Wertheim, LLC v. Currency Corp.

• Decision Date: 06 June 2019
• Docket Number: B277633
• Citation: 35 Cal.App.5th 1124,248 Cal.Rptr.3d 211
• Court: California Court of Appeals Court of Appeals
• Parties: WERTHEIM, LLC, Plaintiff and Appellant, v. CURRENCY CORPORATION, Defendant and Respondent.

35 Cal.App.5th 1124

248 Cal.Rptr.3d 211

WERTHEIM, LLC, Plaintiff and Appellant,

v.CURRENCY CORPORATION, Defendant and Respondent.

B277633

Court of Appeal, Second District, Division 1, California.

Filed June 6, 2019

The Law Offices of F. Jay Rahimi, F. Jay Rahimi, Woodland Hills; Matthew D. Kanin, Beverly Hills; AlvaradoSmith, W. Michael Hensley, Santa Ana, for Plaintiff and Appellant.

Krane & Smith, Jeremy D. Smith, Daniel L. Reback, Encino; Diem Law, Robin L. Diem, Los Angeles, for Defendant and Respondent.

CHANEY, Acting P. J.

After Wertheim LLC obtained a money judgment against Currency Corporation, Currency obtained a bond to secure the judgment and appealed. We affirmed the judgment and issued a remittitur in July 2012. Wertheim sought to satisfy the judgment from the appeal bond but Currency blocked disbursement. After the issuer deposited the bond funds with the superior court and withdrew itself from the dispute, Wertheim and Currency litigated their respective entitlement to the funds, resulting in another trial and two more appeals that ultimately determined the parties' rights under the judgment.

In 2016, Wertheim moved for postjudgment enforcement costs pursuant to Code of Civil Procedure section 685.080,¹ which requires that such costs be sought by noticed motion before the judgment is "satisfied." The trial court denied Wertheim's motion as untimely on the ground that the bond issuer's deposit of appeal bond funds with the superior court satisfied the judgment long before Wertheim's motion, notwithstanding Currency's successful efforts to forestall disbursement.

We reverse. Disputed funds on deposit with the superior court do not satisfy a judgment for purposes of a postjudgment motion for costs. Wertheim's motion was therefore timely, and we remand the matter for the trial court to determine its merits. Additionally, Currency has moved this court for monetary sanctions against Wertheim and its counsel and to dismiss the appeal based on being frivolous. We have considered this motion and deny it on the merits.

BACKGROUND

A. Original Lawsuit

We recount some of the facts from an opinion authored by Division Five of this District in the second of two related appeals, which we will call Wertheim III . ( Wertheim, LLC v. Currency Corp. (Aug. 25, 2017, B270926) 2017 WL 3668985 [nonpub. opn.].)

In 2009, a jury in Department 44 of the superior court found Currency liable to Wertheim for breach of contract, and awarded it $ 38,554.48. The trial court entered judgment in this amount in June 2009, and in February 2010 amended the judgment to add $ 152,164 in attorney fees and costs, bringing the total to $ 190,718.48. Both parties appealed.

To stay enforcement of the judgment during pendency of the appeal Currency obtained an appeal bond from The Bar Plan Mutual Insurance Company (Insurer) in the amount of $ 286,078. (See § 917.1 [the perfecting of an appeal does not stay enforcement of the judgment absent an undertaking].)

We affirmed the judgment in May 2012, and issued a remittitur on July 25, 2012. ( Wertheim v. Currency Corp. (May 22, 2012, B218547) 2012 WL 1854944 [nonpub. opn.] ( Wertheim I ).)

Nearly 16 months later, on November 18, 2013, Wertheim submitted a claim to Insurer requesting payment of $ 275,000.37 from appeal bond funds, comprising the judgment of $ 190,718.48 plus interest at 10 percent. (See §§ 695.210, subd. (b), 685.010, subd. (a) [the amount required to satisfy a money judgment includes the judgment plus interest].) Currency opposed release of any funds on the ground that the amount Wertheim sought was excessive and failed to take into account offsets arising from six liens Currency held against Wertheim from judgments in other cases.

Wertheim moved in department 44 to enforce liability on the appeal bond, which Currency also opposed. The court denied the motion as untimely under section 996.440, subdivision (b), which requires that a motion in the original action to enforce liability on a bond be brought within a year after any appeal is finally determined.²

On December 17, 2013, while Wertheim's motion to enforce liability on the appeal bond was pending, Insurer deposited a check in the full amount of the appeal bond ($ 286,078) to the Clerk of the Los Angeles Superior Court for disbursement "as the Court sees fit."

B. Parallel Action

Although Wertheim's motion to enforce liability on the appeal bond was untimely under section 996.440, section 996.430 provides that liability on a bond may also be enforced by way of a separate lawsuit, to which both the principal and surety must be joined.³ Accordingly, Wertheim filed a new lawsuit in February 2014 against Insurer and Currency (the parallel action), which was assigned to department 39.

Insurer, now a defendant, responded by filing a motion pursuant to section 386.5, which allows a defendant holding money in which it claims no interest to apply for an order discharging it from liability and dismissing it from the action (a deposit and discharge motion).⁴ Department 39 ultimately granted the motion, discharged Insurer from liability, awarded it attorney fees (charged solely to Wertheim), and dismissed it from the case.

After our colleagues in Division Five affirmed these orders ( Wertheim, LLC v. Bar Plan Mut. Ins. Co. (Dec. 1, 2016, B268539) 2016 WL 7011343 [nonpub. opn.] ( Wertheim II )), the parallel action proceeded to trial on the only remaining issues: When did interest on the judgment begin and end, and on what principal amount?

Wertheim contended interest began accruing on the full amount of the judgment ($ 190,718.48) in June 2009, when judgment was entered in the original proceeding, and had never ceased because Wertheim had not yet been paid. Currency admitted that interest on the original judgment ($ 38,554.48) began accruing in June 2009 but argued interest on the costs portion of the amended judgment ($ 152,164) did not begin to accrue until February 2010, when they were added. Currency further argued that interest ceased accruing in July 2012, when our remittitur issued in the original proceeding.

Department 39, Judge Feffer, ultimately found, as pertinent here, that the judgment was "satisfied" on July 25, 2012, the date our remittitur issued, because the funds were theoretically available to Wertheim then, and interest stopped running at that time. The court entered judgment accordingly, and both sides appealed. (The judgment also included an offset of $ 5,161.56 for two judgment liens held by Currency.)

Division Five held that interest on the full judgment, including the costs portion, began accruing in June 2009, when the original judgment was entered. ( Wertheim III, supra , B270926, at pp. 11-12.)

This ruling effectively vindicated Wertheim's November 18, 2013 claim on the appeal bond for $ 275,000.37.

Division Five agreed with the trial court that interest stopped running when the judgment was satisfied, but held contrary to the trial court that satisfaction occurred not in July 2012, when our remittitur issued, but December 2013, when Insurer deposited appeal bond funds with the superior court. ( Wertheim III, supra , B270926, at pp. 16-17.) (Division Five also affirmed the trial court's refusal to apply a third lien, in the amount of $ 8,535.14, to offset the judgment, as Currency had failed to perfect it.)

C. Motion for Postjudgment Costs

On March 10, 2016, while the cross-appeals in Wertheim III were pending, Wertheim moved in the original proceeding for postjudgment attorney fees incurred to date pursuant to section 685.080. Such a motion must be filed before the subject judgment has been "satisfied."⁵

Department 44, considering itself bound by department 39's yet-extant finding that the judgment was satisfied in July 2012—which Wertheim III later reversed—denied the motion as "untimely due to the finding of [department 39] that the judgment was satisfied in [July] 2012."

Wertheim now appeals this ruling.

Wertheim filed its opening appellate brief before Wertheim III was decided, and in it addressed issues that have since been obviated by that opinion.

Currency filed its respondent's brief after Wertheim III , raising the new argument that even if, as Division Five held, judgment satisfaction occurred in December 2013 rather than July 2012, Wertheim's motion for postjudgment costs was still untimely because it was not made until March 10, 2016.

To afford the parties an opportunity to address the impact of Wertheim III , we invited and received supplemental briefs from both sides.

DISCUSSION

Wertheim contends the trial court erred in finding its motion for postjudgment costs was made after the judgment was satisfied, because to this day the judgment remains unpaid. It argues Wertheim III 's holding that the judgment was satisfied in December 2013 pertains only to cessation of interest, not to the timeliness of postjudgment motions. We agree.

A. Standard of Review and Relevant Law

We review both statutory interpretation and entitlement to attorney fees de novo. ( Conservatorship of Ribal (2019) 31 Cal.App.5th 519, 524, 243 Cal.Rptr.3d 177.)

A judgment between two parties is a bilateral construct that finally determines the rights and corresponding obligations of each side. (See § 577 ["A judgment is the final determination of the rights of the parties in an action or proceeding"].) " ‘There can be but one final judgment in an action, and that is one which in effect ends the suit in the court in which it was entered, and finally determines the rights of the parties in relation to the matter in controversy.’ " ( Bank of America Nat. Trust & Savings Ass'n v. Superior Court (1942) 20 Cal.2d 697, 701-702, 128 P.2d 357.)

"Satisfaction" of such a judgment is also necessarily bilateral, as it both compensates the judgment creditor for harm inflicted by the judgment debtor and insulates the debtor against further claims from the creditor. (See Borba Farms, Inc. v. Acheson (1988) 197 Cal.App.3d 597, 605, 242 Cal.Rptr. 880 [satisfaction of a...