Rossa v. D.L. Falk Construction Accepted for Review on August 11, 2010.
In Cooper v. Westbrook Torrey Hills, 81 Cal.App.4th 1294, 1300 (2000), the Court of Appeal confirmed that interest paid on sums borrowed to obtain a cash deposit undertaking on appeal were recoverable costs of appeal under California Rule of Court 8.278(d)(1)(F). However, more recently, the First District in Rossa v. D.L. Falk Construction, 181 Cal.App.4th 438 (2010) decided that recoverable costs of appeal did not encompass interest expended by an appellant to obtain a letter of credit to secure a surety bond undertaking for an appeal (even though the LOC premium payment was recoverable).
This anomaly in treatment between appeal bonds and cash deposits in lieu undertakings likely inspired the California Supreme Court to grant review of Rossa by a 7-0 vote on August 11, 2010. The issue presented for review is: “Does California Rules of Court, rule 8.278(d)(1)(F), which permits a successful appellant to recover ‘the costs to obtain a letter of credit as collateral,’ allow the recovery of interest paid on sums borrowed to fund a letter of credit used to secure a surety bond?” We will let you know how our state supreme court rules when its opinion is issued in the future.