Wertheim, LLC v. Currency Corp., Inc. is yet another example of how
surety insurers providing appeal bonds can find themselves stuck in the middle
of two parties that disagree over the amount of the judgment owed, and the
challenges it can create for all parties.
As in many cases, the main disagreement centered around when interest
should start to accrue and when it should end. In this case, the plaintiff,
Wertheim, prevailed in their earlier lawsuit and obtained a judgment that was
later affirmed on appeal. When Wertheim submitted a demand to the insurer on
November 2013, over a year after the remittitur issued on July 25, 2012, the
defendant, Currency Corp., “wrote to Insurer and protested the release of any
Appeal Bond funds on the ground that plaintiff’s calculation of the amount due
was “greatly exaggerated and completely incorrect.” Currency Corp. contended
that the calculation of the interest should have started when the amended
judgment was entered not when the original judgment was entered as Wertheim
claimed.
When a dispute such as this presents itself, an insurer will generally
try to see if the parties can come to an agreement. In some instances, they may
be able to pay the undisputed portion to the plaintiff, but in this case, the
parties could not agree, and the insurer had to retain counsel in an attempt to
interplead the funds and seek a court order to determine the correct amount
that should be paid. On December 17, 2013, the insurer then, “provided a check
in the full amount of the Appeal Bond ($286,078) to the Clerk of the Los
Angeles Superior Court for disbursement “as the Court sees fit.”, which was
ultimately rejected.
The court reached two important conclusions regarding the interest owed
on the judgment. The first is interest on a money judgment begins accruing on
the date the judgment was first entered, and the second is interest does not
cease until the judgment is satisfied either by payment to the judgment
creditor or the date the insurer deposited the appeal bond funds with the court
(even though in this case the court ultimately rejected the deposit).
Two other practical considerations that can be gleaned from this decision
are CCP 996.440, “which permits a party to move to enforce liability on a bond
in the original action only if the motion is made within one year after any
appeal is finally determined.” Ultimately, the trial court denied the
plaintiff’s motion to enforce liability under the bond since it was over the
prescribed time limit.
That led the plaintiff to sue the insurer to collect under the appeal
bond per CCP 996.430. The insurer filed a deposit and discharge motion, and
after that was granted and the funds were deposited with the court, the insurer
filed a motion to recover their attorney’s fees and costs from the plaintiff,
which was also granted and affirmed on appeal for the amount of $73,218.21.
Interestingly enough, had the insurer not recovered the attorney’s fees, they
potentially could have sought reimbursement by the defendant under the
indemnity agreement they signed in procuring the appeal bond.
This entire case demonstrates that both defendants and plaintiffs need
to carefully consider the possible ramifications when resolving a judgment even
after the appeal is over.
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