Judge: Michael E. Whitaker, Case: 21SMCV01850, Date: 2024-03-19 Tentative Ruling

Case Number: 21SMCV01850    Hearing Date: March 19, 2024    Dept: 207

TENTATIVE RULING

MOTION

On January 30, 2024, following a jury trial, the Court entered judgment in favor of Plaintiff Innerspin Marketing, LLC (“Plaintiff”) and against Defendant Consequent Capital Management, LLC (“Defendant”) in “the sum of $448,000.00, with prejudgment interest, costs and attorneys’ fees in amounts to be determined through post-trial proceedings.”  (January 30, 2024 Judgment.) 

Plaintiff now moves to fix the amount of prejudgment interest to be awarded.  Defendant opposes the motion and Plaintiff replies.

ANALYSIS

            Plaintiff seeks $194,145.71 in prejudgment interest, representing a 10% annual interest rate on the outstanding balances of twenty-six invoices that were transmitted between July 2017 and March 2021, as outlined in a chart on page 6 of the Motion. 

            Defendant argues (1) Plaintiff cannot recover any prejudgment interest, because the issue was not presented to the jury; (2) if prejudgment interest is allowed, the interest rate should be capped at 7%, as Plaintiff voluntarily dismissed with prejudice the breach of contract claim, and prevailed at trial only as to the common counts; and (3) the start dates Plaintiff used in the chart are premature.

            Entitlement to Prejudgment Interest Generally

            Civil Code section 3288 provides:  “In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.” 

In support of Defendant’s assertion that the issue of prejudgment interest was waived by Plaintiff’s failure to present it to the jury, Defendant cites only to CMI Integrated Techs., Inc. v. Xzeres Corp. (C.D. Cal. Apr. 29, 2016) No. CV15805RGKFFMX, 2016 WL 7058091, at *3), an unpublished nonbinding federal district court case, for the proposition that only a jury, and not the Court can award prejudgment interest.

            But California courts have held that where the amount of loss and the date from which interest should be computed are capable of definite ascertainment, a court does not abuse its discretion in awarding prejudgment interest pursuant to Civil Code section 3288.  (See e.g., Peskin v. Phinney (1960) 182 Cal.App.2d 632, 636.)  As discussed below, the amount of loss was determined by the jury and the dates from which interest should be computed are capable of definite ascertainment. 

            Moreover, the judgment itself provides that Plaintiff may recover prejudgment interest.  Therefore, Plaintiff is entitled to prejudgment interest.

            Prejudgment Interest Rate

            Plaintiff seeks an interest rate of 10%, pursuant to Civil Code section 3289, subdivision (b), which provides, “If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.”      

The California Constitution provides, “The rate of interest upon the loan or forbearance of any money, goods, or things in action, or on accounts after demand, shall be 7 percent per annum[…]”  (Cal. Const. art. XV, § 1.)

Defendant argues that the 10% interest rate applicable to breach of contract does not apply, because Plaintiff voluntarily dismissed the breach of contract claim and prevailed at trial only as to their common counts, and therefore the default 7% interest rate applies.

The Court agrees with Defendant.  The proper applicable interest rate is 7%, not 10%.

Dates Interest Began

Plaintiff calculated interest on the outstanding balance of each invoice from the date of each invoice to the date of the judgment.  Defendant contends this is erroneous, because a jury needs to determine when the amounts actually became due.  The Court disagrees.

Each invoice indicates that the amount payable is “Due Upon Receipt.”  (See Carter Decl. ¶ 2 and Exhibits thereto.)  Therefore, Plaintiff appropriately calculated interest from the date of each invoice.

CONCLUSION

            Because Plaintiff calculated the requested interest using a 10% interest rate, as opposed to a 7% interest rate, Plaintiff’s request to fix the prejudgment interest is denied without prejudice.  Plaintiff may resubmit a request in conformance with this order. 

            Plaintiff shall provide notice of the Court’s ruling and file a proof of service of such.  Further, Plaintiff is ordered to file an amended proposed judgment in conformance with the Court’s ruling.

DATED:  March 19, 2024                                                      ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court