30-12-600613

Motion for Attorney Fees

On 1-20-15 the Court ordered:

Plaintiffs’ motion for post-judgment attorney fees and costs is continued to 12/11/15. No later than 11/30/15, Plaintiffs are to file and personally serve supplemental briefing addressing whether adding post-judgment interest to the judgment will result in impermissible compounding of interest above statutory limits. See Westbrook v. Fairchild (1992) 7 Cal. App. 4th 889 and Hess v. Ford Motor Co. (2002) 27 Cal.4th 516. Defendants may respond no later than 12/4/15 with briefing of no more than five pages. No other filings will be permitted.

The Court rejects Defendants’ claim that the motion was untimely. Under CCP §12, time for “any act provided by law” is computed by excluding the first day and including the last. The motion was filed on the 40th day after the clerk gave notice of remittitur. CRC Rule 3.1702(c)(1) & Rule 8.891(c)(1).

California Dep’t of Corr. & Rehab. v. California State Pers. Bd. (2010) 238 Cal. App. 4th 710, 720 stated that §12 “governs the calculation of all statutorily prescribed time periods.” [Court’s emphasis] The Court found reasons for an exception because the case concerned a probationary period, including that it would be absurd to exclude the first day someone works from that period. (Id. at 721.)

None of Defendants’ other cases are on point. In re Marriage of Freeman (2005) 132 Cal. App. 4th 1 concerned when the time for a motion begins, not when it ends. Nor was this addressed in the other cases Defendants cite. Bellows v. Aliquot Associates, Inc. (1994) 25 Cal. App. 4th 426 dealt with when jurisdiction vests in the court after an appeal. Committee for Green Foothills v. Santa Clara County. Bd. of Supervisors (2010) 48 Cal. 4th 32 dealt with what period applies for a CEQA challenge. Under Chevron U.S.A., Inc. v. Workers’ Comp. Appeals Bd. (1999) 19 Cal.4th 1182, 1195, “An opinion is not authority for propositions not considered.”

The Court sees no reason to require a separate motion to recover post-judgment costs and fees that are unrelated to the appeal as these can be added to the judgment. However, ¶6 of Mr. Hammers’

declaration admits that the total amount for the period was $6505 while the heading of that paragraph claims $8085.50. There is no explanation for the $1580.50 difference; the fees will be reduced by this amount. No further evidence or briefing on this issue is permitted.

Defendants argue that Hess and Westbrook apply. They claim that the statutory language of CC §5975, like the statute involved in Hess, doesn’t provide for compounding interest. Section 5975(c) states:

In an action to enforce the governing documents, the prevailing party shall be awarded attorney fees and costs.

The moving parties rely on Big Bear Properties, Inc. v. Gherman (1979) 95 Cal. App. 3d 908, in which the Court held that a judgment accrues interest on the entire amount of the judgment, even if the judgment itself contains interest. Id. at 916. It stated interest accrues from the “date of entry.” However, the case that was appealed was a separate case for declaratory relief regarding liability for interest; the case didn’t involve an appeal from the judgment itself. So the issue remains: What is the “date of entry” of the judgment, when it was originally issued or when it became final after the appeal?

Hess concerned §3291, which states that if a §998 offer isn’t accepted and the Plaintiff recovers more, “the judgment shall bear interest at the legal rate of 10 percent per annum calculated from the date of the plaintiff’s first offer pursuant to Section 998 of the Code of Civil Procedure which is exceeded by the judgment, and interest shall accrue until the satisfaction of judgment.” It distinguished Big Bear on the ground that it involved a different statute, albeit without any discussion, so it is really no help. The statute involved in Big Bear was CC §3288, which states:

In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.

Plaintiff’s treatment of Westbrook v. Fairchild (1992) 7 Cal. App. 4th 889, also ducks the issue. It too points to language allowing a judgment to include interest so that later there is interest on interest. But Plaintiff’s aren’t asking that the original judgment just be affirmed. They are asking for a NEW judgment that will include POSTJUDGMENT interest on the interest in the original judgment and which then will accrue interest on interest.

What the supplemental points and authorities do is quote Westbrook’s quotation from Big Bear and make it sound like it is a quote from Westbrook. The Court actually said:

“’Although compound interest generally is not allowable on a judgment, it is established that a judgment bears interest on the whole amount from its date even though the amount is in part made up of interest. … As a consequence, compound interest may in effect be recovered on a judgment whereby the aggregate amount of principal and interest is turned into a new principal. …’ ” (Id., at p. 913, italics added.)

The italics were in Westbrook. In quoting this language, Plaintiffs omit the italics and ignore the fact that Westbrook was talking about the inclusion of prejudgment interest in an original judgment.

Westbrook stated @ 894, “The only exception to the rule that interest on interest (i.e. compound interest) may not be recovered is in situations in which interest is included in a judgment which then bears interest at the legal rate.” The example the Court gave was renewal of a judgment; the Court explained that the legislature specifically considered the issue and limited renewal to once every five years to limit the compounding of interest. Id. at 895.

Plaintiffs obviously recognize what the issue is, as shown by their excluding the italics from their quote of Westbrook. They just don’t address it. In fact, their conclusion is:

The court in Westbrook specifically stated that “interest on interest is allowed when prejudgment interest is incorporated into a judgment which then bears interest,” and noted that the judgment at issue already incorporated two years of prejudgment interest.” [My emphasis]

But they are trying to add post-judgment interest, by pretending that the judgment after the appeal is a wholly new one. The Court of Appeal merely affirmed the old judgment; it didn’t create a new one.

The moving parties claim fees and costs of $31,360.50 and $67,550 totaling $98,910.50. You previously ruled this should be reduced by $1580.50 so the total is $97,330.

The motion of Plaintiffs and Cross-defendants for attorney fees, costs and costs is granted in part. The moving parties are awarded in attorney fees and costs of $97,330 for the reasons stated by the Court in its 11/20/15 minute order. Their motion to add post-judgment interest to an amended judgment is denied. The Court does not preclude them from collecting interest; they just cannot add it to the principal amount of the judgment. Westbrook v. Fairchild (1992) 7 Cal. App. 4th 889.

It is undisputed that the judgment can include pre-judgment interest under Westbrook. That is the only holding of Big Bear Properties, Inc. v. Gherman (1979) 95 Cal. App. 3d 908; there was no issue of whether interest accruing after the original judgment could be added to the principal amount of the judgment following an appeal. Nor do the moving parties cite any authority that a Court of Appeals order that merely affirms a prior judgment creates a wholly new judgment and that interest accrued between a judgment and affirmance is “prejudgment” interest.

Westbrook stated @ 894, “The only exception to the rule that interest on interest (i.e. compound interest) may not be recovered is in situations in which interest is included in a judgment which then bears interest at the legal rate.” The example the Court gave was renewal of a judgment; the Court explained that the legislature specifically considered the issue and limited renewal to once every five years to limit the compounding of interest. Id. at 895. No similar legislative history is cited to support the position of the moving parties.