In first-impression case, Court of Appeal holds that a renewed judgment includes accrued post-judgment interest; and that interest accrues on the total renewed judgment
November 13, 2008
OCM Principal Opportunities Fund v. CIBC World Markets (2008) 168 Cal.App.4th 185 (California Court of Appeal, Second Appellate District, Division Four). [published]. GMSR co-counseled with Hennigan Bennett & Dorman in this second appellate victory for the prevailing plaintiffs and respondents in a case of first impression involving the accumulation of interest on a multi-million dollar judgment. In prior cross-appeals from the judgment, also co-counseled by GMSR, the Court of Appeal upheld plaintiffs' $31 million jury verdict and reversed the trial court's denial of plaintiffs' request for prejudgment interest. While the cross-appeals were pending (they took several years), plaintiffs applied for renewal of the judgment. The clerk followed statutory procedures and entered a renewed judgment in an amount equal to the prior judgment plus post-judgment interest that had accrued at 10% per annum for the prior three and a half years. Defendants moved to vacate the renewed judgment on the ground that it violated the state constitutional provision specifying that judgments bear interest at 10% per annum. Defendants argued, among other things, that adding accrued interest to the amount of the judgment and then computing future interest at 10% on the aggregate amount impermissibly compounded interest at more than the 10% rate set by the constitution. The trial court denied defendants' motion to vacate the renewal, and defendants appealed again.
The Court of Appeal affirmed in favor of GMSR's clients. By statute, the Court ruled, a judgment is enforceable for ten years; it can be renewed any time within the ten-year period, even while an appeal is pending, but not again for five years; the renewed judgment includes the amount of the original judgment plus accrued interest. The Constitution does not expressly prohibit compounding of post-judgment interest, nor does it specify that 10% interest is limited to simple interest. Bowing to the Legislature's interpretation, the Court held that permitting renewal of the judgment once every five years does not "positively and certainly" offend the constitution.
OCM Principal Opportunities Fund v. CIBC World Markets (2008) 168 Cal.App.4th 185
Irving H. Greines (Retired)
Marc J. Poster
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