Interest: Postjudgment Interest On Prejudgment Fees/Costs Begins Accruing On The Date Of The Judgment Or Order Establishing A Party’s Right To Recover Fees/Costs Whether Or Not That Recoverable Amount Has Been Established

Lucky Did Not Reach All Aspects Of The Issue Before The 4/1 DCA – With Copper Liquor Being More In Line With The Panel’s Construction Of The Enforcement Of Judgments Law.

Steve Jobs [Apple computer].  1984.  Photographer Bernard Gotfryd. Library of Congress.

            For a great discussion on the start date for the accrual of postjudgment interest on an award of prejudgment costs and/or fees, we commend for reading the 4/1 DCA’s opinion in Felczer v. Apple, Case No. D077314 (4^th Dist., Div. 1 April 23, 2021) (published).

            A subclass of retail workers had been $2,000,000 in damages against defendant Apple Inc. for wage-and-hour violations following a combined jury/bench trial.  When the trial court entered judgment in September 2017, it noted that costs would be later determined.

            In March 2018, the trial court awarded over $2,000,000 in Code Civ. Proc. § 1021.5 attorney fees to class counsel, plus an additional $440,000 in costs a month later after partially granting Apple’s motion to tax costs.  Although ultimately including the amounts for the fees and costs awards in the original judgment, the trial court did not specify when interest on the fees and costs would begin.

            During proceedings for a distribution plan an appropriate notice to class members, a dispute arose between the parties as to the date interest was to begin accruing on the fees and costs awards.  Plaintiffs argued that fees and costs, which are typically determined at a later time, retroactively become a part of the judgment, and that interest on the award of fees and/or costs runs from the date judgment was entered – in this case from September 2017. Apple argued interest runs on fees and costs awards from the date the amounts of those awards are determined – in this case from the March and April 2018 dates.  The trial court entered an order in line with Apple’s position.

            Plaintiffs appealed – relying on Lucky United Properties Investment, Inc. v. Lee, 185 Cal.App.4^th 125 (2010), which holds that interest ordinarily begins on the date of judgment.  However, the panel found Lucky did not reach all aspects of the issue before it because the prevailing party’s entitlement to fees was clear in Lucky – not so here as the judgment in this case established plaintiffs’ right to certain costs, but did not include attorney fees. 

            Ultimately, following the approach used in Copper Liquor, Inc. v. Adolph Coors Co. (5^th Cir. 1983) 701 F.2d 542 in constructing the Enforcement of Judgments Law – with Code Civ. Proc. § 685.020 providing that interest begins to accrue on a money judgment on the date that “judgment” was entered, and § 680.270 establishing a money judgment as that part of a judgment that requires the payment of money – the panel concluded that interest begins accruing as soon as a money judgment establishing entitlement to recover funds is entered, whether or not that recoverable amount has been determined, as “[w]aiting until the amount is certain would only create incentives for the judgment debtor to delay the final accounting.”

        As to the interest on costs, the 4/1 DCA reversed and remanded with instructions for the trial court to enter an order awarding interest on the costs from the September 2017 judgment date as the September 2017 judgment included a money judgment for certain costs – even though the precise amount was to be determined at a later date.  As to interest on the attorney fees award, the panel affirmed – finding no money judgment on attorney fees had been entered until the trial court made a decision as to plaintiffs’ right to the fees in March 2018.