Chodos v. Borman

• Decision Date: 18 August 2015
• Docket Number: B260326
• Citation: 239 Cal.App.4th 707,190 Cal.Rptr.3d 889
• Court: California Court of Appeals Court of Appeals
• Parties: Hillel CHODOS, Plaintiff and Appellant, v. Navabeh P. BORMAN, Defendant and Respondent.

239 Cal.App.4th 707

190 Cal.Rptr.3d 889

Hillel CHODOS, Plaintiff and Appellant

v.Navabeh P. BORMAN, Defendant and Respondent.

B260326

Court of Appeal, Second District, Division 5, California.

Filed August 18, 2015

The Law Offices of Philip Kaufler, Beverly Hills, Philip Kaufler, for Plaintiff and Appellant Hillel Chodos.

The Law Offices of Ronald Richards & Associates, Beverly Hills, Ronald N. Richards and Nicholas A. Bravo, for Defendant and Respondent Navabeh P. Borman.

MOSK, J.

INTRODUCTION

Plaintiff and appellant, Attorney Rafael Chodos, as executor and trustee of the estate of his brother, Attorney Hillel Chodos¹ (attorney), appeals from the revised judgment entered by the trial court following this court's reversal with instructions to enter a new judgment in Chodos v. Borman (2014) 227 Cal.App.4th 76, 173 Cal.Rptr.3d 266 (Chodos I ). Originally, on September 19, 2013, the trial court entered a judgment for attorney for the value of legal services, which comprised the lodestar amount of $1.8 million found by the jury, plus a multiplier, resulting in a total amount awarded of $7.8 million with two stipulated adjustments. In finding the multiplier inappropriate, we ordered the trial court to enter a new judgment in the amount of the $1,717,921—the lodestar with the two stipulated adjustments.

Attorney contends that the trial court erred when it failed to include postjudgment interest in the final judgment, with interest to run on the $1,717,921 from September 19, 2013, the date of the original judgment. Defendant and respondent Navabeh P. Borman (client) argues that interest should only run from the date of entry of the judgment following remittitur, November 14, 2014. Additionally, attorney asserts that the trial court erred because its modified final judgment failed to provide for recovery of attorney's trial court costs of $12,983.99, and for interest on those costs from September 19, 2013.

We hold that interest ran on the $1,717,921 judgment from the date of the original judgment—September 19, 2013—and that attorney is entitled to the costs claimed and interest on those costs from that date. Accordingly, we modify and affirm the judgment to reflect our holding.

FACTUAL BACKGROUND

Attorney represented client “in two divorce cases and a related Marvin^[ [^{2 ]} action without a statutorily required written hourly or contingency fee agreement, [and thereafter] sued his client [in a quantum meruit action] for the reasonable value of the services he rendered in the three cases.” ( Chodos I, supra, 227 Cal.App.4th at p. 82, 173 Cal.Rptr.3d 266 ). The jury awarded attorney $7.8 million by special verdict, finding a reasonable hourly rate of $1,000 per hour, a reasonable number of hours expended on the two divorce cases and the Marvin action of 1,800, and a multiplier of five. On September 19, 2013, the trial court, in accordance with the jury's special verdict, entered a final judgment for attorney of $7,717,421,³ reflecting two stipulated adjustments deducting the costs paid to attorney for his work on the three actions and adding attorney's out-of-pocket costs. On September 24, 2013, attorney filed a memorandum of costs setting forth his trial court costs, which client did not challenge.

Client appealed from the judgment in Chodos I, supra, 227 Cal.App.4th at page 82, 173 Cal.Rptr.3d 266, contending, inter alia, that the trial court erred by instructing the jury that it could apply a multiplier to the lodestar amount.⁴ We determined that, as a matter of law, the multiplier was not appropriate and therefore that the instruction allowing the jury to award a multiplier was erroneous.

Our disposition in Chodos I, filed on June 18, 2014, read as follows: “The judgment is reversed and the matter is remanded to the trial court with instructions to enter a new judgment based on that portion of the special verdict form that awarded the attorney a $1.8 million lodestar amount based on the jury's finding of a reasonable hourly rate of $1,000 and a reasonable number of hours expended on the two divorce cases and the Marvin action of 1,800. As it did in the original judgment, the trial court shall make adjustments to the $1.8 million award by adding the amount of $24,921 and deducting the amount of $107,000. Client shall recover her costs on appeal.” (Chodos I, supra, 227 Cal.App.4th at pp. 105–106, 173 Cal.Rptr.3d 266.)

We issued a remittitur on November 4, 2014, and two days later, attorney filed an ex parte application for entry of a revised judgment. Attorney's ex parte application sought, inter alia, postjudgment interest on the trial court's revised final judgment and on his trial court costs incurred in his quantum meruit action at 10 percent per annum from September 19, 2013. Client filed an opposition to attorney's ex parte application, and on November 6, 2014, the trial court issued a minute order stating, “The court declines to hear the matter raised by [attorney's] Ex Parte Application since there is no showing of any urgency much less an emergency.”

On November 14, 2014, the trial court entered a new final judgment of $1,717,921 in attorney's favor, noting that “[a]ny previously issued Judgment in this case ha[s] been vacated and set aside by virtue of an order by the Court of Appeal....” Attorney filed an appeal on November 25, 2014, contending that the postjudgment interest in the judgment should have run from September 19, 2013, not from November 14, 2014, at 10 percent per annum, and that he should be awarded trial costs from Chodos I, supra, 227 Cal.App.4th 76, 173 Cal.Rptr.3d 266 of $12,983.99, with interest thereon from September 19, 2013.

DISCUSSION⁵

I. Standard of Review

The principal issue on appeal is whether attorney is entitled to postjudgment interest on the revised judgment and on his trial court costs from the date of entry of the original judgment or only from the date of entry of the revised judgment. Code of Civil Procedure section 685.020, subdivision (a) provides in part that “interest commences to accrue on a money judgment on the date of entry of the judgment.”⁶ The date from which interest should run and the interest rate “are questions of law, which we review de novo.” (Roden v. AmerisourceBergen Corp. (2010) 186 Cal.App.4th 620, 658, 113 Cal.Rptr.3d 20 (Roden ).) The legal question of whether attorney is entitled to interest at the statutory rate from the date of entry of the trial court's original judgment depends on whether our holding in Chodos I, supra, 227 Cal.App.4th 76, 173 Cal.Rptr.3d 266 was in legal effect a modification or a reversal of the trial court's original judgment. (Snapp v. State Farm Fire & Cas. Co. (1964) 60 Cal.2d 816, 818, 36 Cal.Rptr. 612, 388 P.2d 884.)

II. Interest on the Judgment

A judgment bears interest from the date of its entry in the trial court even though the judgment is still subject to direct attack. (Bellflower City School Dist. v. Skaggs (1959) 52 Cal.2d 278, 280, 339 P.2d 848.) As stated in Munoz v. City of Union City (2009) 173 Cal.App.4th 199, 92 Cal.Rptr.3d 527, “ ‘When a judgment is modified upon appeal, whether upward or downward, the new sum draws interest from the date of the entry of the original order, not from the date of the new judgment. [Citations.] On the other hand, when a judgment is reversed on appeal the new award subsequently entered by the trial court can bear interest only from the date of entry of such new judgment. [Citation.]’ [Citation.]” (Id. at p. 203, 92 Cal.Rptr.3d 527 ; see 7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 333, p. 938.)

Whether an order by an appellate court is a modification or a reversal depends on the substance and effect of that order. (Snapp v. State Farm Fire & Cas. Co., supra, 60 Cal.2d at p. 821, 36 Cal.Rptr. 612, 388 P.2d 884 ; see Lucky United Properties Investment, Inc. v. Lee (2013) 213 Cal.App.4th 635, 653, 152 Cal.Rptr.3d 641.) An appellate court order is “a reversal in the legal sense” when it reverses the trial court and remands an issue to the trial court for further hearing and factfinding necessary to the resolution of the issue forming a basis for appeal. (Stockton Theatres, Inc. v. Palermo (1961) 55 Cal.2d 439, 441, 444, 11 Cal.Rptr. 580, 360 P.2d 76.) The reversal of a trial court judgment on grounds of insufficient evidence is also a substantive reversal. (Ehret v. Congoleum Corp. (2001) 87 Cal.App.4th 202, 210, 104 Cal.Rptr.2d 370.) Furthermore, when a “trial court ha[s] no authority to award damages at th[e] point” when the award is made, a reversal on appeal is a substantive reversal. (Roden, supra, 186 Cal.App.4th at p. 660, 113 Cal.Rptr.3d 20.) In Roden, the Court of Appeal had reversed the award of damages entirely because the trial court had no authority to award damages at the time the award was made. (Ibid. )

When, however, an order stated in terms of reversal amends a trial court order on remand to “state what it should have stated on th[e] date” of the original order, it is “in law and in fact, a modification.” (Stockton Theatres, Inc. v. Palermo, supra, 55 Cal.2d at pp. 443–444, 11 Cal.Rptr. 580, 360 P.2d 76.) An order can be “couched in terms of a reversal with directions ... [but have] the legal and practical effect of modifying the original award.” (Id. at p. 444, 11 Cal.Rptr. 580, 360 P.2d 76.) Language in an appellate court order that “purportedly set[s] aside the original findings and award, [and] which is inconsistent with the actual effect of the decision, should be disregarded.” (Myers v. Workmen's Comp.App. Bd. (1969) 2 Cal.App.3d 621, 630, 83 Cal.Rptr. 427.)

In Snapp v. State Farm Fire & Cas. Co., supra, 60 Cal.2d at page 818, 36 Cal.Rptr. 612, 388 P.2d 884, for example, our Supreme Court held that an appellate court order providing that “the judgment is reversed with directions to enter a judgment for plaintiffs in the amount of $25,000” was in legal and practical effect a modification when the trial court had originally entered a judgment for the plaintiffs in...