In 1990, Leticia Flethez became an employee of San Bernardino County. He worked as an equipment operator from 1991 until 2000. In 1998, he was injured while performing his job duties. His last day of work was on January 28, 2000.
On June 12, 2008, Flethez filed an application with SBCERA for a service-related disability retirement and allowance. It was rejected for omission of a signed medical records authorization.
A little more than one year later, Flethez filed a complete application, including a signed medical records authorization and a supporting physician’s report. In August 2010, SBCERA granted Flethez’s application for service-related disability retirement benefits, effective as of the date of his initial application in 2008.
Flethez then filed a request for review and reconsideration limited to the question of the starting date for his benefits. When SBCERA maintained its original decision setting June 12, 2008 as the commencement date for his benefits, Flethez requested a formal administrative hearing on the issue. An administrative hearing rejected his request to make payment retroactive to July 15, 2000.
Flethez filed a petition for writ of mandate in the superior court seeking a writ ordering SBCERA to set aside its decision and grant him service-related disability retirement benefits effective as of July 15, 2000. He also sought interest at the legal rate on all retroactive amounts.
The superior court issued a peremptory writ commanding SBCERA to grant Flethez a service-connected disability retirement allowance retroactive to July 15, 2000. The superior court also ruled Flethez was entitled to prejudgment interest under section 3287(a) at the legal rate from the date that each payment of retroactive disability retirements benefits would have been due, starting from July 15, 2000. The interest payments on all retroactive amounts totaled $132,865.37. SBCERA timely filed a notice of appeal “limited to the issue of interest.”
The Court of Appeal reversed the judgment insofar as it awarded prejudgment interest retroactive to July 15, 2000. It concluded that “in the context of disability retirement benefits, a retiring member is entitled to recover section 3287(a) prejudgment interest on a court award of disability retirement benefits from the day on which his or her right to recover those benefit payments became vested,” which was “not until the retiring member establishes his or her entitlement” to those benefits.
The Supreme Court reviewed the Court of Appeal in the published case of Flethez v San Bernardino County Employee’s Retirement Association and concluded that prejudgment interest begins to run only when a county retirement board wrongfully denies a member’s application for retroactive disability retirement benefits.
Flethez’s disability retirement benefits under the CERL were not due before SBCERA received his application and made a determination of his eligibility. Flethez experienced a wrongful withholding of his benefits when the Board erroneously denied his application for a retroactive disability retirement allowance under the inability to ascertain permanency clause. His entitlement to prejudgment interest under section 3287(a) commenced on the date of wrongful denial