paid $4 million to the District pursuant to an interim agreement between the parties. Prior to that date an accounting had determined the Authority owed the District $6,351,792. The remaining balance of $2,351,792 was the subject of the litigation.
Senate Bill No. 533 brought the school district under state control. Inglewood’s state administrator Melendez de Santa Ana, in her capacity as its trustee, filed the operative third amended complaint, which alleged the same underlying breach of contract claim as the initial complaint.
The court found the District was entitled to $2,351,792 plus interest on retained funds in the amount of $192,711, but the Authority was not entitled to recovery of attorney fees and costs incurred in the litigation. The trial court judgment was affirmed in the unpublished case of Santa Ana v. Benefit & Liability Programs of California
Although the Authority had paid $4,000,000 in 2016,a balance of $2,351,792 remained outstanding. The court found, “Two years is not a reasonable time.” Thus, the trial court essentially ruled the District was therefore entitled to prejudgment interest on the withheld funds pursuant to Civil Code section 3287, subdivision (a). Substantial evidence, including the parties’ stipulated facts, supports the trial court’s finding of breach.
The court expressly found the Authority was not entitled to its attorney fees “under the [Agreement], Bylaws, Resolution or the law.” The court of appeal agreed with the trial court’s interpretation of the Resolution.