Court Opinion

ID: 9581855
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:19:39.801854+00
Date Added: 2024-06-11T13:37:17.918327
License: Public Domain

KAUFMAN, J.
I respectfully dissent. In my view, the Court of Appeal in Estate of Messner (1987) 190 Cal.App.3d 818 [235 Cal.Rptr. 495], correctly held that in enacting Welfare and Institutions Code section 14009.5 (section 14009.5), the Legislature did not intend to subject decedents’ estates to claims by the Department of Health Services (department) for reimbursement of amounts paid before June 28, 1981, the section’s effective date, for health care services rendered to the decedent.
“It is an established canon of interpretation that statutes are not to be given a retrospective operation unless it is clearly made to appear that such was the legislative intent.” (Aetna Cas. & Surety Co. v. Ind. Acc. Com. (1947) 30 Cal.2d 388, 393 [182 P.2d 159]; accord, Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1207 [246 Cal.Rptr. 629, 753 P.2d 585]; Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 153 [233 Cal.Rptr. 308, 729 P.2d 743].) The department attempts to infer such intent from the fact that section 14009.5 was included in an urgency measure (Cal. Const., art. IV, § 8, subd. (d)). As Messner explains: “Section 14009.5 was enacted as part of a chapter amending, adding, and repealing over 160 statutes in 10 different codes. [Stats. 1981, ch. 102, pp. 699-769.] Many of these statutes were in the Welfare and Institutions Code and were directed to developing pilot programs to save money, i.e., prospective savings. In this light any force to a retroactive argument based on the urgency of the legislation becomes ethereal. Moreover, we cannot overlook the Legislature’s silence on this issue. Had the Legislature wanted section 14009.5 to be applied retroactively, it could have easily so stated. (See Perry v. Heavenly Valley (1985) 163 Cal.App.3d 495, 500-501 [209 Cal.Rptr. 771].)” (190 Cal.App.3d at p. 821.) Further, in Evangelatos v. Superior Court, supra, 44 Cal.3d 1188, the majority of this court rejected a virtually identical argument—that intent to make an initiative statute retroactive should be inferred from the statute’s declarations of urgency. (Id. at pp. 1209-1212; cf. id. at pp. 1231-1233 [dis. opn. of Kaufman, J.].)
The majority opinion argues, however, that the fact that section 14009.5 affects only “estates arising” (i.e., decedents dying) after the section’s effective date makes “its application . . . prospective, not retroactive,” and that therefore “the issue is whether [section 14009.5’s] application to benefits received before the statute’s effective date somehow has an imper*14missible retroactive effect.” (Ante, p. 7.) But this is a distinction without a difference, for the very essence of statutory retroactivity is the making of substantial changes in the legal effects of past events. (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 153; Aetna Cas. & Surety Co. v. Ind. Acc. Com., supra, 30 Cal.2d 388, 394; see also Evangelatos v. Superior Court, supra, 44 Cal.3d 1188, 1206.)1
As the majority observes, “[a] statute does not operate retroactively merely because some of the facts or conditions upon which its application depends came into existence prior to its enactment. (Burks v. Poppy Construction Co. (1962) 57 Cal.2d 463, 474 [20 Cal.Rptr. 609, 370 P.2d 313]; United States v. Jacobs (1939) 306 U.S. 363, 367 [83 L.Ed. 763, 767, 59 S.Ct. 551]).” (Ante, pp. 7-8.) Rather, to be retroactive, a statute “must give the previous transaction to which it relates some different legal effect from that which it had under the law when it occurred” (Holt v. Morgan (1954) 128 Cal.App.2d 113, 117 [274 P.2d 915]). The nature of the change in legal effect which a statute must give a preexisting transaction if it is to be deemed retroactive is illustrated by the foregoing three cases, Burks, Jacobs, and Holt, where the statutes in question depended for their application on a preexisting transaction but were deemed nonretroactive because they did not give the transaction in question a different legal effect. Burks, supra, 57 Cal.2d 463, 474, held that a statute prohibiting discrimination in publicly assisted housing was not made retroactive by the mere fact that the public assistance had been received prior to enactment; the statute did not change the legal effect of the public assistance. Jacobs, supra, 306 U.S. 363, 366 [83 L.Ed. at pp. 766-767], held a statute imposing an estate tax on transfers to a surviving joint tenant was not retroactive as applied to previously created joint tenancies, the legal effect of which was not changed by the tax. Holt, supra, 128 Cal.App.2d 113, 117, held a statute which prohibited the pledge of a liquor license as security for a debt was not retroactive as applied to an attempted pledge of a liquor license after the statute’s effective date as security for a debt created before that date. “Prior to the enactment of the [statute] plaintiff was nothing but an unsecured creditor, without any right contractual or otherwise to demand security. The enactment of [the statute] did not cause any change in the position of an unsecured creditor. There could only be retroactive application where prior to the enactment the *15transfer of the liquor license had been pledged or some right to its transfer been obtained.” (128 Cal.App.2d at p. 117.)
Section 14009.5, on the other hand, does change the legal effect of MediCal payments and thus, as construed in the majority opinion, will have a retroactive effect on such payments made before its enactment. This is made clear in Estate of Messner, supra, 190 Cal.App.3d 818, 822-823, as follows: “Whether a statute’s application is retroactive depends on whether it operates to change the legal effect of past transactions. (Cole v. Fair Oaks Fire Protection Dist. [supra] 43 Cal.3d 148, 153.) Pursuant to this definition, the only way section 14009.5 can operate prospectively is for the Department to be reimbursed for Medi-Cal services rendered after the statute became effective. To conclude otherwise permits the statute to materially affect earlier acts and transactions contrary to the reasonable expectations of the parties. Here, for example, it is undisputed that Messner [the decedent] obtained most of her benefits at a time when the relevant statutory provisions precluded the Department from seeking reimbursement. (See County of San Diego v. Muniz (1978) 22 Cal.3d 29, 33 [148 Cal.Rptr. 584, 583 P.2d 109] [‘(a)t common law, in the absence of fraud in procuring relief, a recipient was under no obligation to repay the government agency disbursing the charity. (Citations.)’].) In these circumstances, it was certainly reasonable for Messner, as it would be for other similarly situated persons, to expect that her accumulated savings would be distributed in accordance with her respective estate plans and not used to satisfy a claim made under a statute which was not in existence at the time the services were rendered. According to the Department’s rationale, if a post-65-year-old person had the misfortune of dying seconds after the statute became effective, that decedent’s estate would be subject to a claim for services all of which were rendered before the statute’s effective date. To permit the statute to operate in a fashion which authorizes the creation of an after-the-fact debt resulting in the partial or total elimination of a person’s life savings is a classic illustration of a statute’s retroactive application materially changing the legal effect of past transactions.”
The majority opinion attempts to justify application of section 14009.5 to previously paid benefits by construing it as a regulation of testamentary disposition and analogizing it to an estate or inheritance tax on transfers of a decedent’s property. (Ante, p. 9.) Section 14009.5, however, does not purport to restrict or tax testamentary transfers but instead authorizes the department to file a creditor’s claim for money previously expended for the decedent’s health care. (See Probate Code, former section 700.1, which was enacted simultaneously with section 14009.5 and required an executor or administrator of a decedent who had received Medi-Cal benefits to give special notice to the head of the department, who was given four months *16thereafter to perfect a claim. Similar provisions now appear in Probate Code section 9202.)
The majority opinion does not rely solely, however, on the erroneous theory that section 14009.5 merely regulates testamentary disposition, but goes on to address the argument, adopted as a holding in the foregoing quotation from Messner, supra, 190 Cal.App.3d 818, “that section 14009.5, as applied here, is retroactive because it creates an ‘after-the-fact’ debt or liability. If the application of section 14009.5 creates an ‘after-the-fact’ debt or liability, then it alters a Medi-Cal recipient’s vested interest in not having to repay such benefits.” (Ante, p. 10.)
The majority opinion’s answer to this reasoning is to adopt a definition of debt as “a sum of money which is ‘certainly and in all events payable’ without regard to whether it is payable now or at a future time (UMF Systems, Inc. v. Eltra Corp. (1976) 17 Cal.3d 753, 756 [132 Cal.Rptr. 129, 553 P.2d 225]” and to assert that therefore, “a sum payable upon some contingency is not a debt until the contingency occurs.” (Ante, p. 10.) From this it is concluded that under section 14009.5, the department’s claim to reimbursement of Medi-Cal payments is not a debt at the time of such payments because the claim is contingent upon the death of the health care recipient with assets against which the claim can be asserted.
As UMF Systems makes clear, however, the term “debt” is often regarded as including contingent obligations. This is true, for example, under the statutory scheme considered in that case (former Corp. Code, § 826, authorizing suit on a debt or claim that arose prior to unlawful distribution of corporate assets) and the former Uniform Fraudulent Conveyances Act, which expressly defined “debt” to include a contingent liability (see former Civ. Code, § 3439.01). (17 Cal.3d at pp. 756-759.) (See also Uniform Fraudulent Transfer Act, Civ. Code, § 3439.01, subd. (b) [“ ‘Claim’ means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured”], and subd. (d) [“ ‘Debt’ means liability on a claim”].)
For present purposes, the most relevant statutory definitions are those in the Probate Code, under which the department must make the claim authorized by section 14009.5 (Prob. Code, former §700.1, now § 9202). When section 14009.5 was enacted, the claims required to be filed included those “justly due,” “not due when filed or presented,” and “contingent,” (id., former § 705; see also former § 707, subd. (a)). Probate Code section 9000, enacted in 1987 for purposes of simplification and clarification (see Recommendations Relating to Probate Law, Creditor Claims Against *17Decedent’s Estate (Jan. 1987) 19 Cal. Law Revision Com. Rep. (1988) p. 303), defines claims that are required to be filed, as follows: “(a) ‘Claim’ means a demand for payment for any of the following, whether due, not due, or contingent, and whether liquidated or unliquidated: [fl] (1) Liability of the decedent, whether arising in contract, tort, or otherwise.” (Italics added.) Since the remainder of the definition pertains only to taxes, funeral expenses, and disputes over title to property (Prob. Code, § 9000, subds. (a)(2), (a)(3), & (b)), it is clear that the claim which the director is authorized to file under section 14009.5 is based not on the liability of the estate, or of the personal representative, or of any other survivor, but on the liability of the decedent.
Any liability of a decedent necessarily must have existed during the decedent’s lifetime, while he or she was still a person. The only event during a decedent’s lifetime which could create the decedent’s liability enforceable under section 14009.5 is the payment of money for the decedent’s health care. Section 14009.5 changes the legal effect of such payment by causing the payment to give rise to a contingent liability of the decedent which would not previously have existed. Thus, as to such payments made before section 14009.5’s effective date, “the operation on existing rights would be retroactive ‘because the legal effects of past events would be changed, and the statute will be construed to operate only in futuro unless the legislative intent to the contrary clearly appears.’ [Citing Aetna Cas. & Surety Co. v. Ind. Acc. Com., supra, 30 Cal.2d 388, 394.]” (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 153.) No such legislative intent appears here, clearly or otherwise.
Since I conclude that section 14009.5 was not intended to authorize claims for reimbursement of Medi-Cal payments made before the section’s effective date, I would reverse the judgment of the Court of Appeal.
Mosk, J., and Broussard, J., concurred.

 The majority opinion asserts: “Evangelatos and Aetna are distinctly different from the case before us, where we are concerned not with the case law in effect when a cause of action arises but rather with the law governing testamentary disposition.” (Ante, p. 7, fn. 4.) To the contrary, we are concerned here with the law in effect at the time of a transaction—payment of health care benefits. Under section 14009.5, contrary to the preexisting law, payment of health care benefits gives immediate rise to a claim against the decedent contingent only upon the decedent’s death with assets in his estate and without a surviving spouse or minor or disabled child.