Opinion
A114471
5-10-2007
CHARLES A. PAPPAS et al., Cross-complainants and Appellants, v. JERRY MUELLNER, Cross-defendant and Respondent.
NOT TO BE PUBLISHED
Appellants Charles A. Pappas (Pappas) and Charles M. Shields III, Trustee of Georgia Pappas Family Revocable Trust (Trust), cross-defendants below, appeal from a trial court judgment after bench trial awarding defendant Jerry Muellner damages of $77,813.80 and foreclosure rights, contending there was a failure of consideration for the obligation enforced by the court, and no basis for the award of interest in any event. We affirm in part and reverse in part.
BACKGROUND
In July 2004, Pappas sued to quiet title, seeking a declaration that a particular deed of trust was unenforceable. Muellner, filed a cross-complaint for declaratory relief against Pappas regarding his rights under the deed of trust, and for attorney fees and costs; he later obtained leave of court to add the Trust as a defendant. A one-day bench trial followed.
The parties do not dispute Muellners right to pursue a claim based on the note and deed of trust following Terrys death.
Relevant Evidence
Pappas, a quadriplegic since 1973, and his mother, Georgia Pappas, purchased real property in Berkeley, California, in 1990. In 1996, Pappas and his mother conveyed title to the property to the Georgia Pappas Family Revocable Trust.
Pappas met the late Terrance Muellner (Terry) in 1982, when Terry was 14 years old. In 1984, Terry became an emancipated minor and moved in with Pappas, with whom he lived almost continuously until 1990. From 1984 to 1986, Terry assisted Pappas with his physical needs after Pappass attendants left for the day. Terry moved out of Pappass house in 1990.
Terry died in 1993. In June 1992, Pappas and Terry executed a promissory note in favor of Terry in the amount of $50,000, which was introduced into evidence at trial. The note states that Pappass promise was made "for value received." It states further that "[t]he sum of $50,000 (fifty thousand) is owed to Terrance E. Mullner [sic] for personal services rendered to Charles A. Pappas in the years 1984, 1985 and 1986." It also states that the signer of the note would "pay such sum as the court may fix as attorneys fees" if an action were instituted on the note. The note does not state a due date, and stated that there would be "zero" percent interest per annum on the unpaid principal amount.
Pappas prepared the promissory note with the assistance of a blind workers compensation attorney who was his long-time friend. Pappas testified as follows:
"Q. . . . And what instructions did you give to [the attorney]?
"A. I instructed him to—to draw up a lien on my property and have Terry the beneficiary.
"Q. Okay. But how did the note come about?
"A. The note came about because I wanted to—I wanted to help Terry in a difficult period in his life with—with what I thought would be a gesture to show my appreciation for his involvement in my life."
Pappas testified that he had no agreement with Terry to compensate him for any services provided from 1984 to 1986. At the time he created the note, Terry was no longer assisting him, and Pappas understood he had no legal obligation to compensate Terry for any past services. Pappas testified that in signing the note, he did not believe that he was agreeing to compensate Terry for past services. Pappas stated that he selected the $50,000 figure not because it was related to the value of any services provided by Terry, but because it represented half of his down payment in buying the subject property from his mother. He further testified that at the time he executed the note, he did not have the ability to pay $50,000 to Terry, and did not know when he would be in such a position.
The attorney who assisted Pappas to prepare the note also testified. He understood that "there was no specific debt to Terrance Muellner. That this was a—going to be a document showing Mr. Pappass appreciation and goodwill towards Terrance Muellner." When asked if he was aware of any consideration for the note, he said, "No. Only past services that Charlie appreciated. All the help that Terry had given him when he was living with him." However, in response to a question by the trial court, the attorney acknowledged that the language of the note called for a legal, rather than a moral, obligation.
The attorney also indicated he advised Pappas not to go forward with the transaction. The court, after referring to the note and deed of trust, asked the attorney, "And you advised him against doing this type of transaction?" The attorney responded, "Yes, indeed." The court also reviewed the form of the note, which indicated it was secured by a deed of trust, and asked, "That was a format that you chose to carry out the wishes of Mr. Pappas. That you had advised him against going forward on; am I correct?" The attorney responded, "Right."
The month after executing the promissory note, July 1992, Pappas executed a short form deed of trust on the Berkeley real property to secure the note, which he subsequently had notarized and recorded. Pappas testified that he did so to demonstrate his "sincerity." He acknowledged that he intended the deed of trust to be recorded as a lien against his property. The attorney testified that Pappas prepared and executed the deed of trust against his advice and without his involvement.
Raymond G., who was Pappass friend, one-time attendant, and a witness to Pappass execution of the deed of trust, also testified. He stated that on the morning he was to witness Pappass execution of the deed of trust, he confronted Pappas, questioning why Pappas was executing the deed, and emphasizing that Pappas would "really owe somebody $ 50,000." Raymond G. testified that Pappas told him, "I just want the old Terry back and I figure if I do him a favor, it will work out." Raymond G. also testified that if Pappas owed anyone a favor, it was him, as he had helped Pappas over many years, and that he thought Pappas would give him his house.
Pappas also testified that he never understood he had a legal obligation to pay the note, that Terry did not make a demand for a payment, and that no payments were made. In 1997, Pappas tried to clear title to the Berkeley real property. Terrys brother Scott testified that around this time, Pappas acknowledged that he had incurred a debt, telling Scott that "the money was owed to [Terry]," but not to Scott or Terrys father, Muellner. Scott also testified that Terry had told him that Pappas "had owed him money."
The Courts Ruling
The trial court issued a written verdict, statement of decision and factual findings. The court found that there was "overwhelming" evidence that Pappas received consideration from Terry, that the note was a valid obligation, and that it was secured by an enforceable deed of trust. The court found that the note "clearly reflects" Pappass intent to pay Terry $50,000 "for valuable services performed," a conclusion further supported by Pappass attorneys participation and Pappass signing of the deed of trust.
The court found that Pappass true intent, and the fact of consideration, was further demonstrated by Pappass conduct, which the court found spoke "as loud, if not louder, than words." The court stated that "[i]f, as Pappas testified, all he wanted to do was to make a gesture expressing gratitude and appreciation for [Terry] the note itself would certainly have sufficed." The court pointed out that, rather than being a form obligation, the note was created with the help of counsel. Furthermore, Pappas proceeded with the note and deed against the advice of that counsel, although he was "fully informed as to the legal consequences of his intended act of signing the note, executing a deed . . . and recording that deed. Pappas not only had his attorney draft the obligation according to the terms of his wishes, Pappas also signed the document against the advice of his attorney." The court further noted the attorney "merely advised Pappas against signing the note and deed, not that there was an absence of consideration for such an obligation," that the note included an attorney fee provision, and that the word "gift" was nowhere to be found on the document. The court also observed that "[i]f a gift was the intent of Mr. Pappas that could easily have been reflected, not to mention that there were other legal mechanisms available which could have been utilized to achieve such a goal more effectively."
Finally, the court placed significance on Pappass execution and recordation of the deed of trust, noting that Pappas went to the trouble of recruiting witnesses and having the document notarized, and that more than a month passed between execution of the note and deed, giving Pappas plenty of time to reconsider his actions.
The court directly addressed Pappass claim that he intended to give a gift to Terry without receiving any consideration, stating that it "is not credible in light of his own conduct." The court continued: "The documents speak clearly as to his intent. Pappas wanted to compensate Terry more fully for the services Terrance had performed for him as a personal care attendant in 1984, 1985 and 1986. Specifying the time-frame in which the services were performed would not have been necessary if this were merely a gift. . . . In 1992, at the time Pappas executed the note, signed the deed and had it recorded, it is clear Pappas felt a moral obligation to compensate Terrance $50,000 for the services Terrance had provided to him from 1984 through 1986. The note, deed and its recordation assured Terrance would be properly compensated sometime in the future when Pappas could afford it."
The court further found credible the testimony by Terrys brother Scott that Pappas acknowledged that he owed the money to Terry, but not to Scott or Muellner. The court found this statement had "a ring of truth," and was "an admission by Pappas that the obligation was owed."
The court entered judgment in Muellners favor, finding he was entitled to judgment in the sum of $50,000, plus interest at the legal rate from the date Pappas had filed his complaint, and reasonable attorney fees. After the court entered judgment, this timely appeal followed.
DISCUSSION
Pappas raises two issues on appeal. First, he argues that as a matter of law the promissory note and deed of trust are unenforceable gifts unsupported by bargained for consideration. Second, he argues that the courts award of pre-judgment interest was contrary to the notes provision for "zero" percent interest per annum. We conclude that the note and deed of trust are enforceable, but that the court erred when it awarded Muellner pre-judgment interest.
I. Consideration
A. Standard of Review
Cross-defendants contend that de novo review is appropriate because "[t]he evidence at trial is undisputed. Charles Pappas gave the Note and Deed of Trust to Terry without any bargained for consideration. There was no bargain that Terry would do anything or refrain from anything in exchange for the Note." He argues that we should conclude based on the undisputed facts that as a matter of law, neither the note nor deed of trust is enforceable because of a failure of consideration.
This analysis is incorrect because it ignores the evidence of consideration. We agree with Muellner that the appropriate standard of review in light of the conflicting evidence is one that determines whether substantial evidence supports the trial courts determinations. "When a trial courts factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. If such substantial evidence be found, it is of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.)
B. Evidence of Consideration
We conclude that substantial evidence of sufficient consideration for the note and deed of trust was presented in the bench trial below. "Consideration consists of a benefit bestowed or a detriment suffered as bargained for by the parties. [Citation.] The adequacy of consideration is tested as of the time of the making of the contract, [citation] and the courts do not weigh the quantum of the consideration as long as it has some value." (A. J. Industries, Inc. v. Ver Halen (1977) 75 Cal.App.3d 751, 761.) The primary evidence of consideration is contained in the notes writing itself. As we have already indicated, the note states that it is being given "for value received." It specifically states that $50,000 is owed to Terry for personal services he rendered to Pappas in the mid-1980s. Thus, the note itself clearly indicates consideration for Pappass promise.
Courts have previously held that this statement alone constitutes prima facie evidence of consideration, as indicated by our independent research. (National Hardware Co. v. Sherwood (1913) 165 Cal. 1, 7 [stating that a recitation in a note that it was given for value received constituted "prima facie evidence of a valuable consideration sufficient to support the promise to pay," and was subject to impeachment]; see also Egenberger v. Neuman (1919) 41 Cal.App.134, 135-136 [a note payable in the alternative which "purports on its face to be for value received" contains a sufficient statement of consideration to entitle recovery as on a contract].)
In addition, as the trial court found, Pappass actions indicated an intent to enter into a binding legal obligation for consideration, rather than to give a "gift" to Terry. We refer to the courts findings, as summarized in the discussion section above and plainly supported by evidence, indicating among other things that Pappas drafted and executed a promissory note with the assistance of counsel; himself acted to record a notarized deed of trust against his counsels advice; was told that his actions would result in a binding legal obligation to pay Terry; and later acknowledged to Terrys brother Scott that he owed Terry the money.
Given this evidence of consideration, we need not address an issue that the parties extensively debate in their appellate papers. Muellner argues that pursuant to Civil Code section 1614, "[a] written instrument is presumptive evidence of a consideration," and must be overcome by cross-defendants by the presentation of proof to the contrary, presumably pursuant to Civil Code section 1615. Cross-defendants contend that this presumption merely bears on the burden of coming forward with evidence, citing Rancho Sante Fe Pharmacy, Inc. v. Seyfert (1990) 219 Cal.App.3d 875, 884, and has no significance here in light of the evidence they presented casting doubt on the truth of any presumed consideration. We note that the trial courts ruling did not refer to any statutory presumption. However, cross-defendants incorrectly state that the promissory notes "recital of consideration" creates the rebuttable presumption of consideration. Civil Code section 1614 makes clear that the presumption is created by the existence of the written instrument itself. (See Glickman v. Collins (1975) 13 Cal.3d 852, 861 ["the written guaranty is itself presumptive evidence of consideration"]; Rancho Sante Fe Pharmacy, Inc. v. Seyfert, supra, 219 Cal.App.3d at p. 880 [producing the written guaranty itself satisfied the obligation of establishing that it was valid and enforceable, pursuant to Civ. Code, § 1614].)
C. Cross-Defendants Past Consideration Argument
Cross-defendants also argue that the only consideration for Pappass $50,000 payment was Terrys services from 1984 to 1986, services they contend Terry provided without any expectation of payment. They argue that the note and deed of trust are unenforceable because of the general rule that past consideration will not support a new contract. (See Passante v. McWilliam (1997) 53 Cal.App.4th 1240, 1247 [" `[p]ast consideration will not support a contract "].) They argue that the trial court applied the wrong legal analysis, confusing Pappass sense of gratitude and "moral obligation" with bargained for consideration. In their view, "[t]he evidence was undisputed and showed nothing more than [Pappass] appreciation for Terrys assistance and friendship."
Under a substantial evidence standard of review, we cannot agree with cross-defendants argument. The note states that "[t]he sum of 50,000 (fifty thousand) is owed to Terrance E. Mullner [sic] for personal services rendered to Charles A. Pappas in the years 1984, 1985 and 1986." (Italics added.) This statement can be reasonably construed as memorializing an existing obligation between the parties, rather than making a new promise based solely on past consideration. It is reasonable to infer from it that Pappas had previously promised to compensate Terry $50,000 in return for his personal services, including at the time that Terry performed his services.
Cross-defendants point out in support of their lack of consideration argument that Muellner concedes in his appellate papers regarding Terrys performance of services that "the record is silent on the expectation of payment." Furthermore, the courts statement of decision and factual findings did not directly address cross-defendants "past consideration" argument, although they do imply a rejection of it. Nonetheless, "[a] judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)
As already indicated, the court stated, "The documents speak clearly as to his intent. Pappas wanted to compensate [Terry] more fully for the services [Terry] had performed for him as a personal care attendant in 1984, 1985 and 1986. Specifying the time-frame in which the services were performed would not have been necessary if this were merely a gift."
Moreover, the courts reference to Pappass "moral obligation" does not necessarily support the contention that there was a lack of consideration for the note and deed of trust. Indulging all intendments and presumptions in favor of the courts ruling (In re Marriage of Arceneaux, supra, 51 Cal.3d at p. 1133), we construe the courts reference as a response to cross-defendants argument in their posttrial reply brief that any statute of limitations would have run on any bargain formed in the mid-1980s. As cross-defendants acknowledge in their reply brief, "[a]n existing legal obligation resting upon the promisor, or a moral obligation originating in some benefit conferred upon the promisor, or prejudice suffered by the promisee, is also a good consideration for a promise, to an extent corresponding with the extent of the obligation, but no further or otherwise." (Civ. Code, § 1606, italics added; see Dow v. River Farms Co. (1952) 110 Cal.App.2d 403, 409 (Dow) [if there was once past obligation, but remedy is barred, such as where debt is barred by statute of limitations or discharge in bankruptcy or statute of frauds, a subsequent promise to pay is enforceable].)
Cross-defendants rely most heavily on two cases for their argument that no bargained for consideration can be found here, Passante v. McWilliam, supra, 53 Cal.App.4th 1240, and Dow, supra, 110 Cal.App.2d 403. These cases are distinguishable from the present circumstances. Passante involved a companys promise to give corporate counsel certain stock after he had arranged for additional funding for the corporation. The company later reneged on its promise, and the lawyer sued. The trial court set aside a jury verdict in the lawyers favor, finding, among other things, that the lawyer had violated ethical standards in failing to advise the company that it might want to consult with another lawyer before making its promise. (Passante, at p. 1242.) The appellate court affirmed, reasoning that "[i]f the promise was bargained for, it was obtained in violation of Passantes ethical obligations as an attorney. If, on the other hand, it was not bargained for—as the record here clearly shows—it was gratuitous. It was therefore legally unenforceable, even though it might have moral force." (Id. at p. 1243.) However, the present case involves neither such an ethical violation nor a clear record that the note was given without valid consideration.
In Dow, supra, 110 Cal.App.2d 403, the widow of the founder of a corporation was denied recovery for her claim that a $50,000 payment to her husband had been agreed to by the companys board of directors before he died. (Id. at p. 404.) The appellate court found that the founder had rejected the boards offer of this payment. (Id. at p. 408.) It also concluded from the record (which included the statement in the boards written resolution that the founder "`has never requested nor has he ever indicated that he expected any payment " for his services (id. at p. 404)) that the boards offer had been a promise to make a gift and, therefore, was unenforceable. (Id. at p. 408.) The record here contains no such clarity. As we have already discussed, the language of the note itself, and Pappass actions at the time he entered into the note and recorded the deed, creates the reasonable inference that valid consideration was given for Pappass obligation to pay Terry pursuant to the note, making the note and deed enforceable.
D. Cross-Defendants Evidence
Cross-defendants argue that the evidence presented to the trial court indisputably supports their view that no consideration was given. As indicated by our discussion above, this is incorrect. Moreover, other than pointing to the notes lack of interest or due date (which do not necessarily establish a lack of consideration, and are contradicted by the notes own recitations), cross-defendants essentially rely on the testimony of Pappas, his attorney, and Raymond G. For example, cross-defendants contend: "In the relevant period of 1984-86, Terry, while providing assistance to Pappas . . . had no agreement for nor expectation of compensation. Consistent therewith, Terry never made a demand for compensation. . . . [Pappass attorney] testified that he understood that the Note was a gift to Terry because Charles felt grateful to Terry for services earlier provided. Charles testified that he wanted to reward Terry for helping him, even though he had no legal obligation to do so. Raymond [G.] . . . testified that he, similarly, without any agreement for nor expectation of compensation, had helped Charles Pappas over many years as Terry had done for a much shorter period. . . . Evidence adduced on Charles cross-examination merely reinforced the conclusion that this was a gift in light of the familial tone of the relationship between Charles and Terry."
Although not raised by Muellner, "[t]he determination of the credibility of each witness and the weight to be given to his or her testimony is within the exclusive province of the trial judge as the trier of fact. [Citation.] The trier of fact `properly may reject part of the testimony of a witness, though not directly contradicted . . . . " (Gonzales v. Gonzales (1968) 267 Cal.App.2d 428, 432.) " `[I]n passing on credibility, the trier of facts is entitled to take into consideration the interest of the witness in the result of the case. . . . Provided the trier of the facts does not act arbitrarily, he may reject in toto the testimony of a witness, even though the witness is uncontradicted. " Nichols v. Mitchell (1948) 32 Cal.2d 598, 606-607, italics omitted.) Accordingly, we will not interfere with the trial courts evaluation of the credibility and weight that should be given to witness testimony. Clearly, the trial court did not find credible the relevant testimony of Pappas and his attorney, and, as the court noted, Raymond G.s testimony about his lack of compensation is of little consequence to determinations about any agreement between Pappas and Terry. In short, the trial court, rather than finding cross-defendants testimony evidence to be indisputable, rejected it, and was entitled to do so.
E. Other Arguments by Cross-Defendants
Cross-defendants also argue that Muellners argument in posttrial briefing that he may be entitled to one half the equity of the property shows a "lack of clarity" that reinforces there was no bargained for consideration. Muellners statement was as much hyperbole as argument (it was raised in a parenthesis, prefaced by the statement that "indeed, it would appear that a valid argument can be made . . . ."), and he did not pursue it below. We see no merit in cross-defendants argument.
Cross-defendants further argue in their reply brief to this court that even if Pappas ever had a legally enforceable obligation to compensate Terry, he failed "to carry his burden to adduce evidence of his damages," mandating reversal of the trial courts judgment. We need not consider the merit of this argument, as our review of the record indicates that cross-defendants failed to raise this issue below, or in their opening brief on appeal. Therefore, we disregard it as waived. (E.g., Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1209, 1236.)
Cross-defendants also argue that the trial court made "a mistake of law" by relying on evidence that Pappas subjectively viewed his execution of the note and deed of trust as creating a legal obligation. Cross-defendants do not provide record citations or legal authorities to support their argument; accordingly we disregard it. (See, e.g., People v. Stanley (1995) 10 Cal.4th 764, 793; Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216; Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1379.)
In summary, it is incorrect that as a matter of law the promissory note and deed of trust are unenforceable gifts unsupported by bargained for consideration. The trial courts findings regarding consideration for the note and deed of trust are supported by substantial evidence, and are not a basis for reversal of the judgment.
II. Interest
Cross-defendants next argue that the lower court erroneously awarded pre-judgment interest to Muellner in the amount of $8,582.30. We agree that the court erred, as an award of interest was contrary to the express terms of the promissory note.
The parties debate whether or not the notes reference to zero percent interest controls here, or whether the court correctly awarded prejudgment interest as damages. The note states that $50,000 is promised to Terry, "with interest, on the unpaid principal amount from Charles A. Pappas, his heirs and/or assigns at the rate of zero per cent per annum, interest payable _____." (Italics added to those terms typed onto the form document.)
Pappas argues that this provision is very similar to that discussed in Pugh v. Dawson (1928) 95 Cal.App. 505, which stated a promise to pay two thousand dollars in a year, " `with interest, payable at the rate of no per cent per annum from date until paid." (Id. at p. 508.) The same paragraph also stated that " `[s]hould the interest not be paid when due, then both principal and interest shall become immediately due and payable at the option of the holder of this note. " (Id. at p. 514.) The trial court construed the notes language as providing for interest from and after the date of the notes maturity until paid. (Ibid.) The appellate court disagreed, concluding "that a careful reading or fair consideration of the language of the note regarding interest must lead to the conclusion that it was not intended by the original parties to the instrument that it should bear interest either before or after the date of its maturity." (Ibid.) The court noted that the word "no" had been written into the phase " `with interest payable at the rate of no per cent until paid," which the court considered "indicative of a deliberate purpose to charge no interest." (Id. at p. 515) The court considered it "probable" that if the parties understood the note was to draw interest after the date of its maturity if not paid, "it would seem probable that . . . the parties would have caused to be likewise written in the instrument, in language too plain to be misunderstood, a provision to that effect." (Ibid.)
We think the analysis in Pugh v. Dawson, supra, 95 Cal.App. 505 controls in the present case. The note between Pappas and Terry states that there shall be "zero" percent interest per annum on any "unpaid principal amount." (Italics added.) This provision, particularly with its typewritten insertion of the word "zero," can only be construed as a no-interest stipulation between the parties regarding any unpaid principal amount. Written in all-encompassing language without any qualification, it must be construed as such, particularly in light of the absence of any date certain for the maturity of the note.
Muellner argues that Pugh v. Dawson, supra, 95 Cal.App. 505, is distinguishable from the present case because it involved a note that referred to "interest payable at no per cent per annum from date until paid" (id. at p. 508, italics added), and the phrase "until paid" is not present in the note before us. This argument is unpersuasive. The reference to "unpaid principal amount" in the note before us essentially serves the same purpose as the phrase "until paid."
Muellner also argues that cross-defendants are incorrect on two additional points. First, Muellner contends that the cross-defendants conceded in their posttrial brief below that "interest commences to run upon a demand instrument containing no provision as to interest from the time of commencement of suit, sometimes designated as judicial demand." Muellner ignores that cross-defendants first argued in this same brief that "[t]he note must be observed and no pre-judgment interest may be awarded," and prefaced their "concession" by stating "[e]ven were the note not clear in denying interest . . . ." Obviously, cross-defendants did not make any concession other than for the sake of an alternative argument.
Second, Muellner contends that "the rule is well established that interest is recoverable in this situation." He cites as his principal support for this argument Puppo v. Larosa (1924) 194 Cal. 717, 720 (Puppo), which states that "[i]f . . . interest is not expressly reserved, and the paper matures at the time certain, it will draw interest from its maturity by operation of law without prior demand, and at the legal rate." (Id. at p. 720.) However, the court in Puppo construed the relevant provision in the note (it only refers to the words " `at the rate of no interest "from the note itself) to mean that the note "should not bear interest before it matured." (Id. at pp. 720-721.) Thus, interest at the legal rate could be awarded as damages for not paying the note at maturity. (Ibid.)
Muellner also cites a number of other cases, without discussion. Most of these cases follow Puppo, supra, 194 Cal. 717. (See Nesbit v. MacDonald (1928) 203 Cal.219; Estate of Adams (1959) 174 Cal.App.2d 505, 508; Epstein v. Frank (1981) 125 Cal.App.3d 111, 123; Mark McDowell Corporation v. LSM 128 (1989) 214 Cal.App.3d 1427, 1430-1433, disapproved on other grounds in Southwest Concrete Products v. Gosh Construction Corp. (1990) 51 Cal.3d 701, 704.) The agreement in Wood & Tatum Co. v. Basler (1918) 37 Cal.App. 381, also cited by Muellner, did not address interest one way or another. (Id. at p. 383.)
Muellners analysis ignores a critical fact which distinguishes the present case from Puppo, supra, 194 Cal. 717, and the cases that followed it. As we have already pointed out, the note between Pappas and Terry does not contain a time certain for its maturity, and does contain an affirmative stipulation to "zero" interest on any "unpaid principal amount." Accordingly, the note does not allow for an interpretation that the parties intended that its interest provision apply only to the period prior to demand for payment or the filing of a suit.
In conclusion, the trial court erred in awarding Muellner pre-judgment interest. We reverse that portion of the trial courts judgment and remand the matter to the trial court for entry of a revised judgment consistent with this opinion.
III. Attorney Fees
Both appellants and respondent argue that they are entitled to attorney fees on appeal. This issue is best determined by the trial court upon remand. (See Liu v. Moore (1999) 69 Cal.App.4th 745, 754.)
DISPOSITION
The superior courts judgment is affirmed in part and reversed in part. The matter is remanded to the trial court for further proceedings consistent with this opinion. Each side is to bear its own costs on appeal.
We concur:
Kline, P.J.
Haerle, J.