Sureties’ “Contractual Only” Argument Did Not Cut It On Appeal.
Okay, our followers, this one deals with judgment enforcement. If you are interested, stay tuned—because these are indeed arcane-oriented issues. If you are not, either watch some March Madness or still read just so you maybe put something away for later use in a matter.
Rosen v. LegacyQuest, Case No. A136985 (1st Dist., Div. 1 Mar. 21, 2014) (unpublished) involved, as the appellate court described it, “the morass of litigation between the parties that has now spanned nearly a decade.” Judgment creditor obtained a $434,743.36 judgment against judgment debtors, which eventually was backed up by judgment debtors’ sureties later getting hit with a motion by which an augmented judgment including postjudgment interest of $592,558.74 was entered against sureties. Sureties lost an attempt to vacate the judgment and obtain a new trial both in the lower and appellate courts. Then, judgment creditor moved for postjudgment enforcement attorney’s fees and costs against the sureties. The lower court denied the fees motion, but did grant some postjudgment costs to judgment creditor, prompting an appeal by judgment creditor from the fee denial ruling.
Judgment creditor did well in appealing.
Judgment creditor sought fees under CCP § 685.040, which generally allows postjudgment enforcement fees and costs to a judgment creditor. However, the statute is crafted in a way where there are two sentences—one very general and another geared toward contractual actions, but with the lower court deciding that no fees could be awarded against sureties because the underlying basis (a surety statute, CCP § 996.480(a)(2)) was statutory rather than contractual in basis. The appellate court found that the sureties and lower court misread section 685.040’s scope.
Unlike the third sentence of this provision, the second sentence applied to non-contract cases, or fees authorized by statute—falling into the “otherwise provided by law” language in the second sentence of section 685.040. (Berti v. Santa Barbara Beach Properties (2006) 145 Cal.App.4th 70, 77; accord Ketchum v. Moses, 24 Cal.4th 1122, 1141, 1141 n. 6 (2001).) So, judgment creditor was entitled to fee recovery against sureties based on the statutory surety fee predicate.
So, what about fees on appeal? The appellate court decided that fees on appeal in statutory fee provisions, including the surety provision (CCP § 996.480; Grade-Way Constr. Co. v. Golden Eagle Ins. Co., 13 Cal.App.4th 826, 837-838 (1993)), allowed for an award of fees that judgment creditor reasonably expended on appeal against sureties.