Judge: Stephen P. Pfahler, Case: PC058046, Date: 2023-01-25 Tentative Ruling

Case Number: PC058046    Hearing Date: January 25, 2023    Dept: F49

Dept. F-49

Date: 1-25-23

Case #PC058046

CHALLENGE TO RENEWAL OF JUDGMENT

MOVING PARTY: Defendant, O’Reilly Auto Enterprises, LLC

RESPONDING PARTY: Plaintiff, Renee Vines

RELIEF REQUESTED

Motion to Challenge Renewal of Judgment

SUMMARY OF ACTION

On October 16, 2017, Plaintiff Renee Vines filed a FEHA action against Defendant O’Reilly Auto Enterprises, LLC for retaliation, race and age discrimination, age and race harassment, and failure to prevent discrimination, harassment, and retaliation.

A jury found in favor of Plaintiff on the retaliation and his failure to prevent retaliation claims. Plaintiff was awarded economic and noneconomic damages in the amount of $70,200 ($35,100 each). Judgment was entered on July 2, 2019.

On September 9, 2019, the court heard the motion for attorney fees. Plaintiff sought $809,681.25—calculated as $647,745 in fees multiplied by a 1.25 lodestar factor. The court awarded $129,540.44 based on a deduction of $129,583.23 in fees the court determined not reasonably incurred, an additional reduction of 75% from the remaining base due to Plaintiff only prevailing on 25% of the claims ($518,161.77 times 0.75% = $388,621.33), and a multiplication of the remaining hours at a reduced hourly rate.

Plaintiff appealed. The Court of Appeal reversed the order and remanded the case for further hearing “not inconsistent with the opinion.” Plaintiff was also awarded costs on appeal. On May 20, 2022, the court entered the parties’ stipulation regarding fees and costs on appeal. On June 29, 2022, the court awarded Plaintiff $518,161.77 in total attorney fees.

On September 6, 2022, Plaintiff filed three forms: a memorandum of costs after judgment, acknowledgment of credit, and declaration of accrued interest; application for renewal of judgment; and, declaration. On September 28, 2022, Plaintiff filed a notice of renewal of judgment.

RULING: Denied.

Request for Judicial Notice: Denied as to Ex. 1 & 4, Granted as to the Remainder.

Defendant O’Reilly Auto Enterprises, LLC moves to vacate the application for renewal of judgment. Defendant moves for relief on grounds that following the recalculation on the order granting attorney fees, the outstanding judgment has been paid in full. Defendant denies owing any additional prejudgment interest, and contends the calculated fees from prior to the appellate court reversal is an error. Plaintiff Renee Vines in opposition contends the fees were properly calculated from the date of entry of judgment, not the remittitur from the Court of Appeal. Defendant in reply reiterates the basis of the motion, and challenges the authority relied upon by Plaintiff. Defendant emphasizes the nature of the appellate decision as a reversal, rather than a modification, with interest therefore accruing from the date of the June 29, 2022, order.

Defendant contends its payment of the full $518,161.77, on July 20, 2022 satisfied the full, revised attorney fee award judgment. The argument relies on a finding that the interest began accruing following the remand from the court of appeal, and recalculated award issued on June 29, 2022. Because the judgment was paid within 30 days, the judgment was satisfied in full, the court should therefore vacate the renewal listing additional interest owed from September 9, 2019. Plaintiff counters that the interest accrued on the date of the original September 9, 2019 award of attorney fees, and Defendant fails to establish a basis of relief under Code of Civil Procedure section 683.170.

The renewal of judgment lists the $518,161.77 attorney fee award as the basis of the disputed balance. Plaintiff acknowledges payment of the $70,200 balance from the jury verdict, plus pre-judgment accrued on this amount, and $51,150.13 in costs. The $518,161.77 is identified as a “separate money judgment,” and therefore subject to prejudgment accrued interest. On this portion, Plaintiff lists receipt of $521,426.85 in payment, but seeks an additional $138,454.44 in interest from the September 9, 2019 attorney fee award (judgment), which includes the $45 filing fee. The right to collect interest on the subject “separate judgment” itself is not in dispute.

The parties disagree over the accrual date of the interest—September 9, 2019 or June 29, 2022—and therefore the total amount due listed in the renewal. The court first considers relevant portions of section 683.170.

“(a) The renewal of a judgment pursuant to this article may be vacated on any ground that would be a defense to an action on the judgment, including the ground that the amount of the renewed judgment as entered pursuant to this article is incorrect, and shall be vacated if the application for renewal was filed within five years from the time the judgment was previously renewed under this article.

…

“(c) Upon the hearing of the motion, the renewal may be ordered vacated upon any ground provided in subdivision (a), and another and different renewal may be entered, including, but not limited to, the renewal of the judgment in a different amount if the decision of the court is that the judgment creditor is entitled to renewal in a different amount.” (Code Civ. Proc., § 683.170.)

The court finds the statutory basis of the challenge proper under the plain language of the statute regarding an incorrect amount. The statute itself provides a foundation for relief, which under the language of the statute reasonably includes a challenge to the accrual date. The court therefore considers the standard for determining the date interest accrues on an attorney fee “judgment.”

Plaintiff cites to the latest case on the subject as the main basis for retroactively establishing the accrued interest date began on September 9, 2019, rather than June 29, 2022. “In the case of prevailing parties seeking costs and/or fees, we ultimately conclude that interest begins to run on the date their right to those items is determined, even if the exact amount is ascertained at a later time.” (Felczer v. Apple Inc. (2021) 63 Cal.App.5th 406, 411 (Apple).)

Apple specifically involved an award of attorney fees, which were subsequently reduced by the trial court. The appellate court was presented with the question of the accrual date of interest on the attorney fee award. The court specifically found the award constituted a “judgment” for purposes of fixing an interest accrual date, and consistent with California Rules of Court and federal law on the subject matter, concluded interest begins to accrue on the attorney fee judgment entry date. (Id. at pp. 415-418.)

Again, the right to recovery interest from the determined accrual date remains undisputed. The court finds however that the language relied upon by Plaintiff in Apple regarding the fixing of the date regardless of the lack of a fixed amount only presents a general a standard for interest accrual following the award of initial fees and costs. The Apple court was not presented with the more specific issue of fixing the accrual date for purposes of interest accumulation following a post-appellate review on a trial court order regarding attorney fees. (Ibid.) The court finds other cases more specifically addresses the issue of imposition of fixing the date following appellate review and subsequent trial court hearing.

“A judgment bears legal interest from the date of its entry in the trial court even though it is still subject to direct attack. (Citation.) When a judgment is modified upon appeal, whether upward or downward, the new sum draws interest from the date of entry of the original order, not from the date of the new judgment. (Citation.) On the other hand, when a judgment is reversed on appeal the new award subsequently entered by the trial court can bear interest only from the date of entry of such new judgment.” (Stockton Theatres, Inc. v. Palermo (1961) 55 Cal.2d 439, 442–443.) The distinction arises from the necessity of the fees and costs addressed by the reviewing court in either the prevailing party obtaining more fees as part of the underlying action, or fees uniquely incurred as part of the appeal.

“[A] judgment that has been modified on appeal accrues interest from the original date of entry of the judgment, but a judgment that has been reversed on appeal accrues interest from the date of entry of a new judgment following remand. (Citations.) ‘It is not the form of the order on the first appeal that controls, but the substance of that order.’ (Citation.)” (Lucky United Properties Investment, Inc. v. Lee (2013) 213 Cal.App.4th 635, 653.) When “interest accrues from the date that the trial court fixes the amount due or errs in fixing the amount due but that error is corrected on appeal without the need for further factfinding in the trial court. When, on the other hand, the amount due is not and cannot be fixed until after further factfinding on remand from appellate review, interest does not accrue until the final determination is made. In either case, it is the correct fixing of the amount of the award that triggers the accrual of interest.” (Id. at p. 654.)

“Whether an order by an appellate court is a modification or a reversal depends on the substance and effect of that order. (Citations.) An appellate court order is ‘a reversal in the legal sense’ when it reverses the trial court and remands an issue to the trial court for further hearing and fact finding necessary to the resolution of the issue forming a basis for appeal. (Citation.) The reversal of a trial court judgment on grounds of insufficient evidence is also a substantive reversal.” [¶] “When, however, an order stated in terms of reversal amends a trial court order on remand to ‘state what it should have stated on th[e] date’ of the original order, it is ‘in law and in fact, a modification.’ (Citation.) An order can be ‘couched in terms of a reversal with directions ... [but have] the legal and practical effect of modifying the original award.’ (Citation.)” (Chodos v. Borman (2015) 239 Cal.App.4th 707, 713.)

Defendant relies on a characterization of the appellate court order as a “reversal” versus a “modification.” Defendant contends the June 29, 2022, Appellate Court order required a recalculation of the fee award in context of the entire action, including the unsuccessful portion of the case, as required under public policy. The amount owed was therefore not known until the remand and rehearing by the trial court. Plaintiff counters that the Appellate Court order constituted a modification in that that the $129,583.23 reduction from the requested amount was left undisturbed, and the court was instructed to conduct a further hearing on the original remaining balance.

The Court of Appeal specifically found the trial court improperly reduced the fee by 75%. In reversing the order, the Appellate Court instructed the trial court to determine the fees as if the fees incurred on the non-successful claims were sufficiently related or factually intertwined. More specifically, the opinion instructed the court make the determination based on the “probative” process in investigating the common core of facts rather than drawing “historical fact” distinctions following the verdict. The Appellate Court left the $129,583.23 undisturbed, and only returned the case on the 75% reduction of the remaining balance ($647,745 minus $129,583.23 = $518,161.77).

In considering the instructions from the Court of Appeal, the court considered the standard for employment fee cases, including unsuccessful claims, based in part of the “results obtained” criteria. “This factor is particularly crucial where a plaintiff is deemed ‘prevailing’ even though he succeeded on only some of his claims for relief. In this situation two questions must be addressed. First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?” (Hensley v. Eckerhart (1983) 461 U.S. 424, 434.)

“‘Where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee.’ … ‘Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation.... In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. [Citation.]’ (Citation).” (Wysinger v. Automobile Club of Southern California (2007) 157 Cal.App.4th 413, 430; Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990.)

Under the guidance of the Court of Appeal order, the trial court specifically found the fees intertwined in bringing the entire action regardless of whether Plaintiff prevailed on all claims. The court declined to find any decoupling of fees in context the jury verdict. The court therefore awarded $518,161.77 based on both the reasonableness of fees and rejection of any application of a negative or positive multiplier.

The order increasing the attorney fees constituted a modification: the Court of Appeal specifically found the reward inadequate due to the failure to sufficiently take into account public policy requirements of the “results obtained” criteria on the unsuccessful claims. The increased fee award engaged in no new fact-finding relative to the case, and directly reflects back on the fees incurred in bringing the case to trial, rather than an increase in fees unique to the appellate process. The court therefore considers the Court of Appeal opinion and subsequent June 29, 2022, order as an order correcting “‘what it should have stated on th[e] date’ of the original order.” (Chodos v. Borman , supra, 239 Cal.App.4th at p. 713; Stockton Theatres, Inc. v. Palermo, supra, 55 Cal.2d at pp. 442–443; Snapp v. State Farm Fire & Cas. Co. (1964) 60 Cal.2d 816, 821-822; Lucky United Properties Investment, Inc. v. Lee , supra, 213 Cal.App.4th at pp. 653-654; Munoz v. City of Union City (2009) 173 Cal.App.4th 199, 207.)

The court therefore denies the motion to vacate the renewal of the judgment fixing the interest accrual date at June 29, 2022, and allows the calculation of interest from the date of the original judgment date of September 9, 2019.

Defendant to give notice.