Filed 2/13/14 (unmodified opn. attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

CITY OF CLOVIS et al.,

Plaintiffs and Respondents,

v.

COUNTY OF FRESNO,

Defendant and Appellant.

F060148

(Super. Ct. No. 08CECG03535)

ORDER MODIFYING OPINION

AND DENYING REHEARING

[CHANGE IN JUDGMENT]

IT IS ORDERED, pursuant to California Rules of Court, rule 8.264(c)(1), that the 

published opinion filed in this appeal on January 16, 2014, be modified in the following 

particulars. The page numbers in this order refer to the pagination of the slip opinion.

1. Delete the first sentence of the first paragraph on page 5. Replace it with 

the following:

On September 30, 2013, after briefing was completed, the 

Legislature enacted legislation addressing interest awardable 

against local government entities in certain types of cases. 

2. Delete the second paragraph on page 5 (beginning “In other words ....).

3. On page 19, in the first paragraph of subsection B., delete the final 

sentence.

4. Delete the last paragraph on page 20. Replace it with the following:

The new legislation applies to interest in the present action 

beginning January 1, 2014. 
2.

5. Delete the first paragraph of the Disposition. Replace it with the following:

The judgment is modified to reflect that, effective January 1, 

2014, the rate of interest to be awarded in this action is 

controlled by section 3287, subdivision (c). The judgment is 

affirmed in all other respects.

6. Delete footnote 6.

The alternative request for rehearing contained in the letter filed by the City and 

County of San Francisco on February 5, 2014, is denied. Except for the modifications set 

forth, the opinion previously filed remains unchanged. These modifications include a 

change in the judgment, as reflected in the modified Disposition.

_____________________

Oakley, J.

WE CONCUR:

_____________________

 Gomes, Acting P.J.

_____________________

 Detjen, J.

 



Judge of the Superior Court of Madera County, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution. 
Filed 1/16/14 (unmodified version)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

CITY OF CLOVIS et al.,

Plaintiffs and Respondents,

v.

COUNTY OF FRESNO,

Defendant and Appellant.

F060148

(Super. Ct. No. 08CECG03535)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Jeffrey Y. 

Hamilton, Jr., Judge.

Freeman, D’Aiuto, Pierce, Gurev, Keeling & Wolf, Thomas H. Keeling; Kevin 

Briggs, County Counsel, Arthur G. Wille and Peter J. Wall, Deputy County Counsel, for 

Defendant and Appellant.

Jennifer B. Henning for California State Association of Counties as Amicus Curiae 

on behalf of Defendant and Appellant.

Jarvis, Fay, Doporto & Gibson, Benjamin P. Fay and Rick W. Jarvis; Colantuono 

& Levin, Michael G. Colantuono and Jon R. DiCristina for League of California Cities as 

Amicus Curiae on behalf of Plaintiffs and Respondents.

McCormick, Kabot, Jenner & Lew, Nancy A. Jenner for Plaintiffs and 

Respondents.

-ooOoo-
2.

The City of Clovis and six other Fresno County cities (cities) sued the County of 

Fresno (county) over the calculation of a fee the county withholds for the service of 

collecting property taxes from property owners and distributing the proceeds to the cities. 

In other litigation raising the same fee-calculation issue, the California Supreme Court 

rejected the county’s position and required use of the methodology advocated by the 

cities. (City of Alhambra v. County of Los Angeles (2012) 55 Cal.4th 707 (Alhambra).) 

The trial court in this case anticipated Alhambra. It ordered the county to apply the 

methodology advocated by the cities and to issue refunds to the cities. It also ordered the 

county to pay prejudgment and postjudgment interest.

The county appeals. It does not challenge the orders to use the Alhambra

methodology and issue refunds. It appeals only from the order to pay prejudgment and 

postjudgment interest, an issue the Alhambra opinion does not address. 

As we will explain, the relevant statutes were amended on September 30, 2013, 

effective January 1, 2014. Having ordered supplemental briefing on the new law, we 

conclude that we must address it because it will be in effect at the time when the 

judgment in this case becomes final. As we will explain, interest was awardable even 

under the law in effect at the time of trial. Under the new law, interest is likewise 

awardable, though at different rates. The new law changes the applicable rates of interest. 

We will affirm the trial court’s judgment insofar as it awards prejudgment and 

postjudgment interest, but we will reverse with respect to rate of interest on and after 

January 1, 2014.

FACTUAL AND PROCEDURAL HISTORIES

The Alhambra opinion explains the legal issue behind the parties’ primary dispute. 

To compensate counties for administrative costs incurred in their role as tax collectors, 

counties are authorized to charge cities a property tax administration fee (PTAF). 

(Alhambra, supra, 55 Cal.4th at p. 714.) A county withholds the PTAF from the tax 

revenues distributed to the cities. (Id. at p. 715.) The PTAF for each city is based on the 
3.

ratio of the taxes collected on its behalf to the total property taxes collected by the county. 

(Ibid.) Excluded from this calculation, however, are taxes collected on behalf of cities 

and deposited into the county’s Educational Revenue Augmentation Fund (ERAF). (Id.

at pp. 713-714, 715.) The county ERAF’s were created by the Legislature in 1992 to help 

resolve a budget crisis. Property tax revenue is diverted from local government to each 

county’s ERAF to maintain funding levels for education in the face of declining 

contributions from the state general fund. (Id. at p. 714.) Since property tax revenues 

diverted to ERAF’s are not included in the calculation of the PTAF’s withheld by the 

counties, each county must absorb the cost of administering those revenues and is not 

reimbursed for it by cities. (Id. at p. 715.) 

In 2004, in response to another budget crisis, the Legislature diverted ERAF 

money to cover various budget gaps. This diversion took two forms. The first, known as 

the “Triple Flip,” caused local sales tax revenue to be diverted to repay state bonds. 

ERAF funds were then used to replace the lost sales tax revenue, and state general fund 

money was used to compensate for the lost ERAF funds. (Alhambra, supra, 55 Cal.4th at 

pp. 715-716.) The second diversion involved the state Vehicle License Fee (VLF) and is 

called the “VLF Swap.” The VLF was reduced from two percent of a vehicle’s market 

value to 0.65 percent. This change resulted in a reduction of revenue to local 

governments. The VLF Swap diverted property tax revenue from the ERAF’s to local 

governments to compensate for the loss. (Id. at p. 716.) 

Under the Triple Flip and the VLF Swap, property tax revenue that formerly went 

to the ERAF’s now goes to cities, compensating them for lost sales tax and VLF funds. 

The California State Association of County Auditors prepared informal guidelines for use 

by counties implementing the statutory changes. According to these guidelines, the PTAF 

for each city should now be calculated on the basis of distributions, including the amount 

that formerly went to the county’s ERAF, instead of excluding that amount as before. 

(Alhambra, supra, 55 Cal.4th at p. 717.) This means the administrative costs associated 
4.

with collecting and distributing those funds would be shifted from counties to cities. 

(Ibid.) Los Angeles County followed the guidelines (ibid.), as did Fresno County and 

some other counties. 

In Alhambra, our Supreme Court rejected these counties’ interpretation of the 

statutory changes that resulted in the Triple Flip and the VLF Swap. The court concluded 

that counties “should be no better, or worse, off in recouping [their] costs of property tax 

administration as a result of” the statutory changes. (Alhambra, supra, 55 Cal.4th at 

p. 725.) Los Angeles County’s method of calculating the PTAF was held to violate the 

law. (Id. at p. 729.)

In the present case, the cities initiated mandate proceedings against the county on 

grounds that, as the parties agree, are essentially identical to those on which the cities in 

Alhambra sued Los Angeles County. Before the Supreme Court’s decision in Alhambra

was issued, the trial court in this case anticipated that decision by holding the county’s 

method of calculating the PTAF unlawful. It ruled that the county could withhold “the 

actual incremental costs to implement the Triple Flip and VLF Swap in lieu payments” 

but could not increase the basis on which the PTAF was calculated by including the 

ERAF revenue. The county was required to refund the difference to the cities for each 

year in which it had applied its erroneous new formula. The judgment also includes the 

following: “Petitioners are awarded costs of suit, prejudgment interest and postjudgment 

interest at the rate of 7% per annum as set forth in Civil Code section 3287 and 

article XV, section 1 of the California Constitution.” 

As the Supreme Court noted, the county’s appeal in this case was stayed during the 

pendency of Alhambra in the Supreme Court. (Alhambra, supra, 55 Cal.4th at p. 712, 

fn. 3.) After Alhambra was decided, the county filed its opening brief challenging only 

the award of prejudgment and postjudgment interest, and arguing that no law authorized 

those awards. 
5.

On September 30, 2013, after briefing was completed, the Legislature enacted 

legislation addressing prejudgment and postjudgment interest, and the rates of such 

interest, awardable to local government entities in certain types of cases. (Stats. 2013, 

ch. 424 (chapter 424).) Chapter 424 amended Civil Code section 32871to add a new 

subdivision (c), providing as follows:

“Unless another statute provides a different interest rate, in a tax or fee 

claim against a public entity that results in a judgment against the public 

entity, interest shall accrue at a rate equal to the weekly average one year 

constant maturity United States Treasury yield, but shall not exceed 7 

percent per annum. That rate shall control until the judgment becomes 

enforceable under Section 965.5 or 970.1 of the Government Code, at 

which time interest shall accrue at an annual rate equal to the weekly 

average one year constant maturity United States Treasury yield at the time 

of the judgment plus 2 percent, but shall not exceed 7 percent per annum.” 

(Ch. 424, § 1.)

In other words, prejudgment interest accrues at a rate equal to the specified 

treasury yield, and postjudgment interest accrues at the same rate plus two percent, with 

neither rate to exceed seven percent. 

In this case, as noted, the trial court applied existing law and set the prejudgment 

and postjudgment interest rates at seven percent. The weekly one year constant maturity 

United States Treasury yield, by contrast, has been less than one percent since the end of 

2008 and was considerably below seven percent for many years before that. 

(<http://www.federalreserve.gov/releases/h15/data.htm> [as of Jan. 10, 2014].) 

When it passed chapter 424, the Legislature apparently believed the interest rates 

payable by government entities under existing law were too high. A Senate Rules 

Committee report on the legislation stated the views of the bill’s author, Assembly 

Member Eggman, as follows:

 

1Subsequent statutory references are to the Civil Code unless otherwise noted.
6.

“California’s judgment interest rate against public entities such as schools, 

special districts, local and state government is out-of-date and provides an 

artificially higher rate of return than what the current market could provide. 

These rates result in very large sums of taxpayer money being spent in legal 

costs.

“When California’s judgment interest rate was codified, in the late 70s and 

early 80s, the U.S. had been in a severe economic recession—characterized 

by high inflation but low business activity—and interest rates had begun to 

skyrocket, reaching as high as 21 [percent].

“At the time, the rates adopted were considered significant relief. Now the 

reverse has happened and market rates are far lower, but there has been no 

adjustment to reflect this. At a time when local governments continue to 

struggle, with loss of revenue forcing cuts to vital services—education, 

public safety, social services—the rate of interest these public entities pay 

on judgments remains high. That rate is not responsive to the times or to the 

public interest. In current economic conditions, it is far higher than the 

market can justify, posing an unnecessary burden to taxpayers, contra[ry] to 

the public good....

“This bill saves taxpayer money for vital services by tying the rate applying 

to public entities to a market rate—as does the federal government—that 

serves as a close indicator of the economy’s health, and a fair 

approximation of the value of the judgment.” (Sen. Rules Com., Off. of 

Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 748 (2013-

2014 Reg. Sess.) as amended Aug. 20, 2013, p. 7.) 

Because chapter 424 was enacted on September 30, 2013, it will become effective 

on January 1, 2014. (Cal. Const., art. 4, § 8 [“a statute enacted at a regular session shall 

go into effect on January 1 next following a 90-day period from the date of enactment”].) 

Oral argument took place and this case was submitted on December 10, 2013. The new 

law will be in effect when the judgment becomes final.2 

On November 19, 2013, this court asked the parties to submit supplemental briefs 

on the effect of chapter 424 on this case. Specifically, we asked the parties to assume for 

 

2A decision of the Court of Appeal is final in this court 30 days after the opinion is 

filed. (Cal. Rules of Court, rule 8.264(b)(1).)
7.

the sake of argument that interest is awardable in this case and to explain whether the new 

interest rates apply to prejudgment and/or postjudgment interest here. We also asked 

whether the new rates apply to interest accruing on and after January 1, 2014, even if they 

do not apply to interest accruing before that date.

In their supplemental brief, the cities argue that the new law does not apply to any 

portion of the interest in this case because the cause of action arose long before its 

effective date, and statutes generally apply only prospectively unless the Legislature 

clearly expresses a contrary intent. The cities also contend that the new legislation does 

not apply because this case does not involve a “tax or fee claim” within the meaning of 

new section 3287, subdivision (c). The county argues that, assuming any interest is 

awardable, the new enactment applies because it is a procedural or remedial statute, and 

the general rule against retroactivity does not apply to procedural and remedial statutes. 

In a letter submitting supplemental authority just before oral argument, the cities 

suggested that the new interest rates apply beginning January 1, 2014.

DISCUSSION

This appeal presents the following questions: Does the law authorize awards of 

prejudgment and postjudgment interest against the county? If it does, what are the 

applicable rates of interest? As these are pure questions of law, we review the judgment 

de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799; Topanga and Victory 

Partners v. Toghia (2002) 103 Cal.App.4th 775, 779-780.)

The cities argue that the issues have not been preserved for appellate review 

because the county did not object to the interest award in the trial court. We ordinarily do 

not consider claims of error where an objection could have been, but was not, made in 

some appropriate form at trial. Such claims are generally forfeited. (People v. Saunders

(1993) 5 Cal.4th 580, 590.) The rule of forfeiture does not apply, however, to 

“noncurable defects of substance where the question is one of law,” or to “matters 

involving the public interest or the due administration of justice ....” (9 Witkin, Cal. 
8.

Procedure (5th ed. 2008) Appeal, § 406, pp. 464, 465.) Further, we have discretion to 

consider a forfeited claim. (People v. Williams (1998) 17 Cal.4th 148, 161-162, fn. 6; In 

re Sheena K. (2007) 40 Cal.4th 875, 887, fn. 7.) Here we deal with an asserted defect of 

law, a defect which (had it been a real defect) could not have been cured in the trial court 

by any means short of an opposite outcome. We also deal with a matter of public interest, 

since other counties using the accounting method rejected by the Supreme Court in 

Alhambra might be ordered to pay interest. We will decline the cities’ invitation not to 

address the merits. 

As we will explain, we agree with the cities’ view that the interest awards were 

authorized under prior law. Additionally, we agree with the county that the present claim 

of the cities is the type of claim to which chapter 424 is applicable, thus reinforcing our 

view that interest awards are authorized in this action. However, we find the legislative 

modification of the rates of interest to be effective only as of the effective date of the 

legislation, namely January 1, 2014.

I. Interest was awardable under prior law

In their original briefs, the parties naturally analyzed the question of whether 

interest was awardable in this case under the law that applied before chapter 424 was 

enacted. As we will explain, interest was properly awarded under prior law. 

A. Prejudgment interest

Section 3287, subdivision (a), authorizes an award of prejudgment interest on 

damages awarded against a county:

“A 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 the 

person upon a particular day, is entitled also to recover interest thereon from

that day, except when 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 debtor, including the state or any county, 

city, city and county, municipal corporation, public district, public agency, 

or any political subdivision of the state.”
9.

The county does not contend that the money it has been ordered to pay cannot be 

made certain by calculation or that the cities were not entitled to recover it on a particular 

day. In our view, the plain meaning of section 3287, subdivision (a), calls for an award of 

prejudgment interest in this case.

The county’s argument is that the money it has been ordered to pay is not 

“damages” within the meaning of section 3287. This argument is based on City of 

Dinuba v. County of Tulare (2007) 41 Cal.4th 859 (Dinuba).

In Dinuba, the City of Dinuba sued Tulare County after that county distributed less 

property tax revenue to Dinuba’s redevelopment agency than the agency was statutorily 

entitled to receive. (Dinuba, supra, 41 Cal.4th at p. 862.) Tulare County claimed it was 

immune from suit under the Government Claims Act3(Gov. Code, § 810 et seq.). 

(Dinuba, supra, at p. 863.) 

The Supreme Court disagreed. It gave two reasons for its holding. First, although 

the Government Claims Act immunizes a public agency from liability for “an injury” 

caused by an erroneous interpretation or application of “any law relating to a tax” (Gov. 

Code, § 860.2), it also defines “‘injury’” as a harm “of such nature that it would be 

actionable if inflicted by a private person” (Gov. Code, § 810.8). Tulare County’s 

erroneous tax distribution did not fit this description because “[t]he wrong plaintiffs 

complain of ‘is one which by its very nature could not exist in an action between private 

persons ....’” (Dinuba, supra, 41 Cal.4th at p. 867.) 

Second, “the immunity provisions of the [Government Claims] Act are only 

concerned with shielding public entities from having to pay money damages for torts.” 

(Dinuba, supra, 41 Cal.4th at p. 867.) Government Code section 814 provides that 

“liability based on contract or the right to obtain relief other than money damages is 

 

3Government Code section 810, subdivision (b), previously often referred to as the 

“Tort Claims Act.” (See City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 734.)
10.

unaffected by” the immunity provisions of the Government Claims Act. (Dinuba, supra, 

at p. 867.) The Supreme Court reasoned that Dinuba did not “seek damages; [it sought] 

only to compel [Tulare County] to perform [its] express statutory duty. While compliance 

with the duty may result in the payment of money, that is distinct from seeking damages.” 

(Ibid.) As an example of the kind of remedy that probably would be excluded by the 

Government Claims Act as damages, the court mentioned “compensatory damages for a 

downgraded bond rating or increased interest rates as a result of [Tulare County’s] failure 

to disburse the funds to which [Dinuba was] entitled ....” (Dinuba, supra, at p. 868.)

In this case, according to the county, the excess PTAF withholding the cities will 

recover also is not damages. In the county’s view, it will only be complying with its 

statutory duty when it follows the trial court’s order to release the excess PTAF 

withholding, just as Tulare County was doing in Dinuba when it repaid the misallocated 

tax revenue. Therefore, the county maintains, the remedy the trial court ordered is not 

“damages” within the meaning of section 3287, subdivision (a), and an award of interest 

is not authorized by that provision. 

While superficially attractive, the county’s argument does not withstand analysis. 

“Damages” for purposes of the Government Claims Act does not necessarily have the 

same meaning as “damages” for purposes of section 3287, subdivision (a). When the 

Supreme Court held that a monetary remedy to correct a misallocation of revenue among 

government entities is not damages, it did so specifically for purposes of the Government 

Claims Act. “With the statutory scheme [of the Government Claims Act] in mind,” it 

stated, “we consider the scope of governmental immunity under the Act and whether 

relief is available.” (Dinuba, supra, 41 Cal.4th at p. 867, italics added.) It did not 

consider whether the remedy awarded was damages for purposes of section 3287, 

subdivision (a). “Language used in any opinion is of course to be understood in the light 

of the facts and the issue then before the court, and an opinion is not authority for a 

proposition not therein considered.” (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2.) 
11.

The first reason for rejecting the county’s argument, then, is that Dinuba simply does not 

stand for the proposition the county advocates.

Even if we construe the county’s argument to be that the Supreme Court merely 

implied that the type of remedy at issue here is not damages for purposes of prejudgment 

interest, and that the court would endorse the county’s position if it considered the matter, 

the argument would still be unpersuasive. The Dinuba opinion reasoned that reallocation 

of tax revenue was not damages in the context of the purposes of the Government Claims 

Act, in order to decide whether that statute’s immunity provisions applied to an action for 

that type of remedy, as we have said. The court’s evident objective in holding that these 

provisions did not apply was to prevent the Government Claims Act from becoming an 

obstacle to the use of the courts to resolve disputes between governmental entities over 

the proper allocation of tax revenue, an obstacle the Legislature never intended to create. 

Viewing the reasoning and result of Dinuba from this perspective confirms that the case 

implies nothing about whether interest can be awarded in litigation of this kind. In 

holding that governmental entities can be liable to one another for this type of monetary 

recovery, the Supreme Court did not likely intend to intimate that they cannot be liable 

for interest on that money. 

Finally, Dinuba is distinguishable from this case on its facts. The dispute in 

Dinuba was over the question of whether a county had allocated the correct amount of tax 

revenue to a city. That is the context in which the Supreme Court held there to be no 

dispute of a kind that could arise between private parties. Here, as the cities point out, the 

dispute is over the amount of a fee charged by the county, a type of dispute that arguably 

could arise between private parties. Consequently, it is not at all clear that the Dinuba

court’s reasoning would point to the denial of an interest award here, even assuming its 

reasoning can be transferred to the context of this case. The considerations relevant to 

misallocation of tax revenue are different.
12.

For these reasons, the appropriate inquiry is whether the money award is damages 

in light of the purposes of section 3287, not whether it is damages in light of the purposes 

of the Government Claims Act. A primary purpose of section 3287 is to ensure that a 

plaintiff awarded money by a court receives, in addition, the lost time value of that 

money. (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 663-664.) That 

purpose is applicable here. 

The county asserts that no interest of any kind should be awarded because Revenue 

and Taxation Code section 96.1, subdivision (c)(3), does not mention interest. That 

statute provides that, when a county must reallocate taxes for previous fiscal years, the 

total amount reallocated cannot exceed one percent of the current year’s tax roll and is to 

be distributed in installments over three years. (Rev. & Tax. Code, § 96.1, subd. (c)(3).) 

The county contends this is a specific statute that controls over section 3287, which is a 

general one. 

The county is mistaken. The rule that a specific statute controls over a general one 

applies to conflicts between statutes. (Code Civ. Proc., § 1859 [“when a general and 

particular provision are inconsistent, the latter is paramount to the former”]; Stone Street 

Capital, LLC v. California State Lottery Com. (2008) 165 Cal.App.4th 109, 119 [“If 

inconsistent statutes cannot otherwise be reconciled, ‘a particular or specific provision 

will take precedence over a conflicting general provision.’”].) Section 3287 and Revenue 

and Taxation Code section 96.1 do not conflict. One statute provides for interest awards. 

The other is silent about interest awards. That is not a conflict.

Amicus curiae California State Association of Counties (Association) also argues 

that Revenue and Taxation Code section 96.1, subdivision (c)(3), is a bar to the interest 

award in this case. Association relies on legislative history documents to support the 

contention that the statute reflects a desire on the part of the Legislature to relieve 

hardship for counties. Association says this desire is inconsistent with an intent to allow 

interest awards. 
13.

Even if the Legislature had this motivation, we do not think the statute bars interest 

awards for any category of judgments against counties. When subdivision (c)(3) of 

Revenue and Taxation Code section 96.1 was enacted in 2001 (Stats. 2001, ch. 381, § 1), 

section 3287 already provided for interest awards against counties (Stats. 1955, ch. 1477, 

p. 2689; Stats. 1959, ch. 1735, p. 4186), and the Legislature did not see fit to create an 

exception. We assume the Legislature knows existing law and legislates in light of it. 

(People v. Harrison (1989) 48 Cal.3d 321, 329.) 

Association also contends that the Legislature must have intended to preclude 

interest awards in disputes like this one because “the Legislature has provided for the 

payment of interest in other sections of the Revenue and Taxation Code” but did not so 

provide in Revenue and Taxation Code section 96.1. The only example Association cites 

is Revenue and Taxation Code section 5151, which provides for interest on refunds of 

property taxes to taxpayers. We do not believe the Legislature’s decision to authorize 

interest in that situation is an implied bar on interest awards against counties in all other 

cases involving taxes. Again, the Legislature acted against the background of 

section 3287 and did not choose to create any exception that would govern this case. 

Finally, Association argues that the interest award in this case is inconsistent with 

public policy because it means a city could be ordered to pay interest if it were 

“erroneously allocated too much property tax.” This would be inappropriate, Association 

says, because it would complicate financial planning. 

Upholding the interest award in this case, where the county overcharged the cities 

because it used an erroneous method of calculating the PTAF, implies nothing about 

whether it would be appropriate to award interest against a city if, through no fault of its 

own, a county erroneously overpaid it. We express no opinion about that situation. 

B. Postjudgment interest

The trial court’s award of postjudgment interest was authorized by article XV, 

section 1, of the California Constitution, which states in part:
14.

“The rate of interest upon a judgment rendered in any court of this 

State shall be set by the Legislature at not more than 10 percent per annum. 

Such rate may be variable and based upon interest rates charged by federal 

agencies or economic indicators, or both.

“In the absence of the setting of such rate by the Legislature, the rate 

of interest on any judgment rendered in any court of the State shall be 7 

percent per annum.”

The California Supreme Court has held that postjudgment interest can be awarded 

upon judgments entered against local government entities and that seven percent is the 

correct rate. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 

Cal.4th 342, 344-345, 347-348 (California Federal).) Code of Civil Procedure 

section 685.010 provides that, “[i]nterest accrues at the rate of 10 percent per annum on 

the principal amount of a money judgment remaining unsatisfied,” but Government Code 

section 970.1, subdivision (b), provides that a judgment against a local public entity is 

“not enforceable under Title 9 (commencing with Section 680.010) of Part 2 of the Code 

of Civil Procedure,” of which Code of Civil Procedure section 685.010 is a part. The 

Supreme Court held that the effect of Government Code section 970.1, subdivision (b), is 

that the seven percent rate set forth in the Constitution is the applicable rate for judgments 

against local public entities.4 (California Federal, supra, at pp. 344-345, 347-348.) 

The county’s argument about postjudgment interest is as follows: Code of Civil 

Procedure section 685.010 provides for interest on a “money judgment”; Code of Civil 

Procedure section 680.270 defines a money judgment as “that part of a judgment that 

requires the payment of money”; and the judgment in this case is not a money judgment 

under that definition because (among other reasons) it requires the amount due to be 

calculated instead of stating the amount in dollars and cents. 

 

4Chapter 424 amended Government Code section 970.1 to conform to new 

section 3287, subdivision (c), i.e., to provide for postjudgment interest, on tax or fee 

judgments, equal to the weekly average one year constant maturity United States Treasury 

yield plus two percent, not to exceed seven percent. 
15.

The county’s argument overlooks the plain language of Government Code 

section 970.1, subdivision (b). As our Supreme Court observed in California Federal, 

supra, 11 Cal.4th at page 344, that statute exempts local government entities from title 9 

of the Code of Civil Procedure, in which Code of Civil Procedure sections 685.010 and 

680.270 are contained. The issue of postjudgment interest against local government 

entities therefore was governed only by article XV, section 1, of the California 

Constitution, until the enactment of chapter 424. The constitutional provision does not 

refer to a “money judgment” or state any definition of a money judgment. It refers 

instead to “interest upon a judgment” and “interest upon any judgment.” Government 

Code section 970, subdivision (b), defines “‘judgment’” as “a final judgment for the 

payment of money rendered against a local public entity.”

The trial court’s seven-percent postjudgment interest award was correct under 

article XV, section 1, of the California Constitution and California Federal.

II. Applicability of new law to cause of action arising before effective date

We agree with the county’s view that the new law is applicable even though it 

became effective after the events underlying the cause of action took place. This is 

because it is a remedial or procedural statute and will be in effect when the judgment 

becomes final. The cities are mistaken in their reliance on the general rule that new laws 

apply only prospectively.

“A basic canon of statutory interpretation is that statutes do not operate 

retrospectively unless the Legislature plainly intended them to do so.” (Western Security 

Bank v. Superior Court (1997) 15 Cal.4th 232, 243.) At the same time, it has been held 

that if a statute is remedial or procedural in nature, it may be applied in litigation pending 

when it came into effect, even if the events underlying the cause of action took place 

before it came into effect, so long as it does not create a new cause of action, deprive a 

defendant of a defense on the merits, or alter a party’s vested rights. (Kuykendall v. State 

Bd. of Equalization (1994) 22 Cal.App.4th 1194, 1211, fn. 20 (Kuykendall).) 
16.

Chapter 424 is remedial or procedural within the meaning of the case law on this 

topic. Plainly, it does not create a new cause of action or eliminate a defense on the 

merits. It is also clear that it does not alter the cities’ vested rights, for it has been held 

that no one has a vested right in existing remedies. (Kuykendall, supra, 22 Cal.App.4th at 

p. 1211, fn. 20; Hardy v. Western Landscape Construction (1983) 141 Cal.App.3d 1015, 

1018; Coast Bank v. Holmes (1971) 19 Cal.App.3d 581, 596.) 

Consequently, the anti-retroactivity rule does not apply. The application of new 

procedural or remedial statutes to cases still pending on appeal when they become 

effective is deemed not to be retroactive—even though the cause of action arose earlier—

because the change in the law affects only the conduct of the litigation and the provision 

of a remedy going forward, not the rights and duties of the parties in the past. (Coast 

Bank v. Holmes, supra, 19 Cal.App.3d at pp. 593-594.) New procedural or remedial laws 

are consistently applied to cases not yet final when they become effective, unless the 

Legislature expresses an intent not to so apply them. (Mir v. Charter Suburban Hospital

(1994) 27 Cal.App.4th 1471, 1478; Hogan v. Ingold (1952) 38 Cal.2d 802, 814-815.) 

This doctrine has been applied to changes in remedies with equal or greater 

consequences for the parties than the change in interest rates here at issue. In numerous 

cases, it has been held that new statutes allowing awards of attorneys’ fees are applicable 

to litigation pending when the statutes came into effect, even though they were not in 

effect when the underlying facts took place. (Rumford v. City of Berkeley (1982) 31 

Cal.3d 545, 559 [attorneys’ fees awardable under Code Civ. Proc., § 1021.5, which 

became effective while case was pending on appeal]; Woodland Hills Residents Assn., 

Inc. v. City Council (1979) 23 Cal.3d 917, 928-932 [same]; Coast Bank v. Holmes, supra, 

19 Cal.App.3d at pp. 593-594 [contractual attorney fee award upheld under § 1717, which 

became effective after execution of the contract and after alleged default]; Mir v. Charter 

Suburban Hospital, supra, 27 Cal.App.4th at p. 1478 [Bus. & Prof. Code, § 809.9 

applicable as basis of attorney fee award in action pending on statute’s effective date].)
17.

The cities attempt to distinguish Kuykendall, which was mentioned in our briefing 

letter. They point out that the Kuykendall court concluded that the Legislature clearly 

intended the statute there at issue to be applied retroactively (Kuykendall, supra, 22 

Cal.App.4th at p. 1209), while there is no indication that the Legislature had a similar 

intent here. The cities overlook the fact, however, that the Kuykendall court also relied 

on the proposition that “the rule a statute should be construed as not operating 

retroactively absent a clear legislative direction does not apply where, as here, the statute 

is remedial or procedural in nature.” (Id. at p. 1211, fn. 20.) As we have said, when 

statutes are remedial or procedural, courts consistently apply them in cases pending, 

including cases pending on appeal, when the statutes become effective, even though the 

underlying facts predate their effective dates. Courts apply new laws in that situation 

unless there is evidence of a legislative intent not to do so.

III. Effect of new law

Having concluded that chapter 424 applies in this case, we now consider the effect 

it has here.

A. Prejudgment and postjudgment interest are awardable in this case

As the county concedes, if the new law is applicable, it means interest is 

awardable. Section 3287, subdivision (c), states that both prejudgment and postjudgment 

interest are awardable in a case involving “a tax or fee claim.” Assembly Member 

Eggman, the author of the legislation, wrote a letter to the Chief Clerk of the Assembly, 

defining the term “tax or fee claim”: “In Assembly Bill 748 the phrases ‘tax or fee claim’ 

and ‘tax or fee judgment’ mean claims arising from the levy, collection or charge of a tax 

or fee. They do not include the distribution or allocation of those revenues between 

public entities.” (Assem. Member Susan Talamantes Eggman, letter to E. Dotson Wilson, 

Chief Clerk of the Assembly, Assem. J. (Sept. 2, 2013, 2013-2014 Reg. Sess.) p. 3369.) 

This case falls within the definition. The PTAF is a fee charged by counties and paid by 

cities for the service of collecting and processing property taxes. The cities’ lawsuit 
18.

claimed that the county overcharged them for this fee. It is, therefore, a claim “arising 

from the ... charge of a ... fee.” 

Assembly Member Eggman’s definition evidently is intended to exclude cases in 

which the dispute is over the amount of taxes allocated by a county to a city. If this case 

had involved a claim that the county had made an incorrect allocation and had given too 

much money to one city and too little to another, for instance, it would appear that 

Assembly Member Eggman’s definition of a “tax or fee claim” would exclude it. But that 

is not what happened here. The cities simply claim that the county withheld too much for 

the PTAF. 

The cities maintain that this case does not involve a tax or fee claim within the 

meaning of Assembly Member Eggman’s letter because it is a claim for proper allocation 

of taxes between government entities. This is not correct. The cities’ lawsuit did not 

claim the county incorrectly divided the tax money when it allocated that money to each 

city, for instance. Their only claim was that the county withheld too much for the PTAF. 

That, we conclude, is a “fee claim.” 

It is true that the PTAF is withheld from tax proceeds, so the county’s incorrect 

PTAF calculation affected the distribution of tax revenue by the county to the cities. This 

impact on the distribution of tax revenue, however, is merely an incident of the method of 

collecting the PTAF. If counties collected the PTAF instead by sending bills to cities, it 

would be clear that the transaction involved the charge of a fee and not the allocation of 

tax revenue. We do not think the Legislature intended the method of collection to 

determine the applicability of interest.

A reference to this case in the legislative history reinforces our conclusion. A 

committee report discussing the fiscal impact of the legislation notes a potential reduction 

in revenue to government agencies that are plaintiffs in suits against other government 

agencies. This case, City of Clovis v. County of Fresno, is cited as an example in which 

the plaintiffs would receive less interest under the new law. (Sen. Com. on 
19.

Appropriations, Fiscal Summary on Assem. Bill No. 748 (2013-2014 Reg. Sess.) as 

amended July 8, 2013, p. 1.)5 This reference confirms our view that this case involves a 

“tax or fee claim” and falls within the scope of new section 3287, subdivision (c).

B. New statutory rates of interest are applicable commencing January 1, 

2014

As noted above, the trial court ordered both prejudgment and postjudgment interest 

on the cities’ claims at the rate of seven percent per annum. Chapter 424 provides a 

significant reduction in the rates of interest. Based upon recent market yields, the new 

legislation provides for prejudgment interest at a nominal rate and postjudgment interest 

at a rate of just over two percent per annum. 

Chapter 424 is a remedial or procedural statute, and as we have explained, that 

means it applies in a case in which the cause of action arose before its effective date, but 

which is still pending on appeal on its effective date. Chapter 424 is also, however, a 

change in a statutory interest rate. It has been settled law in this state for well over 100 

years that, although a change in a statutory interest rate applies to a case pending on the 

effective date of the change, the new rate applies only to interest accruing on and after 

that date; the former rate applies to interest accruing before that date. 

“The liability of the state to pay interest is ‘purely statutory ....’” (People v. Union 

Oil Co. (1957) 48 Cal.2d 476, 480, citing Gregory v. State of California (1948) 32 Cal.2d 

700, 703.) “While an interest obligation based upon contract may resist change under 

constitutional guarantees, a statutory interest right for a particular period depends upon 

 

5The author of the summary appears to have been under the mistaken impression 

that this litigation had already concluded and that the interest had already been paid. The 

summary states: “[I]n the case of City of Clovis v. County of Fresno, for example, the 

City of Clovis was paid $1.8 million in interest, but would have received a significantly 

lower payment under the interest rates proposed herein.” (Sen. Com. on Appropriations, 

Fiscal Summary on Assem. Bill No. 748 (2013-2014 Reg. Sess.) as amended July 8, 

2013, p. 1.) 
20.

the law in effect at that time. This has been the settled law in this state for many years.” 

(People v. Union Oil Co., supra, at p. 482, citing White v. Lyons (1871) 42 Cal. 279, 284-

285 & Gregory v. State of California, supra, at p. 702.)

In White v. Lyons, supra, 42 Cal. at pages 284-285, the Supreme Court wrote:

“But, I think, the Court erred in fixing the rate of interest at ten per cent per 

annum up to the date of the judgment. When the conversion occurred that 

was the rate fixed by statute in transactions of this character. But the Act of 

March 30th, 1868, reduced the rate from ten to seven per cent per annum; 

and from the time when this Act took effect the interest should have been 

computed at seven per cent per annum. In the absence of a contract for 

interest, it is only allowed as damages for a failure to pay the money due 

[citation]; and it is competent for the Legislature to fix the amount which 

shall be recovered. But the Act reducing the rate was only prospective in its 

operation, and was not intended to take away or impair rights which had 

already accrued under the prior statute. In Bullock v. Boyle, 1 Hoffman, N. 

Y. Ch. R., 294, the effect of statutes modifying the rate of interest is fully 

and elaborately discussed, and the authorities collated by the Vice 

Chancellor; and the conclusion at which he arrived is, that a change in the 

rate, as a general rule, operates only prospectively, and does not affect 

rights already accrued.... [¶] The judgment is affirmed, except as to the 

rate of interest; and in respect to the computation of interest, the Court 

below is directed to modify the judgment by computing the interest at ten 

per cent per annum up to the time when the Act of March 30th, 1868, took 

effect, and thereafter at the rate of seven per cent per annum ....” 

Since the new legislation applies to the present action, the applicable rate for 

postjudgment interest, effective January 1, 2014, is “equal to the weekly average one year 

constant maturity United States Treasury yield at the time of the judgment plus 2 

percent ....” (§ 3287, subd. (c).)
21.

DISPOSITION

The judgment is modified to reflect that, effective January 1, 2014, the rate of 

postjudgment interest on the judgment in this action is reduced from seven percent to 2.39 

percent.6 The judgment is affirmed in all other respects.

The parties are to bear their own costs on appeal. The requests for judicial notice 

filed by amici curiae on June 7 and June 27, 2013, are granted. The requests for judicial 

notice filed by the county and the cities on December 2, 2013, are granted. 

_____________________

Oakley, J.

WE CONCUR:

_____________________

 Gomes, Acting P.J.

_____________________

 Detjen, J.

 

6Effective January 1, 2014, postjudgment interest on the judgment in this action is 

“equal to the weekly average one year constant maturity United States Treasury yield at 

the time of the judgment plus 2 percent ....” (§ 3287, subd. (c).) The judgment was 

entered in the trial court on March 18, 2010. The weekly average one year constant 

maturity United States Treasury yield as of March 12, 2010, the last date on which the 

rate was published prior to the entry of judgment, was the rate of .39 percent. 

(<http://www.federalreserve.gov/releases/h15/data.htm> [as of Jan. 10, 2014].) Thus, the 

rate of postjudgment interest on the judgment in this action is reduced from seven percent 

to 2.39 percent as of January 1, 2014. (See Ehret v. Congoleum Corp. (2001) 87 

Cal.App.4th 202, 210; Espinoza v. Rossini (1967) 257 Cal.App.2d 567, 572-573; 

Bellflower City School Dist. v. Skaggs (1959) 52 Cal.2d 278, 281-282.)



Judge of the Superior Court of Madera County, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.