Wertheim, LLC v. Currency Corp.

Decision Date14 October 2021
Docket NumberB310650,B304655
PartiesWERTHEIM, LLC, Plaintiff and Respondent, v. CURRENCY CORPORATION, Defendant and Appellant. WERTHEIM, LLC, Plaintiff and Appellant, v. CURRENCY CORPORATION, Defendant and Respondent.
CourtCalifornia Court of Appeals Court of Appeals

Order Filed Date 11/12/21

APPEALS from orders of the Superior Court of Los Angeles County. No. BC328263, Edward B. Moreton, Jr., Judge, and Stuart M. Rice, Judge.

Shaw Koepke & Satter, Jens B. Koepke for Defendant and Appellant and for Defendant and Respondent.

The Law Offices of F. Jay Rahimi, F. Jay Rahimi; Matthew D Kanin; Alvarado Smith, W. Michael Hensley for Plaintiff and Respondent and for Plaintiff and Appellant.

ORDER MODIFYING OPINION AND DENYING REHEARING

THE COURT:

It is ordered that the opinion filed herein on October 14, 2021, be modified as follows:

At the end of page 12 extending to page 13, the last sentence is modified to read: "However, Wertheim also modified that form by interlineation, specifying that the acknowledgement applied only to a postjudgment interest payment made by Currency."

On page 16, the last sentence of the first paragraph is modified to read: "Equity does not support an award of Wertheim's appellate attorney's fees."

On page 16, the first sentence of the third paragraph is modified to read: "After the case was submitted, we requested supplemental briefing on whether in evaluating Wertheim's attorney fee requests we may consider equitable principles given the disproportion of the fees requested and the original $190, 718 judgment."

These modifications effect no change in the judgment. Appellants' petitions for rehearing are denied.

CHANEY, J.

We have before us in these consolidated appeals three attorneys' fees motions by a judgment creditor seeking over $800, 000 for its efforts to enforce a 2009 judgment entered after a jury awarded it approximately $39, 000. Even standing alone these fee claims are striking in relation to the amount of the underlying judgment, but they also must be considered in light of the more than 40 appeals occasioned by the parties' competing businesses in the Second District's docket over the last dozen years.[1]

In the current litigation, the trial court awarded Wertheim LLC's attorney fees incurred in successfully appealing an order made during judgment enforcement proceedings years ago. Currency Corporation appeals that award, arguing the fees were unreasonable and unnecessary. Because Wertheim's litigation strategy has been unnecessary and objectively unreasonable, we reverse the order awarding its post-appeal attorneys' fees.

The trial court also denied two subsequent motions by Wertheim, the first of which involved postjudgment enforcement fees not encompassed within its earlier motion, and the second of which sought attorneys' fees in connection with enforcement of an appeal bond.

The trial court concluded that the postjudgment enforcement fee motion was untimely, and that both motions sought fees that were unnecessarily incurred. We conclude that the motion for post-judgment enforcement fees was timely, but also hold that most of the fees sought in these two subsequent motions were not necessarily or reasonably incurred and, hence, unrecoverable. Accordingly, while affirming the trial court's denial of fees as to the appeal bond fee motion, we reverse, in part, its denial of fees as to postjudgment enforcement fees.

BACKGROUND

These appeals involve Wertheim's three motions for attorney fees incurred in this lawsuit and a separate but related suit.

A. Original Action and 2009 Judgment
1. Lawsuit

The parties are engaged in dozens of disputes concerning the assignment of royalty rights from third parties. In 2009, a jury found Currency liable to Wertheim for breach of contract and awarded it $38, 554.48. (The "original action.") The trial court entered judgment, including interest and costs, as amended, in the amount of $190, 718.48. Both parties appealed, and in May 2012 we affirmed the judgment and issued a remittitur in July 2012. (Wertheim v. Currency Corp. (May 22, 2012, B218547) [nonpub. opn.] (Wertheim I).)

2. First Postjudgment Motion

On March 10, 2016, during its enforcement efforts, Wertheim moved for postjudgment attorney fees incurred to date. (The postjudgment motion.) Such a motion must be filed before the subject judgment has been satisfied. (Gray1 CPB, LLC v. SCC Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 891 (Gray1).) The trial court denied the motion as untimely because the availability of an as-yet unpaid appeal bond satisfied the judgment, and any motion for attorney fees made after that bond became available was untimely.

Wertheim appealed and we reversed, concluding that for timing purposes, a judgment is satisfied not when an appeal bond becomes available but when payment is actually tendered. (Wertheim LLC v. Currency Corp. (2019) 35 Cal.App.5th 1124 (Wertheim IV).)[2] We directed the trial court to consider the postjudgment motion "on the merits." We further directed that Wertheim recover its costs on appeal, which Currency paid.

3. Post-Appeal Motion

On remand from Wertheim IV, Wertheim moved under Civil Code section 1717 for attorney fees incurred solely in prosecuting the Wertheim IV appeal. (The post-appeal motion.) It supported the motion with the declarations and time records of three attorneys who worked on the appeal.

Currency opposed the motion, contending that because Wertheim IV was an appeal from an order made during postjudgment collection efforts, not from the judgment itself (which had been appealed in Wertheim I), any award of attorney fees incurred in prosecuting that appeal was governed by Code of Civil Procedure section 685.040, not Civil Code section 1717. Code of Civil Procedure section 685.040 has a requirement which Civil Code section 1717 does not: only fees that were necessarily incurred are recoverable. Currency argued Wertheim was unable to satisfy the requirement of Code of Civil Procedure section 685.040 that such fees be necessary. Currency also sought a continuance to conduct discovery in to the reasonableness of fees sought.

The trial court denied the continuance, found that Civil Code section 1717 governed (which requires no showing of necessity), and found Wertheim's attorney fees were for the most part reasonable. It therefore granted Wertheim's motion and awarded it $241, 399.01.

Currency appeals that order.

B. Bond Action

1. Lawsuit

Currency secured the 2009 judgment in the original action by an appeal bond. Liability on a bond may be enforced expeditiously on noticed motion filed within a year after any appeal is finally determined, or more laboriously by a separate lawsuit. (Code Civ. Proc., § 996.440.)[3] After we affirmed the 2009 judgment (Wertheim I), we issued a remittitur in July 2012. This gave Wertheim until July 2013 to file a motion to enforce liability on the bond. However, Wertheim waited until December 2013 to do so, which the trial court found was untimely. Wertheim thereafter initiated a new lawsuit against the bond company to recover on the bond. (The bond action.)

The bond company interpleaded the bond funds and was awarded attorney fees, which our colleagues in Division Five affirmed. (Wertheim, LLC v. The Bar Plan Mutual Ins. Co. (Dec. 1, 2016, B268539) [nonpub. opn.] (Wertheim II).)

After trial in the bond action, Currency moved for an order allocating the entire amount of the bond company's attorney fees to Wertheim, which the trial court granted, finding allocation of the fees solely to Wertheim was warranted in part because Wertheim had made an untimely claim on the appeal bond.

Division Five affirmed this order as well, holding, "[Wertheim's] delay in seeking to recover on the Appeal Bond is alone sufficient for us to conclude the trial court's allocation decision was not an abuse of discretion. The lawsuit in this case resulted solely from [Wertheim's] failure to timely file a motion in the Underlying Proceeding within a year of the remittitur issuing. Had [Wertheim] done so, the fees incurred by Insurer would not have been incurred (or would have been negligible) and the attorney work necessary in any such enforcement action would have been almost assuredly far less expensive." (Wertheim, LLC v. Currency Corp. (Aug. 25, 2017, B270926) [nonpub. opn.] (Wertheim III).)

The parties and trial court thereafter negotiated a judgment disbursing $131, 000 of the interpleaded funds to Wertheim "in satisfaction of" the underlying, 2009 judgment, "inclusive of principal and interest." That disbursement did not include "post-judgment interest from Currency as to amounts due under [a] March 11, 2016 Order." To cover this interest, Currency paid Wertheim $14, 300 in March 2019.

After this payment, Wertheim on April 18, 2019, filed an acknowledgment of full satisfaction of the judgment in the bond action.

C. Back in the Original Action

As stated above, on March 10, 2016, during its enforcement efforts, Wertheim moved for postjudgment attorney fees incurred to date. Its efforts continued beyond that date, however, and it incurred further attorney fees.

On February 13, 2020, Wertheim filed an acknowledgment of satisfaction of the judgment in this action, checking the box on Judicial Council form EJ-100 reflecting that the judgment was satisfied in full. However, Wertheim also modified the form by interlineation, specifying that "[t]his acknowledgment applies ONLY to that certain Memorandum of Costs On Appeal (Appeal BC277633) filed September 24, 2020 (Attachment 5a) as to Rule 8.278 costs only, and not any other judgment issued or pending in the above-referenced action or any other action." In other words, Wertheim...

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