205 Cal. App. 4th 16
Cal. Ct. App.2012Background
- Ostermans sued Tenzera, Inc. for contract work to install tile, stone, and marble; contract includes a prevailing-party attorney fees clause.
- The matter submitted to binding arbitration; arbitrator allowed adding Tenzeras as cross-defendants.
- Arbitrator awarded Ostermans $426,047.72 and $181,000 in fees from the company, not the Tenzeras.
- Trial court vacated the entire arbitration award; Ostermans appealed.
- In Tenzera I, we reversed as to the company but affirmed vacatur as to the Tenzeras, and did not decide prejudgment interest or costs on appeal.
- On remand, the trial court denied Ostermans’ attorney-fee request on appeal, awarded prejudgment interest (excluding pendency), and the Ostermans and Tenzeras cross-appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prejudgment interest accrual during appeal from vacatur to reinstatement | Ostermans—interest should accrue during appeal | Tenzera—no accrual during void period under vacatur | Interest accrues; court must recalculate for pendency period |
| Applicability of the 'prevented by law' exception under Civ. Code 3287 | Ostermans—no exception applies | Company—exception should prevent interest | Exception does not apply; no basis to halt accruing interest |
| Ostermans’ entitlement to contractual attorney fees on appeal | Ostermans should recover appellate fees as prevailing party | Tenzeras/Company—no entitlement beyond contract as to appeal | Reversed; remand to award Ostermans’ appellate attorney fees; Tenzeras denied |
Key Cases Cited
- County of Solano v. Lionsgate Corp., 126 Cal.App.4th 741 (Cal. Ct. App. 2005) (setting when prejudgment interest may be appropriate)
- Wisper Corp. v. California Commerce Bank, 49 Cal.App.4th 948 (Cal. Ct. App. 1996) (prejudgment interest policy and availability)
- Pierotti v. Torian, 81 Cal.App.4th 17 (Cal. Ct. App. 2000) (prejudgment interest accrual on arbitration awards)
- Britz, Inc. v. Alfa-Laval Food & Dairy Co., 34 Cal.App.4th 1085 (Cal. Ct. App. 1995) (arbitration award treated as contract; interest accrual)
- Bank of China v. Wells Fargo Bank & Union Trust Co., 209 F.2d 467 (9th Cir. 1953) ('prevented by law' exception discussed with court-ordered deposits)
- Perkins v. Benguet Consol. Min. Co., 55 Cal.App.2d 720 (Cal. Ct. App. 1942) (exception where debtor prevented from paying by creditor's acts)
- Olson v. Cory, 35 Cal.3d 390 (Cal. 1983) (examines whether preventive-by-law applies; denial in statutory contexts)
- Adams v. Johns-Manville Corp., 876 F.2d 702 (9th Cir. 1989) (civil interest when dispute is liability not damages)