Case Number: BC609793 Hearing Date: March 15, 2019 Dept: 48
(1) MOTION TO SET ASIDE JURY’S ADVISORY VERDICT DENYING AFFIRMATIVE DEFENSE OF UNCLEAN HANDS;
(2) MOTION FOR CONTRACTUAL PREJUDGMENT INTEREST
MOVING PARTY: (1) Defendants/Cross-Defendants Berendos, LP and A Community of Friends;
(2) Cross-Complainant/Cross-Defendant Interstate Restoration California LP
RESPONDING PARTY(S): (1) Cross-Defendant/Cross-Complainant Interstate Restoration California LP;
(2) Defendants A Community of Friends and Berendos, LP
PROOF OF SERVICE:
- Correct Address: (1) Yes; (2) Yes.
- 16/21 (CCP § 1005(b): (1) OK. Served by messenger service on February 14, 2019; (2) OK. Served by email on February 19, 2019.
- DENY motion to set aside jury’s advisory verdict;
- GRANT motion for prejudgment interest in the reduced amount of $1,340,495.57.
Motion to Set Aside the Jury’s Advisory Verdict
Defendants/Cross-Defendants Berendos, LP and A Community of Friends moves to set aside the jury’s advisory verdict denying the affirmative defense of unclean hands, and find Interstate’s breach of contract claim barred by the doctrine of unclean hands.
The Court, having heard the evidence presented at trial, including that cited in the opposition brief, finds that the exercise of its discretion does not favor the application of unclean hands as an affirmative defense.
Here, it would be inequitable to deny Interstate recovery for the substantial remediation services it provided. Any issues as to billing practices and reasonableness of work performed were not so egregious as to preclude Interstate’s recovery.
Accordingly, the motion to set aside the jury’s advisory verdict denying the affirmative defense of unclean hands is DENIED.
Motion for Prejudgment Interest
Cross-Complainant/Cross-Defendant Interstate Restoration California LP moves for contractual prejudgment interest of 1.5% per month ($3,053.12 per day) from February 7, 2016 to the date judgment is entered in this action, pursuant to the terms of the parties’ contract, the National Account Agreement.
The National Account Agreement provided at ¶ 11 the following:
A Community of Friends shall pay INTERSTATE the amount of each invoice no later than thirty (30) days following A Community of Friends’ receipt of the invoice. Interest shall accrue on payments not received within such time at the lesser of (i) the maximum lawful interest rate or (ii) one and one-half (1½ %) per month.
Despite A Community of Friends and Berendos’ arguments that the amount owed to Interstate was not capable of being determined based upon the $6.1 million invoice, an amount of damages need not be certain or capable of being made certain by calculation where prejudgment interest is based upon a contractual interest provision:
Although Civil Code section 3287, subdivision (a), requires that the amount of damages be certain or capable of being made certain by calculation, that section does not apply where prejudgment interest is part of the contractual amount owed. None of the cases cited by Pavestone to support its contention that section 3287, subdivision (a), bars plaintiffs’ recovery of prejudgment interest involved a contractual interest provision. (Citations omitted.) In Schmidt, supra, 177 Cal.App.2d at page 34, the court observed: “ ‘ “The general rule with respect to allowance of interest, when there is no contract to pay interest, is that the law awards interest upon money from the time it becomes due and payable, if such time is certain and the sum is certain or can be made certain by calculation.” ’ ” (Italics added.)
Roodenburg v. Pavestone Co., L.P. (2009) 171 Cal.App.4th 185, 191.
Instead, Civil Code § 3289(a) provides: “(a) Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.”
¶ 11 of the National Account Agreement provides:
A Community of Friends agrees to make payment directly to INTERSTATE from the Work, whether or not such Work is covered by insurance. A Community of Friends shall pay INTERSTATE the amount of each invoice no later than thirty (30) days following A Community of Friends’s receipt of the invoice. Interest shall accrue on payments not received within such time at the lesser of (i) the maximum lawful interest rate or (ii) one and one-half percent (1½%) per month. Any remaining balance of the Contract Price after the above payments are made shall be paid no later than thirty (30) days following completion of the Work.
Declaration of Thomas J. Reeve, ¶ 3, Exh. 5 (bold emphasis and underlining added).
In turn, the maximum interest rate allowed by law is set forth in the California Constitution, Art. XV § 1 as follows:
The rate of interest upon the loan or forbearance of any money, goods, or things in action, or on accounts after demand, shall be 7 percent per annum but it shall be competent for the parties to any loan or forbearance of any money, goods or things in action to contract in writing for a rate of interest:
(1) For any loan or forbearance of any money, goods, or things in action, if the money, goods, or things in action are for use primarily for personal, family, or household purposes, at a rate not exceeding 10 percent per annum; provided, however, that any loan or forbearance of any money, goods or things in action the proceeds of which are used primarily for the purchase, construction or improvement of real property shall not be deemed to be a use primarily for personal, family or household purposes; or
(2) For any loan or forbearance of any money, goods, or things in action for any use other than specified in paragraph (1), at a rate not exceeding the higher of (a) 10 percent per annum or (b) 5 percent per annum plus the rate prevailing on the 25th day of the month preceding the earlier of (i) the date of execution of the contract to make the loan or forbearance, or (ii) the date of making the loan or forbearance established by the Federal Reserve Bank of San Francisco on advances to member banks under Sections 13 and 13a of the Federal Reserve Act as now in effect or hereafter from time to time amended (or if there is no such single determinable rate of advances, the closest counterpart of such rate as shall be designated by the Superintendent of Banks of the State of California unless some other person or agency is delegated such authority by the Legislature).
Cal. Const, Art. XV § 1 (bold emphasis and underlining added).
Accordingly, it appears that the “lesser” interest rate which—by the terms of ¶ 11 of the 11 of the National Account Agreement applies—is 7%.
Utilizing the due date and days of interest earned as set forth in the summary attached as Exhibit A to the Declaration of Thomas J. Reeve, the total amount of interest earned at 7% per annum is $1,340,495.57, calculated as follows:
Invoice # 26060: Feb. 7, 2016 due date; 1129 days of interest earned; 7% per annum on $3,413,673.91 balance = $654.68/day =$739,133.72 total
Invoice #26059: Feb. 7, 2016 due date; 1129 days of interest earned; 7% per annum on $2,777,373.57 balance = $532.65/day =$601,361.85 total
$739,133.72 + $601,361.85 = $1,340,495.57 total interest on both invoices
Accordingly, the motion for prejudgment interest is GRANTED in the reduced total amount of $1,340,495.57.
 That is, 18% per annum.
 Interstate implicitly admits this is not a “forbearance”. Motion at Page 5:18-24.