Mendez v. Kurten

• Decision Date: 23 July 1985
• Citation: 215 Cal.Rptr. 924,170 Cal.App.3d 481
• Court: California Court of Appeals Court of Appeals
• Parties: Steve MENDEZ, Plaintiff and Respondent, v. James P. KURTEN, Defendant and Appellant. Civ. B007127.

Page 924

215 Cal.Rptr. 924

170 Cal.App.3d 481

Steve MENDEZ, Plaintiff and Respondent, v. James P. KURTEN, Defendant and Appellant.

Civ. B007127.

Court of Appeal, Second District, Division 4, California.

July 23, 1985.

Review Denied October 28, 1985.

[170 Cal.App.3d 483] Demler & Armstrong, and Robert B. Ryder, Long Beach, for defendant and appellant.

Gage & Mazursky, and Sanford M. Gage, Beverly Hills, for plaintiff and respondent.

ARGUELLES, Associate Justice.

Appellant James P. Kurten (appellant), defendant in the underlying action for personal injuries, appeals from a postjudgment order denying his motion to clarify that portion of the judgment dealing with interest accruing on the judgment to the date of its satisfaction. ¹

The sole issue before us is whether for the time between the entry of judgment and its satisfaction interest may be awarded on a judgment at the rate of 10 percent pursuant to Civil Code section 3291 (hereafter section 3291) and at the rate of an additional 10 percent pursuant to Code of Civil Procedure section 685.010, subdivision (a) (hereafter section 685.010), or whether such an award violates article XV, section I, of the California Constitution, which does not allow the rate of interest upon a state court judgment to exceed 10 percent per annum. We have concluded that the Legislature did not intend, and the California Constitution does not allow, interest to be cumulatively awarded pursuant to both sections between entry of judgment and its satisfaction.

FACTS

Respondent Steve Mendez (respondent) filed a complaint on March 13, 1981, against appellant for personal injuries arising

out of an automobile-motorcycle collision

[170 Cal.App.3d 484] On September 15, 1983, respondent's counsel caused an offer to compromise, pursuant to Code of Civil Procedure section 998, in the amount of $275,000 to be served upon appellant. The offer was rejected.

The matter proceeded to trial and resulted in a verdict for respondent in the amount of $450,000 "with interest thereon at the rate of ten per cent per annum from the date of the verdict until paid ...."

Subsequently, respondent brought a motion to augment costs pursuant to section 3291, requesting that he in addition be awarded interest at the rate of ten percent on the judgment from the date of the statutory offer (see Code Civ.Proc., § 998) to the date of satisfaction of judgment. The trial court granted respondent's motion.

Appellant claims that not until a letter of January 31, 1984, did respondent ever express an intention to obtain both (1) 10 percent per annum interest from the date of the statutory offer to compromise to the date of entry of judgment and (2) 20 percent per annum interest on the judgment from the date of judgment entry to the date of satisfaction.

Thereafter, appellant paid the amount of the judgment plus 10 percent per annum interest calculated from the date of the statutory offer to compromise to the date of payment, for which respondent filed a partial satisfaction of judgment. Appellant then filed a motion to clarify the nature and extent of the interest awarded on the judgment. The motion was denied. This appeal followed.

DISCUSSION

Appellant's sole contention on appeal is that the award of interest on the judgment pursuant to both section 3291 and section 685.010, subdivision (a), violated article XV, section 1 of the California Constitution.

Section 3291 of the Civil Code provides in relevant part as follows: "In any action brought to recover damages for personal injury ... it is lawful for the plaintiff in the complaint to claim interest on the damages alleged as provided in this section. [p] If the plaintiff makes an offer pursuant to Section 998 of the Code of Civil Procedure which the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, 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." (Emphasis added.)

Section 685.010, subdivision (a), of the Code of Civil Procedure provides as follows: "Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied."

Article XV, section 1, of the California Constitution provides, in relevant part, as follows: "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.... [p] The provisions of this section shall supersede all provisions of this Constitution and laws enacted thereunder in conflict therewith." (Emphasis added.)

Whenever possible, statutes are to be interpreted as consistent with applicable constitutional provisions so as to harmonize both. (California Housing Finance Agency v. Elliott (1976) 17 Cal.3d 575, 594, 131 Cal.Rptr. 361, 551 P.2d 1193.) Thus, "legislation is presumptively constitutional and all doubts are to be resolved in favor of its validity. [Citations.]" (Kizziah v. Department of Transportation (1981) 121 Cal.App.3d 11, 18, 175 Cal.Rptr. 112.) "A statute should be judicially construed in such a manner to avoid unconstitutional results. [Citations.]" (American National Bank v. Peacock (1985) 165 Cal.App.3d 1206, 1212, 212 Cal.Rptr. 97.)

" 'The fundamental rule of statutory construction is that the court should ascertain the intent of the Legislature so as to effectuate the purpose of the law. [Citations.] Moreover, "every statute should be construed with reference to the whole system of law of which it is a part so that all may be harmonized and have effect." [Citation.] If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose. [Citation.] Such purpose will not be sacrificed to a literal construction of any part of the act.' .... [p] For purposes of statutory construction, the various pertinent sections of all the codes must be read together and harmonized if possible. (Channell v. Superior Court, 226 Cal.App.2d 246, 252 .).... Also relevant when the seeming inconsistencies appear in separate codes is the rule declaring that the codes blend into each other and constitute a single statute for purposes of statutory construction. [Citations.]" (Cannon v. American Hydrocarbon Corp. (1970) 4 Cal.App.3d 639, 648, 84 Cal.Rptr. 575, quoting Select Base Materials, Inc. v. Board of Equalization (1959) 51 Cal.2d 640, 645, 335 P.2d 672.)

Statutes must be given a reasonable construction which conforms to the legislative intent. They should be interpreted to promote the objective intended and consistent with wise policy, and the statutory language read as a whole, as well as the consequences that would flow from a particular result, must be considered. (Kahn v. Kahn (1977) 68 Cal.App.3d 372, 381, 137 Cal.Rptr. 332.)

Although interest is calculated from an earlier time under section 3291 than under section 685.010, under both statutes, interest continues to accrue until the judgment is satisfied. Appellant contends that if the court permits both sections to be applied to the same time period, the resulting combined interest rate of 20 percent from the time judgment is entered until the time it is satisfied is twice the constitutionally allowable rate.

In ascertaining the intent of the Legislature, we first look to the plain language of the sections involved.

Interest on a judgment pursuant to section 685.010, subdivision (a), accrues as long as a money judgment remains "unsatisfied." Interest pursuant to section 3291 accrues from the date of the statutory offer "until the satisfaction of judgment." On its face, an award of interest pursuant to both sections during the time after judgment offends the constitutional interest limitation.

We note also that the Legislature did not include any language in section 3291 indicating that the interest provided under that section's provisions, to accrue until satisfaction of a judgment, was in addition to interest on a judgment pursuant to section 685.010.

Respondent argument that the prejudgment "interest" allowed by section 3291 should be held to be "in the nature of damages" like the other sections of the same article which is entitled, "Interest as Damages." (See Lineman v. Schmid (1948) 32 Cal.2d 204, 209, 195 P.2d 408; see also 4 Witkin, Cal.Procedure (2d ed. 1971) Judgment, §§ 135-136, pp. 3284-3285.) By contrast, respondent asserts that section 685.010,...