Burns v. Baldwin

• Decision Date: 27 February 2003
• Docket Number: No. 27839.,27839.
• Citation: 65 P.3d 502,138 Idaho 480
• Parties: Robert B. BURNS, Plaintiff-Appellant, v. James P. BALDWIN, Defendant-Respondent.
• Court: Idaho Supreme Court

65 P.3d 502

138 Idaho 480

Robert B. BURNS, Plaintiff-Appellant, v. James P. BALDWIN, Defendant-Respondent.

No. 27839.

Supreme Court of Idaho, Boise, 2003 Term of Court.

February 27, 2003.

Moffatt, Thomas, Barrett, Rock & Fields, Boise, for appellant. Mark S. Prusynski argued.

Ducote & Frasca, Costa Mesa, California, for respondent. Joanne M. Frasca argued. Hawley Troxell Ennis & Hawley, LLP, Boise, for respondent. Kim C. Stanger appeared.

SCHROEDER, Justice.

This case involves an attempt to enforce a judgment obtained in California. A California Superior Court jury awarded Robert Burns (Burns) $2.5 million in damages against James Baldwin (Baldwin) in 1997. On a second appeal the California Court of Appeal modified the original judgment to allow post-judgment interest only from the date of remittitur after the first appeal rather than from the date of entry of the original judgment. Burns petitioned for rehearing, but the petition was denied. He did not appeal to the California Supreme Court. Baldwin paid the judgment and interest, as modified by the Court of Appeal. Burns filed an acknowledgment and satisfaction of judgment in California. Burns subsequently filed the original California judgment in Idaho, seeking to recover the post-judgment interest that was disallowed by the California Court of Appeal. He maintains that the Court of Appeal's modification of the judgment was void. The district court granted Baldwin's motion to strike the foreign judgment and awarded Baldwin attorney fees. Burns appeals.

I. FACTUAL AND PROCEDURAL HISTORY IN CALIFORNIA

In 1994 Burns quit his position as a division head of Baldwin Builders, Inc., a Southern California homebuilder. He filed suit against his former employer and its principals, including Baldwin, in the California Superior Court seeking damages relating to his employment. A jury awarded Burns $2.5 million in damages against Baldwin. Judgment was entered June 30, 1997, and began to accrue interest. Burns moved for a new trial on the issue of damages, and Baldwin moved to vacate the judgment. The trial court granted Burns's motion for a new trial. Baldwin appealed. The California Court of Appeal reversed the order for new trial and affirmed the original judgment. Baldwin then filed a second motion to vacate the original judgment, asking the court to provide for post-judgment interest to accrue from the date of remittitur from the Court of Appeal (October 12, 1999) rather than from the date of original entry of judgment (June 30, 1997). The trial court ruled that the reinstated judgment would accrue interest from entry of the original judgment. Baldwin appealed the trial court ruling.

On the second appeal the Court of Appeal reversed the trial court ruling that provided for accrual of post-judgment interest from the time of the original judgment. The Court of Appeal determined that post-judgment interest would accrue from the date of issuance of the remittitur rather than from the date of the entry of the original judgment. The Court of Appeal denied Burns' subsequent petition for rehearing. Burns did not appeal to the California Supreme Court.

On May 3, 2001, Baldwin tendered $2,919,325.52 to Burns, which amount reflected the judgment as modified by the Court of Appeal. Burns executed and filed a written Acknowledgment of Satisfaction of Judgment on May 9, 2001. The Acknowledgment of Satisfaction of Judgment states that is was filed "without waiver of rights" and includes the following two provisions:

4. The subject judgment was filed on June 30, 1997, and modified by decision of the Court of Appeal of the State of California, Second Appellate District, Division Seven (Appeal B137768), filed March 21, 2001.

5. The subject judgment, to the extent modified by the decision in Appeal B137768, is satisfied in full.

The Court of Appeal issued a remittitur on May 24, 2001, and the California Superior Court issued a Certificate of Satisfaction of Judgment on June 26, 2001.

II. PROCEDURAL HISTORY IN IDAHO

Burns filed a "Filing of Foreign Judgment" in Idaho on June 6, 2001. Attached to the Filing was a certified copy of the original judgment entered June 30, 1997, and Minutes entered June 20, 1997. Burns asserted that he was a judgment creditor and that he had been partially paid on May 3, 2001, but that there was an "unpaid balance owed" of $583,466.91. The filing regarding partial payment stated the following: "Payment in the amount of ... ($2,919,325.20) comprising payment in full of all awarded costs in the amount of $25,607.30, all post-judgment interest on the judgment and costs in the amount of $977,184.81, and partial satisfaction of the underlying $2.5 million judgment in the amount of $1,916,533.09 was made on May 3, 2001, leaving an unpaid balance owed on said judgment of ... ($583,466.91) as of May 3, 2001." This amount equals post-judgment interest if it were calculated from the date of entry of the original judgment to the date of the first remittitur.

In effect Burns proceeded in Idaho in an effort to recover the amount of post-judgment interest from the date of original entry of judgment to the first remittitur in California which interest was disallowed by the second California Court of Appeal decision. However, he characterized the payment from Baldwin on May 3, 2001, as having satisfied all post-judgment interest but only partially satisfying the underlying judgment. This characterization was deceptive, especially because the California Court of Appeal decision modifying post-judgment interest was not attached to the Filing of Foreign Judgment, and no mention was made of such decision. Burns attempts to justify his failure to disclose the fact that the judgment he seeks to enforce in Idaho was superceded in California on the basis that the Court of Appeal's modification of the judgment was void, maintaining that the California Court of Appeal had no jurisdiction to contravene the California Constitution regarding judgment interest and had no jurisdiction to modify a judgment that was already affirmed on a previous appeal. Regardless, he did not disclose the fact to the Idaho court that he was attempting to collect on a judgment that had been modified in California eliminating his right to recover that interest. He did not disclose that there had been a full satisfaction of the subsequent judgment. Burns is a lawyer.

Baldwin filed a motion to strike and vacate the foreign judgment on June 15, 2001. The district court granted the motion holding that "[s]ince the California Court ruled on [the] jurisdictional issue, and no further appeal was taken, the issue of jurisdiction became res judicata, and the judgment is entitled to full faith and credit, in its entirety, in this State." The district court also awarded costs and attorney fees to Baldwin. Burns appealed.

III. THE CALIFORNIA JUDGMENT WHICH BURNS ATTACKS IS ENTITLED TO FULL FAITH AND CREDIT AND HIS CLAIM FOR ADDITIONAL INTEREST UNDER THE ORIGINAL JUDGMENT IS BARRED

A. Standard of Review

This is an appeal from an order by the district court granting Baldwin's motion to strike a foreign judgment filed in Idaho pursuant to I.C. § 10-1301 et seq. The dismissal was based on giving full faith and credit to the California Court of Appeal modification decision. This is a question of law over which this Court exercises free review.

B. The Full Faith and Credit Clause bars a collateral attack in Idaho on the modified judgment entered in California.

Burns argues that the California Court of Appeal decision that disallowed post-judgment interest from the entry of the original judgment to the first remittitur is invalid on the basis that the California Court of Appeal was without jurisdiction to order such a modification. Burns does not assert that the California Court of Appeal lacked personal or subject matter jurisdiction. He maintains that the decision of the Court of Appeal contravenes the California Constitution. Therefore, he argues, the court had no jurisdiction to enter the order.

The constitutional provision at issue states the following:

The rate of interest upon a judgment rendered in any court of this State shall be set by the Legislature at not more than 10 percent per annum. Such rate may be variable and based upon interest rates charged by federal agencies or economic indicators, or both.

In the absence of the setting of such rate by the Legislature, the rate of interest on any judgment rendered in any court of the state shall be 7 percent per annum.

Cal. Const. art. XV, § 1.

The constitutional provision says nothing of the timing of judgment interest. Burns relies on California case law and statutes that seemingly interpret this provision as providing for judgment interest from the date of entry of judgment. In San Francisco Unified School District v. San Francisco Classroom Teachers Ass'n, 222 Cal.App.3d 146, 272 Cal.Rptr. 38 (Ct.App.1990), the court articulated the holding of Harland v. State, 99 Cal.App.3d 839, 160 Cal.Rptr. 613 (Ct.App. 1979) as being that "article XV, section 1, mandates postjudgment interest ... and that the interest begins to accrue when the judgment is entered." San Francisco, 272 Cal. Rptr. at 40. At issue in the Harland case was whether the State of California was obligated to pay interest on a judgment obtained against it in a tort action. The primary holding in Harland was that the State was not immune from paying judgment interest. With respect to when interest begins, the only relevant statement by the Harland court was that it would be contrary to the constitution to say that "a judgment bears interest only after it becomes final." Harland, 160 Cal.Rptr. at 615. It does not appear that the California Supreme Court has determined the applicability of the California constitutional provision to the particular issue in this case. The constitutionality rule claimed by Burns is based upon court decisions interpreting the California...