FRINK v. PROD (1981)

Helene Frink has appealed from an order denying her petition for writ of mandate. By that petition, she sought to overturn a decision of the California Department of Social Welfare denying her application for Aid to the Totally Disabled (hereinafter referred to as ATD).

She contends that the trial court erred in applying the substantial evidence test to review the administrative ruling, and contends that the court should have exercised its independent judgment in reweighing the evidence. Although the trial court applied the substantial evidence test reluctantly and stated that under the independent judgment test it would have reversed the administrative decision, we affirm the trial court's judgment.

I

Appellant applied for ATD in 1973. Her application was denied in April 1973, and in December 1973, a hearing was held before the then Department of Social Welfare. In January 1974, the department referee denied appellant's application for ATD benefits, which denial was adopted by the department in February 1974. In April 1975, appellant filed a petition for writ of mandate in the superior court. In October 1979, appellant filed a petition for writ of peremptory mandamus, which petition was heard in November, 1979. The denial of that petition is the subject of this appeal.

II

At the time of the hearing below, appellant was a 53-year-old married woman residing with her husband. She sought benefits claiming that she was totally and permanently disabled within the meaning of section 13501 of the Welfare and Institutions Code. That section, at the time of her application, provided for welfare benefits for certain needy disabled persons. A “needy disabled person” was defined as someone who was both permanently impaired and totally disabled. Permanent impairment was defined as a physical or mental impairment reasonably certain to continue throughout the lifetime of the applicant without substantial improvement. (Welf. & Inst.Code, s 13501, subds. (a) and (b).)

Appellant sought benefits based on functional limitations resulting from medically verified impairments of her back, legs, heart, lungs, and hand, and a psychological impairment. The order denying her application for benefits was based on the referee's conclusion that her impairments were not permanent but were likely to improve with time or medical treatment.

III

We first dispose of a threshold issue raised by respondent: that appellant may not contend for the first time on appeal that an improper standard of review was utilized by the trial court. The record reflects that, in appellant's memorandum of points and authorities in support of her petition for writ, she conceded that the substantial evidence test should be applied. Respondent asserts that a party to an action may not, for the first time on appeal, change the theory of his case. (Panopulos v. Maderis (1956) 47 Cal.2d 337, 340, 303 P.2d 738.)

However, the foregoing rule is subject to numerous exceptions, and the purpose of the rule would not be served by its adherence in this case. It is often stated that the primary purpose of the rule is to avoid unfairness to the trial judge, who should have been given an opportunity to address the issue and correct any errors at trial. (See, e. g., 6 Witkin, Cal. Procedure (2d ed. 1971) Appeals, s 276, p. 4265.) However, in the instant case, the issue was raised and addressed by the trial judge. In ruling on the petition the court stated:

“Gentlemen, I do recognize the fact that the last appellate authority indicates that this should be reviewed by the substantial evidence test. (P) I have serious question about that being the correct standard of review in this case. (P) If it is a substantial evidence test, then I would be required to deny the writ because there is evidence which would support the determination. (P) However, it seems to me the weight of the evidence is contrary to the decision below, so I would deny the writ but I would find that substantial evidence supports the decision, the weight of the evidence is contrary to the decision (P) I think that if the matter were to be re-examined, the appellate court would find that the independent judgment test should be the proper standard of review.”

It is apparent that, although the issue was not raised by appellant below, the trial court was aware of the issue, addressed it, and made a clear record of his position on that issue for potential appellate review.

Furthermore, a party may raise an issue on appeal for the first time if the issue presented is purely a question of law. (Ward v. Taggart (1959) 51 Cal.2d 736, 742, 336 P.2d 534.) The question of the proper standard of appellate review is a question of law. The only facts presented to the trial court were those contained in the administrative record. No other or additional facts would have been presented had the issue been properly framed by appellant below. Therefore, we address appellant's contentions, although not originally addressed to the trial court.

IV

California Welfare and Institutions Code section 10962 makes a final administrative decision denying ATD benefits reviewable under Code of Civil Procedure section 1094.5. The scope of judicial review under section 1094.5 is dependent upon the nature of the rights involved in the administrative proceeding.¹ (Bixby v. Pierno (1971) 4 Cal.3d 130, 144-147, 93 Cal.Rptr. 234, 481 P.2d 242.) Appellant's primary contention is that the right to ATD benefits is a fundamental right and that, under the recent decision of the California Supreme Court, Interstate Brands v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770, 779, 163 Cal.Rptr. 619, 608 P.2d 707, she need not establish that the right is also a vested one. We disagree.

The California Supreme Court in a steady line of cases beginning in 1939 has reaffirmed the rule that, in order to qualify for independent judicial review of an administrative decision, a petitioner must show that the decision deprived him of a vested right. In Drummey v. State Bd. of Funeral Directors (1939) 13 Cal.2d 75, 85, 87 P.2d 848, the Supreme Court held that “ the court to which the application for mandate is made to secure the restoration of a professional license must exercise an independent judgment on the facts.” In the later case of McDonough v. Goodcell (1939) 13 Cal.2d 741, 753, 91 P.2d 1035, the Supreme Court distinguished between the review of an agency decision affecting the restoration of a license and the attempted acquisition of such a right. Since the attempt to obtain a license did not involve a fundamental vested right, the Supreme Court distinguished Drummey, where the aggrieved party already possessed such a right, and held that the substantial evidence test was the appropriate method of review. (See also Laisne v. Cal. St. Bd. of Optometry (1942) 19 Cal.2d 831, 840, 123 P.2d 457, and Dare v. Bd. of Medical Examiners (1943) 21 Cal.2d 790, 799, 136 P.2d 304.)

In Bixby v. Pierno, supra, 4 Cal.3d at pages 137-147, 93 Cal.Rptr. 234, 481 P.2d 242, the Supreme Court reviewed the history of the appropriate standard for judicial review of administrative decisions and stated at page 144, 93 Cal.Rptr. 234, 481 P.2d 242:

“The courts must decide on a case-by-case basis whether an administrative decision or class of decisions substantially affects fundamental vested rights and thus requires independent judgment review. (Citations.) As we shall explain, the courts in this case-by-case analysis consider the nature of the right of the individual: whether it is a fundamental and basic one, which will suffer substantial interference by the action of the administrative agency, and, if it is such a fundamental right, whether it is possessed by, and vested in, the individual or merely sought by him. In the latter case, since the administrative agency must engage in the delicate task of determining whether the individual qualifies for the sought right, the courts have deferred to the administrative expertise of the agency. If, however, the right has been acquired by the individual, and if the right is fundamental, the courts have held the loss of it is sufficiently vital to the individual to compel a full and independent review.” (Emphasis added.)

Obviously, under Bixby, in order to qualify for independent judicial review, a petitioner was required to demonstrate that the right lost by the administrative decision was both fundamental and vested. Appellant's argument that the Supreme Court has, by an oblique reference in a footnote, eliminated the need to establish the vested nature of the right, would have us disregard all of the following statements by that court in the years since Bixby : “This court has repeatedly held that, with exceptions not pertinent here, the independent judgment review standard must be applied whenever an administrative decision substantially affects ‘fundamental vested rights.’ (Citations.) (P) The term ‘vested’ has been used in a nontechnical sense to denote generally a right ‘already possessed’ (citation) or ‘legitimately acquired.’ (Citation.) On this basis, this court has distinguished generally between applicants and recipients in determining whether a right is ‘vested’ for the limited purpose of determining the applicable scope of review.” (Harlow v. Carleson (1976) 16 Cal.3d 731, 735 (129 Cal.Rptr. 298, 548 P.2d 698.))

“As we made clear in Bixby, the basic consideration in determining the scope of judicial review to be afforded administrative decisions of an adjudicatory nature is the importance of the affected right to the individual who stands in jeopardy of losing it. Thus, we explained, ‘(i)f the right has been acquired by the individual, and if the right is fundamental, the courts have held the loss of it is sufficiently vital to the individual to compel a full and independent review ’ ” (Anton v. San Antonio Community Hosp. (1977) 19 Cal.3d 802, 821 (140 Cal.Rptr. 442, 567 P.2d 1162).)

“Thus, independent judgment as to weight of the evidence is required where a ‘vested’ right is at stake; substantial evidence review is sufficient where the right is not vested. (Citation.)” (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979) 24 Cal.3d 335, 343-344, 156 Cal.Rptr. 1, 595 P.2d 579.)

With respect to appellant's contention that the independent judgment test should have been applied here, we have no quarrel with her statement that the right to welfare benefits is a fundamental right. That precise issue was addressed in Harlow v. Carleson, supra, 16 Cal.3d at page 737, 129 Cal.Rptr. 298, 548 P.2d 698. However, Harlow involved an administrative decision terminating a recipient's ATD benefits. The benefits, already being received by the petition in that case, were therefore vested.

However, appellant contends that once it is established that a right is fundamental it is also necessarily vested, citing Interstate Brands v. Unemployment Ins. Appeals Bd., supra, 26 Cal.3d at page 779, 163 Cal.Rptr. 619, 608 P.2d 707, footnote 5. In that case, the board had granted unemployment insurance benefits to plaintiff's employees who had been locked out following a selective strike. The trial court exercised independent judgment on the evidence and issued a peremptory writ setting aside the order. The Supreme Court affirmed, holding that an employer's right to be free from erroneous charges to its unemployment insurance reserve account is a fundamental vested right. In reaching that conclusion, the court addressed a contention that Bixby had eliminated a right to independent review which had previously existed. Prior to Bixby, independent review was authorized in all cases in which a vested property right was affected by an administrative decision. It was argued in Interstate Brands that, by adding a separate new requirement that the right be fundamental, the fact that the affected right was vested and deprived an appellant of property was no longer sufficient to warrant independent review. (Interstate Brands v. Unemployment Ins. Appeals Bd., supra, 26 Cal.3d at pp. 774-775, 163 Cal.Rptr. 619, 608 P.2d 707.) The court rejected this argument, pointing out that in the Bixby opinion they concluded that the substantial evidence test was appropriate, since petitioners did not allege “ ‘any deprivation of their right to a livelihood or a deprivation of their property.’ ” (Interstate Brands, supra, at p. 778, 163 Cal.Rptr. 619, 608 P.2d 707, citing Bixby v. Pierno, supra, 4 Cal.3d at p. 147, 93 Cal.Rptr. 234, 481 P.2d 242.) The Interstate Brands court then made the following observation, which is the basis for appellant's allegation that a new standard of review was enunciated in Interstate Brands :

“As the foregoing summary demonstrates, we believe, our concern in the Bixby case was not directed toward restricting or withdrawing the availability of independent review in ‘decision(s) or class(es) of decisions' as to which such availability had been previously established. Rather our concern was directed toward providing a doctrinal basis through which such review could be extended to ‘decision(s) or class(es) of decisions' which, although not involving vested property rights in the traditional sense, nevertheless had an impact on the individual ‘sufficiently vital to compel a full and independent review’ by the court. 5 (Bixby v. Pierno, supra, 4 Cal.3d at p. 144, (93 Cal.Rptr. 234, 481 P.2d 242).) It was in this spirit, then, that we said: ‘In determining whether the right is fundamental the courts do not alone weigh the economic aspect of it, but the effect of it in human terms and the importance of it to the individual in the life situation.’ (Id., italics added.)” (Interstate Brands, supra, 26 Cal.3d at p. 779, 163 Cal.Rptr. 619, 608 P.2d 707.)

The court's footnote 5 provides:

“The relationship between ‘vestedness' in the traditional sense and ‘fundamentalness' in the Bixby sense is illuminated by a little-noted passage of the opinion which states: '(I)n determining whether the right is sufficiently basic and fundamental to justify independent judgment review, the courts have considered the degree to which that right is ‘vested,’ that is, already possessed by the individual.' (4 Cal.3d at p. 146, (93 Cal.Rptr. 234, 481 P.2d 242).) Thus it could truly be said that the search for ‘vestedness' and the search for ‘fundamentalness' are one and the same. The ultimate question in each case is whether the affected right is deemed to be of sufficient significance to preclude its extinction or abridgement by a body lacking judicial power. (See and cf. Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 34-45 (112 Cal.Rptr. 805, 520 P.2d 29).)” (Interstate Brands, supra, 26 Cal.3d at p. 779, 163 Cal.Rptr. 619, 608 P.2d 707.)

Appellant contends that the footnote means that once an applicant has demonstrated that she is applying for benefits of fundamental significance, she has automatically established that the right is vested. We do not so interpret the language of that footnote. Rather, the court merely explained that the elements of “vestedness” and “fundamentalness” are often similar, and the extent to which a right is vested will have a bearing on whether it is sufficiently basic and fundamental to warrant independent review. That observation does not eliminate the requirement that both elements must be satisfied before the right to independent review is established.

In addition, Interstate Brands quotes with approval the language of Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 34, 112 Cal.Rptr. 805, 520 P.2d 29, as follows:

“The essence to be distilled is this: When an administrative decision affects a right which has been legitimately acquired or is otherwise ‘vested,’ and when that right is of a fundamental nature from the standpoint of its economic aspect or its ‘effect in human terms and the importance to the individual in the life situation,’ then a full and independent judicial review of that decision is indicated ”

Appellant's interpretation of the meaning of the quoted footnote must also be rejected because we do not believe that the Supreme Court would overturn, sub silentio, a rule which the court itself so carefully crafted and repeatedly explained. A rule of such significance would undoubtedly be accorded a more public burial by the court.

The fact that welfare benefits are deemed fundamental is insufficient to warrant independent judicial review,² where, as here, the applicant had no vested and existing right of which she was deprived by the board's decision.

V

Appellant next contends that ATD benefits are in fact vested for applicants, because the respondent does not have discretion to deny benefits once eligibility requirements are met. Appellant relies on Thomas v. California Emp. Stab. Com. (1952) 39 Cal.2d 501, 504, 247 P.2d 561, where the court said:

“When a claimant has met all requirements of the act, and all contingencies have taken place under its terms, he then has a statutory right to a fixed or definitely ascertainable sum of money. The determination of the exact amounts due is essentially a mathematical and mechanical process, and the administrative authorities have no discretion to withhold benefits from any particular claimant once it is determined that the facts support his claim and the condition of the fund permits payment.”

Thomas and the other cases relied on by appellant are all distinguishable from the instant case. In those, appellants were seeking pension or disability benefits. In each case, the benefits were those for which consideration had been paid and to which the applicant was entitled under contract rights. The benefits applied for were deemed vested prior to application. Those cases are readily contrasted from the instant appeal. Here, in order to qualify for ATD benefits, the law requires that an applicant prove total and permanent disability. The factual determination of qualification is vested in the review board. Only when that board has determined that an applicant is in fact totally disabled and permanently impaired, is entitlement to benefits established. This is not a situation where the board has no discretion but to award benefits once an application is filed.

Therefore, appellant has not demonstrated that she had a vested right to benefits which would entitle her to a limited trial de novo in the superior court following the denial by the administrative board.

The trial court properly applied the substantial evidence test in reviewing the decision of the Director of the California State Department of Benefit Payments. Appellant does not contend that no substantial evidence supports the decision of the board or the judgment of the superior court. Therefore, the judgment is affirmed.

FOOTNOTES

1.  Code of Civil Procedure section 1094.5, subdivision (c) provides: “Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence; and in all other cases, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in light of the whole record.”

2.  Respondent contends that the “fundamentally vested” approach of Bixby v. Pierno, supra, 4 Cal.3d 130, 93 Cal.Rptr. 234, 481 P.2d 242, should be abandoned and the substantial evidence test should be applied to all cases where administrative decisions are challenged in the superior court, provided that procedural due process is guaranteed under the statutory scheme which empowers the administrative officers to render a decision, and such test is legislatively mandated. This contention is more properly addressed to the Supreme Court and is neither reached nor resolved here. Independent judicial review has been mandated by the Supreme Court when a fundamental vested right has been affected by an administrative decision. This court is bound by Supreme Court decisions establishing that rule. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 454-455, 20 Cal.Rptr. 321, 369 P.2d 937.)

WOODS, Associate Justice.

FILES, P. J., and KINGSLEY, J., concur.