AGO 1979 No. 8 - Apr 5 1979
COUNTIES ‑- FUNDS ‑- INSURANCE ‑- TORT CLAIMS ‑- CREATION OF A SPECIAL COUNTY FUND FOR THE PAYMENT OF TORT CLAIMS NOT COVERED BY INSURANCE
(1) RCW 36.33.065 does not authorize a board of county commissioners to establish a special fund for the payment of only a certain category of claims against a county; i.e., tort claims not covered by insurance; however, RCW 36.33.020, authorizing the creation of one or more county cumulative reserve funds for specified county purposes, does authorize a board of county commissioners to establish such a special county fund for the payment of tort claims not covered by insurance.
(2) Except as provided by RCW 36.29.020, any interest earned through the investment of monies in a county cumulative reserve fund established under RCW 36.33.020, would properly be creditable to the cumulative reserve fund from which the particular investments were made.
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April 5, 1979
Honorable Stephen L. Henley
P.O. Box 1130
Okanogan, Washington 98840
Cite as: AGO 1979 No. 8
By letter previously acknowledged you requested our opinion on several questions involving the establishment of a special county fund for the payment of tort claims not covered by insurance. We paraphrase your questions as follows:
(1) Does RCW 36.33.065 authorize a board of county commissioners to establish a special fund for the payment of only a certain category of claims against a county;i.e., tort claims not covered by insurance?
[[Orig. Op. Page 2]]
(2) In the alternative, does RCW 36.33.020 authorize a board of county commissioners to establish a special county fund for the payment of tort claims not covered by insurance?
(3) In the event of an affirmative answer to question (2), how is any interest earned through the investment of monies in a cumulative reserve fund established under RCW 36.33.020 to be credited?
We answer question (1) in the negative, question (2) in the affirmative and question (3) in the manner set forth in our analysis.
Your first question relates to RCW 36.33.065 which reads as follows:
"The legislative authority of any class county may establish by resolution a fund to be known as the claims fund, which shall be used for paying claims against the county. Such claims fund shall be reimbursed from any county funds or other funds under the jurisdiction or control of the county treasurer or county auditor budgeted for such expenditures. The deposits shall be made in the exact amount of the vouchers paid from the claims fund."
It is our opinion that this statute does not contemplate the establishment of a special fund for the payment of only a certain category of claims against a county. Instead, as we read it, RCW 36.33.065 only authorizes the creation of a general claims fund for the payment of all claims against a given county‑-with the claims fund then, in turn, to be reimbursed by the particular fund from which the claim would otherwise have been paid.
[[Orig. Op. Page 3]]
Alternatively, you have asked whether RCW 36.33.020 is sufficient to authorize a board of county commissioners to create a special county fund for the payment of tort claims not covered by insurance. This statute, notably, was significantly amended some years ago by § 1, chapter 172, Laws of 1961. Accordingly, for ease of comprehension, we will here set forth the text of that amendment (the underscored portion of which represents the current version of the law) in bill form as follows:
The board of county commissioners may establish a cumulative reserve fund for the construction of a particular building or improvement and annually budget and levy a tax therefor. It may also accept gifts and make transfers from the current expense fund for that purpose.)) Any board of county commissioners may establish by resolution a cumulative reserve fund in general terms for several different county purposes as well as for a very specific county purpose, including that of buying any specified supplies, material or equipment, or the construction, alteration or repair of any public building or work, or the making of any public improvement. The resolution shall designate the fund as 'cumulative reserve fund for . . . . . . . . . . . . . (naming the purpose or purposes for which the fund is to be accumulated and expended.)' The moneys in said fund may be allowed to accumulate from year to year until the board of county commissioners of the county shall determine to expend the moneys in the fund for the purpose or purposes specified: PROVIDED, That any moneys in said fund shall never be expended for any other purpose or purposes than those specified, without an approving vote by a majority of the electors of the county at a general or special election to allow other specified uses to be made of said fund."
Under the provisions of chapter 4.96 RCW, counties are now liable for their tortious conduct, or the tortious conduct of their officers, agents or employees ". . . to the [[Orig. Op. Page 4]] same extent as if they were a private person or corporation: . . ."1/ Therefore, the payment of tort claims against a county constitutes a legally sanctioned "county purpose." The question which we must resolve is whether, nevertheless, this particular county purpose is beyond the scope of RCW 36.33.020, supra, because of the express enumeration therein of certain specific county purposes‑-preceded by the word "including."
As was aptly stated by one federal district court judge in the recent case ofIn Re Midas Coin Company, 264 F.Supp. 193 (U.S.D.C., E.D., Missouri, 1967),
"The term 'including' has various shades of meaning, in some instances operating as a restriction upon and in others as an enlargement of the general language that precedes it and in still others simply as connoting illustrative examples. And it would appear that the term has been used in all such senses in the very law now under consideration although most frequently it appears therein as an enlargement or illustration. See, for example, Section 400.1-201 V.A.M.S. which contains general definitions of many of the words and terms used in the Code." 264 F.Supp. 198.
In that case the court was concerned with the meaning and thrust of the word "including" as it appears in the introductory section of Article 9 of the Uniform Commercial Code, the Washington counterpart of which is RCW 62A.9-102(1), which reads as follows:
"(1) Except as otherwise provided in RCW 62A.9-103 on multiple state transactions and in RCW 62A.9-104 on excluded transactions, this Article applies so far as concerns any personal property and fixtures within the jurisdiction of this state
"(a) To any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures [[Orig. Op. Page 5]] including goods, documents, instruments, general intangibles, chattel paper, accounts or contract rights; and also
"(b) to any sale of accounts, contract rights or chattel paper." (Emphasis supplied)
As thus used, the court in the Midas Coin Company case held the sense of the term "including" to be restrictive, saying:
"We conclude . . . that the enumeration following the word 'including' in Section 400.9-102 would be rendered meaningless and useless if not intended to clarify and limit the scope of the words 'any personal property' and 'personal property' 'because the latter words, standing alone encompass the whole field, and if such was the legislative intent, it was unnecessary to say more.' . . ." 264 F.Supp. 198.
At first blush this same approach might seem to be applicable in the case of RCW 36.33.020,supra. In the context of that section of chapter 36.33 RCW, however, we think a better view is that the term "including" there merely connotes an illustrative, nonexclusive, list of examples of what would constitute ". . . a very specific county purpose" for which a county cumulative reserve fund might be created. Cf., AGO 51-53 No. 339 (copy enclosed) at page 6.
The basic difficulty we have with the reasoning of the court in theMidas Coin Company case is that it is really inconsistent with that court's own prior recognition that the term "including" can be either expansive or illustrative as well as restrictive. It is always possible to say that the legislature would not have added an "including . . ." phrase to a given statute unless it had intended to limit the scope of the words preceding that phrase‑-for otherwise the "including . . ." phrase would be surplusage. Yet as theMidas court itself earlier said, this is not the only way in which such language in a statute is to be interpreted.
With regard to RCW 36.33.020, supra, we have quoted the language of that statute in the context of the legislature's 1961 amendment thereto in order to demonstrate the expansive, [[Orig. Op. Page 6]] rather than restrictive, nature of the amendment. Whereas before a county cumulative reserve fund could only be created ". . . for the construction of a particular building or improvement . . .," making it necessary for a separate fund to be established for each such project,2/ it is now possible to have a single cumulative reserve fund ". . . for several different county purposes . . . ." Or, instead, the county may (as is here proposed) establish a cumulative reserve fund ". . . for a very specific county purpose . . ." which mayinclude
". . . that of buying any specified supplies, material or equipment, or the construction, alteration or repair of any public building of work, or the making of any public improvement. . . ."
From the foregoing it seems apparent that the county purpose here contemplated by your question (i.e., the payment of tort claims not covered by insurance) could be included, along with others, within the scope of a single cumulative reserve fund for several different county purposes‑-for the troublesome "including . . ." phrase only modifies its last antecedent which reads ". . . or for a very specific county purpose," as is evidenced by the fact that the first word following "including" is "that" rather than "those." See also,Martin v. Aleinikoff, 83 Wn.2d 842, 846, 389 P.2d 422 (1964) and cases cited therein. But if that is true it would seem highly incongruous to say that the payment of tort claims can be encompassed, along with other county purposes, by a multi-purpose cumulative reserve fund but not by one created solely for that "very specific county purpose."
Finally, let us briefly address your question regarding the proper rendition or allocation of any interest which might be earned through the investment of monies in a cumulative reserve fund established under RCW 36.33.020,supra. Presumably, any such investments would be made by the county treasurer under RCW 36.29.020. Therefore, as provided for in the statute,
[[Orig. Op. Page 7]]
". . . Five percent of the interest or earnings, with an annual minimum of ten dollars or annual maximum of fifty dollars, or any transactions authorized by each resolution of the governing body shall be paid as an investment service fee to the office of the county treasurer or other municipal corporation treasurer when the interest or earnings become available to the governing body.
". . ."
The remainder of any such earnings, in turn, would be properly creditable to the fund from which the particular investments were made. Accord, RCW 43.09.210.
We trust that the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
*** FOOTNOTES ***
1/See RCW 4.96.010, codifying the provisions of § 1, chapter 164, Laws of 1967; see also, Kelso v. Tacoma, 63 Wn.2d 913, 390 P.2d 2 (1964).
2/See, AGO 51-53 No. 308 (copy enclosed) and AGO 51-53 No. 339.