Court Opinion

ID: 4404306
Source: CourtListenerOpinion
Date Created: 2019-06-06 22:01:53.876616+00
Date Added: 2024-06-11T14:52:31.097388
License: Public Domain

Filed 6/6/19
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                           DIVISION ONE

WERTHEIM, LLC,                            B277633

        Plaintiff and Appellant,          (Los Angeles County
                                          Super. Ct. No. BC328263)
        v.

CURRENCY CORPORATION,

        Defendant and Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County. Mark A. Borenstein, Judge. Reversed and
remanded.
     The Law Offices of F. Jay Rahimi, F. Jay Rahimi; Matthew
D. Kanin; AlvaradoSmith, W. Michael Hensley for Plaintiff and
Appellant.
     Krane & Smith, Jeremy D. Smith, Daniel L. Reback; Diem
Law, Robin L. Diem for Defendant and Respondent.
             ___________________________________
      After Wertheim LLC obtained a money judgment against
Currency Corporation, Currency obtained a bond to secure the
judgment and appealed. We affirmed the judgment and issued a
remittitur in July 2012. Wertheim sought to satisfy the
judgment from the appeal bond but Currency blocked
disbursement. After the issuer deposited the bond funds with the
superior court and withdrew itself from the dispute, Wertheim
and Currency litigated their respective entitlement to the funds,
resulting in another trial and two more appeals that ultimately
determined the parties’ rights under the judgment.
      In 2016, Wertheim moved for postjudgment enforcement
                                                          1
costs pursuant to Code of Civil Procedure section 685.080, which
requires that such costs be sought by noticed motion before the
judgment is “satisfied.” The trial court denied Wertheim’s motion
as untimely on the ground that the bond issuer’s deposit of
appeal bond funds with the superior court satisfied the judgment
long before Wertheim’s motion, notwithstanding Currency’s
successful efforts to forestall disbursement.
      We reverse. Disputed funds on deposit with the superior
court do not satisfy a judgment for purposes of a postjudgment
motion for costs. Wertheim’s motion was therefore timely, and
we remand the matter for the trial court to determine its merits.
Additionally, Currency has moved this court for monetary
sanctions against Wertheim and its counsel and to dismiss the
appeal based on being frivolous. We have considered this motion
and deny it on the merits.

      1
      All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.

                                2
                          BACKGROUND
A.     Original Lawsuit
       We recount some of the facts from an opinion authored by
Division Five of this District in the second of two related appeals,
which we will call Wertheim III. (Wertheim, LLC v. Currency
Corp. (Aug. 25, 2017, B270926) [nonpub. opn.].)
       In 2009, a jury in Department 44 of the superior court
found Currency liable to Wertheim for breach of contract, and
awarded it $38,554.48. The trial court entered judgment in this
amount in June 2009, and in February 2010 amended the
judgment to add $152,164 in attorney fees and costs, bringing the
total to $190,718.48. Both parties appealed.
       To stay enforcement of the judgment during pendency of
the appeal Currency obtained an appeal bond from The Bar Plan
Mutual Insurance Company (Insurer) in the amount of $286,078.
(See § 917.1 [the perfecting of an appeal does not stay
enforcement of the judgment absent an undertaking].)
       We affirmed the judgment in May 2012, and issued a
remittitur on July 25, 2012. (Wertheim v. Currency Corp. (May
22, 2012, B218547) [nonpub. opn.] (Wertheim I).)
       Nearly 16 months later, on November 18, 2013, Wertheim
submitted a claim to Insurer requesting payment of $275,000.37
from appeal bond funds, comprising the judgment of $190,718.48
plus interest at 10 percent. (See §§ 695.210, subd. (b), 685.010,
subd. (a) [the amount required to satisfy a money judgment
includes the judgment plus interest].) Currency opposed release
of any funds on the ground that the amount Wertheim sought
was excessive and failed to take into account offsets arising from
six liens Currency held against Wertheim from judgments in
other cases.

                                 3
       Wertheim moved in department 44 to enforce liability on
the appeal bond, which Currency also opposed. The court denied
the motion as untimely under section 996.440, subdivision (b),
which requires that a motion in the original action to enforce
liability on a bond be brought within a year after any appeal is
                    2
finally determined.
       On December 17, 2013, while Wertheim’s motion to enforce
liability on the appeal bond was pending, Insurer deposited a
check in the full amount of the appeal bond ($286,078) to the
Clerk of the Los Angeles Superior Court for disbursement “as the
Court sees fit.”
B.     Parallel Action
       Although Wertheim’s motion to enforce liability on the
appeal bond was untimely under section 996.440, section 996.430
provides that liability on a bond may also be enforced by way of a
separate lawsuit, to which both the principal and surety must be
       3
joined. Accordingly, Wertheim filed a new lawsuit in February

      2
         Section 996.440 provides in pertinent part: “(a) If a bond
is given in an action or proceeding, the liability on the bond may
be enforced on motion made in the court without the necessity of
an independent action. [¶] (b) The motion shall not be made
until after entry of the final judgment in the action or . . . until
[any] appeal is finally determined. The motion shall not be made
. . . more than one year after the later of the preceding dates.”
      3
        Section 996.430 provides in pertinent part: “The liability
on a bond may be enforced by civil action. Both the principal and
the sureties shall be joined as parties to the action. [¶] . . . . If
the bond was given other than in an action or proceeding, the
action shall be commenced in any court of competent
jurisdiction . . . .”

                                  4
2014 against Insurer and Currency (the parallel action), which
was assigned to department 39.
      Insurer, now a defendant, responded by filing a motion
pursuant to section 386.5, which allows a defendant holding
money in which it claims no interest to apply for an order
discharging it from liability and dismissing it from the action (a
                                4
deposit and discharge motion). Department 39 ultimately
granted the motion, discharged Insurer from liability, awarded it
attorney fees (charged solely to Wertheim), and dismissed it from
the case.
       After our colleagues in Division Five affirmed these orders
(Wertheim, LLC v. Bar Plan Mut. Ins. Co. (Dec. 1, 2016, B268539)
[nonpub. opn.] (Wertheim II)), the parallel action proceeded to
trial on the only remaining issues: When did interest on the
judgment begin and end, and on what principal amount?
       Wertheim contended interest began accruing on the full
amount of the judgment ($190,718.48) in June 2009, when
judgment was entered in the original proceeding, and had never
ceased because Wertheim had not yet been paid. Currency
admitted that interest on the original judgment ($38,554.48)
began accruing in June 2009 but argued interest on the costs
portion of the amended judgment ($152,164) did not begin to
accrue until February 2010, when they were added. Currency

      4
         Section 386.5 provides in pertinent part: “Where the only
relief sought against one of the defendants is the payment of a
stated amount of money alleged to be wrongfully withheld, such
defendant may . . . apply to the court for an order discharging
him from liability and dismissing him from the action on his
depositing with the clerk of the court the amount in dispute . . . .”

                                    5
further argued that interest ceased accruing in July 2012, when
our remittitur issued in the original proceeding.
       Department 39, Judge Feffer, ultimately found, as
pertinent here, that the judgment was “satisfied” on July 25,
2012, the date our remittitur issued, because the funds were
theoretically available to Wertheim then, and interest stopped
running at that time. The court entered judgment accordingly,
and both sides appealed. (The judgment also included an offset of
$5,161.56 for two judgment liens held by Currency.)
       Division Five held that interest on the full judgment,
including the costs portion, began accruing in June 2009, when
the original judgment was entered. (Wertheim III, supra,
B270926, at pp. 11-12.)
       This ruling effectively vindicated Wertheim’s November 18,
2013 claim on the appeal bond for $275,000.37.
       Division Five agreed with the trial court that interest
stopped running when the judgment was satisfied, but held
contrary to the trial court that satisfaction occurred not in July
2012, when our remittitur issued, but December 2013, when
Insurer deposited appeal bond funds with the superior court.
(Wertheim III, supra, B270926, at pp. 16-17.) (Division Five also
affirmed the trial court’s refusal to apply a third lien, in the
amount of $8,535.14, to offset the judgment, as Currency had
failed to perfect it.)
C.     Motion for Postjudgment Costs
       On March 10, 2016, while the cross-appeals in Wertheim III
were pending, Wertheim moved in the original proceeding for
postjudgment attorney fees incurred to date pursuant to section

                                6
685.080. Such a motion must be filed before the subject judgment
                      5
has been “satisfied.”
      Department 44, considering itself bound by department
39’s yet-extant finding that the judgment was satisfied in July
2012—which Wertheim III later reversed—denied the motion as
“untimely due to the finding of [department 39] that the
judgment was satisfied in [July] 2012.”
      Wertheim now appeals this ruling.
      Wertheim filed its opening appellate brief before Wertheim
III was decided, and in it addressed issues that have since been
obviated by that opinion.
      Currency filed its respondent’s brief after Wertheim III,
raising the new argument that even if, as Division Five held,
judgment satisfaction occurred in December 2013 rather than
July 2012, Wertheim’s motion for postjudgment costs was still
untimely because it was not made until March 10, 2016.
      To afford the parties an opportunity to address the impact
of Wertheim III, we invited and received supplemental briefs from
both sides.
                           DISCUSSION
      Wertheim contends the trial court erred in finding its
motion for postjudgment costs was made after the judgment was

      5
        Section 685.080, today’s workhorse, provides in pertinent
part: “The judgment creditor may claim costs authorized by
Section 685.040 by noticed motion. The motion shall be made
before the judgment is satisfied in full, but not later than two
years after the costs have been incurred. . . . [¶] . . . [¶] . . . The
court shall make an order allowing or disallowing the costs to the
extent justified under the circumstances of the case.” (Italics
added.)

                                   7
satisfied, because to this day the judgment remains unpaid. It
argues Wertheim III’s holding that the judgment was satisfied in
December 2013 pertains only to cessation of interest, not to the
timeliness of postjudgment motions. We agree.
A.     Standard of Review and Relevant Law
       We review both statutory interpretation and entitlement to
attorney fees de novo. (Conservatorship of Ribal (2019) 31
Cal.App.5th 519, 524.)
       A judgment between two parties is a bilateral construct
that finally determines the rights and corresponding obligations
of each side. (See § 577 [“A judgment is the final determination
of the rights of the parties in an action or proceeding”].) “ ‘There
can be but one final judgment in an action, and that is one which
in effect ends the suit in the court in which it was entered, and
finally determines the rights of the parties in relation to the
matter in controversy.’ ” (Bank of America Nat. Trust & Savings
Ass’n v. Superior Court (1942) 20 Cal. 2d 697, 701-702.)
       “Satisfaction” of such a judgment is also necessarily
bilateral, as it both compensates the judgment creditor for harm
inflicted by the judgment debtor and insulates the debtor against
further claims from the creditor. (See Borba Farms, Inc. v.
Acheson (1988) 197 Cal. App. 3d 597, 605 [satisfaction of a
judgment compensates for some harm and bars further
recovery].)
       1.    Satisfaction—General Rule
       A money judgment may be satisfied—and the judgment
creditor compensated and the debtor insulated against further
claims—“by payment of the full amount required to satisfy the

                                 8
judgment or by acceptance by the judgment creditor of a lesser
                                                                   6
sum in full satisfaction of the judgment.” (§ 724.010, subd. (a).)
        “ ‘Payment to a judgment creditor is governed by the cases
and statutes which govern commercial transactions.’ [Citation.]
 . . . [T]hat means California Uniform Commercial Code section
3310[, which states:] ‘Unless otherwise agreed, if a certified
check, cashier’s check, or teller’s check is taken for an obligation,
the obligation is discharged to the same extent discharge would
result if an amount of money equal to the amount of the
instrument were taken in payment of the obligation.’ ” (Gray1
CPB, LLC v. SCC Acquisitions, Inc. (2015) 233 Cal. App. 4th 882,
893-894 (Gray1).) Therefore, for purposes of judgment
satisfaction, “payment” means either (1) the tender of cash or (2)
the tender and acceptance of a certified check or similar
instrument. (See Conservatorship of McQueen (2014) 59 Cal. 4th
602, 615 (McQueen); Gray1, at pp. 892-893, 896.)
        In other words, because a judgment creditor has the right
to demand payment in cash, an unaccepted noncash tender
neither constitutes payment nor satisfies the judgment.
(McQueen, supra, 59 Cal.4th at p. 615; Gray1, supra, 233
Cal.App.4th at p. 894.)
B.      Satisfaction for Purposes of Interest Cessation
        Interest accrues on a judgment at a rate of 10 percent.
(§ 685.010, subd. (a).) Because a judgment creditor may reject a
noncash tender, a judgment debtor unable immediately to pay in
cash—for example in the case of a sizeable judgment—would be

      6
        Other modes of satisfaction include offset, a covenant not
to enforce, and operation of law. (Legis. Com. com., Deering’s
Ann. Code Civ. Proc., § 724.010 (2014 ed.) p. 502.)

                                  9
at the mercy of the creditor with respect to interest accumulating
after the tender. But “there is no reason a judgment creditor
should continue to earn interest on its judgment after refusing
payment of the judgment.” (Gray1, supra, 233 Cal.App.4th at p.
896.)
       Therefore, in section 685.030, titled “Cessation of interest,”
the Legislature has provided that interest will cease to accrue on
a judgment on the date “satisfaction is tendered to the judgment
creditor or deposited in court for the judgment creditor.”
(§ 685.030, subds. (b) & (d); see Gray1, supra, 233 Cal.App.4th at
p. 895 [“Interest on a judgment ceases to accrue [on] . . . ‘the date
satisfaction is tendered to the judgment debtor or deposited in
              7
court’ ”].)
       7
           Section 685.030 provides in relevant part:

      “(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.

       “(c) If a money judgment is partially satisfied . . . interest
ceases to accrue as to the part satisfied on the date the part is
satisfied.

      “(d) For the purposes of subdivisions (b) and (c), the date a
money judgment is satisfied in full or in part is the earliest of the
following times:

     “(1) The date satisfaction is actually received by the
judgment creditor.

      “(2) The date satisfaction is tendered to the judgment
creditor or deposited in court for the judgment creditor.

      “(3) The date of any other performance that has the effect of
satisfaction.”

                                   10
       Although section 685.030 defines this tender or deposit as
“satisfaction” of the judgment, it expressly limits the scope of the
definition only “[f]or the purposes of” interest cessation.
(§ 685.030, subd. (d).) No authority expands this definition for
use outside the interest cessation context.
C.     Satisfaction for Purposes of Postjudgment Motions
       Pursuant to the Enforcement of Judgments Law (§ 680.010
et seq.), a judgment creditor may claim authorized costs incurred
while enforcing a judgment, including authorized attorney fees
(§§ 685.040, 685.090). Section 685.080 requires that a motion for
such costs be made before the judgment is “satisfied in full.”
(§ 685.080, subd. (a).) The time limitation is “ ‘ “to avoid a
situation where a judgment debtor has paid off the entirety of
what he [justifiably] believes to be his obligation in the entire
case, only to be confronted later with a motion for yet more
fees.” ’ ” (Gray1, supra, 233 Cal.App.4th at p. 891.) Section
685.080 does not define the phrase “satisfied in full,” but absent
some legislative indication to the contrary, of which there is none,
satisfaction requires payment.
       Comerica Bank v. Runyon (2017) 16 Cal.App.5th 473
(Runyon) illustrates the point. There, the creditor obtained a
joint and several judgment against several defendants in the sum
of almost $430,000. After some judgment debtors settled with
the creditor a balance of $1,350 remained unpaid. One of the
debtors then moved for contribution from another debtor
pursuant to section 883, which permits a co-judgment debtor to
apply on noticed motion for an order determining liability for
contribution from other judgment debtors. Such an application

                                11
must be made before the judgment is “satisfied in full,” or within
                                      8
30 days thereafter. (§ 883, subd. (a).)
      The appellate court held the debtor’s application was timely
because the creditor had not yet been fully paid—there was an
outstanding balance of $1,350—when the application was filed.
The court stated that “[a] judgment cannot be satisfied within the
meaning of section 883, subdivision (a) until the judgment
creditor is paid in full and has no outstanding claim and the
obligation of the judgment debtor has been fully extinguished.”
(Runyon, supra, 16 Cal.App.5th at p. 482.)
      Here, Insurer tendered a certified check or similar
instrument in December 2013, when it deposited appeal bond
funds with department 39. However, Wertheim never accepted
the funds; it was prevented from doing so when Currency
disputed the amount due. Because Wertheim has not been paid,
the judgment has not been satisfied. Therefore, Wertheim’s
motion for postjudgment costs, filed on March 10, 2016, was
timely.
      Currency argues that the definition of judgment
satisfaction prescribed by section 685.030 for interest cessation
should apply to postjudgment costs motions as well. No principle
or authority supports the argument. We think the better rule is
that described in Runyon, which like the instant case involved a

      8
        Section 883 provides in pertinent part: “A judgment
debtor entitled to compel contribution or repayment pursuant to
this chapter may apply on noticed motion to the court that
entered the judgment for an order determining liability for
contribution or repayment. The application shall be made at any
time before the judgment is satisfied in full or within 30 days
thereafter.”

                                12
post-judgment motion that had to be made before the judgment
was “satisfied in full.” A judgment is not satisfied for purposes of
postjudgment motions until the judgment creditor has been paid.
      This rule makes sense from a policy standpoint as well.
Sections 685.030, 685.080 and 883, pertaining respectively to
interest cessation, postjudgment costs, and postjudgment
contribution, vest a measure of control over postjudgment
charges in the party to be charged. Section 685.030 enables a
judgment debtor to limit its liability for postjudgment interest by
tendering satisfaction of the judgment, whether or not the
creditor chooses to accept the tender. Section 883 enables a
judgment co-debtor to retain the option of seeking contribution so
long as the debtor chooses not to satisfy his or her portion of the
judgment, and provides a measure of insulation (30 days) should
the judgment otherwise be satisfied. Section 685.080 enables a
creditor to recoup its postjudgment costs notwithstanding an
unperfected tender by filing its motion before accepting the
tender. In each case the rights of the party at risk are insulated
from unilateral acts of third parties over whom it may have no
control.
      This rule also works no mischief on the judgment debtor,
who could unilaterally avoid further postjudgment costs simply
by delivering cash.
      In conclusion, satisfaction of a judgment for purposes of
interest cessation does not satisfy the judgment for all purposes.
In the context of a postjudgment motion for costs, the judgment is
not satisfied until the judgment creditor has been paid. Because
Wertheim has not yet been paid, its judgment remains
unsatisfied, and its postjudgment motion, which otherwise was
brought within two years of the costs having been incurred, was

                                13
timely. The order denying Wertheim’s motion on untimeliness
grounds is therefore reversed and the matter is remanded to the
trial court for determination of the motion on its merits.
                          DISPOSITION
       The order is reversed and the matter remanded to the trial
court for further proceedings as set forth above. Appellant is to
recover its costs on appeal.
       CERTIFIED FOR PUBLICATION

                                          CHANEY, Acting P. J.
We concur:

             BENDIX, J.

                           *
             WEINGART, J.

      *
       Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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