1)??? Motion for Award of Prejudgment Interest
Plaintiff moves for an award of prejudgment interest in her favor at the rate of ten percent (10%) per annum on the verdict of $142,599 beginning April 2007. She argues that, under CCP ? 3287(a), prejudgment interest would equal at least $130,715.76. In the alternative, Plaintiff seeks interest under Civil Code ? 3287(b) in the amount of $125,962.45. Plaintiff?s motion is GRANTED in part and DENIED in part.
Prejudgment Interest on Liquidated Claims
With certain exceptions not applicable here, prejudgment interest is recoverable in any action in which (1) damages are certain or capable of being made certain by calculation; and (2) the right to recover such damages is vested in the plaintiff on a particular day. (CC ? 3287(a).)? The test for determining ?certainty? is whether Defendant actually knew the amount owed or could have computed the amount from reasonably available information. (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 960.) The ?certainty? requirement concerns whether there is a factual dispute about the amount of damages, regardless of whether there is a legal dispute concerning Defendant?s liability. ?Damages will be deemed ?capable of being made certain by calculation? if the amount due can be determined by reference to a fixed standard: e.g., a payment schedule; a readily ascertainable market value; or data supplied by plaintiff to defendant.? (Marine Terminals Corp v. Paceco, Inc. (1983) 145 Cal.App.3d 991, 995-996 [internal citations omitted].)
But where damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at 960.) Also, ?where there is a large discrepancy between the amount of damages demanded in the complaint and the size of the eventual award, that fact militates against a finding of the certainty mandated by? CC ? 3287 (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at 961.)
In this case, the Court finds that only the $101,500 figure, representing unpaid additional living expenses of $3,500 pursuant to the contract, is subject to prejudgment interest. It is a liquidated claim because it can be calculated by reference to the underlying settlement agreement at issue in this action.
The remaining portion of the judgment, representing damage to personal property, loss of use of personal property, and mitigation and investigation costs, are unliquidated. Such damages cannot be determined by a fixed standard or a readily ascertainable market value. And although Plaintiff offered invoices to support those damages, Defendant did not concede that the amounts paid by Plaintiff were reasonable costs, and it was certainly possible that lesser amounts could have been awarded had the jury found that Plaintiff failed to mitigate her damages.
Prejudgment Interest on Unliquidated Claims
If a contract claim is unliquidated, the Court has discretion to decide whether interest should be awarded and to decide the date from which such interest should be awarded. (CC ? 3287(b).) The Court ?must consider the circumstances, realizing a party cannot pay the amount due until it is determined what that amount was?which in this case was the reason for the litigation in the first place.? (Union Pacific Railroad Company v. Santa Fe Pacific Pipelines, Inc. (2014) 231 Cal.App.4th 134, 203.) Based on the circumstances of this case and for the reasons set forth above, the Court declines to exercise its discretion to award prejudgment interest pursuant to subdivision (b).
Calculation of Prejudgment Interest
Prejudgment interest commences on the first day there exists both a breach and a liquidated claim. (CC ??3287(a); see Maurice L. Bein, Inc. v. Housing Authority of City of Los Angeles (1958) 157 Cal.App.2d 670, 686.) It generally continues to accrue until the date of the judgment. (See Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 532-33 [division between pre- and post- judgment interest is date of entry of judgment, not entry of verdict].)
The prejudgment interest due Plaintiff ?is first computed on the judgment without deduction or offset for amounts paid by a settling joint tortfeasor? or co-obligor. (Newby v. Vroman (1992) 11 Cal.App.4th 283, 288.) Accordingly, beginning April 2007 and continuing for period of 29 months ($3,500 x 29 = $101,500), interest is calculated at 10% per annum for from the date of each missed payment to the date of judgment. For example, for the first missed $3,500 payment, prejudgment interest accrues beginning April 2007 and ends 07/07/16. For the second missed $3,500 payment, interest accrues from May 2007 to 07/07/16, and so forth.
As the parties note, the calculation of prejudgment interest is affected by Plaintiff?s settlements with Defendants PCM and Optimum, to the extent the settlements occurred before entry of judgment. Thus, Plaintiff may recover from Defendant Association: ?(a)?prejudgment interest up to the date of settlement on the total judgment; and (b) prejudgment interest after the date of settlement only on the balance of the total judgment remaining after its reduction by the settlement sum paid.? (Newby v. Vroman (1992) 11 Cal.App.4th 283, 288 [applying formula to prejudgment interest under CCP ? 3288].)
Moreover, absent any agreed-upon apportionment by the parties and approved by the Court, PCM?s settlement of $15,000 must be apportioned before it is factored into the prejudgment interest calculation. Plaintiff obtained a judgment of $142,599, but may only recover prejudgment interest on $101,500, which is about 71% of the total judgment. Thus, only 71% of the PCM settlement, or $10,650, is to be applied as an offset. Because Plaintiff settled with PCM on 03/20/15, prejudgment interest on the total $101,500 accrues until 03/20/15. Thereafter, prejudgment interest is calculated based on the $90,850 reduced judgment ($101,500 less $10,650).
This process is to be repeated with the $25,000 Optimum settlement, to the extent the settlement was entered into before the 07/07/16 judgment.
Plaintiff shall prepare a Proposed Order that calculates the prejudgment interest to be award in accordance with this ruling. Pursuant to CRC 3.1312, Plaintiff shall serve the Proposed Order on Defendant for its review, before lodging it with the Court.
Plaintiff shall also submit a corrected judgment inasmuch as the judgment prepared by Plaintiff and signed by this court mistakenly lists the damages awarded for ?unpaid additional living expenses? as $105,500 instead of the $101,500 actually awarded by the jury.