California, United States of America
The following excerpt is from Luna v. Carleson, 119 Cal.Rptr. 711, 45 Cal.App.3d 670 (Cal. App. 1975):
We observe that the matter of when a governmental agency becomes liable for the payment of interest is in a somewhat confused state. But we have found no case overruling the general principle as enunciated in Sanders v. City of Los Angeles (1970) 3 Cal.3d 252, 262, 90 Cal.Rptr. 169, 176, 475 P.2d 201, 208, that: 'This (case) is an exception to the general rule that interest cannot be recovered against a state or municipality.'
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