Monday, April 27, 2015

I Want My Two Dollars . . . .

Hyundai Motor of Am. v. Superior Court, No. G051279 (D4d3 Mar. 20, 2015)

The is a Song-Beverly warranty case where the Hyundai made a full value plus attorneys’ fees offer under Code of Civil Procedure § 998 for the entire value of a car plaintiff claimed was a lemon. Plaintiff took the offer. The trial court awarded him $42k in attorneys’ fees. Plaintiff also demanded post-judgment interest on the fee award, running from the acceptance of the § 998 offer. The court declined. After all, judgment hadn’t been entered yet.

Hyundai paid off the entire fee amount—with judgment still not yet entered—but Plaintiff claimed the payout was $462.50 short for interest between the fee award hearing and the payoff. Plaintiff’s counsel then began judgment enforcement proceedings for his four hundred bucks, including noticing a judgment debtor exam of the CEO of Hyundai’s US sub. Plaintiff also filed a number of cost memos demanding ever-increasing cost awards.

Hyundai challenged the cost memos with the trial court. It determined that, notwithstanding the fact that judgment had not been entered until shortly before the hearing, its fee award was, in effect, an enforceable judgment that accumulated 10 percent post-judgment interest from the date of the order.  Hyundai took a writ.

This isn’t too hard. Post-judgment interest accrues from the entry of final judgment.  No judgment, no post-judgment interest. That includes cases where § 998 offers are accepted and judgment isn’t entered till later. And it also includes pre-judgment fee awards that are later subsumed into a final judgment. 

Writ granted.

The court of appeal goes on to explain that a peremptory writ—a writ granted without following the formal order to show cause process—is appropriate in this case. The court issued a Palma notice—a warning that it was considering entering a peremptory writ so the respondent better chime in right away. Upon reviewing plaintiff’s Palma response, it decided Hyundai’s right to relief was clear. Moreover, the court took particular notice of plaintiff’s counsel’s unprofessional move of noticing an apex judgment debtor exam of Hyundai America’s CEO to collect on a bogus $462.50 debt. The court felt like that kind of ridiculous litigation tactic required it to step in on an emergency basis.

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