TENTATIVE RULING

Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street
P.O. Box 21107 
Santa Barbara, CA  93121-1107

CIVIL LAW & MOTION

Nature of Proceedings: Hearing re Interest

Interest to be Included in Judgment 
			
Ruling

For reasons stated below, the court awards pre-judgment interest on the judgment herein 
pursuant to Civil Code § 3287 in the amount of $495,032.04, consisting of interest on 
economic damages in the amount of $1,075.51; and interest on noneconomic damages in 
the amount of $493,956.53. Of the $493,956.53 in noneconomic damages, $75,733.21 is 
attributable to Cal-West Group.

Analysis 

Prejudgment Interest Pursuant to CCP §3288

Civil Code § 3288 provides: “In an action for the breach of an obligation not arising from 
contract, and in every case of oppression, fraud, or malice, interest may be given, in the 
discretion of the jury.” Since that section provides for discretionary interest on an “obligation 
not arising from contract, and in every case of oppression, fraud, or malice” [italics added], 
it is clear “that a party does not have to prove both a breach of a noncontractual obligation 
and oppression, fraud or malice.” Bullis v. Security Pac. Nat'l Bank (1978) 21 Cal.3d 801, 
815.

Here, plaintiffs never demanded interest under Civil Code §3288 until after trial. During the 
colloquy on March 24, 2009, the Court indicated that interest would be determined by a 
post-judgment memo, not by the jury. That is the procedure for adding interest pursuant to 
Civil Code §3287. Plaintiffs never requested that the matter be submitted to a jury, never 
mentioned Civil Code §3288 and did not submit a jury instruction on interest. See Jury 
Instruction Index – Rulings filed on April 29, 2009.

The court finds instructive the case of Stein v. Southern Cal. Edison Co. (1992) 7 
Cal.App.4th 565. In that case, the plaintiff “specifically requested prejudgment interest 
under only section 3287 until after the hearing on the motion to tax costs.” Id. at 572. The 
appellate court found that plaintiff did not request interest under §3288 in a timely manner. 
The court held that the defendant “was entitled to have a jury determine prejudgment 
interest under section 3288 since it is an issue for the trier of fact” and the defendant “did 
not waive that right by stipulating that the trial court could consider the matter of 
prejudgment interest when it considered costs. The record reveals that the parties never 
contemplated section 3288 at the time of the stipulation.” Id. Here plaintiffs did not 
specifically request interest under Civil Code §3287 but they did not specifically request it 
under §3288, either. Defendants and the court were not alerted to the need for a jury 
determination.

Plaintiffs “must propose complete and comprehensive instructions in accordance with 
[their] theory of the litigation; if [they] do not do so, the court has no duty to instruct on its 
own motion.” Failure to propose an instruction constitutes waiver of the issue. Agarwal v. 
Johnson (1979) 25 Cal.3d 932, 951, disapproved on other grounds in White v. Ultramar 
(1999) 21 Cal.4th 563, 574 n4. Plaintiffs claim they preserved the issue by filing a jury 
verdict form that included a prejudgment interest question. “To preserve for appeal a 
challenge to separate components of a plaintiff's damage award, a defendant must request 
a special verdict form that segregates the elements of damages.” Greer v. Buzgheia 
(2006), 141 Cal.App.4th 1150, 1158. But plaintiffs provided no instruction to guide the jury in 
making that determination. Importantly, there is no question in the proposed verdict form 
asking the jury if they find, in their discretion, that plaintiffs are entitled to interest, which 
would be a necessary prelude to any determination of the amount of interest. Again, 
plaintiffs made no citation to Civil Code §3288 at any time prior to judgment.

Plaintiffs contend it would have been inappropriate for plaintiffs to renew the request weeks 
or months after the pre-trial order. [Reply 3:19-21] But plaintiffs misread the pre-trial order. 
The court expressly stated, as to both jury instructions and the verdict form, “we will meet 
from time to time during trial after 4:30 p.m. to discuss.” [PTO ¶¶ 3 and 4, p. 2] 

It is well settled law that the court has “no authority to usurp the discretion conferred on the 
jury” under §3288. Barry v. Raskov (1991) 232 Cal.App.3d 447, 457. Having failed to 
request interest under §3288 in time to submit it to the jury, Plaintiffs have waived any right 
to interest under that section.

Ironically, plaintiffs contend that defendants waived their right to a jury trial, citing Escamilla 
v. Cal. Ins. Guar. Ass'n (1983) 150 Cal.App.3d 53. In that case the court found from a 
review of the record that “there emerges a mosaic, depicting a clear and vivid jury waiver.” 
Id. at 58. The trial court said: “The action by the cross . . . the Reserve . . . versus 
Terheggen . . . captioned as declaratory relief and indemnity alleges . . . a controversy . . . 
and it would appear to the Court that both the action in which we're proceeding are 
equitable in nature and the matter would be appropriately tried by the Court. Do you have 
any comments in that regard?” Counsel for the Escamillas remained silent, although 
another counsel did argue the point. There was no subsequent objection. Id. at 59. The 
case is very different from the situation here. First, it was not defendants’ demand for a jury 
trial that was at issue. Rather, the court was addressing plaintiffs’ request for interest. Nor 
was it clear and vivid that the interest plaintiffs sought required a jury. As mentioned before, 
plaintiffs’ counsel did not mention Civil Code §3288 orally, in the jury instructions or in the 
jury verdict form. Plaintiffs say in their reply that §3288 is the only source of interest their 
counsel could have been talking about. But that is a “should have known” argument that is 
insufficient notice for waiver of such an important right as a jury trial. The court finds that 
defendants did not waive the right to have Civil Code §3288 interest determined in the 
exercise of the jury’s discretion.

Even if the court had discretion to decide the issue now, it would exercise its discretion not 
to award interest because an award of interest would not be just under the circumstances.

Plaintiffs did not argue for pre-verdict interest under Civil Code §3287 until the reply. [Reply 
1:10-11] New arguments cannot be raised in a reply. Plaintiffs make no argument that any 
damages were certain on the date of Yoni’s death.

Post-Verdict/Pre-Judgment Interest

Plaintiffs seek post-verdict interest pursuant to CRC 3.1802, which provides: “The clerk 
must include in the judgment any interest awarded by the court and the interest accrued 
since the entry of the verdict.” “When a verdict or decision, as in [former] Code of Civil 
Procedure section 1033, is rendered, regardless of whether any interest by specific 
provision is included, the award bears interest at the legal rate of 7 percent for the interim 
period following verdict or decision until entry of judgment.” Espinoza v. Rossini (1967) 257 
Cal.App.2d 567, 569. (At the time of that decision, the post-judgment interest rate was 7%.) 
Court’s have followed Espinoza even after the repeal of former CCP § 1033 and 
replacement of its interest provisions with CCP §685.020. “The award must bear interest at 
the legal rate during the period following rendition of the verdict or decision and until entry of 
judgment. [Citing Espinoza v. Rossini] Thereafter, any final judgment for money bears 
interest at the legal rate from the date of entry. This is so regardless of whether or not the 
original claim was liquidated or unliquidated, in contract or in tort.” Ehret v. Congoleum 
Corp. (2001) 87 Cal.App.4th 202, 208. Accord, Holdgrafer v. Unocal Corp. (2008) 160 
Cal.App.4th 907, 935.

The court acknowledges that the Sixth District Court of Appeal takes a different view in 
Pellegrini v. Weiss (2008) 165 Cal.App.4th 515. “We read rule 3.1802 of the California 
Rules of Court as directing the clerk to calculate the continuation of any prejudgment 
interest that may have been awarded from the date of the verdict through the date of the 
judgment. Were we to construe California Rules of Court, rule 3.1802 as providing that 
postjudgment interest accrues between verdict and judgment, it would conflict with Code of 
Civil Procedure section 685.020. A rule of court cannot take precedence over a statute, 
however, so we decline to construe California Rules of Court, rule 3.1802 in that fashion.” 
Id. at 532-533. That court acknowledged “that it once was the law that ‘whether or not 
interest is included in the damage award (either by the court or by the jury), the award must 
bear interest at the legal rate during the period following rendition of the verdict or decision 
and until entry of judgment.’” Id. at 533. But the court determined that former CCP §1033 
expressly required postverdict interest to be included in judgments but that “[t]here is no 
equivalent statutory provision today….” Id.

The Second District Court of Appeal in Ehret, as confirmed in Holdgrafer (Div. Six), has 
found that CCP § 685.020 was intended to carry on the practice as it had been under 
former CCP §1033. Ehret v. Congoleum Corp., supra, 87 Cal.App.4th at 208. “Decisions of 
every division of the District Courts of Appeal are binding upon all the justice and municipal 
courts and upon all the superior courts of this state” unless there are more than one 
appellate court decision, and those appellate decisions are in conflict, in which case the 
trial court must make a choice between the conflicting decisions. Auto Equity Sales, Inc. v. 
Superior Court (1962) 57 Cal.2d 450, 455-456. “As a practical matter, a superior court 
ordinarily will follow an appellate opinion emanating from its own district even though it is 
not bound to do so.” McCallum v. McCallum (1987) 190 Cal.App.3d 308, 315.

The court does not find the Second District jurisprudence inconsistent with the Sixth 
District. The analysis in Ehret is arguably dicta because the court noted that the difference 
between the rule and CCP § 685.020 was immaterial because, in that case, the verdict 
was reached and the judgment on the verdict was entered one day apart. Ehret v. 
Congoleum Corp., supra, 87 Cal.App.4th at 209 n2. And the court in Holdgrafer 
noted: “Moreover, we agree with the trial court that former rule 875 [now CRC 3.1802] is 
consistent with Civil Code section 3287, which provides for the payment of prejudgment 
interest from the date they are certain or capable of being made certain, e.g., the date the 
jury's verdict is entered.” Holdgrafer v. Unocal Corp., supra, 160 Cal.App.4th 907, 935.

Defendants claim that plaintiffs have not timely moved for interest pursuant to Civil Code 
§3287. “That a party is entitled to prejudgment interest does not make an award automatic 
(except in the case of postjudgment interest). A request for interest must be made in the 
trial court; it cannot be made for the first time on appeal.” N. Oakland Medical Clinic v. 
Rogers (1998) 65 Cal.App.4th 824, 829. That court ruled that “prejudgment interest should 
be awarded in the judgment on the basis of a specific request therefor made before entry of 
judgment.” Here, plaintiffs did request interest at the pre-trial conference and the court 
indicated it would determine that on post trial motions. Also, the very judgment entered in 
this case specified the request for interest and set this very hearing date and briefing 
schedule. Necessarily, the request for interest was made prior to entry of judgment. While 
the court has not found that §3288 interest was on the table at the pre-trial conference, 
necessarily some interest was contemplated and defense counsel was present for that 
discussion. Defense counsel was present when the court set a hearing on post-judgment 
interest and invited briefs. The court finds that plaintiffs have timely requested interest 
pursuant to Civil Code §3287.

Some award of interest is warranted particularly in this case as defendants requested that 
the court hold off on entering judgment until the alter ego and fraudulent transfer claims 
were resolved. To deny post-verdict/prejudgment interest would be a windfall to 
defendants. Besides, once the requirement of CCP §3287 regarding certainty of damages 
is met, plaintiffs are “entitled, as a matter of right, to recover prejudgment interest on the 
sum awarded from the time such sum became due.” Leff v. Gunter (1983), 33 Cal.3d 508, 
521. 

The court finds that, pursuant to the rationale in Holdgrafer, it should award prejudgment 
interest pursuant to Civil Code §3287 from the date of the verdict to the date of judgment. 
Plaintiffs contend that “the rate of prejudgment interest should be that fixed by article XV, 
section 1 of the California Constitution; namely, 7 percent per annum,” citing Children's 
Hospital & Medical Center v. Bontá (2002) 97 Cal.App.4th 740, 775. The court will use the 
prejudgment rate suggested by plaintiffs.

Amounts Subject to Interest Calculation

Plaintiffs’ damages, economic and noneconomic, were made certain when found by the 
jury. The damages in the November 3, 2009 judgment total $13,885,466 -- $29,516 
economic and $13,855,950 noneconomic. There are no punitive damages in the judgment. 
The punitive damages verdict was omitted from the judgment pursuant to plaintiffs’ 
settlement with Richard Berti and the payment of $1,500,000, which has been tendered. 
The court will calculate interest on economic and noneconomic damages separately 
because Cal-West Group is not jointly and severally liable for noneconomic damages. Cal-
West Group is separately liable for $2,078,392.50 in noneconomic damages. The 
calculations are as follows (the number of days between the April 27 verdict and the 
November 3 judgment is 190):

$13,555,950 x .07 x (190/365) = $493,956.53

$29,516 x .07 x (190/365) = $1,075.51

The interest attributable to Cal-West Group on noneconomic damages:

$2,078,392.50 x .07 x (190/365) = $75,733.21

The interest on the Cal-West portion is included in the $493,956.53 figure above. So the 
total interest awarded is $495,032.04.