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Bear Creek Master Assn. v. Edwards

California Court of Appeals, Fourth District, Second Division
Jul 17, 2007
No. E040210 (Cal. Ct. App. Jul. 17, 2007)

Opinion


BEAR CREEK MASTER ASSOCIATION, Plaintiff, Cross-Defendant and Respondent, v. PARLAN L. EDWARDS et al., Defendants, Cross-Complainants and Appellants. E040210 California Court of Appeal, Fourth District, Second Division July 17, 2007

NOT TO BE PUBLISHED

APPEAL from the Superior Court of Riverside County. Gloria Trask, Judge. Super.Ct.No. RIC338575

Law Office of Lucila Enriquez and Lucila Enriquez for Plaintiff, Cross-Defendant and Respondent.

Fiore, Racobs & Powers, Peter E. Racobs, and Amanda N. Owens, for Defendant, Cross-complainant, and Appellant.

OPINION

McKINSTER Acting P.J.

Defendant and appellant Parlan L. Edwards (Edwards), as one of the trustees of the Parlan L. Edwards and Gloria Renico Edwards Family Trust (the Trust), appeals certain postjudgment orders of the Superior Court in an action brought by plaintiff and respondent Bear Creek Master Association (Bear Creek). For the reasons which follow, we affirm.

FACTS

Bear Creek is the master homeowners’ association for the Bear Creek development, a gated community development in Riverside County. Country Club Villas (CCV) is the homeowners’ association, or subassociation, within the Bear Creek master development. Edwards had acquired, through foreclosure, a parcel of property located within the CCV subassociation, inside the Bear Creek master development. The parcel Edwards acquired was planned for eight condominium units, but they had not yet been built.

Bear Creek filed a request for this court to take judicial notice of its own records, consisting of certain orders of this court, a remittitur issued by this court in an earlier related appeal, and this court’s written opinion in that earlier appeal. We grant the motion. (Evid. Code, § 452, subd. (d) [court may take judicial notice of relevant court records].)

Bear Creek sent homeowners’ association ballots and notices of association assessments to Edwards. Edwards voted the ballots, but did not pay the assessments. Edwards took the view that, without a condominium building, there was no condominium “unit.” He therefore owned no condominium “units” and he had no duty to pay assessments. He also testified that, in the absence of any condominium “units,” he would not have the right to vote in homeowners’ association elections, and he argued that he had voted his Bear Creek association ballots only to “‘protect’” himself. After making this argument, however, he still faxed proxy votes for Bear Creek association elections, although he also claimed that he immediately faxed counter-instructions cancelling his proxy votes.

Bear Creek notified Edwards of delinquency of the association assessments, filed lis pendens until its lien could be established, and filed the action below for judicial foreclosure, foreclosure of equitable lien, and breach of contract.

CCV, the subassociation, had preceded Bear Creek in filing similar claims to foreclose, based upon unpaid subassociation dues, and had obtained a default judgment against Edwards in that action. Edwards filed a cross-complaint in the Bear Creek action, naming both Bear Creek and CCV as cross-defendants, and seeking to set aside the default judgment in the CCV action. CCV appeared on the second amended cross-complaint in the Bear Creek action. The CCV default action had never been tried together with the Bear Creek action. Edwards’s cross-complaint as to CCV solely attacked the validity of the separate default judgment action. It resulted in a wholly separate appeal, not involving Bear Creek. We agreed with Edwards that the default judgment should have been vacated. We reversed the cross-complaint as to CCV, and ordered the trial court to instead enter an order granting the motion to vacate the default judgment. The remand of Edwards’s cross-complaint as to CCV required only the entry of such an order; its true effect was to set aside the default judgment in the CCV action, which was a wholly separate action. Our remittitur in the appeal from the cross-action as to CCV awarded costs on appeal to Edwards. The remittitur was issued September 16, 2005. While the appeal was pending, however, on May 27, 2003, the cross-complaint as to CCV was severed from the Bear Creek action altogether, and consolidated with the separate CCV action. Both the CCV action and the Edwards cross-action were assigned to a judge different from the judge who tried the main Bear Creek action.

Edwards’s cross-complaint as to Bear Creek was like wise disposed of separately, and not considered with the main Bear Creek matter. It was dismissed as a sanction for discovery violations, and resulted in a separate appeal. We affirmed the dismissal of the cross-complaint as to Bear Creek. We issued the remittitur in that appeal on November 3, 2005, awarding Bear Creek its costs on the appeal.

The Bear Creek and CCV portions of the cross-complaint had disposed of the entire cross-complaint. The main Bear Creek action thus was tried separately, and resulted in yet another separate appeal, as follows:

The main Bear Creek matter was tried. The court found for Bear Creek on both the judicial and equitable foreclosure causes of action, and granted a directed verdict on the breach of contract claim. The judgment awarded Bear Creek $113,668.36, plus attorney fees and costs, for a total judgment amount of $249,026.71.

Edwards appealed. Bear Creek objected to the amount of the cash in lieu of under taking that Edwards had posted. The judgment, as noted, had been substantially increased by the addition of attorney fees and costs. The court ordered Edwards to post an increased cash amount. Edwards did so, posting the sum of $124,540.06. Edwards had apparently earlier filed a $250,000 deposit in lieu of bond or undertaking. Edwards filed a second notice of appeal, contesting the attorney fees and costs awards, as well as the requirement of an additional appeal cash deposit in lieu of undertaking. The two appeals were consolidated.

We held that the assessments on the condominium units were proper, even though no structures were actually built on the property. Edwards had failed to pay any assessments. Bear Creek was entitled to enforce its remedies to recover the delinquent assessments. We held that the notices had been properly given, and the amounts due had been properly determined. We made rulings on other issues, and also upheld the attorney fees award of $129,915.50. We also awarded costs on appeal to Bear Creek, the amount of which would be set by the trial court upon remand. Our remittitur issued on October 26, 2005.

After this court issued its remittitur, returning the matter to the trial court, the parties each took different actions with respect to the litigation. Bear Creek filed a writ of execution claiming the $249,026.71 judgment amount, plus $47,872.29 in postjudgment interest, plus a fee for issuance of the writ, for a total of $296,905.97.

Edwards, on the other hand, filed a peremptory challenge against Judge Trask, on November 17, 2005. The peremptory challenge was filed in the Bear Creek main action, although the supporting declaration of Edwards’s attorney referenced primarily the remittitur of the appeal on the CCV portion of Edwards’s cross-complaint as a justification. The other justification was Bear Creek’s attempted writ of execution in the main action, including the claim for interest, which Edwards disputed. The peremptory challenge purported to disqualify Judge Trask from any further proceedings in the Bear Creek action.

Finally, on November 18, 2005, Bear Creek moved for an award of costs, including attorney fees, on appeal.

Judge Trask denied Edwards’s peremptory challenge as to the Bear Creek action. In so doing, Judge Trask noted that the only ruling which had been reversed on appeal was denial of Edwards’s motion to vacate the default judgment in the CCV action. The CCV portion of Edwards’s cross-complaint had been severed from the Bear Creek matter, however, long before the reversal, and had been consolidated with CCV’s separate enforcement action. The consolidated matters had been assigned, two years earlier to a different judge. The sole matter as to which Judge Trask had been reversed, therefore, had been assigned to a different judge. Code of Civil Procedure section 170.6, subdivision (a)(2) provides that “A motion under this paragraph may be made following reversal on appeal of a trial court’s decision, or following reversal on appeal of a trial court’s final judgment, if the trial judge in the prior proceeding is assigned to conduct a new trial on the matter.” Because Judge Trask would not be assigned to conduct a new trial on the matter which had been reversed, section 170.6 did not apply. This court heard and denied Edwards’s writ petition on the disqualification matter.

All further statutory references will be to the Code of Civil Procedure unless otherwise indicated.

Then, Judge Trask awarded Bear Creek $61,079.50 for attorney fees and costs on appeal, and denied Edwards’s motion to recall and quash the writ of execution, and to vacate the levy of execution. The latter ruling effectively upheld Bear Creek’s addition of postjudgment interest to the judgment below.

Edwards now appeals, contending that Judge Trask was required to comply with the peremptory challenge under section 170.6, that the court’s award of attorney fees and costs for the appeal was erroneous, and that the court erred in failing to recall and quash the writ of execution.

DISCUSSION

1.

EDWARDS’S PEREMPTORY CHALLENGE WAS PROPERLY DENIED

A. Standard of Review

We review a decision under section 170.6, granting or denying a peremptory challenge, under a non deferential, de novo standard. (Ziesmer v. Superior Court (2003) 107 Cal.App.4th 360, 363.)

B. No “Retrial” Was Contemplated; Section 170.6 Did Not Apply

Section 170.6, subdivision (a)(2) provides that, “[a] motion under this paragraph may be made following reversal on appeal of a trial court’s decision, or following reversal on appeal of a trial court’s final judgment, if the trial judge in the prior proceeding is assigned to conduct a new trial on the matter.”

Here, there were three appeals and three remittiturs. The only reversal occurred with respect to the appeal on Edwards’s cross-complaint, and even then, as to CCV only. In 2003, long before the appeal was decided, and even before the trial on the main Bear Creek matter had begun, the CCV portion of the Bear Creek action (actually, the cross-action) had been wholly severed from the Bear Creek matters, consolidated with the separate CCV action, and reassigned to a different judge. There was therefore no reversal in the CCV matters to which Judge Trask, as the trial judge in the prior proceeding, would be “assigned to conduct a new trial on the matter.” (§ 170.6, subd. (a)(2).) Section 170.6 therefore did not apply to the reversal in the CCV appeal.

As to the remaining two appeals, however, there was no reversal at all. As to the post trial appeal in the main Bear Creek matter, we affirmed the judgment in its entirety. As to the dismissal of Edwards’s cross-complaint against Bear Creek, we likewise affirmed without reservation. There was therefore no “reversal on appeal of a trial court’s decision,” or “reversal on appeal of a trial court’s final judgment” in the Bear Creek matters. Section 170.6 therefore did not apply, and Edwards was not entitled to file a peremptory challenge against Judge Trask as to any Bear Creek matters.

In any event, and assuming that Edwards could properly file such a peremptory challenge, his challenge was not well taken. Section 170.6 in the post appeal context is not given a broad or liberal construction as to the meaning of a “new trial.” (Peracchi v. Superior Court (2003) 30 Cal.4th 1245, 1263; First Federal Bank of California v. Superior Court (2006) 143 Cal.App.4th 310 (First Federal).) The matter turns on whether there has been a trial, and whether there will be a retrial. (First Federal, supra, at p.314.) A “trial” has taken place if the trial court’s initial decision had “either addressed the merits or otherwise terminated the case.” (Burdusis v. Superior Court (2005) 133 Cal.App.4th 88, 93.) A retrial is a “‘reexamination’ of a factual or legal issue that was in controversy in the prior proceeding. [Citations.]” (Geddes v. Superior Court (2005) 126 Cal.App.4th 417, 424.)

Here, the main Bear Creek action below consisted of a trial on the issues of the appropriateness of the assessments and Bear Creek’s lien, the amount of the assessments, and attorney fees and costs awarded at trial. None of these matters was to be revisited or retried upon remand. The amount of the judgment was fixed, and was not reversed. The matters taken up on remand were Bear Creek’s writ of execution of the judgment as affirmed, and the award of attorney fees and costs on appeal.

The matter of the writ of execution was simply a ministerial matter as to which no new trial was contemplated. A section 170.6 peremptory challenge does not lie as to “merely . . . ministerial” post appeal matters. (Stegs Investments v. Superior Court (1991) 233 Cal.App.3d 572, 576.)

There was not, and could not have been, a “trial” on the issue of attorney fees and costs to be awarded for the appeal; manifestly, then, there could be no “retrial” or “new trial” as to that matter.

The cases upon which Edwards relies are inapposite. Pfeiffer Venice Properties v. Superior Court (2003) 107 Cal.App.4th 761 (Pfeiffer), involved the question whether a post appeal challenge under section 170.6 was available only to the party who had filed the appeal. The appellate court held that responding parties also had the opportunity to file such challenges upon remand. The matter to be revisited by the trial court on remand was the determination of attorney fees in connection with an anti-SLAPP (strategic lawsuit against public participation) motion that had been determined below. The postjudgment fee award was a matter subject to the trial court’s determination before the appeal had been taken; its redetermination required more than a ministerial act. (Pfeiffer, at p. 768.)

In Stubblefield Construction Co. v. Superior Court (2000) 81 Cal.App.4th 762 (Stubblefield), the trial court had granted summary judgment in favor of one of the parties. On appeal, this court reversed in part and remanded for further proceedings. We held that the remand after reversing a grant of summary judgment was a “new trial” within the meaning of section 170.6, subdivision (a)(2). (Stubblefield, at pp. 765-766.) Although there had not been a full trial, the same issues upon which disposition had been made were to be revisited on remand. (Id. at p.. at p. 766.)

Hemingway v. Superior Court (2004) 122 Cal.App.4th 1148 (Hemingway), involved a peremptory challenge under section 170.6 at the initiation of trial. In that context, section 170.6 is to be “liberally construed” (Hemingway, at p. 1154.), but this is not such a case, and the courts have held otherwise when the peremptory challenge is made under the amended portion of the statute, permitting the challenge after appeal.

Here, section 170.6 had no applicability at all. To the extent it arguably could apply, there was no “new trial” contemplated in the matters before the court. The authorities upon which Edwards relies do not support a contrary result. The trial court properly denied Edwards’s section 170.6 challenge to Judge Trask.

2.

THE AWARD OF ATTORNEY FEES ON APPEAL WAS PROPER

A. Proceedings Below Concerning Attorney Fees on Appeal

In our opinion in the former appeal in the main Bear Creek action, we awarded attorney fees and costs on appeal to Bear Creek. Likewise, our remittitur of Edwards’s appeal of the dismissal of his cross-complaint against Bear Creek awarded costs on appeal to Bear Creek. We awarded costs on appeal to Edwards in the remittitur of the cross-complaint as to CCV. Here, Edwards complains of the trial court’s award of attorney fees and costs to Bear Creek, both as plaintiff in the main action, and as a cross-defendant in the appeal on the dismissed cross-complaint.

On November 18, 2005, Bear Creek filed its motion to determine its award of attorney fees on appeal. Bear Creek filed the motion in its capacity as plaintiff in the main action. Bear Creek sought compensation for 210 hours of attorney and paralegal time (5.25 full time weeks at 40 hours per week) spent on the appeal, plus 34.5 additional hours of actual and estimated attorney and law clerk time, devoted to the fee motion itself. Based on “lodestar” rates for the work performed on the appeal and fees motion, Bear Creek requested $61,079.50 in attorney fees on appeal.

Bear Creek’s attorney provided a declaration in which he claimed specific hours were spent “on this case since the post-trial award of attorney[] fees.” The tasks were broken down into categories for client communications, drafting of documents, travel to court, reviewing documents filed by other parties, legal research, supervision of other employees working on the case, and other such responsibilities.

On December 12, 2005, separate counsel who had represented Bear Creek on the cross-complaint filed her own motion for attorney fees and costs on appeal. The attorney representing Bear Creek as a cross-defendant claimed $37,417 in attorney fees on appeal. The attorney’s declaration detailed over 200 hours devoted to the appeal on the cross-complaint as to Bear Creek. Some time was spent communicating with other parties, hours were spent on legal research and analysis of documents, preparing documents and briefs, preparation for oral argument, client communication, analysis of papers submitted by other parties, and other tasks.

Edwards opposed Bear Creek’s claim for attorney fees on appeal in the main case, arguing that Bear Creek’s appellate victory was based upon “falsified law to the effect that . . . assessments commence on built and unbuilt units . . . .” Edwards also claimed that Bear Creek’s attorney falsified the bill.

Edwards also filed an opposition to cross-defendant Bear Creek’s claim for attorney fees on appeal.

On or about January 26, 2006, the court awarded Bear Creek, as plaintiff in the main action, its claim for $61,079.50 in attorney fees on appeal. On February 22, 2006, the court filed an order granting attorney fees on appeal to cross-defendant Bear Creek in the sum of $37,417 in attorney fees and $1,018 in costs.

Edwards’s notice of appeal encompassed both orders for attorney fees on appeal.

In his brief on appeal, Edwards argues, as to Bear Creek as plaintiff in the main action: (1) Bear Creek’s claim for fees was illegitimate because it was obtained by perpetrating a “fraud on the court” by “‘fabricating’ law”; (2) there was no legal basis for an award of attorney fees on appeal; (3) Bear Creek’s showing in support of its claim for attorney fees included improper items, including work done for the underlying litigation, duplicated claims in its capacity as cross-defendant, and other matters; and (4) the court used an improper standard in making the award. As to the award to Bear Creek in its capacity as cross-defendant, Edwards argues that there was no proper legal basis for an award of attorney fees on appeal.

B. Standard of Review

“An order granting or denying an award of attorney fees is generally reviewed under an abuse of discretion standard of review; however, the ‘determination of whether the criteria for an award of attorney fees and costs have been met is a question of law.’ [Citation].” (Salawy v. Ocean Towers Housing Corp.(2004) 121 Cal.App.4th 664, 669.)

C. There Was a Proper Legal Basis for the Award of Attorney Fees on Appeal

“Generally, a court may properly award attorney[] fees only pursuant to an agreement of the parties or statutory authority.” (Bauguess v. Paine (1978) 22 Cal.3d 626, 634.) When a contract or statute does provide for recovery of attorney fees by the prevailing party at trial, the prevailing party is also entitled to attorney fees and costs on appeal. (Palmer v. Agee (1978) 87 Cal.App.3d 377, 387-388; see also Villinger/Nicholls Development Co. v. Meleyco (1995) 31 Cal.App.4th 321, 327.)

Here, the Davis-Stirling Act (Civ. Code, § 1351 et seq.) creates a statutory right to attorney fees for the prevailing party in an action to enforce homeowner association governing documents such as the relevant covenants, conditions and restrictions (CC&R’s). Civil Code section 1354, subdivision (c) provides that, “[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney[] fees and costs.”

Bear Creek’s action to enforce the lien for unpaid homeowner assessments was an action to enforce the CC&R’s. It prevailed in the action. It also prevailed on appeal against Edward’s contention that the Davis-Stirling Act could not apply to unbuilt condominium units. Civil Code section 1366, subdivision (e)(1) provides that, “[i]f an assessment is delinquent the association may recover all . . . [¶] . . . [r]easonable costs incurred in collecting the delinquent assessment, including reasonable attorney[] fees.”

A similar analysis applies to the award of attorney fees on appeal to Bear Creek in its capacity as a cross-defendant. Although Edwards argued strenuously that the cross-complaint involved tort issues, as to which attorney fees generally do not apply, Bear Creek’s attorney on the cross-action pointed out that the cross-complaint itself belies Edwards’s characterization. The cross-complaint made numerous claims to enforce the CC&R’s, and Edwards’s prayer included a request for attorney fees “ ‘pursuant to applicable statutory provisions and the CC&R provisions.’” Bear Creek was the prevailing party on the cross-complaint, both in the trial court and on appeal.

Another basis also existed for the post appeal award of attorney fees: California Rules of Court, rule 8.276(a) provides that, “the party prevailing in the Court of Appeal in a civil case is entitled to costs on appeal.” We awarded Bear Creek its costs on appeal pursuant to that provision in both appeals: as plaintiff and as cross-defendant on the cross-complaint.

Edwards’s contention that there was no proper legal basis for the award to Bear Creek (as plaintiff) because Bear Creek perpetrated a “fraud on the court,” is without merit. The “fraud on the court” or “fabrication” of law to which Edwards refers is simply a reiteration of his view that an unbuilt condominium cannot be considered a “unit” for purpose of assessments under the Davis-Stirling Act. We have previously decided this substantive issue adversely to Edwards.

Edwards argues that the trial court used an improper basis for awarding attorney fees, effectively punishing Edwards for “choos[ing] to litigate.” While Edwards is correct that it is improper to punish a litigant for pursuing its rights, the court’s remark betrays no such improper animus. Rather, Judge Trask simply acknowledged the truism that, “[t]his case has been hard litigated. It has been litigated in an aggressive and repetitive manner. And when one chooses to litigate in this manner, one has to appreciate that if you win, you will be awarded attorney[] fees, and if you lose, you will bear the consequence of having to pay the other side’s attorney[] fees.” That Edwards “cho[se] to litigate” in a particular manner was not the legal basis of the award; it was, however, a factor which contributed to the amount of fees for which Bear Creek was entitled to be compensated.

Contrary to Edwards’s contentions, there was ample legal basis for the award of attorney fees to Bear Creek on appeal, in its capacity both as a plaintiff in the main action and as a cross-defendant in the appeal on the cross-complaint.

D. The Court Did Not Abuse Its Discretion in Setting the Amount of Fees Awarded

The trial court awarded Bear Creek $61,079.50 in attorney fees on appeal. Edwards argues that there was no proper basis for the attorney fees award for several reasons.

First, he asserts that Judge Trask was required to recuse herself because of the peremptory challenge under section 170.6. We have determined that no such disqualification was required.

Second, Edwards asserts, the attorney fees claim for Bear Creek as the plaintiff duplicated attorney fees attributable to Bear Creek’s defense of Edwards’s cross-complaint, and improperly included amounts attributable to trial, not appellate, proceedings. Edwards fails to make a sufficient record, however, to establish his claims of error in determination of the amount of the fees.

Edwards states that the trial court could have required the attorneys to produce billing records to support their claims for attorney fees. That the court may require a more extensive showing does not undermine the showing that was in fact made. The attorneys for Bear Creek, as plaintiff and as cross-defendant, respectively, presented formal declarations, under penalty of perjury, as to the hours spent on the appeals. An attorney’s declaration or testimony in this manner is sufficient to support an award of attorney fees. (Steiny & Co., Inc. v. Calif. Electric Supply Co. (2000) 79 Cal.App.4th 285, 293.)

Edwards complains here, as he did below, that the attorneys claimed fees on appeal for matters pertaining to the preappeal litigation. Edwards has misinterpreted the purport of the attorneys’ respective declarations. Bear Creek’s counsel, as plaintiff and as cross-defendant, each mentioned the success they had obtained in their respective portions of the trial litigation as part of the history of the case, to explain their entitlement to designation as the prevailing party at trial and on appeal, to explain the legal basis for the claim for attorney fees on appeal (which was based in part on the same statutory authorization which had supported that determination below), and to explain the difficulty and protractedness of the proceedings which had led to such awards below. Bear Creek plainly did not make its claims for attorney fees on appeal based upon the years of extended litigation. Its claims were for the equivalent of 5.25 weeks of employee hours for plaintiff’s attorneys and approximately 6 weeks for cross-defendant’s attorneys. These claims are fully consistent with the shared labor of multiple employees spent only during the posttrial period. Edwards made no showing that any of the claimed amounts were incurred for unrelated litigation, were incurred for plaintiff’s voluntarily injecting itself into unrelated litigation, were duplicative of other fees, were for fees incurred at trial which had already been compensated, or were otherwise improper. In the absence of a showing of clear error, we will not disturb the trial court’s exercise of discretion in setting the fee amounts. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)

3.

THE COURT PROPERLY DENIED THE MOTION TO RECALL AND QUASH THE WRIT OF EXECUTION

A. Factual Background

As we described briefly, ante, Edwards posted cash in lieu of an undertaking with the court, in the amount of $250,000 in December of 2003 when taking the appeal in the main Bear Creek action. This amount represented both the amounts due for the unpaid assessments and the award of attorney fees and costs at trial. There was apparently also a second deposit of funds with the court, in the amount of $124,540.06, made on January 26, 2004.

In February of 2004, Edwards’s counsel filed a demand that Bear Creek acknowledge a satisfaction of judgment, and release of lis pendens, lien or recorded judgment, with respect to the amounts due under the judgment in the main Bear Creek action. Edwards made the demand “on the ground[] that the judgment . . . has been satisfied by sufficient undertaking through deposit in lieu of bond filed with the court on December 10, 2003, and January 26, 2004, which extinguishes all liens and further mandates that the judgment creditor shall immediately file an acknowledgment of satisfaction releasing all liens.” (Citing §§ 697.040, 697.050, 697.400.)

On February 25, 2004, Bear Creek filed a release of judgment lien for San Diego County after the cash amounts were deposited with the court. This court issued remittiturs in the main Bear Creek appeal and in the appeal on the Bear Creek portion of the cross-action on October 26, 2005, and November 3, 2005, respectively.. On the same day we issued the remittitur in the main Bear Creek action, October 26, 2005, Bear Creek obtained a writ of execution, purporting to be issued on a total judgment of $249,026.71, plus interest after judgment in the amount of $47,872.26, plus a $7 fee for issuance of the writ, for a total of $296,905.97. Bear Creek’s counsel filed a declaration concerning accrued interest, stating that interest had accrued on the amended judgment between the date of entry of the amended judgment (Jan. 6, 2004) and the date of the writ (Oct. 26, 2005) at the legal rate (Code Civ. Proc., § 685.010), for a total of $47,872.26.

Edwards filed an objection to the claim for accrued interest on November 3, 2005. Edwards argued that the deposit of funds into the court precluded any accumulation of interest, and that Edwards had not been properly served with a copy of the writ of execution. Edwards then moved for an order quashing the writ of execution. Edwards’s counsel also requested attorney fees on the motion to quash.

On November 9, 2005, Bear Creek gave notice that it had levied on the funds held by the Superior Court. The court issued funds of $296,905.97 to Bear Creek. Bear Creek also opposed Edwards’s motion to recall and quash the writ of execution. Bear Creek filed a notice on December 29, 2005, of partial satisfaction of its judgment, after levying on the funds which had been deposited with the court.

On January 26, 2006, the court denied Edwards’s motion to recall and quash the writ of execution.

Bear Creek’s attorneys filed a declaration concerning further interest claims. Attorney Racobs averred that the writ of execution was issued on October 26, 2005, and included interest through that date of $47,872.26. The Riverside County Treasurer issued a check for $296,905.97 in response to the writ of execution. Attorney Racobs averred that interest at a daily rate of $68.22 should have been included for the period between issuance of the writ of execution on October 26, 2005 and the date the County Treasurer issued its check, December 12, 2005. Thus, Bear Creek claimed an additional 47 days of interest, at $68.22, or a total of $3,206.34, was due and owing.

Edwards’s attorney countered with a motion to the court for an order releasing any remaining deposited funds to Edwards. Edwards had deposited $250,000 in December of 2003, plus and additional $124,540.06 in January of 2004, for a total deposit of $374,540.06. Bear Creek’s levy had resulted in issuance of $296,905.97. Edwards claimed that all remaining funds should be released to him.

On the court’s own motion, it set a hearing on an order to show cause (OSC) why the remaining deposited funds should not be released to Edwards. Ultimately, the court ordered the funds released to Edwards, less $479.39 which it had awarded to Bear Creek (as plaintiff) in costs on appeal.

Edwards’s argument on appeal is addressed to the issue of the claimed $47,872.26 in postjudgment interest. He argues that the kind of deposit he made with the court stopped the accrual of interest, and that the claim for postjudgment interest was therefore invalid.

B. Standard of Review

Issues of statutory construction, including the determination of which statute applies, are matters of law which we review independently. (See In re Vitamin Cases (2003) 107 Cal.App.4th 820, 826; Camarillo v. Vaage (2003) 105 Cal.App.4th 552, 560; American Nat. Ins. Co. v. Low (2000) 84 Cal.App.4th 914, 923-924.)

Bear Creek argues that the court’s exercise of inherent power whether to grant or deny a motion to quash is a matter of discretion, which should be reviewed for abuse of that discretion. Here, the trial court’s exercise of discretion (to deny the motion to quash, and effectively uphold the claim for postjudgment interest) was premised on its understanding of the statutory provisions. We review the matter de novo.

C. The Deposit With the Court Did Not Halt the Accrual of Post judgment Interest

“The fundamental purpose of statutory construction is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law.” (People v. Pieters (1991) 52 Cal.3d 894, 898.)

Section 685.010 et seq., deals with the issue of interest. Section 685.010 provides that “Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.” (§ 685.010, subd. (a).) Generally, also, “interest commences to accrue on a money judgment on the date of entry of the judgment.” (§ 685.020, subd. (a).)

Section 685.030 provides: “(b) If a money judgment is satisfied in full other than pursuant to a writ under this title, interest ceases to accrue on the date the judgment is satisfied in full. [¶] . . . [¶] (d) For the purposes of subdivision (b) . . . the date a money judgment is satisfied in full or in part is the earliest of the following times: [¶] . . . [¶] (2) The date satisfaction is tendered to the judgment creditor or deposited in court for the judgment creditor.”

This last is the provision upon which Edwards relies. Edwards argues that the deposit of funds with the court in 2003 was a satisfaction of the judgment which should have halted all accrual of interest. This proposition is untenable. Edwards’s deposit of funds with the court was not in the nature of and was not intended as a satisfaction of the judgment. It was not “deposited in court for the judgment creditor.” (§ 684.030, subd. (d)(2), italics added.) It was never intended as an immediate satisfaction of the judgment; as Bear Creek points out, it was not viewed as a satisfaction of the judgment; it was deposited for precisely the opposite purpose, to prevent or stay the judgment from being executed or satisfied while Edwards appealed.

Section 916, subdivision (a) provides that, “Except as provided in Sections 917.1 to 917.9, inclusive, . . . the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order . . . .”

Section 917.1 provides that, “(a) Unless an undertaking is given, the perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order is for any of the following: [¶] (1) Money or the payment of money . . . . [¶] . . . . (b) The undertaking shall be on condition that if the judgment or order or any part of it is affirmed or the appeal is withdrawn or dismissed, the party ordered to pay shall pay the amount of the judgment or order, or the part of it as to which the judgment or order is affirmed, as entered after the receipt of the remittitur, together with any interest which may have accrued pending the appeal and entry of the remittitur, and costs which may be awarded against the appellant on appeal. This section shall not apply in cases where the money to be paid is in the actual or constructive custody of the court; and such cases shall be governed, instead, by the provisions of Section 917.2. . . .” (Italics added.)

Section 917.2 in turn provides, “The perfecting of an appeal shall not stay enforcement of the judgment or order of the trial court if the judgment or order appealed from directs the assignment or delivery of personal property, including documents, whether by the appellant or another party to the action, or the sale of personal property upon the foreclosure of a mortgage or other lien thereon, unless an undertaking in a sum and upon conditions fixed by the trial court, is given that the appellant or party ordered to assign or deliver the property will obey and satisfy the order of the reviewing court . . . .”

Section 995.710 provides that, in any case where a bond or undertaking is required, “the principal may instead of giving a bond, deposit with the officer any of the following: [¶] (1) Lawful money of the United States. . . .” (§ 995.710, subd. (a)(1).)

Here, Edwards appealed from a money judgment. Although the action was brought to enforce Bear Creek’s lien, for unpaid assessments, against Edwards’s real property located within Bear Creek, the judgment was for money, for the amount of the unpaid assessments, and for the attorney fees and costs awarded as part of the judgment. Ordinarily, therefore, section 917.1 would have applied. Section 917.1, subdivision (b) expressly provides that the bond or undertaking on appeal from a money judgment stays enforcement of the judgment, and that to effect the stay, the bond or undertaking must be on condition that the undertaking or bond funds will be subject to execution, upon affirmance of the judgment, not only for the judgment amount but also for any accrued interest, plus costs and attorney fees awarded on appeal. (§ 917.1, subd. (b).)

Section 917.1, subdivision (b) also expressly states that, “This section shall not apply in cases where the money to be paid is in the actual or constructive custody of the court; and such cases shall be governed, instead, by the provisions of Section 917.2.” Section 917.2 normally applies to cases of an appeal from a judgment directing the assignment or delivery of personal property. The undertaking applicable to such personal property judgments or orders is intended to secure the performance of the appellant against waste, damage or destruction of the personal property to be delivered. Where the judgment is for personal property, instead of or in addition to an undertaking, the appellant may deliver the personal property itself to the actual or constructive custody of the court. “Money” is not always included in the term “personal property,” but where the money is a special fund and capable of identification, it may be considered “personal property” within the predecessor section to section 917.2. (McCallion v. Hibernia Sav. & Loan Soc. (1893) 98 Cal. 442.) Money placed on deposit in lieu of a bond or undertaking can constitute such a special fund, as it is clearly identifiable.

The deposit of funds into the custody of the court is thus subject to section 971.2, not 917.1. Section 917.2 also provides that, even when the personal property in issue is deposited with the court, that does not necessarily obviate the need for a bond or undertaking under conditions; rather, the deposit of the property is a “fact [to] be considered by the court in fixing the amount of the undertaking.” (§ 917.2.) In addition, section 917.2 provides that the appeal is not stayed on a judgment for personal property “unless an undertaking in a sum and upon conditions fixed by the trial court, is given that the appellant . . . will obey and satisfy the order of the reviewing court, and will not commit or suffer to be committed any damage to the property, and that if the judgment or order appealed from is affirmed, . . . the appellant shall pay the damage suffered to such property and the value of the use of such property for the period of the delay caused by the appeal.” (§ 917.2, italics added.)

In the case of money, the value of the use of such property for the period of delay caused by the appeal is the interest which would be earned on that money. Although Edwards was not himself using the cash during the period of the appeal, the deposit of cash was expressly for the purpose of delaying execution of the money judgment, as to which under section 917.1, Bear Creek would have been entitled to interest on the unpaid and unsatisfied judgment amount during the pendency of appeal, had a bond or under taking succeeded in staying execution. Under the money judgment provision for staying execution on appeal (§ 917.1), Bear Creek would have been entitled to recover for interest during the pendency of the appeal. Under the personal property provision for staying execution on appeal, the respondent is entitled to the value of the use of the property for the period of delay caused by the appeal. We can discern no reason to discount the value of Bear Creek’s judgment by the expedient of Edwards’s having deposited cash in lieu of a bond or other under taking.

Edwards’s reliance on section 685.030 provides him no comfort. Section 685.030 provides that, when a judgment is not satisfied by levy, but by an alternate means, interest stops accruing on, “The date satisfaction is tendered to the judgment creditor or deposited in court for the judgment creditor.” (§ 685.030, subd. (d)(2), italics added.) Deposit of funds or other property in court “for the judgment creditor” is an alternative method of “tender” to a judgment creditor. The funds here were not deposited “for the judgment creditor,” however. Rather, they were instead deposited in court for the precise opposite purpose, to prevent satisfaction of the judgment by the judgment creditor.

Edwards also points to Civil Code section 1504, to the effect that “[a]n offer of payment or other performance, duly made, though the title to the thing offered be not transferred to the creditor, stops the running of interest on the obligation, and has the same effect upon all its incidents as a performance thereof.” This provision likewise does not support Edwards’s position, not least because the deposit of funds with the court here was not “[a]n offer of payment or other performance” of the judgment obligation to Bear Creek.

Edwards’s reliance on People ex rel. Dept. Pub. Wks. v. Redwood Hotels Corp. (1969) 269 Cal.App.2d 60 (Redwood), is unavailing. There, in an eminent domain action, the entity deposited the adjudged value of the condemned property with the court, while it appealed the claim of interest. The property owners did not withdraw the condemnation award funds until some months after it was deposited with the court. In holding that the deposit of funds with the court stopped the accrual of interest, the appellate court held that the owners of the condemned property were not entitled to interest between the time of deposit and the time of withdrawal. The eminent domain law provided, somewhat analogously to section 685.030, that interest ceases to accrue at any of several measurable moments, including the date the “‘full amount the defendant is then entitled to receive as finally determined in the eminent domain proceeding together with the full amount of the interest then due thereon is paid into court for the defendant after entry of judgment . . . .’” (Former § 1255b, subd. (c)(4), repealed; see now § 1268.110, subd. (a) [“the plaintiff may, at any time after entry of judgment, deposit with the court for the persons entitled thereto the full amount of the award, together with interest then due thereon . . . .”], italics added.) The court stated, “[w]here deposit is made after entry of a judgment, as in the instant case, and is for the full amount thereof, interest thereon stops [Citations.]. [Fn. omitted.] To accomplish this result, the deposit must be for the defendant and must be withdrawable by him.” (Redwood, supra, 269 Cal.App.2d 60, 62, fn. omitted, italics added.) Here, of course, the funds were not deposited for Bear Creek as judgment creditor, and were not withdrawable by Bear Creek.

While a “valid tender, made by a defendant pending plaintiff’s appeal from the judgment, of the full amount of the judgment and costs to date of tender, stops interest from that moment” (Rose v. Hecht (1949) 94 Cal.App.2d 662, 666), Edwards here made no such “tender.” “A tender is an offer of performance made with the intent to extinguish the obligation. [Citation.]” (Still v. Plaza Marina Commercial Corp. (1971) 21 Cal.App.3d 378, 385, italics added.) “A tender must be one of full performance [citation] and must be unconditional to be valid. [Citation.]” (Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 580.)

Edwards’s deposit of funds with the court in this instance was not the equivalent of a tender, with intent to extinguish the obligation. The deposit of funds was for the purpose, rather, of delaying satisfaction of the disputed obligation. It was conditioned on staying satisfaction of the obligation during the pendency of the appeal. Preventing execution of a judgment is the antithesis of “satisfying” the judgment. For this reason, Edwards’s reliance on Bell v. Farmers’ Insurance Exchange (2006) 137 Cal.App.4th 835, is misplaced. The question there was, when was the judgment satisfied? When the defendant deposited funds in the trust account of class counsel, or when actual payment was made to the class members? In either case, the defendant in Bell paid moneys that were accessible and distributable to the creditors. Not so here. The payment of moneys here was not for the purpose of paying the creditor, but to prevent the creditor from receiving the funds paid.

Edwards’s suggestion that Bear Creek was estopped from claiming the judgment was satisfied is not well taken. Bear Creek’s release of its lien on the property is not the same thing as a satisfaction of judgment. As of the time Bear Creek released its lien, it had a money judgment, but had not been paid any moneys in satisfaction of the judgment.

The deposit of funds pending appeal was for the purpose of effecting a stay, and not “for the judgment creditor.” Section 685.030 did not apply to the deposit of funds in lieu of an undertaking to stay the appeal. Interest therefore accrued on the unsatisfied judgment from the date of judgment until the date of levy of execution. The trial court properly denied Edwards’s motion to recall and quash the writ of execution.

DISPOSITION

The orders of the trial court are affirmed. Bear Creek, as the prevailing party, shall recover its costs on this appeal.

We concur: RICHLI J., MILLER J.


Summaries of

Bear Creek Master Assn. v. Edwards

California Court of Appeals, Fourth District, Second Division
Jul 17, 2007
No. E040210 (Cal. Ct. App. Jul. 17, 2007)
Case details for

Bear Creek Master Assn. v. Edwards

Case Details

Full title:BEAR CREEK MASTER ASSOCIATION, Plaintiff, Cross-Defendant and Respondent…

Court:California Court of Appeals, Fourth District, Second Division

Date published: Jul 17, 2007

Citations

No. E040210 (Cal. Ct. App. Jul. 17, 2007)