Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV150771
BAMATTRE-MANOUKIAN, J.
I. INTRODUCTION
Appellant Vertical Ventures Capital, LLC (Vertical Ventures) entered into a real estate investment agreement with respondent PMP Access Fund Manager, LLC (PMP Access) that included an arbitration clause. After a dispute arose concerning Vertical Ventures’ obligations, the parties stipulated to an arbitration award that required Vertical Ventures to pay PMP Access $400,000 plus 20 percent interest on that amount until paid, if Vertical Ventures did not satisfy certain conditions.
The trial court confirmed the stipulated arbitration award and on December 4, 2009, entered judgment in favor of PMP Access in the amount of $400,000 plus interest in an amount to be determined by postjudgment motion. On January 22, 2010, the trial court granted PMP Access’s postjudgment motion and ordered Vertical Ventures to pay interest at the rate of 20 percent, including prejudgment interest in the amount of $61,369.96 and postjudgment interest of $219.18 per day from December 4, 2009, until the judgment is paid.
On appeal, Vertical Ventures challenges the portion of the January 22, 2010 postjudgment order awarding both prejudgment and postjudgment interest at the rate of 20 percent. According to Vertical Ventures, the contract rate of 20 percent violates the California interest rate limit of 10 percent (Cal. Const., art. XV, § 1; Code Civ. Proc., § 685.010) and also constitutes an unreasonable and unenforceable penalty under Civil Code section 1671. For the reasons stated below, while we reject Vertical Ventures’ contention that the prejudgment interest rate of 20 percent is unenforceable, we agree that the postjudgment interest rate on a California judgment is limited to 10 percent. We will therefore direct the trial court to modify the January 22, 2010 postjudgment order to award postjudgment interest at the constitutional and statutory rate of 10 percent. As so modified, we will affirm the order.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Parties’ Agreement
In 2007, Vertical Ventures was a small real estate investment company that invested in office, industrial and retail properties. PMP Access was the managing member of a real estate investment fund known as the Page Mill Properties Access Fund, LLC (the Fund). Vertical Ventures became an investor member of the Fund by entering into an Amended and Restated Limited Liability Company Agreement with PMP Access.
The record on appeal contains only a few excerpts of the Amended and Restated Limited Liability Company Agreement.
Pursuant to the terms of the Amended and Restated Limited Liability Company Agreement, Vertical Ventures became an accredited member, which meant that it was not required to make an initial capital contribution to the Fund but could be required to make a capital contribution if it did not meet certain financial requirements. The agreement also provided that if an investor member failed to make a capital contribution by the capital call payment date, then 10 days after notice of default “the Managing Member may, or may not, in its sole and absolute discretion, subject such Defaulting Member to any one or more of the following adverse consequences: (i) interest accruing on the amount of such default and any costs of collection associated therewith commencing on the Capital Call Payment Date at the lesser of (A) the rate of 20% per annum, compounded annually, and (B) the maximum rate allowable under the applicable law....”
Additionally, the Amended and Restated Limited Liability Company Agreement included an arbitration clause that required all disputes arising under the agreement to be arbitrated before a single arbitrator in accordance with the rules and procedures of Judicial Arbitration and Mediation Services/Endispute (JAMS). The choice of law provisions in the arbitration agreement stated: “The binding arbitration shall be conducted by a single arbitrator... who, if reasonably possible, shall have familiarity with Delaware law.... [¶]... [¶]... The arbitrator shall be required to determine all issues in accordance with the existing case and statutory laws of the state of Delaware.” (Capitalization omitted.) The arbitration clause further provided for the entry of judgment in California: “Judgment on the award shall be entered in the federal or state courts located in San Mateo or Santa Clara County, California, and once entered, such judgment may be enforced in the same manner as a final judgment entered by the federal or state courts located in San Mateo or Santa Clara County, California.” (Capitalization omitted.)
As to appeal rights, the arbitration clause stated, “The members expressly waive any right to appeal from the arbitrator’s decision, the judgment entered on the arbitrator’s decision or any order of the arbitrator except on grounds that would be available to vacate the decision for any binding arbitration under the laws of the state of Delaware.”
B. The Stipulated Arbitration Award
On September 19, 2008, Vertical Ventures was notified in accordance with the terms of the Amended and Restated Limited Liability Company Agreement that it had failed to meet the financial requirements for an accredited member of the Fund and had until October 22, 2008, to cure its failure. Vertical Ventures did not cure its failure and on February 17, 2009, its status as an accredited member was revoked and a capital contribution of $400,000 was demanded.
In March 2009, PMP Access initiated arbitration proceedings in which it sought payment of the $400,000 capital contribution from Vertical Ventures. On May 5, 2009, the parties stipulated to an arbitration award in favor of PMP Access. The arbitrator (Hon. William F. Martin (Ret.)) issued the arbitration award in conformity with the parties’ stipulation on May 29, 2009.
The stipulation to the arbitration award included a provision regarding the right to appeal: “[T]he parties waive their right to vacate this Award or appeal the Award pursuant to this stipulation.” We note that PMP Access has not raised an issue as to whether Vertical Ventures has waived its appeal rights.
The stipulated arbitration award states in pertinent part: “If [Vertical Ventures] does not, on or before June 15, 2009, (1) become an Accredited Investor pursuant to the Credit Facility with CNB [City National Bank] as confirmed by CNB and (2) pay to [PMP Access] costs of collection of $3000, [PMP Access] shall recover against [Vertical Ventures] the amount of $400,000, plus interest at 20% per annum, compounded annually, in the amount of $23,671, plus costs of collection in the amount of $3000, for a total Award of $426,671. The Award shall bear interest at 20% per annum, compounded annually, until paid.”
C. The Judgment and Postjudgment Order
The parties subsequently filed competing motions in the trial court with respect to the stipulated arbitration award. PMP Access filed a petition to confirm the arbitration award on August 26, 2009, while Vertical Ventures filed a petition to vacate the arbitration award on September 4, 2009. In its response to PMP Access’s motion to confirm the arbitration award and in its own petition to vacate the award, Vertical Ventures argued that the stipulated arbitration award should be vacated because it had been procured by fraud.
On November 19, 2009, the trial court issued its order granting PMP Access’s petition to confirm the arbitration award. The judgment entered on December 4, 2009, awarded PMP Access $400,000, plus interest in an amount to be determined by post-judgment motion and costs.
Thereafter, PMP Access filed a motion for attorney fees and interest in which it sought prejudgment interest (for the period of June 15, 2009, to December 4, 2009) in the total amount of $61,369, 96 and postjudgment interest in the amount of $219.18 per day until the judgment is paid. PMP Access calculated the interest owed by applying an interest rate of 20 percent per annum, compounded annually, as set forth in the stipulated arbitration award. Additionally, PMP Access argued that a contract interest rate of 20 percent was allowed under Delaware law and therefore the anticipated defense of usury was precluded.
We observe that this case does not implicate California usury laws since it does not involve a loan or forbearance. “ ‘The usury laws protect against the oppression of debtors through excessive interest rates charged by lenders. [Citation.] Usury laws ‘protect the public from sharp operators who would take advantage of ‘unwary and necessitous borrowers.” ’ [Citation.]” (Agapitov v. Lerner (2003) 108 Cal.App.4th 830, 838.) “The essential elements of usury are: (1) The transaction must be a loan or forbearance; (2) the interest to be paid must exceed the statutory maximum; (3) the loan and interest must be absolutely repayable by the borrower; and (4) the lender must have a willful intent to enter into a usurious transaction. [Citations.]” (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 798.) “ ‘In determining whether a particular transaction is usurious, courts look to its substance rather than to its form. The key question is whether the transaction has as its true purpose the hire of money at an excessive interest rate.’ [Citation.] A ‘forbearance’ has been defined as an agreement to extend the time for payment of an obligation.’ [Citation.]” (Roodenburg v. Pavestone Co., L.P. (2009) 171 Cal.App.4th 185, 193.)
In its opposition, Vertical Ventures argued that the 20 percent interest rate was unenforceable because California law limits the postjudgment interest rate to 10 percent per annum (Code Civ. Proc., § 685.010) and bars the recovery of unreasonable penalties. Vertical Ventures therefore asserted that prejudgment interest should be calculated at the 10 percent rate from the date of the stipulated arbitration award through entry of judgment, and postjudgment interest should also be calculated at the 10 percent rate.
On January 22, 2009, the trial court entered its order granting PMP Access’s motion for attorney fees and interest. The order states in pertinent part, “Following submission of the moving papers and argument of counsel, the Court granted [PMP Access]’s Motion and awarded [PMP Access] reasonable attorneys’ fees in the amount of $19,502.00. The Court also granted [PMP Access]’s request for 20% interest of $61,369.96, plus interest of $219.18 per day on and after December 4, 2009 until the judgment is paid.”
Vertical Ventures filed a timely notice of appeal from that portion of the January 22, 2010 order imposing postjudgment and prejudgment interest.
III. DISCUSSION
On appeal, Vertical Ventures argues that the portion of the January 22, 2009 postjudgment order awarding prejudgment and postjudgment interest at a rate of 20 percent per annum must be reversed because an interest rate of 20 percent violates the California interest rate limit of 10 percent (Cal. Const., art. XV, § 1; Code Civ. Proc., § 685.010) and also constitutes an unreasonable and unenforceable penalty under Civil Code section 1671. We will begin our analysis with a discussion of appealability and the applicable standard of review.
A. Appealability
Before determining the standard of review, we first observe that Vertical Ventures correctly states that the January 22, 2009 postjudgment order is appealable. “[A]ny order relating to the enforcement of a judgment or the refusal to grant such an order is appealable. [Citations.] While this rule has chiefly been applied to orders concerning execution and the like, it may also include an attempt to obtain interest on a judgment. An order relating to an attempt to obtain interest is similar to a post-judgment order determining costs. Such an order is appealable. [Citation.] (Redevelopment Agency v. Goodman (1975) 53 Cal.App.3d 424, 429; Mendez v. Kurten (1985) 170 Cal.App.3d 481, 483.)
B. Standard of Review
In the analogous situation of a postjudgment award of attorney fees, it has been held that “in an appeal from a postjudgment order awarding attorney fees, we may review the entitlement to, as well as the amount of, the fees awarded.” (P R Burke Corp. v. Victor Valley Wastewater Reclamation Authority (2002) 98 Cal.App.4th 1047, 1055.) It follows that, in this appeal from a postjudgment order awarding interest, we may review PMP Access’s entitlement to interest at the rate of 20 percent, as set forth in the stipulated arbitration award. However, the scope of our review is limited under the pertinent California Supreme Court decisions.
“It is well settled that the scope of judicial review of arbitration awards is extremely narrow.” (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 943; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10 (Moncharsh).) “Because ‘arbitral finality is a core component of the parties’ agreement to submit to arbitration’ [citation] and because arbitrators are not required to make decisions according to the rule of law, parties to an arbitration agreement accept the risk of arbitrator errors [citation] and arbitrator decisions cannot be judicially reviewed for errors of fact or law even if the error is apparent and causes substantial injustice [citation].” (Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, 534 (Berglund).)
The same rules apply to limit appellate review of a judgment confirming an arbitration award. Thus, “[t]he decision to confirm or vacate an arbitration award lies with the trial court.” (Betz v. Pankow (1993) 16 Cal.App.4th 919, 923; Code Civ. Proc., §§ 1285-1287.6.) Appellate courts cannot review the merits of the dispute, the sufficiency of the evidence, or the reasoning in support of the arbitrator’s decision. (Pierotti v. Torian (2000) 81 Cal.App.4th 17, 23.)
The statutory scheme for private arbitration also provides that a judgment upon an arbitration award reached pursuant to a contractual agreement to arbitrate is not subject to reversal except on the grounds set forth in Code of Civil Procedure section 1286.2, subdivisions (a)(1) through (6). Absent clear proof of one of these grounds, an appellate court may not intervene. (Moncharsh, supra, 3 Cal.4th at p. 33; California Faculty Assn. v. Superior Court, supra, 63 Cal.App.4th at p. 944.)
In the present case, however, Vertical Ventures has not attacked the December 4, 2009 judgment on the stipulated arbitration award on any of the grounds available under Code of Civil Procedure section 1286.2, subdivision (a). Instead, Vertical Ventures challenges PMP Access’s entitlement under California law to a 20 percent interest rate, as provided in the stipulated arbitration award confirmed by judgment and applied in the postjudgment order awarding prejudgment and postjudgment interest.
Where, as here, the issue presents a pure question of law and does not involve the resolution of disputed facts, we apply the de novo standard of review. (Estate of DePasse (2002) 97 Cal.App.4th 92, 148.) Accordingly, we will independently review the legal issue of whether the trial court properly applied a 20 percent interest rate in calculating the amount of both prejudgment and postjudgment interest.
C. Prejudgment Interest
The postjudgment order of January 22, 2009, awarded prejudgment interest as requested by PMP Access for the period of June 15, 2009, to the date of entry of judgment, December 4, 2009, in the amount of $61,369.96, which PMP Access calculated at a 20 percent interest rate. Vertical Ventures contends that imposing prejudgment interest at the contract rate of 20 percent constitutes an unreasonable and unenforceable penalty under Civil Code section 1671. Relying on Ridgley v. Topa Thrift and Loan Assn. (1998) 17 Cal.4th 970, 977, Vertical Ventures explains that “there is no evidence that the liquidated damages provision--the 20% interest charge--bears a reasonable relationship to any damages PMP [Access] suffered, or that it represents the result of a reasonable effort by the parties to estimate a fair average compensation for any loss that may be sustained.”
Civil Code section 1671 provides, “(a) This section does not apply in any case where another statute expressly applicable to the contract prescribes the rules or standard for determining the validity of a provision in the contract liquidating the damages for the breach of the contract. [¶] (b) Except as provided in subdivision (c), a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made. [¶] (c) The validity of a liquidated damages provision shall be determined under subdivision (d) and not under subdivision (b) where the liquidated damages are sought to be recovered from either: [¶] (1) A party to a contract for the retail purchase, or rental, by such party of personal property or services, primarily for the party’s personal, family, or household purposes; or [¶] (2) A party to a lease of real property for use as a dwelling by the party or those dependent upon the party for support. [¶] (d) In the cases described in subdivision (c), a provision in a contract liquidating damages for the breach of the contract is void except that the parties to such a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.”
PMP Access rejects Vertical Ventures’ contention that the 20 percent interest rate is unenforceable. According to PMP Access, the issue must be resolved under Delaware law because the parties’ Amended and Restated Limited Liability Company Agreement included a choice of law provision unequivocally providing that the rights and obligations of the parties under the contract “shall be governed by and construed in accordance with the laws of the State of Delaware.” PMP Access maintains that Delaware law precludes a member of a limited liability company, such as Vertical Ventures, from using the defense of usury to an obligation under the limited liability company agreement, and also authorizes the imposition of adverse consequences on a member who fails to make a required capital contribution.
Alternatively, PMP Access argues that because the 20 percent interest rate was included in the stipulated arbitration award, it cannot be challenged except on grounds available to vacate an arbitrator’s decision under Delaware law, as provided by the parties’ agreement. PMP Access asserts that “[u]nder Delaware law, courts may vacate an arbitration award only where there is fraud, lack of arbitrator neutrality, the arbitrator exceeded his powers, substantial prejudice to the rights of a party, or the lack of a valid underlying agreement to arbitrate. [Citation.]”
In response, Vertical Ventures urges that California law applies to the determination of the enforceability of the 20 percent interest rate included in the stipulated arbitration award, since the parties’ Amended and Restated Limited Liability Company Agreement was extinguished by the judgment confirming the award. Vertical Ventures further contends that under California State Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 664, the court may reject a stipulated judgment that is contrary to public policy, such as a provision in the judgment providing for an interest rate that exceeds California’s constitutional interest rate limit of 10 percent.
We need not determine whether the 20 percent interest rate applied to the calculation of prejudgment interest violates the California limit on interest rates or is authorized as an adverse consequence under Delaware law. As stated above, our review is governed by California Supreme Court decisions that establish a narrow scope of review for arbitration awards. Here, the stipulated arbitration award confirmed by the trial court expressly provides that “[PMP Access] shall recover against [Vertical Ventures] the amount of $400,000, plus interest at 20% per annum....” Assuming, without deciding, that the prejudgment interest rate of 20 percent is illegal or constitutes an unreasonable and unenforceable penalty, it nevertheless constitutes a legal error in the arbitration award that is not subject to appellate review “even if the error is apparent and causes substantial injustice [citations].” (Berglund, supra, 44 Cal.4th at p. 534.)
Moreover, the general rule is that the contract rate of interest “ ‘applies until the contract is superseded by a judgment.’ [Citations.]” (Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 538; Civ. Code, § 3289, subd. (a).) Thus, it has been held that where the parties stipulated to the entry of an arbitration award that provided for payment of the principal sum of $106,479.93 in monthly installments with an interest rate of 15 percent per year, and then agreed to a stipulated judgment that included the 15 percent interest rate, the contract rate of interest applied until the judgment became enforceable. (John Siebel Associates v. Keele (1986) 188 Cal.App.3d 560, 567 (John Siebel Associates); see also Sandrini Brothers v. Agricultural Labor Relations Bd. (1984) 156 Cal.App.3d 878, 889 (Sandrini Brothers) [interest on award of employee backpay accrues at National Labor Relations Board interest rate exceeding 10 percent until superior court enforcement order is obtained].)
Civil Code section 3289, subdivision (a) provides, “Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.”
We believe this rule applies to the parties’ stipulated arbitration award. Pursuant to Code of Civil Procedure section 1287.6, “An award that has not been confirmed or vacated has the same force and effect as a contract in writing between the parties to the arbitration.” Thus, we determine that until the stipulated arbitration award was confirmed by the trial court and entered as a judgment on December 4, 2009, the 20 percent contract interest rate provided by the parties’ contract--the stipulated arbitration award--remained in effect.
The decision in California State Auto. Assn. Inter-Ins. Bureau v. Superior Court, supra, 50 Cal.3d 658, on which Vertical Ventures relies for the proposition that the parties’ agreement to prejudgment interest in excess of 10 percent is unenforceable as against public policy, does not alter our determination. That decision is distinguishable because it did not involve an arbitration award; instead, the injured party and the insurer in the underlying personal injury action stipulated that the insured admitted liability and agreed to pay $175,000 in damages with a reservation of rights against the insurer. (Id. at p. 662.) The trial court then entered judgment in accordance with the terms of the stipulation. (Ibid.) The issue before the California Supreme Court was not the applicable prejudgment interest rate, but whether the stipulated judgment could be given collateral estoppel effect in an action against the insurer. (Id. at pp. 664-666.)
For these reasons, we determine that the postjudgment order of January 22, 2009, is enforceable to the extent the order awards prejudgment interest of $61,369.96 calculated at the rate of 20 percent per annum, as provided by the parties’ stipulated arbitration award and confirmed by the trial court.
D. Postjudgment Interest
The January 22, 2009 postjudgment order also granted PMP Access’s request for postjudgment interest of $219.18 per day on and after December 4, 2009, (the date of entry of judgment) until the judgment is paid, which PMP Access had calculated using the 20 percent interest rate. Vertical Ventures contends that the postjudgment interest rate of 20 percent violates the 10 percent postjudgment interest rate limit imposed by the California Constitution, article XV, section 1 and Code of Civil Procedure section 685.010.
With regard to postjudgment interest, the threshold issue is whether the trial court had jurisdiction to apply a postjudgment interest rate of 20 percent in violation of the California postjudgment interest rate limit, as provided by the parties’ stipulated arbitration award. “The question of the trial court’s jurisdiction is a pure question of law subject to our independent review. [Citations.]” (Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 537.)
The California Supreme Court has instructed that “[a] court acts in excess of jurisdiction ‘where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no “jurisdiction” (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.’ [Citation.]” (In re Jesusa V. (2004) 32 Cal.4th 588, 624.) However, “[t]he granting of relief, which a court under no circumstances has any authority to grant, has been considered an aspect of fundamental jurisdiction for purposes of declaring a judgment or order void. [Citation.]” (Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 20.) In other words, “[a] judgment is void on its face if the trial court exceeded its jurisdiction by granting relief it had no power to grant. [Citation.]” (John Siebel Associates, supra, 188 Cal.App.3d at p. 564, fn.3.)
We therefore consider whether the trial court here acted in excess of its jurisdiction because it had no power to award postjudgment interest at an interest rate of 20 percent. The general rules regarding postjudgment interest are as follows.
Under the legislative scheme for the enforcement of judgments (Code Civ. Proc., § 680.010 et seq.), “postjudgment interest is appropriately included as an element of the enforcement of judgments.... [T]he judgment rate of interest is a ‘judicial tool’ for enforcing judgments because it reduces the incentive to delay payment. [Citation.] It also serves to adequately compensate plaintiffs. [Citation.]” (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 350.)
The postjudgment interest rate applicable to a California judgment is expressly provided by both constitutional and statutory provisions. Under the California Constitution, “[t]he rate of interest upon a judgment rendered in any court of this state shall be set by the Legislature at not more than 10 percent per annum.” (Cal. Const., art. XV, § 1.) Code of Civil Procedure section 685.010, subdivision (a) provides that “[i]nterest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.”
These postjudgment interest rules apply equally to a judgment entered in conformity with an arbitration award, which “has the same force and effect as, and is subject to all the provisions of law relating to, a judgment in a civil action of the same jurisdictional classification; and it may be enforced like any other judgment of the court in which it is entered, in an action of the same jurisdictional classification.” (Code Civ. Proc., § 1287.4.)
A trial court lacks jurisdiction to award postjudgment interest at a rate that violates the California constitutional and statutory limits because such an award would constitute “relief which the court had no power to grant....” (311 South Spring Street Co. v. Department of General Services (2009) 178 Cal.App.4th 1009, 1014 (311 South Spring Street).) Moreover, the parties may not confer jurisdiction on the court to award postjudgment interest in excess of the constitutional and statutory limits. (John Siebel Associates, supra, 188 Cal.App.3d at p. 564, fn. 3.) In John Siebel Associates, the parties agreed to a stipulated arbitration award that included a postjudgment interest rate of 15 percent and also agreed to the entry of judgment on the award. (Id. at p. 565.) The appellate court determined that “no judgment may provide for a 15 percent award of interest” and instructed the trial court to recalculate postjudgment interest at the constitutional rate. (Id. at p. 565.)
The present case is similar to John Siebel Associates. Here, the trial court lacked jurisdiction to award postjudgment interest at a 20 percent interest rate because that would “constitut[e] a grant of relief which the Constitution forbids and the court had no power to grant.” (311 South Spring Street, supra, 178 Cal.App.4th at p. 1018.) The parties could not, by virtue of their stipulated arbitration award, confer jurisdiction on the trial court to award postjudgment interest at a rate that violated the constitutional and statutory limits. (John Siebel Associates, supra, 188 Cal.App.3d at p. 564, fn. 3.)
We observe that PMP Access has not cited any California decisions in which an award of postjudgment interest in violation of the constitutional and statutory limits was upheld. Instead, PMP Access contends that the postjudgment interest rate of 20 percent awarded by the trial court in conformity with the parties’ stipulated arbitration award is enforceable under Delaware law pursuant to the Delaware choice-of-law provision in the parties’ agreement.
The decisions on which PMP Access relies-Mencor Enterprises, Inc. v HETS Equities Corp., (1987) 190 Cal.App.3d 432 (Mencor), Sarlot-Kantajarian v. First PA. Mortg. Trust (9th Cir. 1979) 599 F.2d 915 (Sarlot-Kantajarian), Gamer v. duPont Glore Forgan, Inc. (1976) 65 Cal.App.3d 280 (Gamer), and Ury v. Jewelers Acceptance Corp. (1964) 227 Cal.App.2d 11 (Ury)-do not support its position.
In Mencor, the appellate court reversed a judgment of dismissal on a demurrer sustained without leave to amend, finding that it could not be determined as a matter of law that the 44 percent interest rate permitted in Colorado on the parties’ promissory note would be enforced under the note’s Colorado choice-of-law provision. (Mencor, supra, 190 Cal.App.3d at p. 440, 441.) The Mencor court did not, and could not, consider any issue of postjudgment interest in reversing a judgment of dismissal.
In Sarlot-Kantajarian, the federal court determined that summary judgment was properly granted in a debtor’s action to recover usurious interest paid on a construction loan, where the loan agreement included a Massachusetts choice-of-law provision and the interest rate charged was lawful in Massachusetts. (Sarlot-Kantajarian, supra, 599 F.2d at pp. 916-918.) The decision in Sarlot does not reflect an award of postjudgment interest and no issue of postjudgment interest was raised. (Id. at p. 916.)
In Gamer, the appellant similarly sought recovery of allegedly usurious interest paid on a securities margin account. (Gamer, supra, 65 Cal.App.3d at p. 283.) Although the appellant was charged interest in excess of 10 percent on the debit balance in his margin account, the appellate court upheld summary judgment in favor of the creditor because the parties’ agreement included a New York choice-of-law provision, the interest rate was lawful under New York law, and no California public policy was offended. (Id. at pp. 284-285, 290.) Again, the decision does not reflect an award of postjudgment interest and the parties did not raise any issue pertaining to postjudgment interest.
In Ury, the appellants were jewelers who sought rescission of a loan agreement on the ground that the interest rate of more than 20 percent was usurious. (Ury, supra, 227 Cal.App.2d at pp. 13-14.) The trial court granted judgment in the lender’s favor for the amount of unpaid principal and plus interest at the contract rate “from date of calculation to judgment.” (Id. at p. 15.) The judgment was affirmed on appeal on the ground that the loan agreement was made in New York, the interest rate was not usurious under New York law, and a “strong public policy against the particular rate” was not found. (Id. at p. 21.) No award of postjudgment interest was mentioned, and therefore no issue of postjudgment interest was raised or considered in Ury.
Thus, the decisions in Mencor, Sarlot-Kantajarian, Gamer, and Ury do not aid PMP Access since none of the decisions addressed an issue regarding postjudgment interest. We are also not convinced by PMP Access’s alternative argument that the award of 20 percent postjudgment interest cannot be attacked as a legal error in the arbitration award. As we have discussed, once a judgment is entered in California upon a stipulated arbitration award, the award is enforceable as a judgment and the California constitutional and statutory limits on postjudgment interest apply. (John Siebel Associates, supra, 188 Cal.App.3d at p. 567.)
We also note that, in another context, the appellate court determined that the Agricultural Labor Relation Board’s order for employee backpay was subject to the California constitutional postjudgment interest rate of 10 percent, rather than the greater National Labor Relations Board interest rate, when “the order becomes vested with enough of the attributes of a judgment so that the constitutional rate should thereafter apply.” (Sandrini Brothers, supra, 156 Cal.App.3d at p. 889.) The court noted, “Such a metamorphosis is not unknown in the law. For instance, when a domestic judgment is obtained in California based upon a judgment in a sister state, the California judgment is entered for the amount unpaid under the sister state judgment, plus interest accrued computed at the rate of interest applicable to the judgment under sister state law. From the date of entry of the judgment here, however, interest accrues at the rate applicable to a judgment entered in this state. (Code Civ. Proc., § 1710.25.)” (Id. at p. 889.)
Thus, even if the judgment in this case had been entered in Delaware and postjudgment interest of 20 percent was awarded under Delaware law, the 20 percent postjudgment interest rate would be unenforceable in California pursuant to the statute governing sister state judgments, Code of Civil Procedure section 1710.25. That section provides, “(a) Upon the filing of the application, the clerk shall enter a judgment based upon the application for the total of the following amounts as shown therein: [¶] (1) The amount remaining unpaid under the sister state judgment. [¶] (2) The amount of interest accrued on the sister state judgment (computed at the rate of interest applicable to the judgment under the law of the sister state). [¶] (3) The amount of the fee for filing the application for entry of the sister state judgment. [¶] (b) Entry shall be made in the same manner as entry of an original judgment of the court. From the time of entry, interest shall accrue on the judgment so entered at the rate of interest applicable to a judgment entered in this state.” (Code Civ. Proc., § 1710.25, italics added.)
For these reasons, we determine that the trial court properly awarded PMP Access postjudgment interest from December 4, 2009, the date of entry of the judgment on the stipulated arbitration award, but the court lacked jurisdiction to apply a postjudgment interest rate of 20 percent in excess of the California constitutional and statutory postjudgment interest rate limits of 10 percent. (Cal. Const., art. XV, § 1; Code Civ. Proc., § 685.010.) We will therefore direct the trial court to modify the January 22, 2010 postjudgment order to award postjudgment interest at the constitutional and statutory interest rate.
IV. DISPOSITION
The trial court is directed to modify the postjudgment order of January 22, 2010 to award postjudgment interest from December 4, 2009, at the rate of 10 percent per annum in accordance with California Constitution, article XV, section 1 and Code of Civil Procedure section 685.010. As so modified, the January 22, 2010 order is affirmed. Each party is to bear its own costs on appeal.
WE CONCUR: ELIA, ACTING P. J., MIHARA, J.