Court Opinion

ID: 9757186
Source: CourtListenerOpinion
Date Created: 2023-08-28 22:22:41.486955+00
Date Added: 2024-06-11T07:28:35.700950
License: Public Domain

DISSENTING OPINION by
Judge FRIEDMAN.
Because I believe that the holding in Braig v. Pennsylvania State Employes’ Retirement Board, 682 A.2d 881 (Pa.Cmwlth.1996), is controlling, I respectfully dissent.
The majority concludes Braig is inapplicable to the present controversy, mischar-acterizing that case as one that concerns contract disputes. (Majority op. at 5.) However, like the present case, Braig involved the question of whether interest was payable, despite the absence of a statutory or contractual obligation, where payments required by statute were withheld.
In Braig, the State Employees’ Retirement Board (SERB) initially denied the claimants’ applications for retirement benefits. SERB eventually issued retroactive payments to the claimants, but denied their request for interest for the period during which the benefits had been withheld. On appeal, the Braig court first addressed the threshold issue of whether SERB was under either a statutory or contractual duty to pay interest on the withheld payments and found that, although the -underlying benefit payments were statutorily mandated, no duty to pay interest existed by virtue of statute or contract. However, unlike the majority in this case, the court in Braig did not end its analysis there, but next examined the question of whether SERB was under an independent obligation, by virtue of the common law of this Commonwealth, to pay the claimants interest on their withheld benefits.
Pennsylvania common law recognizes interest as a form of damages allowed, in the absence of an express contract, when payment is withheld after the debtor has a duty to discharge the debt. Id. There are two prerequisites to the running of interest under these circumstances: the debt must have been liquidated with some degree of certainty, and the duty to pay it must have become fixed. Id. Once these prerequisites are met, failure to discharge the principal of the debt at the time fixed for payment is considered a wrongful withholding of the payment due that warrants an award of interest at the legal rate from the date the money was due and payable. Id.; Cianfrani v. State Employees’ Retirement Board, 505 Pa. 294, 479 A.2d 468 (1984). Therefore, we held in Braig that a *1080common law obligation to pay interest did exist, because the retirement benefits were liquidated and SERB was required by statute to grant the claimants retirement benefits.1
The present case is factually similar. Wayne Ross and Nancy Ross (Petitioners) adopted two girls on April 19, 1988. Although state regulations required Susquehanna County Children and Youth Services (SCYS) to execute a written adoption assistance agreement at or prior to the finalization of the adoption, SCYS failed to inform Petitioners that adoption assistance was available and did not stipulate that Petitioners were entitled to assistance until the hearing on March 1, 2000. The Department of Public Welfare (Department) concedes that the instant debt was liquidated with some degree of certainty prior to April 19, 1988, (Department’s Brief, p. 17), and there is no dispute that the duty of SCYS to pay the debt was fixed by law at that time. 42 U.S.C. § 675(3); 55 Pa.Code § 3140.203.
The material facts of this case are on point with those in Braig, and, therefore, the same analysis applies: because SCYS’ duty to pay a liquidated debt was fixed, its actions in withholding Petitioners’ assistance benefits can be characterized as wrongful,2 and Pennsylvania common law imposes an obligation on SCYS to award Petitioners interest.3
The majority states that the available remedies are limited to those provided by statute or regulation, i.e., a hearing and retroactive assistance payments, but our holding in Braig compels a contrary conclusion. Moreover, the authority to issue assistance payments retroactively appears to be contained only in a federal policy interpretation question and a Department policy announcement,4 not a statute or regulation. See Gruzinski v. Department of Public Welfare, 731 A.2d 246 (Pa.Cmwlth.), appeal denied, 561 Pa. 661, 747 A.2d 902 (1999). I suggest that the lack of other authority to make retroactive assistance payments is evidence that the absence of a *1081statute or regulation authorizing an award of interest is not dispositive in this case.

. Although Braig refers to contract principles, the opinion states clearly that the claim for interest is cognizable under common law, which imposes a duty to pay interest based upon a delay in the discharge of a debt. Braig, 682 A.2d at 888.

. A debt may be "wrongfully” withheld despite the fact that withholding is not the result of bad faith or blame worthy conduct. The common law rule requiring a debtor to pay interest on a debt is based on a theory that interest represents compensation for the loss of use of money and is restitutionary rather than punitive in nature. See Atlin v. Security-Connecticut Life Insurance Co., 788 F.2d 139 (3d Cir.1986); Penneys v. Pennsylvania Railroad Co., 408 Pa. 276, 183 A.2d 544 (1962).

. In contrast, the decision on which the majority relies, Northampton Convalescent Center v. Department of Public Welfare, 550 Pa. 167, 703 A.2d 1034 (1997), did not involve a statutory duty to make underlying payments and the wrongful withholding of such payments, but, ultimately, the application of the. state Medical Assistance Manual. Our supreme court previously had applied the state manual to conclude that interest on additional monies paid to a provider as the result of a successful appeal were not allowable costs subject to reimbursement, because they were not necessary and reasonable costs to the proper care of Medical Assistance Program patients. Western Reserve Convalescent Home v. Department of Public Welfare, 541 Pa. 77, 660 A.2d 1312 (1995). Relying on Western Reserve, the Northampton court determined that the state manual, rather than federal regulations, governed the appeal process and the remedies available on appeal.

.U.S. Department of Health and Human Services Policy Interpretation Question 92-02; Pennsylvania Department of Health and Human Services, Administration for Children, Youth and Families, Policy Announcement No. ACYF-CB-PA-01-01, January 23, 2001.