Filed 6/26/15 County of Los Angeles v. Financial Casualty & Surety CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

COUNTY OF LOS ANGELES,

Plaintiff and Respondent,

v.

FINANCIAL CASUALTY & SURETY, 

INC.,

Defendant and Appellant.

 B254010

 (Los Angeles County

 Super. Ct. No. SJ3716)

APPEAL from an order of the Superior Court of Los Angeles County. Lia R. 

Martin, Judge. Order denying interest reversed and remanded with directions.

______

John M. Rorabaugh for Defendant and Appellant.

Mark J. Saladino, County Counsel, Ruben Baeza, Jr., Assistant County Counsel, 

and Joanne Nielsen, Principal Deputy County Counsel, for Plaintiff and Respondent.

______
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Financial Casualty & Surety, Inc. (Financial) appeals from that portion of 

an order in which the trial court denied interest on its motion for restitution pursuant to 

Code of Civil Procedure section 908. Financial contends that the court abused its 

discretion in denying interest. We agree and thus reverse and remand the matter with 

directions.

FACTUAL AND PROCEDURAL BACKGROUND

On June 11, 2011, Financial posted a $100,000 bond for the release of criminal 

defendant Luciano Villa. When Villa failed to appear in court on June 24, bail was 

forfeited. Financial moved to vacate the forfeiture and exonerate the bond on the ground 

that Villa had been deported on June 13 and thus, under Penal Code section 1305, 

subdivision (d), was “permanently unable to appear in the court.” Based on a finding of 

“unclean hands,” the trial court (Hon. Mark A. Young) denied Financial’s motion and 

entered judgment on the forfeited bond. Financial appealed. On April 10, 2012, during 

the pendency of the appeal, Financial paid the judgment, which totaled $101,493.29, 

including court costs and interest, to the County of Los Angeles (County).

We reversed the judgment, concluding that the trial court had applied an incorrect 

legal standard to deny Financial’s motion. (County of Los Angeles v. Financial Casualty 

& Surety, Inc. (2013) 216 Cal.App.4th 1192, 1195-1196.) Because relief from the 

forfeiture of bail under Penal Code section 1306 is neither discretionary nor dependent 

on “‘clean hands,’” we held that exoneration is mandatory so long as the defendant’s 

absence is “‘without the connivance of the bail,’” and no evidence existed that Financial 

had connived in Villa’s absence. (Ibid.) Our remittitur issued on August 1, 2013.

On October 3, Financial moved under Code of Civil Procedure section 908 for 

restitution, including interest on the money it had paid the County. The County opposed 

Financial’s request for interest. On December 11, the trial court (Hon. Lia R. Martin) 

entered an order awarding restitution in the amount paid, $101,493.29, but denying

interest. According to the court, an interest award was not equitable under the 

circumstances because the County had demanded payment of the judgment pursuant to 

Penal Code section 1306, which under subdivision (f) provides a two-year limitation 
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from entry of judgment for enforcement. On December 17, the County paid Financial 

$101,493.29. Financial appealed from that portion of the order denying interest.

DISCUSSION

Code of Civil Procedure section 908 provides that, upon reversal or modification 

of a judgment, “the reviewing court may direct that the parties be returned so far as 

possible to the positions they occupied before the enforcement of or execution on the 

judgment or order. In doing so, the reviewing court may order restitution on reasonable 

terms and conditions of all property and rights lost by the erroneous judgment or 

order. . . . ” “[A] trial court whose order or judgment has been reversed on appeal has 

inherent authority to afford similar relief. [Citations.]” (Gunderson v. Wall (2011) 

196 Cal.App.4th 1060, 1065 (Gunderson).) 

“‘The fundamental rule guiding the court [in awarding restitution under Code of 

Civil Procedure section 908] [i]s, so far as possible, to place the parties in as favorable 

a position as they could have been in had the judgment[] not been enforced pending 

appeal.’ [Citation.]” (Gunderson, supra, 196 Cal.App.4th at p. 1065.) An interest award 

routinely is part of restitution following the reversal of a money judgment unless such 

an award would be inequitable under the circumstances. (Textron Financial Corp. v. 

National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061, 1085 (Textron), disapproved 

on other grounds in Zhang v. Superior Court (2013) 57 Cal.4th 364, 377-379.) Courts 

“generally reason[] that []payment of interest is appropriate because a plaintiff who 

collects his judgment pending appeal assumes the risk that it may have to repay the 

award, along with interest, if the defendant prevails in that appeal. [Citations.]” 

(Gunderson, at pp. 1066-1067.) The decision whether to award interest as restitution is a 

question of “judicial discretion in determining what equity require[s].” (Stockton 

Theatres, Inc. v. Palermo (1953) 121 Cal.App.2d 616, 632; see also Textron, at p. 1085.)

Denying interest here did not place Financial “‘in as favorable a position as [it] 

could have been in had the judgment[] not been enforced pending appeal.’” (Gunderson, 

supra, 196 Cal.App.4th at p. 1065.) Financial lost the time value of its money between 

the time it paid the judgment to the County and the date the County returned its money 
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after our reversal of the judgment. Although the County demanded payment of the 

judgment pursuant to Penal Code section 1306, which under subdivision (f) gives it 

two years from entry of judgment for enforcement, payment of interest fulfills the 

purpose of Code of Civil Procedure section 908 to return Financial to the position it 

occupied before enforcement of the judgment that we reversed on appeal. No evidence 

exists that Financial acted inequitably in postjudgment proceedings to render the denial 

of interest an appropriate act of discretion. (See Gunderson, supra, 196 Cal.App.4th

at pp. 1067-1068 [denial of interest affirmed because defendant who ultimately 

paid judgment pending appeal engaged in inequitable postjudgment conduct that 

caused plaintiff to incur substantial costs in enforcing the judgment].) Under these 

circumstances, an award of interest as restitution is appropriate pursuant to Code of Civil 

Procedure section 908. (Textron, supra, 118 Cal.App.4th at pp. 1085-1086 [interest 

awarded as restitution when defendant had paid judgment based on plaintiff’s threat 

to execute on it and no evidence existed that defendant had acted inequitably in 

postjudgment proceedings].) We, therefore, reverse the denial of interest and remand the 

matter for the trial court to determine a reasonable interest rate and award interest from 

the date Financial paid the judgment (April 10, 2012) through the date the County 

returned the money (December 17, 2013).1

 

1 We note that interest rates are, and have been, low. (See, e.g., 

Department of the Treasury, Resource Center, Daily Treasury Yield Curve Rates 

<http://www.treasury.gov/resource-center/data-chart-center/interestrates/Pages/TextView.aspx?data=yield> [treasury yield curve rate on 10-year 

United States treasury bond 2.19 percent as of June 1, 2015].) Although Financial 

asks for interest at a rate of 10 percent per annum pursuant to Civil Code sections 3287 

and 3289, those provisions do not govern a restitution award under Code of Civil 

Procedure section 908. In addition, Financial has not demonstrated that an interest rate of 

10 percent would be the appropriate interest rate to restore it to as favorable a position as 

it could have been in had the judgment not been enforced pending appeal.
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DISPOSITION

The order insofar as the trial court denied interest is reversed and remanded with 

directions. On remand, the court shall determine a reasonable interest rate to restore 

Financial to its former position and award Financial that interest on the amount of 

$101,493.29 from April 10, 2012 through December 17, 2013. Financial is entitled to 

recover its costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur:

CHANEY, J.

JOHNSON, J.