First District, Division 1 Grants Writ of Mandate Because Trial Court Failed to Exercise Any Discretion on Undertaking for Substantial Cost/Fees Order.
This post is somewhat complimentary to our June 12, 2009 post on Tracy v. Tracy, where a reversal and remand was required because a trial court failed to actually exercise its discretion based on a legal misreading of a judgment. Here, a similar situation arose in a post-judgment undertaking motion, where an aggrieved plaintiff filed a writ of mandate to remedy a perceived lower court error. Plaintiff was right to do so.
W. Wong Construction Co., Inc. v. Superior Court, Case No. A124013 (1st Dist., Div. 1 June 11, 2009) (unpublished) concerned a business plaintiff which won a $131,338.57 damages judgment, which they appealed but paid off. Later, the trial court awarded plaintiff costs in the amount of $28,672.56 and attorney’s fees in the amount of $370,955.20, determinations separately appealed. (BLOG OBSERVATION—Defendants prudently separately appealed the subsequent costs/fee order, a practice we have recommended many times in our category “Appealability.” The appellate panel did indicate that no separate appeal was necessary in this situation because the damages judgment did indicate that plaintiff was the prevailing party for costs and fees, which means the appeal of the first damages order subsumed the later order under Grant v. List & Lathrop, 2 Cal.App.4th 993, 998 (1992) and later cases such as Amwest Surety Ins. Co. v. Patriot Homes, Inc., 135 Cal.App.4th 82, 84 (2005). However, the Court of Appeal did agree with us, observing “[t]he normal practice, however, is to appeal both the judgment and the subsequent award” and citing in support Torres v. City of San Diego, 154 Cal.App.4th 214, 222 (2007).)
Even though defendants had paid off the first damages judgment, plaintiff moved for the trial court to order a discretionary undertaking under Code of Civil Procedure section 917.9(a), which provides “[t]he perfecting of an appeal shall not stay enforcement of the judgment or order in cases not provided for in Sections 917.1 to 917.8, inclusive, if the trial court, in its discretion, requires an undertaking and the undertaking is not given, in any of the following cases: … (3) The judgment against appellant is solely for costs awarded to the respondent by the trial court pursuant to Chapter 6 (commencing with Section 1021) of Title 14.” The trial court denied the request, finding that no undertaking was required for a “solely costs” judgment and none of the section 917.9(a) circumstances were at play.
The appellate court overturned this determination, issuing a peremptory writ of mandate to exercise its discretion under section 917.9(a)(3).
Defendants mainly argued that section 917.9(a)(3) only applies to “judgments,” not “orders,” such that the provision was not applicable to the postjudgment orders at issue. Based on the use of the terms throughout the relevant statutory scheme, the Court of Appeal rejected this argument: “Reading section 917.9(a)(3) to arbitrarily prohibit an exercise of the trial court’s discretion to require an undertaking on appeal of such final money awards simply because they are labeled ‘orders’ and not ‘judgments’ is unreasonable.” (Slip Opn., at p. 4.)
The appellate court found support for its conclusion from other circumstances of record. Because defendants appealed both orders, the judgment was not a “solely costs” judgment so as to fall within section 917.9(a)(3), a result compelled by common sense. After all, the costs/fee orders totaled over $400,000, and it defied logic to believe that section 917.9(a)(3) “completely insulated [them] from any exercise of the court’s discretion, no matter what the circumstances.” (Slip Opn., at p. 5.) Then, in a footnote, the appellate panel also stressed that even if section 917.1 did not mandate an undertaking meant that it was a case “not provided for in Sections 917.1 to 917.8,” which further meant that it was within the ambit of the discretionary authority of the court under section 917.9(a).