StudentConnectionCenter v. MarymountCollege

Filed 4/24/07 Student Connection Center v. Marymount College CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

APPEAL from an order of the Superior Court of Los Angeles County, William G. Willett, Judge. Affirmed.

Shannon Gallagher for Plaintiff and Appellant.

Edgerton & Weaver and Chad Weaver for Defendant and Respondent.

Plaintiff Student Connection Center LLC (plaintiff) appeals the trial courts denial of prejudgment interest on a damage award following a court trial. We find no error, and we affirm.

FACTS AND PROCEDURAL HISTORY

Plaintiff filed the present action against defendant Marymount College (defendant) for breach of contract, fraud, and quantum meruit on May 13, 1998. The matter was tried to the court, and on October 29, 1999, Judge William Willett issued a tentative ruling that plaintiff had established a breach of contract, and he awarded damages of $13,500. On December 21, 1999, the court signed a statement of decision ordering that judgment of $13,500 be entered in plaintiffs favor.[1] However, neither party submitted a proposed judgment, and thus judgment was not entered.

On August 16, 2001, defendants counsel mailed plaintiff a check for $13,500 in full, complete and final satisfaction of the judgment. Plaintiffs counsel returned the check to defendants counsel on September 13, 2001, along with a letter stating as follows: To my knowledge, a judgment has never been entered in the above-entitled case. As such, tender of your clients check in the foregoing amount seems inappropriate at this time, since not only has a judgment not been entered, but also because our client, Student Connection Center, is entitled to award of costs upon entry of a judgment, and, further, we intend to move for a new trial and/or appeal the judgment rendered, if necessary, . . . as to the amount of damages. [] As such, we are returning your clients check to you and will await the entry of a judgment before proceeding with the next step.[2]

Neither party took any further action with regard to this case for nearly five years. Then, on February 14, 2006, plaintiff lodged a proposed judgment seeking an award of $13,500, together with interest thereon at the rate of ten percent (10%) per annum ($3.70 per day) from the date of entry of the Statement of Decision (December 21, 1999) until the date of entry of this Judgment . . . , together with costs of suit per Memorandum of Costs.

Defendant objected to plaintiffs proposed judgment, and on July 12, 2006, the trial court ordered the parties to show cause why judgment should not be entered. Defendant subsequently submitted its own proposed judgment, which did not include an award of prejudgment interest.

The court held a hearing on the order to show cause on July 27, 2006. Defendant stated that it ha[d] no problem with judgment being entered, but it objected to prejudgment interest as not in accordance with the statement of decision. Further, defendant told the court that it had tendered $13,500 to plaintiff in satisfaction of the judgment years earlier. Plaintiff responded that it was entitled under Civil Code section 3287 to prejudgment interest from the date its damages were liquidatedthat is, from the date the court signed the statement of decisionand further that defendants tender was defective because it did not include prejudgment interest or costs.

The court did not resolve the issue of prejudgment interest at the hearing, but it expressed discomfort with plaintiffs contention that it was entitled to such interest notwithstanding its long delay in submitting a proposed judgment: Well, even if damages were basically ascertainable at the time that I signed the statement of decision on December 21st, 1999, I think I have a little problem on the plaintiffs sitting back and doing nothing for five plus years and then claiming they are entitled to five plus years of interest when this could have been handled back in 99 or early 2000, a judgment entered, and then clearly interest would start running if the defendant didnt pay the money.[3] When plaintiff suggested that submitting a proposed judgment was defendants responsibility, not plaintiffs, the court responded that Well, I have a little problem with that. The judgment was in your favor. You want to dump that on the defense. If you want a judgment, you would think the plaintiffs would be submitting a judgment.

On July 27, 2006, the court signed the proposed judgment submitted by defendant, ordering that plaintiff shall recover judgment against Defendant Marymount College in the amount of $13,500 plus costs per memo of costs. The judgment did not include an award of prejudgment interest. Notice of entry of judgment was served the same day.

Plaintiff filed a notice of appeal from that portion of the judgment in this matter which failed to include pre-judgment interest on September 25, 2006.

DISCUSSION

Civil Code section 3287 provides for the recovery of prejudgment interest. Section 3287, subdivision (a), addresses the award of interest on liquidated claims: One who is entitled to recover damages certain, or capable of being made certain by calculation . . . is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. Section 3287, subdivision (b), addresses the award of interest on unliquidated claims: Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.

Upon a proper request, the court must award prejudgment interest from the first day there exists both a breach and a liquidated claim. (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828 (North Oakland).) Accordingly, some courts have awarded prejudgment interest for the period following verdict or decision until the entry of judgment. (Dixon Mobile Homes, Inc. v. Walters (1975) 48 Cal.App.3d 964, 975; Espinoza v. Rossini (1967) 257 Cal.App.2d 567, 569; United States Nat. Bank v. Waddingham (1907) 7 Cal.App. 172, 175.)

However, entitlement to prejudgment interest does not make an award automatic. (North Oakland,supra, 65 Cal.App.4th at p. 829; Wegner, Fairbank & Epstein, Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2006)  17:194, p. 17‑106.) Rather, a party must make a timely request[] by noticed motion that the court exercise its power to determine whether plaintiffs [are] entitled to interest under section 3287. (North Oakland, supra, 65 Cal.App.4th at p. 829, italics added.) If a party fails to do so, prejudgment interest is properly denied.

The court applied these principles in North Oakland, concluding that the trial court properly denied plaintiffs tardy request for prejudgment interest. There, a jury awarded the plaintiffs damages for breach of an oral contract but did not award any prejudgment interest. (65 Cal.App.4th at p. 827.) Judgment was entered several weeks later. (Ibid.) After a hearing on defendants motion to tax costs, plaintiffs submitted a proposed order that awarded both costs and prejudgment interest. (Ibid.) The trial court initially signed the order, but subsequently set aside the award of interest on the ground that plaintiffs had failed to previously move for or request such interest. (Id. at p. 828.) Plaintiffs appealed. (Ibid.)

The court found that plaintiffs complaint had adequately invoked the trial courts power to award prejudgment interest, but said that it nonetheless had to decide whether plaintiffs timely requested the court to exercise its power to determine whether plaintiffs were entitled to interest under section 3287 in circumstances where damages had been awarded but no interest was included in the verdict and where neither court nor jury had determined whether the damages were liquidated or unliquidated. (Id. at p. 829.) Although it acknowledged that no statute or rule of court established a procedure for requesting an award of prejudgment interest, it held that prejudgment interest should be requested before entry of judgment or, at the latest, before the time to file posttrial motions has elapsed. (Id. at p. 830.) Moreover, such request must be made by way of motion prior to entry of judgment, or the request must be made in the form of a motion for new trial no later than the time allowed for filing such a motion. (Id. at p. 831.)

The court concluded that neither procedural prerequisite was met because plaintiffs request for prejudgment interest was made after judgment was entered and was not in the form of a noticed motion. (Id. at p. 831.) Moreover, although prior case law had not clearly established a procedure or time frame for requesting prejudgment interest, the court concluded that holding plaintiffs to the procedures adopted in this case was not unfair: After the verdict in their favor, plaintiffs did not move for an award of interest before entry of judgment. Nor did they seek an award of prejudgment interest at any of the post judgment proceedings which followed. They never sought interest in their request for an award of costs. Rather, at virtually the last minute, plaintiffs inserted an interest award in the order awarding costs which they presented to the court, in clear violation of Rogerss due process right to notice and an opportunity for hearing. [Citations.] Although this due process defect was cured by the subsequent action by the court in reconsidering its ruling following briefing and hearing on the matter, we may consider this egregious conduct together with the extreme lateness of plaintiffs request for interest as warranting denial of prejudgment interest. (Ibid.)

We agree with the principles articulated in North Oakland, and thus we affirm the trial courts denial of prejudgment interest in the present case. Here, although plaintiff requested prejudgment interest before judgment was entered, it did not do so by noticed motion. Rather, as in North Oakland, plaintiff merely inserted an interest award in its proposed judgment, in clear violation of [defendants] due process right to notice and an opportunity for hearing. (65 Cal.App.4th at p. 831.)

Even though defendant had a belated opportunity to be heard, and plaintiffs interest request was made before judgment was entered, we conclude it was even less timely than the request in North Oakland. There, plaintiffs requested prejudgment interest less than three months after the jury returned a special verdict and only two months after entry of judgment. (Id. at p. 827.) Here, in contrast, plaintiff waited more than six years after the trial court issued its statement of decision to request prejudgment interestan extreme[ly] late[] request by any standard. (Id. at p. 831.)

Finally, we note that plaintiff admitted in the trial court that it had made a deliberate tactical decision to delay entry of judgment in order to extend its time to appeal, and further that it rejected as inappropriate defendants attempt to satisfy the judgment because a judgment has never been entered in the above-entitled case. In other words, plaintiff took deliberate steps both to increase the postdecision, prejudgment period, thus substantially increasing prejudgment interest, and to frustrate defendants attempt to stop the running of interest by satisfying the judgment. Under these circumstances, the trial court did not err in denying plaintiffs request for prejudgment interest.

DISPOSITION

The denial of prejudgment interest is affirmed. Defendant shall recover its costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

SUZUKAWA, J.

We concur:

WILLHITE, Acting P.J. MANELLA, J.

Publication Courtesy of California lawyer directory.

Analysis and review provided by Escondido Property line attorney.

[1] The parties have not provided the court with a copy of the signed statement of decision because, according to plaintiff, Despite multiple requests for a conformed copy of the Statement of Decision signed by the court, the clerks office has been unable to supply the requested copy. The joint appendix contains a copy of an unsigned proposed statement of decision, which the court apparently signed after adding an award of costs.

[2] It appears a matter of dispute whether defendants counsel ever received the returned check; according to the declaration of Chad Weaver, counsel for defendant, [d]efendant received no response to its August 2001 tender.

[3] Plaintiffs counsels statements at the hearing made clear that plaintiffs failure to earlier submit a proposed judgment was tactical, not inadvertent: [W]e were not pushing for the entry of the judgment early on, because we were still evaluating [an appeal]. And until that judgment is entered, we dont have to make any of those hard decisions. He made a similar statement later in the hearing: So as long as the judgment is not entered, we still have options. Why would we want to start the clock running on ourselves so that we are forced in a position to have to make a decision [about an appeal]?