Judge: Christopher K. Lui, Case: 19STCV24085, Date: 2022-09-29 Tentative Ruling

Case Number: 19STCV24085    Hearing Date: September 29, 2022    Dept: 76

            This is an action for breach of a promissory note and guaranty thereof, including allegations of fraud in the inducement and fraudulent transfer.

            Defendants Raven Ridge Development, LLC, David Schuman and Richard Nielsen filed a Cross-Complaint alleging that Plaintiff has failed to pay Cross-Complainants their share of a Development Fee pursuant to an agreement whereby Cross-Defendants would provide funding, and Cross-Complainants would develop real properties.

            The Court granted Plaintiff Monrovia Villas, LLC's motion for summary adjudication. Plaintiff brings a motion for prejudgment interest.  

TENTATIVE RULING

Plaintiff Monrovia Villas, LLC’s motion for prejudgment interest is DENIED without prejudice. 

ANALYSIS

Motion For Prejudgment Interest

            Following the court’s grant of Plaintiff Monrovia Villas, LLC’s motion for summary adjudication, Plaintiff brings a motion for prejudgment interest against Defendants Raven Ridge Development, LLC, Old Agoura Apartments, LLC, David Schuman, and Richard Nielsen.          

            Plaintiff seeks an award of $240,164.66 pursuant to Civil Code § 3287 on the principal amount of $680,000 at the rate of 10% per annum from July 9, 2019 until the date of this motion, September 8, 2022. The interest calculations are set forth in the Memorandum of Points and Authorities, at Pages 4-5. 

            ¶ 10(i) of the Promissory Note provides in pertinent part that “[a]ll accrued interest not paid prior to the occurrence of the Event of Default, shall be added to the principal, shall become and be treated as a part thereof, and shall also bear interest at the Default Interest Rate.” (Declaration of Joshua M. Kimura, Exh. A, ¶ 10(i) [bold emphasis added].)

            Here, Plaintiff’s calculation seek to recover pre-judgment interest upon post-default interest. The Promissory Note does not provide for such double recovery, i.e., adding interest accruing upon the principal amount to be added to the principal amount for purposes of pre-judgment interest. Plaintiff has not demonstrated an entitlement to recover such interest upon interest.

            As such, the motion for prejudgment interest is DENIED without prejudice.