WHITMORE UNION ELEMENTARY SCHOOL DIST. v. County of Shasta

Whitmore Union Elementary School District (Whitmore) appeals from the summary judgment granted defendants in an action to recover money Whitmore lost as a result of an alleged improper pooled money investment by defendant Treasurer of Shasta County (the Treasurer).

The summary judgment rests on the theory the action is barred by the discretionary immunity granted the Treasurer by Government Code section 820.2, [1] a provision of the Tort Claims Act. [2] The theory is based on the view a county treasurer has unfettered discretion under section 53635 to invest money on deposit in the county treasury in any of the financial instruments listed in the statute. The defendants reason that, because school district money must be deposited in the county treasury, [3] the Treasurer may invest it without the consent of the district, regardless whether the money is required to meet the district's immediate financial needs. We disagree.

The Treasurer's discretionary authority under section 53635 is limited by its terms to surplus money—money not required for the immediate needs of the depositor—and by the requirements of sections 53601, 53607 and Education Code section 41015 that…