In Hyundai Motor America v. Superior Court (filed 3/20/15, No. G051279), the California Court of Appeal, Fourth Appellate District, determined that the plaintiff consumer was not entitled to postjudgment interest on an attorney’s fees award because the award had already been paid before a final judgment had been entered. The decision reaffirmed the rule that postjudgment interest only begins to accrue when a judgment or court order definitively disposes of the rights of the parties in the action, not before.
Plaintiff filed the original action against Hyundai in July 2010 under the Song-Beverly Consumer Warranty Act (Civil Code § 1790, et seq.; “Song-Beverly Act”) alleging various defects in a 2010 Hyundai Tucson.
Hyundai made an offer of compromise under Code of Civil Procedure § 998, wherein it agreed to pay Plaintiff for return of the vehicle and for reasonable attorney’s fees and court costs in an amount to be determined by the court in exchange for a dismissal of the action with prejudice. Plaintiff accepted and on July 31, 2014, the court held a hearing and awarded Plaintiff $42,203 in attorney’s fees and costs and directed that the action be dismissed with prejudice. A judgment reflecting the dismissal with prejudice was not signed by the court until November 21, 2014.
Before the judgment was signed, Hyundai issued a check to Plaintiff on September 8, 2014 for the $42,203 in attorney’s fees. Plaintiff accepted the check, but claimed it was short by $462.50, which was the alleged amount of postjudgment interest from the date of the court’s July 31, 2014 order. To put pressure on Hyundai, Plaintiff filed a request for Hyundai’s president to appear for a judgment debtor’s examination for $462.50. On October 6, 2014, Hyundai moved to strike Plaintiff’s request, but the trial court denied the motion.
Hyundai petitioned for a peremptory writ reversing the trial court’s order on the grounds that no final judgment had been entered for which interest could accrue. In its review, the California Court of Appeal acknowledged that the Song-Beverly Act provides for a prevailing buyer to recover attorney’s fees “as part of the judgment.” In Plaintiff’s case, the Court of Appeal determined that a final judgment had only been entered on November 21, 2014, when the trial court signed the judgment because the dismissal served as a final disposition of Plaintiff’s action against Hyundai. The Court of Appeal also rejected Plaintiff’s contention that the July 31, 2014 order was a final judgment because an unsigned minute order is a directive and does not itself constitute a judgment.
Notably, the Court of Appeal also explicitly cautioned litigants against requesting a judgment debtor’s examination of a company’s president where the alleged debt is only $462.50 and is against a party with obvious means to pay such a minimal debt. The Court of Appeal indicated that trial courts should not tolerate this tactic, and warned, “[n]ature, not judges, should be in charge of making mountains out of mole hills.”
This case is significant because it provides insight into what constitutes a final judgment, which is critical for determining the appropriate amount, if any, of postjudgment interest. This case is also important because it demonstrates that a fast-acting defendant can eliminate the need to pay postjudgment interest by providing prompt payment of an attorney’s fees award before final judgment is entered.
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