Judge: Malcolm Mackey, Case: 20STCV22741, Date: 2022-09-15 Tentative Ruling

Case Number: 20STCV22741    Hearing Date: September 15, 2022    Dept: 55

FOOTHILL/HUBBARD, LLC v.  AA WIRELESS, INC., d/b/a AT&T        20STCV22741

Hearing Date:  9/15/22,  Dept. 55

#5:   MOTION FOR PREJUDGMENT INTEREST.

Notice:  Okay

Opposition

MP:  Plaintiff

RP:  Defendants

Summary

On 6/16/20, Plaintiff filed a Complaint alleging:

9. On or about April 2020, Defendants breached the Lease and abandoned the Property and since that time Defendants have failed and refused, despite demand by Plaintiff, to pay rents and other charges past due and becoming due under the terms and conditions of the Lease.

10. Defendants have materially breached the Lease by, inter alia, commencing in April 2020 failing to pay rent and/or additional charges as they came due; performing unauthorized alterations and/or additions to the Property; and improper subleasing of the Property.

(Complaint, ¶ 9.)

MP Positions

Moving party requests prejudgment interest in the amount of $16,036.44, on grounds including the following:

·         Plaintiff prevailed against Defendants AA Wireless and Prime Communications, LP on its cause of action for breach of contract claim.

·         Plaintiff is entitled to prejudgment interest pursuant California Civil Code § 3287 and the contractual provisions of the lease.

·         The amount of damages for unpaid rent are undisputed.

·         Plaintiff is entitled to an award of prejudgment interest from the date of breach (April 1, 2020) through the entry of judgment date (March 16, 2022).

RP Positions

Opposing party advocates denying, for reasons including the following:

·         Because Plaintiff did not recover the full amount that it sought, the awarded damages were not certain prejudgment.

·         Section 3287 does not authorize prejudgment interest as a matter of law where the amount of damages depends upon a judicial determination based upon conflicting evidence. (Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 434-35.

·         Plaintiff sought numerous items of damages, including “recapture” of free rent, tenant improvement allowance, and broker’s commissions.

·         Interest can only be computed as the amounts become due and not on an accelerated basis as though the totality of the rent for the remaining term of the lease from April 1, 2020 was due and owing on that date.  (Lease ¶ 13.5).  Interest must only be computed on the 31st day after each month’s rent was due.  Plaintiff erroneously claims that that the lump sum of $81,974.85 was due on April 1, 2020, and pre-judgment interest must be calculated as of that date.

Tentative Ruling

The motion is granted, as prayed.

The Judgment was based on sums capable of being made certain by calculation-- 18 months of rent owed in the amount of $72,567.90.

The other severable theories were denied and not part of the analysis  (3/1/22 Minutes, p. 2).

An opinion summarizes law applicable to interest on liquidated damages, as follows:

The applicable statute provides that “[e]very person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day.” (§ 3287, subd. (a).)

Damages are deemed certain when, though the parties dispute liability, they essentially do not dispute the computation of damages, if any. ( Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 958, 57 Cal.Rptr.2d 141.) “The statute does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, ‘depends upon a judicial determination based upon conflicting evidence and is not ascertainable from truthful data supplied by the claimant to his debtor.’ [Citations.]” (Fireman's Fund Ins. Co. v. Allstate Ins. Co. (1991) 234 Cal.App.3d 1154, 1173, 286 Cal.Rptr. 146.)

Employers Mut. Cas. Co. v. Philadelphia Indem. Ins. Co. (2008) 169 Cal.App.4th 340, 354-55.

Prejudgment interest is not awardable where the amount of damages, as opposed to the determination of liability, depends upon a determination based upon conflicting evidence, and is not ascertainable from truthful data supplied the claimants.  Employers Mut. Cas. Co. v. Philadelphia Indem. Ins. Co. (2008) 169 Cal.App.4th 340, 354-55.

Distinguishably, a cited opinion did not necessarily require denying prejudgment interest based on a discrepancy between a demand and recovery, and did not address severable theories, as illustrated by the following opinion excerpt:

 Further, the cases indicate that where there is a large discrepancy between the amount of damages demanded in the complaint and the size of the eventual award, that fact militates against a finding of the certainty mandated by Civil Code section 3287, subdivision (a). (See Chesapeake Industries, Inc. v. Togova Enterprises, Inc., supra, 149 Cal.App.3d at p. 910; Marine Terminals Corp. v. Paceco, Inc., supra, 145 Cal.App.3d at p. 997, where a small discrepancy was deemed unimportant.)

In the case at bench, the amount of the original demand was $ 55,000. The amount eventually found due after the receipt of all evidence was $ 7,836. This large discrepancy is inconsistent with a sum certain or capable of being made certain at the time of the breach which was the basis of this civil action.

Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 435-436.

Finally, the lease provision for calculating interest for late payments, does not control where the motion is alternatively based upon a statutory provision providing for another calculation.  Civil Code section 3287(a).