Court Opinion

ID: 5118548
Source: CourtListenerOpinion
Date Created: 2021-10-14 21:03:05.494944+00
Date Added: 2024-06-11T08:22:07.749883
License: Public Domain

Filed 10/14/21
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                          DIVISION ONE

WERTHEIM, LLC,                           B304655

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

CURRENCY CORPORATION,

      Defendant and Appellant.
___________________________________

WERTHEIM, LLC,                           B310650

       Plaintiff and Appellant,

       v.

CURRENCY CORPORATION,

       Defendant and Respondent.

     APPEALS from orders of the Superior Court of Los Angeles
County. Edward B. Moreton, Jr., Judge, and Stuart M. Rice,
Judge. Affirmed in part and reversed in part.
     Shaw Koepke & Satter, Jens B. Koepke for Defendant and
Appellant and for Defendant and Respondent.
     The Law Offices of F. Jay Rahimi, F. Jay Rahimi; Matthew
D. Kanin; Alvarado Smith, W. Michael Hensley for Plaintiff and
Respondent and for Plaintiff and Appellant.
             ___________________________________

      We have before us in these consolidated appeals three
attorneys’ fees motions by a judgment creditor seeking over
$800,000 for its efforts to enforce a 2009 judgment entered after a
jury awarded it approximately $39,000. Even standing alone,
these fee claims are striking in relation to the amount of the
underlying judgment, but they also must be considered in light of
the more than 40 appeals occasioned by the parties’ competing
businesses in the Second District’s docket over the last dozen
      1
years.
      In the current litigation, the trial court awarded Wertheim
LLC’s attorney fees incurred in successfully appealing an order
made during judgment enforcement proceedings years ago.
Currency Corporation appeals that award, arguing the fees were
unreasonable and unnecessary. Because Wertheim’s litigation
strategy has been unnecessary and objectively unreasonable, we
reverse the order awarding its post-appeal attorneys’ fees.
      The trial court also denied two subsequent motions by
Wertheim, the first of which involved postjudgment enforcement
fees not encompassed within its earlier motion, and the second of

      1
        We take judicial notice of our docket. (Evid. Code, § 452,
subd. (d).)

                                 2
which sought attorneys’ fees in connection with enforcement of an
appeal bond.
       The trial court concluded that the postjudgment
enforcement fee motion was untimely, and that both motions
sought fees that were unnecessarily incurred. We conclude that
the motion for post-judgment enforcement fees was timely, but
also hold that most of the fees sought in these two subsequent
motions were not necessarily or reasonably incurred and, hence,
unrecoverable. Accordingly, while affirming the trial court’s
denial of fees as to the appeal bond fee motion, we reverse, in
part, its denial of fees as to postjudgment enforcement fees.
                           BACKGROUND
       These appeals involve Wertheim’s three motions for
attorney fees incurred in this lawsuit and a separate but related
suit.
A.     Original Action and 2009 Judgment
       1.    Lawsuit
       The parties are engaged in dozens of disputes concerning
the assignment of royalty rights from third parties. In 2009, a
jury found Currency liable to Wertheim for breach of contract and
awarded it $38,554.48. (The “original action.”) The trial court
entered judgment, including interest and costs, as amended, in
the amount of $190,718.48. Both parties appealed, and in May
2012 we affirmed the judgment and issued a remittitur in July
2012. (Wertheim v. Currency Corp. (May 22, 2012, B218547)
[nonpub. opn.] (Wertheim I).)
       2.    First Postjudgment Motion
       On March 10, 2016, during its enforcement efforts,
Wertheim moved for postjudgment attorney fees incurred to date.
(The postjudgment motion.) Such a motion must be filed before

                                3
the subject judgment has been satisfied. (Gray1 CPB, LLC v.
SCC Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 891 (Gray1).)
The trial court denied the motion as untimely because the
availability of an as-yet unpaid appeal bond satisfied the
judgment, and any motion for attorney fees made after that bond
became available was untimely.
      Wertheim appealed and we reversed, concluding that for
timing purposes, a judgment is satisfied not when an appeal bond
becomes available but when payment is actually tendered.
(Wertheim LLC v. Currency Corp. (2019) 35 Cal.App.5th 1124
                2
(Wertheim IV).) We directed the trial court to consider the
postjudgment motion “on the merits.” We further directed that
Wertheim recover its costs on appeal, which Currency paid.
       3.   Post-Appeal Motion
       On remand from Wertheim IV, Wertheim moved under
Civil Code section 1717 for attorney fees incurred solely in
prosecuting the Wertheim IV appeal. (The post-appeal motion.)
It supported the motion with the declarations and time records of
three attorneys who worked on the appeal.
       Currency opposed the motion, contending that because
Wertheim IV was an appeal from an order made during
postjudgment collection efforts, not from the judgment itself
(which had been appealed in Wertheim I), any award of attorney
fees incurred in prosecuting that appeal was governed by Code of
Civil Procedure section 685.040, not Civil Code section 1717.
Code of Civil Procedure section 685.040 has a requirement which
Civil Code section 1717 does not: only fees that were necessarily
incurred are recoverable. Currency argued Wertheim was unable

     2
         We will introduce Wertheim II and Wertheim III below.

                                 4
to satisfy the requirement of Code of Civil Procedure section
685.040 that such fees be necessary. Currency also sought a
continuance to conduct discovery in to the reasonableness of fees
sought.
       The trial court denied the continuance, found that Civil
Code section 1717 governed (which requires no showing of
necessity), and found Wertheim’s attorney fees were for the most
part reasonable. It therefore granted Wertheim’s motion and
awarded it $241,399.01.
       Currency appeals that order.
B.     Bond Action
       1.    Lawsuit
       Currency secured the 2009 judgment in the original action
by an appeal bond. Liability on a bond may be enforced
expeditiously on noticed motion filed within a year after any
appeal is finally determined, or more laboriously by a separate
                                     3
lawsuit. (Code Civ. Proc., § 996.440.) After we affirmed the
2009 judgment (Wertheim I), we issued a remittitur in July 2012.
This gave Wertheim until July 2013 to file a motion to enforce
liability on the bond. However, Wertheim waited until December
2013 to do so, which the trial court found was untimely.
Wertheim thereafter initiated a new lawsuit against the bond
company to recover on the bond. (The bond action.)
       The bond company interpleaded the bond funds and was
awarded attorney fees, which our colleagues in Division Five
affirmed. (Wertheim, LLC v. The Bar Plan Mutual Ins. Co. (Dec.
1, 2016, B268539) [nonpub. opn.] (Wertheim II).)

      3
        Undesignated statutory references will be to the Code of
Civil Procedure.

                                5
       After trial in the bond action, Currency moved for an order
allocating the entire amount of the bond company’s attorney fees
to Wertheim, which the trial court granted, finding allocation of
the fees solely to Wertheim was warranted in part because
Wertheim had made an untimely claim on the appeal bond.
       Division Five affirmed this order as well, holding,
“[Wertheim’s] delay in seeking to recover on the Appeal Bond is
alone sufficient for us to conclude the trial court’s allocation
decision was not an abuse of discretion. The lawsuit in this case
resulted solely from [Wertheim’s] failure to timely file a motion in
the Underlying Proceeding within a year of the remittitur
issuing. Had [Wertheim] done so, the fees incurred by Insurer
would not have been incurred (or would have been negligible) and
the attorney work necessary in any such enforcement action
would have been almost assuredly far less expensive.”
(Wertheim, LLC v. Currency Corp. (Aug. 25, 2017, B270926)
[nonpub. opn.] (Wertheim III).)
       The parties and trial court thereafter negotiated a
judgment disbursing $131,000 of the interpleaded funds to
Wertheim “in satisfaction of” the underlying, 2009 judgment,
“inclusive of principal and interest.” That disbursement did not
include “post-judgment interest from Currency as to amounts due
under [a] March 11, 2016 Order.” To cover this interest,
Currency paid Wertheim $14,300 in March 2019.
       After this payment, Wertheim on April 18, 2019, filed an
acknowledgment of full satisfaction of the judgment in the bond
action.
C.     Back in the Original Action
       As stated above, on March 10, 2016, during its enforcement
efforts, Wertheim moved for postjudgment attorney fees incurred

                                 6
to date. Its efforts continued beyond that date, however, and it
incurred further attorney fees.
       On February 13, 2020, Wertheim filed an acknowledgment
of satisfaction of the judgment in this action, checking the box on
Judicial Council form EJ-100 reflecting that the judgment was
satisfied in full. However, Wertheim also modified the form by
interlineation, specifying that “[t]his acknowledgment applies
ONLY to that certain Memorandum of Costs On Appeal (Appeal
BC277633) filed September 24, 2020 (Attachment 5a) as to Rule
8.278 costs only, and not any other judgment issued or pending in
the above-referenced action or any other action.” In other words,
Wertheim acknowledged only that Currency had paid the appeal
costs, amounting to $3,481.21, incurred in Wertheim IV.
       1.    Renewed Postjudgment Motion
       Given that we reversed the trial court’s denial of
Wertheim’s March 10, 2016 motion for postjudgment attorney
fees and directed the trial court to consider it on the merits,
Wertheim renewed the motion, seeking $211,112.65 for fees
incurred in prosecuting the bond action.
       2.    Second Postjudgment Motion
       On October 30, 2019, Wertheim filed a motion seeking
$388,122.52 in postjudgment attorney fees incurred after March
10, 2016 in connection with the original action and the bond
action, $91,000 of which were incurred more than two years
before the motion was filed.
       3.    Rulings
       The trial court denied both motions.
             a.     Necessity
       To the extent either motion sought fees incurred in the
bond action, the court found that Wertheim failed to show the

                                 7
fees “resulted from anything other than its dilatory conduct and
should not have been necessary in securing enforcement of the
underlying judgment.” “[T]he necessity of the Bond Action was
created by Wertheim itself,” the court found, “since it failed to
seek enforcement on the bond within a year of remittitur.”
             b.    Timeliness
       To the extent Wertheim sought postjudgment fees incurred
in the original action, the court found the motion, filed six
months after Wertheim acknowledged full satisfaction of the
2009 judgment, was untimely.
                                      4
       Wertheim appeals these rulings.
       We consolidated Currency’s and Wertheim’s appeals.
                           DISCUSSION
       We review both statutory interpretation and entitlement to
attorney fees de novo. (Conservatorship of Ribal (2019) 31
Cal.App.5th 519, 524.) In reviewing an order awarding or
denying attorney fees, we first “determine whether substantial
evidence supports the factual basis on which the trial court
acted” (Obregon v. Superior Court (1998) 67 Cal.App.4th 424,
430), and then determine whether the order constituted an abuse
of discretion. (Jaffe v. Pacelli (2008) 165 Cal.App.4th 927, 934.)
A.     Wertheim’s Appeal of the Orders Denying Its
Renewed and Second PostJudgment Motions
       Wertheim renewed its March 10, 2016 postjudgment
motion for attorney fees, seeking $211,112.65 for fees incurred in
prosecuting the bond action, and on October 30, 2019, filed a

      4
        Wertheim also requested the $126,000 in bond company
fees that the trial court in the bond action had allocated to
Wertheim. The trial court here denied that request, which
Wertheim abandons on appeal.

                                8
second motion for postjudgment attorney fees, seeking
$388,122.52 for fees incurred between July 2016 and October
2019 in connection with both the original action and the bond
action. The trial court denied both motions on the grounds that
fees incurred on the bond action were not necessary, and the
second motion was untimely.
       “Under the ‘American rule,’ followed in California, ‘each
party to a lawsuit ordinarily must pay his or her own attorney
fees. [Citations.]’ [Citation.] An exception to this rule exists
where the parties have agreed to ‘the measure and mode of
compensation of attorneys. [Citation.] For example, a contract
may contain a provision providing for attorney fees in enforcing
the contract. Where a contract contains such a provision, the
court must fix reasonable attorney fees as an element of the costs
of the lawsuit.” (Gray1, supra, 233 Cal.App.4th at pp. 889-890.)
       Here, the contract at issue in the original action provided
that the prevailing party would receive attorney fees incurred in
enforcing the contract.
       Pursuant to the Enforcement of Judgments Law, section
680.010 et seq., postjudgment fees or costs, including attorney
fees incurred in enforcing a judgment, may be added to a
judgment when authorized pursuant to contract or statute, to the
extent they are “reasonable and necessary.” (§ 685.040.)
       A motion for such costs “shall be made before the judgment
is satisfied in full, but not later than two years after the costs
have been incurred.” (§ 685.080, subd. (a).)
       1.     Necessity
       Wertheim argues that the trial court abused its discretion
when it found that no attorney fees incurred in the bond action
were necessary because that action was itself unnecessary. We

                                9
disagree. Wertheim could have avoided a new lawsuit entirely by
filing a timely motion pursuant to section 996.440.
       “The liability on a bond may be enforced by civil action.”
(§ 996.430, subd. (a).) Alternatively, “[i]f 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.” (§ 996.440, subd. (a).)
       If an appeal is taken in the underlying action, a motion to
enforce liability on an appeal bond must be made within one year
of final determination of the appeal. (§ 996.440, subd. (b).)
       We affirmed the 2009 judgment in Wertheim I and issued a
remittitur in July 2012. This gave Wertheim until July 2013 to
file a motion to enforce liability on the bond. It failed to do so
until December 2013, rendering its motion untimely and thereby
precipitating the bond action against the bond company.
        The trial court had an ample basis upon which to conclude
that Wertheim’s attorney fees on the bond action were
unnecessary. Wertheim’s strategy of filing a separate lawsuit,
rather than a timely collection motion, fueled litigation in which
tangential concerns have come to the fore, resulting in fees highly
disproportionate to the result achieved. (See Karton v. Ari
Design & Construction, Inc. (2021) 61 Cal.App.5th 734, 746
[overlitigation appropriately considered in awarding attorney
      5
fees].) Under these circumstances, the trial court did not abuse
its discretion in finding such litigation to be unnecessary.

      5
       We pause here to note both parties share significant
blame for inflating fees. Currency, for example, made multiple
specious arguments on this appeal, and it failed promptly to pay
the small underlying judgment, which could have easily avoided
most of the fees now being sought.

                                10
       Wertheim relies on four cases for the proposition that the
determination of whether section 685.040 entitles a judgment
creditor to attorney fees does not depend upon the forum in which
the expenses were incurred: Jaffe v. Pacelli, supra, 165
Cal.App.4th 927; Chinese Yellow Pages Co. v. Chinese Overseas
Marketing Service Corp. (2008) 170 Cal.App.4th 868; Cardinale v.
Miller (2014) 222 Cal.App.4th 1020; and Globalist Internet
Technologies, Inc. v. Reda (2008) 167 Cal.App.4th 1267.
       We agree with these cases, but in each, resort to the
alternative forum was necessitated by the judgment debtor’s
conduct. Here, the bond action was required largely because
Wertheim failed to file a timely motion under section 685.040. As
Wertheim acknowledges in its opening brief, the court “is not
obligated to grant all of the fees sought by the creditor for all of
its activities. It may, in its discretion, reduce the fee award for
excessive time spent on ill-considered pursuits.” The trial court
was within its discretion to find the bond action to be an ill-
considered pursuit.
       Wertheim argues that categorically denying all of a
creditor’s fees as unnecessary because it chose one procedural
option over another amounts to bestowal of a disfavored status on
one of two equally available procedures. Not so. While both
procedures are equally available, they are not always equally
necessary.
       Wertheim argues that in Wertheim IV we impliedly found
its conduct in the bond action was necessary, to the effect it is
now law of the case. However, in Wertheim IV, we held only that
Wertheim’s motion for postjudgment fees incurred in that action
was not untimely, implying nothing about the necessity of the
bond action.

                                11
       Wertheim argues that in Wertheim IV our direction to the
trial court to consider Wertheim’s motion “on the merits” left the
court without jurisdiction to deny fees altogether. We disagree.
A consideration of the merits of a motion admits the possibility
that the motion has none.
       Wertheim argues we would bestow a windfall on Currency
were we to conclude that its herculean efforts in the bond action
were unnecessary simply because the action itself was
unnecessary. We are not insensitive to this concern, and our
opinion today in no way endorses Currency’s conduct in this
litigation, which, as Wertheim correctly points out, has been
largely unmeritorious. But the trial courts in this never-ending
dispute have always been in a much better position than we to
evaluate the relative equities, and two trial courts have found
Wertheim’s litigation tactics to be unnecessary.
       We conclude that the trial court’s finding here was
supported by substantial evidence and was neither arbitrary,
capricious, or patently absurd, and resulted in no miscarriage of
justice.
       2.    Timeliness
       As previously noted, on October 30, 2019, Wertheim filed
its second motion for postjudgment attorney fees, seeking
$388,122.52 in fees incurred after March 10, 2016, in connection
with both the original action and the bond action, $91,000 of
which were incurred more than two years before the motion was
filed.
       The trial court denied the motion as untimely under section
685.080 because it came six months after Wertheim filed Judicial
Council form EJ-100, on which it checked a box representing that
the 2009 judgment was satisfied in full. However, Wertheim also

                                12
modified that form by interlineation, specifying that the
acknowledgement applied only to Currency’s payment of appeal
costs incurred in Wertheim IV.
       “Payment” for purposes of satisfaction of a money judgment
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; Gray1,
supra, 233 Cal.App.4th at pp. 892-893.)
       No evidence suggests that Currency ever tendered full
satisfaction of the 2009 judgment, or that Wertheim accepted the
tender or acknowledged satisfaction. On the contrary, that
Wertheim’s March 10, 2016 motion for postjudgment attorney
fees was never resolved (until today) suggests that Wertheim
deemed the judgment unsatisfied. Therefore, its second motion
was not rendered untimely by section 685.080 (insofar as it
sought fees incurred within two years of filing the motion). The
court therefore erred in denying the motion on timeliness
grounds.
       Currency argues that once the bond proceeds were
disbursed and Currency paid the remaining $14,300 owed in
postjudgment interest, there were no other costs or fees to add to
the 2009 judgment. It is incorrect. Additional fees were
potentially awardable pursuant to Wertheim’s March 10, 2016
motion for them, which was revived by Wertheim IV, as well as
any motion it might bring for fees incurred after that date.
       Currency relies upon Gray1, supra, for the proposition that
once a judgment is fully satisfied, it includes only attorney fees
actually awarded by a court, not those claimed but as yet
unawarded. We do not disagree, but here, the 2009 judgment has
not been fully satisfied. Although the judgment in the bond

                               13
action stated it was “in satisfaction of” the 2009 judgment,
“inclusive of principal and interest,” it did not purport to be in
full satisfaction of the 2009 judgment. And Currency adduces no
evidence suggesting that any tender it made was conditioned on
its being considered as full satisfaction of 2009 judgment.
       3.      Equitable Tolling is Unavailable
       Wertheim acknowledges that approximately $91,000 of the
fees it seeks in the second postjudgment motion were incurred
more than two years before the motion was filed, rendering that
request untimely pursuant to the two-year provision of section
685.080, but argues that time limit must be equitably tolled
because the pendency of Wertheim IV prevented it from filing the
second motion. We disagree.
       “Equitable tolling is a judicially created doctrine that
permits the tolling of a statute of limitations. [Citation.]
Equitable tolling is invoked ‘ “ ‘[w]hen an injured person has
several legal remedies and, reasonably and in good faith, pursues
one’ ” ’ ” to the exclusion of others. (Gray1, supra, 233
Cal.App.4th at p. 897.) Even were we to assume for purposes of
argument that equitable tolling applies to motions as well as
actions, it would not apply here because nothing about Wertheim
IV, which concerned fees incurred up to March 10, 2016,
precluded a motion for postjudgment fees incurred after that
date. Even though the trial court denied Wertheim’s motion for
pre-March 2016 fees, it was incumbent upon Wertheim to move
for post-March 2016 fees within two years to preserve its claim to
them.

                                14
B.     Currency’s Appeal of the Order Granting Wertheim’s
Post-Appeal Motion
       After our remittitur in Wertheim IV, Wertheim moved
under Civil Code section 1717 for attorney fees incurred in that
appeal, which as discussed above concerned only Wertheim’s
March 10, 2016 motion for postjudgment attorney fees incurred
only in the bond action. The trial court granted the motion, but
made no finding that the fees were necessarily incurred, because
Civil Code section 1717 required none.
       Currency contends that section 685.040, which governs
postjudgment fees, not Civil Code section 1717, which governs
fees incurred on appeal, controls a motion for attorney fees
incurred in enforcing a judgment, even those incurred to appeal a
postjudgment enforcement order. As discussed above, such a
motion must establish the costs were “reasonable and necessary”
(§ 685.040), whereas a motion for costs awardable pursuant to
Civil Code section 1717 need establish only that the costs were
“reasonable” (Civ. Code, § 1717, subd. (a)).
       Currency argues that by failing to consider whether
Wertheim’s appellate costs were necessary, the trial court applied
the wrong standard. Applying the proper standard, it argues,
Wertheim’s appellate costs were unnecessary as a matter of law
because Wertheim IV itself was unnecessary given that the bond
action upon which it was predicated was itself unnecessary.
       We need not decide whether section 685.040 or Civil Code
section 1717 applies because Wertheim’s litigation strategy has
not only been unnecessary under the former, as discussed above,
but also objectively unreasonable under the latter.
       Wertheim had the option of filing either a collection motion
or a separate lawsuit. It chose the lawsuit which, as we have

                                15
said, unnecessarily exploded its legal fees. An “award of
contractual attorney fees is governed by equitable principles.”
(International Industries, Inc. v. Olen (1978) 21 Cal.3d 218, 224;
see also Santisas v. Goodin (1998) 17 Cal.4th 599, 616 prior
version of Civil Code section 1717.) Equity does not support an
award of Wertheim’s appellate attorney’s fees, and the trial court
did not abuse its discretion in denying such an award of appellate
fees in Wertheim IV.
       We also remind the parties that fee awards are
fundamentally governed by equitable principles. The trial and
appellate courts in Los Angeles have been involved in dozens of
litigations sorting out the rights and obligations of these business
rivals in their long running and sometimes personal competition
to obtain royalties from third parties.
       After the case was submitted, we requested supplemental
briefing on whether in evaluating Wertheim’s attorney fee
requests we may consider equitable principles, given the
disproportion of the fees requested and the original judgment. In
response, Wertheim answered that the result achieved may not
be “used to evaluate proportionality,” and the lodestar may not be
“adjusted to achieve proportionality.” Our question was not
about evaluating or achieving proportionality but considering
equitable principles. On this question one of Wertheim’s
citations was helpful: “[T]he amount of money involved in the
litigation is an important factor in determining an award of
attorneys’ fees.” (Niederer v. Ferreira (1987) 189 Cal.App.3d
1485, 1507.) Equity countenances against awarding attorney fees
to parties who litigate unnecessarily or in expensive battles
eclipsing the dispute that initially brought them into court.

                                16
                         DISPOSITION
       The order granting Wertheim’s motion for appellate fees in
Wertheim IV is reversed with directions to enter a new order
denying that motion. The order denying Wertheim’s first
postjudgment motion is affirmed. The order denying Wertheim’s
second postjudgment motion is affirmed as to that portion of the
fees found to be unnecessary by the trial court and as to that
portion incurred more than two years before the motion was filed,
but otherwise reversed.
       The matter is remanded to the trial court to calculate what
portion of the fees Wertheim seeks in its second postjudgment
motion may be attributed to the original action only, were sought
within two years of having been incurred, and were reasonably
incurred. Both sides are to bear their own costs on appeal.
       CERTIFIED FOR PUBLICATION

                                           CHANEY, J.

We concur:

             BENDIX, Acting P. J.

                            *
             CRANDALL, J.

      *
       Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

                                17