Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment and order of the Superior Court of Los Angeles County, No. BC345559, Mary Thornton House, Judge. Reversed and remanded with directions.
Edward Yun, Lee Franck and Mark Weidmann for Plaintiff/Respondent and Plaintiff/Appellant Helen Lee.
Law Office of Anne McWilliams and Anne McWilliams; John L. Fort, A Professional Law Corporation and John L. Fort for Defendant/Appellant and Defendant/Respondent H. Rauvel, Inc.
Manella, J.
In Helen Lee’s action for wrongful termination against H. Rauvel, Inc. (Rauvel), the trial court entered a judgment that Rauvel was the prevailing party for purposes of an award of costs. The trial court later concluded that Lee was the prevailing party, found that the contrary determination in the judgment was a clerical error, and ordered that the original judgment be corrected regarding the prevailing party and other matters. In entering a corrected judgment, the trial court stated that Lee was the prevailing party, but amended other corrections that it had previously ordered in the original judgment. Rauvel appealed from the order correcting the original judgment, contending that it mandated substantive changes to the original judgment. Lee appealed from the corrected judgment, contending that it improperly deviated from the correction order. We conclude that the trial court erred in modifying the original judgment, and thus affirm the original judgment.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
A. Underlying Action and Cross-Action
In December 2002, Lee entered into an employment contract with Rauvel through its owner, Hector Velasco. Under the agreement, Rauvel was to place $350,000 in an interest-bearing bank account in Lee’s name. Although the principal sum of $350,000 was payable to Lee under specified circumstances, Rauvel was to recover the accrued bank interest when the principal sum became payable to Lee.
In January 2006, Lee initiated the underlying action against Rauvel and Velasco. Lee’s first amended complaint, filed March 21, 2006, asserted claims for breach of contract, fraud in the inducement, and declaratory relief. The complaint alleged the following facts: In entering into the 2002 employment contract, Lee agreed to keep her “lucrative business experience, relationships and accounts” with Rauvel, and to keep the company operating, as Velasco was ill and unable to manage Rauvel. Under the contract, Rauvel guaranteed Lee employment until December 31, 2007, and agreed to pay Lee $350,000 on that date unless Velasco died or Rauvel was sold, in which case the funds were immediately payable to Lee. Although Lee substantially performed her obligations under the agreement, Rauvel terminated her in August 2005. Lee’s complaint sought the $350,000 in the bank account and other relief.
The first amended complaint named Rauvel, Velasco, and Nova Transportation Services Inc. (Nova) as defendants. As the record discloses that Nova is an alternative business name (“dba”) for Rauvel, we do not refer to it as a separate party.
Rauvel and Velasco asserted cross-claims against Lee regarding the $350,000. Their first amended cross-complaint contained claims for breach of the employment contract, money had and received, declaratory relief, and imposition of a constructive trust, and sought to recover the $350,000 in the bank account. The complaint alleged that Rauvel and Velasco had complied with the employment agreement, that Lee had breached the agreement by resigning, and that she had improperly refused to return the $350,000.
B. Pretrial Stipulation and Original Judgment
On April 19, 2007, shortly before the beginning of trial, Rauvel and Velasco agreed to dismiss their cross-complaint, and Lee agreed to dismiss Velasco as a defendant. Lee further agreed to return the net difference (if any) between the $350,000 and her recovery under the judgment, once the judgment in the action became final. On this matter, the parties stipulated in open court: “To the extent that the funds in the subject bank account... exceed[] the amount [] Lee recovers by way of final judgment in this lawsuit after... appeals, if any, have been exhausted, [] Lee agrees to return such excess funds... to [Rauvel]. If [] Lee recovers nothing by way of said judgment in this lawsuit, she will return all the funds in the subject bank account to [Rauvel].”
The parties also stipulated that the disbursement of funds following final judgment was to be enforced by court order: “In the event [] Lee does not, within ten days after entry of final judgment after all appeals, if any, return such funds to [Rauvel] as stipulated above, the court shall enter an order upon application of [Rauvel] ordering [] Lee to forthwith return such funds to [Rauvel], within five days of said court order. Said application may be made by ex parte motion.”
On May 4, 2007, the jury returned its special verdicts. The jury found that Velasco’s needs and distress had not induced Lee’s consent to the employment agreement; that Lee had substantially complied with her obligations under the agreement; that Rauvel had prevented her from fulfilling the agreement; that Rauvel had given up its right to satisfaction of the conditions on the payment of the $350,000 to Lee; that Rauvel had breached the agreement; and that Lee had suffered $175,000 in damages as the result of Rauvel’s breach.
On May 10, 2007, Lee submitted a proposed judgment that provided that she was to recover $175,000, and that Rauvel was to recover nothing on its cross-complaint. Lee’s proposed judgment further stated: “Lee has a judgment... for the sum of $175,000 with interest thereon at the rate of ten percent (10%) per annum from the date of the entry of judgment until paid, together with costs and disbursements in the amount of $_______.”
On May 16, 2007, Rauvel submitted objections to Lee’s proposed judgment and an alternative proposed judgment. In opposition to Lee’s proposed judgment, Rauvel contended that it was the prevailing party for purposes of an award of costs, as it was entitled to a higher net recovery than Lee (Code Civ. Proc., § 1032, subd. (a)(4)). Rauvel argued that as of the date of the jury’s verdict, the total sum in the pertinent bank account was at least $380,422.47, and that pursuant to the parties’ stipulation, Rauvel was entitled to recover at least $205,422.47, which exceeded the $175,000 in damages the jury had awarded to Lee. In addition, Rauvel argued that it was entitled to postjudgment interest.
All further statutory citations are to the Code of Civil Procedure.
Rauvel’s proposed judgment recited the terms of the parties’ pretrial stipulation regarding the disbursement of the bank funds, and provided that Lee was to have judgment against Rauvel for $175,000. The judgment further stated: “[Rauvel shall] have judgment against [Lee], for the sum of $205,422.47, along with any additional accrued interest in subject account since March 19, 2007, with interest thereon at the rate of ten percent (10%) per annum from the date of the entry of judgment until paid, together with costs and disbursements as the prevailing party pursuant to [section] 1032 in the amount of $_____. [¶] Now, therefore, it is ordered, adjudge[d] and decreed that [Lee] disburse to [Rauvel] within ten (10) days after entry of final judgment, after all appeals, if any, have been exhausted, the sum of $205,422.47, along with any additional accrued interest in subject account since March 19, 2007, from said account, with interest thereon at the rate of ten percent (10%) per annum from the date of the entry of judgment until paid together with costs and disbursements as the prevailing party pursuant to [section] 1032 in the amount of $_____.”
The judgment recited that as of March 19, 2007, the residual funds in the account amounted to at least $205,422.47 (including interest).
On June 8, 2007, the trial court executed and filed Rauvel’s proposed judgment (the June judgment). Notice of entry of judgment was served on June 12, 2007.
C. Postjudgment Proceedings
Lee and Rauvel each submitted a memorandum of costs. Lee’s memorandum, filed June 22, 2007, sought costs totaling $52,101, including $32,083 in prejudgment interest on the principal sum of $175,000 from the date of the breach (identified as August 15, 2005). Rauvel’s memorandum, filed June 27, 2007, sought $55,031 in costs, including $32,315 in prejudgment interest on a principal sum of $175,000 from the date of the breach (identified as August 3, 2005) to the date of the entry of judgment.
Lee also filed a motion for judgment notwithstanding the verdict, which argued that the evidence at trial unequivocally established her entitlement to the entire principal sum of $350,000 in the bank account.
On July 6, 2007, Rauvel filed objections to Lee’s memorandum, arguing that the June 8, 2007 judgment had determined that Rauvel, not Lee, was the prevailing party. On July 16, 2007, Lee filed a motion to strike Rauvel’s memorandum and to tax costs. The motion argued, inter alia, that Lee, not Rauvel was the prevailing party, as Rauvel’s cross-complaint had been dismissed prior to the trial.
On August 23, 2007, the trial court granted Lee’s motion to strike. The pertinent minute order states: “[Section 1032, subdivision (a)(4)] provides in pertinent part that ‘“[p]revailing party” includes the party with a net monetary recovery....’ [¶] A judgment of $175,000 in favor of [Lee] was entered. Thus, under the plain language of [section 1032, subdivision (a)(4)], [Lee] is the prevailing party and is entitled to costs.”
The trial court also concluded that Lee’s motion for judgment notwithstanding the verdict was moot, as the statutory period for ruling on the motion had elapsed.
In early October 2007, Lee submitted a proposed corrected judgment. The proposed corrected judgment recited the terms of the parties’ pretrial stipulation regarding the distribution of the bank funds, and stated: “[Lee] shall have judgment against [Rauvel] for the sum of $175,000 with interest thereon at the rate of ten percent (10%) per annum from the date of the entry of judgment until paid, together with costs and disbursements in the amount of $_____ [].” Unlike the June judgment, the proposed corrected judgment contained no provision that Rauvel was to have judgment against Lee for any sum.
On October 12, 2007, Rauvel filed an ex parte application for an order rejecting the proposed corrected judgment. Rauvel argued that the trial court could not amend the June judgment, which had become final due to Lee’s failure to notice a timely appeal from it. The trial court requested supplemental briefing, conducted a hearing on November 13, 2007, and took the matter under submission.
On December 3, 2007, the trial court issued an order largely denying Rauvel’s application (the December order). The December order stated: “The judgment is to be amended to reflect that in addition to the $175,000 judgment, [Lee] is entitled to $52,101.00 in costs.”
Regarding the prevailing party determination in the June judgment, the December order explained: “A clerical error was made when the court signed the [June] judgment. The question of costs was left open when the June [] judgment was signed.... The court understood, and the parties seemed to understand, that an award of costs would follow, and the judgment would be changed to reflect how costs ultimately would be disbursed. There was a clerical error made when the court signed the judgment because the court should have stricken all language which made reference to unsettled matters, rather than simply leaving the amount of costs blank.”
The December order also stated that the language in the June judgment awarding statutory postjudgment interest to Rauvel “should have been stricken from the [] judgment because it is inconsistent with other language in the judgment and the parties’ [pretrial stipulation].” On this matter, the trial court reasoned that under the stipulation and the June judgment, the parties understood that Lee was to retain at least $175,000 in the bank account, whereas Rauvel’s share of the funds in the account was “fluid.” The trial court observed: “[T]he fact that costs would be awarded at a later date[] makes clear that while, as of March 19, 2007, [Rauvel was] entitled to $205,422.47, the sum [would] change if circumstances of the case change[d].”
The December order directed Lee to prepare a new corrected judgment that reflected the following determinations: (1) that Lee was entitled to the sum of $175,000 in the bank account, together with “interest on $175,000 from the time the original sum was deposited in the bank until the present”; (2) that Lee was also entitled to $52,101 in costs, as well as “interest on $52,101.00 from the date judgment was entered (June 8, 2007)”; and (3) that Rauvel was entitled to the balance of the bank funds, as well as “prejudgment interest on [the balance] beginning November 14, 2007.” Rauvel noticed an appeal from the December order.
An order correcting a judgment is ordinarily not appealable, as an appeal is properly taken from the corrected judgment. (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 191, pp. 268-269; see Hood v. Verdugo Lumber Co. (1933) 219 Cal. 558, 559.) Because Lee has not objected to Rauvel's premature notice of appeal, we conclude that there is good cause to treat the notice as having been filed immediately after the judgment following the correction order. (Cal. Rules of Court, rule 8.104(e); Stonewall Ins. Co v. City of Palos Verdes Estates (1996) 46 Cal.App.4th 1810, 1827-1828.)
D. Corrected Judgment
On December 21, 2007, Lee submitted a new proposed corrected judgment that reflected the determinations in the December order. This proposed judgment, like its predecessor, contained no provision that Rauvel was to have judgment against Lee for any sum.
Rauvel objected to the new proposed corrected judgment, and challenged Lee’s June 2007 memorandum of costs with a motion to strike or to tax costs. Rauvel argued, inter alia, that the new proposed corrected judgment effectively awarded Lee a double recovery of prejudgment interest, as the $52,101 in costs that Lee sought included a request for prejudgment interest.
On February 20, 2008, the trial court executed and filed the new proposed corrected judgment with interlineated amendments (the February judgment). The trial court (1) awarded Lee $175,000, but struck the provision that she was entitled to ten percent interest “on the $175,000 from the time the original sum was deposited in the bank”; (2) awarded Lee $14,730.50 in costs, rather than $52,101 in costs, and struck the provision that she was entitled to ten percent interest on the costs from the date the judgment was entered; and (3) awarded Rauvel interest at the rate of 10 percent on the remaining funds in the bank account beginning June 8, 2007. Lee noticed an appeal from the February judgment.
In addition, Lee filed a motion for clarification or correction of the February judgment. On July 2, 2008, the trial court ordered the matter stayed. Lee also noticed an appeal from this ruling.
DISCUSSION
Rauvel contends that the December order improperly directed substantive changes in the June judgment, and Lee contends that the February judgment erroneously deviated from the December order. As explained below, we agree with Rauvel, and for that reason do not reach Lee’s contentions.
A. Clerical and Judicial Error
Generally, although a judge may freely alter an announced judgment before its entry, “once the judgment is entered, the judge loses [the] unrestricted power to change it. If the entry conforms to the judgment as rendered, and there is no clerical error in the rendition or entry, there can be no summary amendment by the court itself no matter how wrong in law the decision may be. Judicial error, i.e., an erroneous decision, can only be rectified by the regular procedures for attack on judgment: motion for a new trial, motion to vacate judgment, appeal, or an independent action in equity.” (7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 65, p. 600.) Nonetheless, the judge retains “the power, after final judgment, and regardless of lapse of time, to correct clerical errors or misprisions in its records,... so that the records will conform to and speak the truth.” (Id. at § 67, p. 603.) Here, Lee neither noticed a timely appeal from the June judgment nor challenged its findings regarding the prevailing party and statutory interest “by the regular procedures for attack on judgment.” (Id. at § 65, p. 600.) Accordingly, our inquiry is limited to whether trial court, in issuing the December order and related rulings, directed the correction of clerical errors in the June judgment.
Our Supreme Court has explained: “Clerical error... is to be distinguished from judicial error which cannot be corrected by amendment. The distinction between clerical error and judicial error is ‘whether the error was made in rendering the judgment, or in recording the judgment rendered.’ [Citation.] Any attempt by a court, under the guise of correcting clerical error, to ‘revise its deliberately exercised judicial discretion’ is not permitted. [Citation.] [¶] An amendment that substantially modifies the original judgment or materially alters the rights of the parties, may not be made by the court under its authority to correct clerical error, therefore, unless the record clearly demonstrates that the error was not the result of the exercise of judicial discretion. [Citations.]” (In re Candelario (1970) 3 Cal.3d 702, 705.)
Our inquiry into this matter follows established principles. Generally, in determining whether an error is clerical or judicial, we place “great weight” on the trial court’s declaration regarding its intention in signing an order. (Estate of Doane (1964) 62 Cal.2d 68, 71.) Thus, “‘[w]here there is conflicting evidence as to whether the error was clerical, the reviewing court will probably accept the conclusion of the trial court. (Nacht v. Nacht (1959) 167 Cal.App.2d 254, 262, quoting Morgan v. State Board of Equalization (1949) 89 Cal.App.2d 674, 682.) However, “‘[i]f the record shows clearly that there was no clerical error, the recital by the trial court will not be conclusive.’” (Quoting Morgan v. State Board of Equalization, supra, 89 Cal.App.2d at p. 682 .)
Lee contends that the December order must be reviewed for an abuse of discretion as a ruling on a motion for correction of the judgment under section 473. However, the record discloses no such motion.
Instructive applications of these principles are found in Stevens v. Superior Court (1936) 7 Cal.2d 110 (Stevens) and Hamilton v. Laine (1997) 57 Cal.App.4th 885 (Hamilton). In Stevens, the plaintiff received what he regarded as an insufficient award of damages from the jury and moved for a new trial on several grounds, including instructional error and insufficiency of the evidence. (Stevens, supra, 7 Cal.2d at p. 111.) In denying the motion, the trial court stated that it would have granted a new trial on the basis of instructional error had the plaintiff not filed an express waiver of this ground for a new trial. (Ibid.) The plaintiff’s waiver, in fact, only limited his motion to an order for a new trial on the issue of damages, and did not abandon his assertion of instructional error. (Id. at p. 112.) The trial court later entered an order sua sponte granting the new trial motion, explaining that due to “neglect, oversight, accident, and mistake,” it had misread the waiver to include instructional error, and thus had “inadvertently and improvidently” denied the new trial motion. (Ibid.)
Our Supreme Court reversed the grant of the new trial, concluding that it rested on “an attempt to correct judicial error, even though the trial court recite[d] that the first order was made by inadvertence.” (Stevens, supra, 7 Cal.2d at p. 113.) The court explained: “It appears that the inadvertence consisted of misinterpreting and misconstruing a waiver of all claims to a new trial, other than on the issue of damages, as a waiver of all grounds upon which a new trial was claimed on that issue, except the ground of the insufficiency of the evidence. Both the first and second orders recite that the motion was denied because the court so understood the waiver, that the court was of the opinion that the plaintiff was entitled to a new trial on the ground of the giving of an erroneous instruction. The second order recites that this construction of the waiver was the result of oversight, neglect, accident and mistake in the reading of the waiver and in the conclusion as to its effect; that upon a further reading it appeared the waiver did not operate to waive any ground previously urged.... This is judicial error....” (Ibid. at pp. 113-114.)
In Hamilton, a child developed severe disabilities following a swimming pool accident. (Hamilton, supra, 57 Cal.App.4th at p. 887.) After the child’s parents sued the owners of the swimming pool, the parties entered into a monetary settlement that created a medical trust fund. (Ibid.) The judge who authorized the fund did not expressly establish it as a “special needs trust,” a ruling that would have placed primary responsibility for the child’s medical expenses upon the California Department of Developmental Services, rather than the fund. (Id. at pp. 887-888.) A second judge later entered an order nunc pro tunc effective from the fund’s establishment that the fund was a special needs trust. (Id. at p. 889.) The appellate court reversed, concluding that the order attempted to correct judicial error. (Id. at pp. 890-891.) The court noted that there was no evidence that the judge who initially authorized the fund had intended to create a special needs trust. (Ibid.) In addition, it observed that the second judge, in issuing the nunc pro tunc order, stated only that the first judge “should have [] caught” the error, and “would have [] caught” the error, “had [it] been called to the [judge’s] attention.” (Id. at pp. 891-892, italics deleted.)
B. Prevailing Party and Postjudgment Interest Determinations
Before examining the December order, we explain the principles implicated in the June judgment’s determinations regarding the prevailing party and postjudgment interest. “Section 1032 is the fundamental authority for awarding costs in civil actions,” and it establishes “the general rule... that only the prevailing party recovers its costs.” (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108, 1112.) Subdivision (a)(4) of section 1032 states: “‘Prevailing party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court... in its discretion....” Generally, when a party falls squarely within one of the four situations enumerated in the first sentence of this definition, it is entitled to its costs as a matter of right. (Great Western Bank v. Converse Consultants, Inc. (1997) 58 Cal.App.4th 609, 612-614; Crib Retaining Walls, Inc. v. NBS/Lowry, Inc. (1996) 47 Cal.App.4th 886, 889-891.)
If the circumstances fall outside these enumerated situations, the definition permits the trial court to exercise discretion in determining the prevailing party. (Texas Commerce Bank v. Garamendi (1994) 28 Cal.App.4th 1234, 1248-1249.)
Postjudgment interest accrues only on “the principal amount of a money judgment remaining unsatisfied.” (§ 685.010 subd. (a).) Ordinarily, judgments and cross-judgments are offset within a single action as a matter of right, absent special circumstances (Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 859), and postjudgment interest accrues only on the net principal due on a judgment, after applicable offsets (see Los Angeles Unified School Dist. v. Wilshire Center Marketplace (2001) 89 Cal.App.4th 1413, 1420).
The June judgment contained a judgment in Rauvel’s favor against Lee that exceeded Lee’s recovery under the judgment in her favor. Generally, the existence of such a judgment in favor of the party asserting the offset mandates a determination that it is the prevailing party. (Public Employees’ Retirement System v. Winston (1989) 209 Cal.App.3d 205, 208-209, 212 [as lessor’s judgment against lessee for offset for unpaid rent exceeded lessee’s judgment against lessor, lessor was prevailing party under section 1032, subdivision (a)(4)].) As explained above, the existence of a judgment of this type in a party’s favor would also ordinarily entitle the party to postjudgment interest on its net recovery.
C. Analysis
In our view, the December order directed the correction of judicial error in the June judgment, notwithstanding the trial court’s determination that it was addressing clerical errors. We begin with the finding in the June judgment regarding the prevailing party. Prior to the entry of the June judgment, the parties submitted conflicting proposed judgments. Lee’s proposed judgment stated that she alone had obtained a judgment in her favor, and sought postjudgment interest and an award of costs, the amount of which was to be determined in further proceedings. In contrast, Rauvel’s proposed judgment asserted that although each party had obtained a judgment in its favor, it had achieved a net recovery, and thus was entitled to postjudgment interest and an award of costs, the amount of which was to be determined later. Twice the proposed judgment referred to Rauvel as the prevailing party. Moreover, Rauvel objected to Lee’s proposed judgment on the ground that Rauvel had obtained a net recovery.
The December order does not suggest the trial court did not examine the competing proposed judgments and Rauvel’s objection before executing the June judgment, or that it was unaware that the June judgment contained a judgment awarding Rauvel a net recovery. In concluding that the prevailing party finding in the June judgment was a clerical error, the trial court stated: “The question of costs was left open when the June [] judgment was signed. The judgment contained language concerning costs, however, the issue had not been raised prior to the signing of the judgment, and[] the judgment reflected that no award of costs had been made, because the court did not fill out an amount of costs which should have been awarded. The court understood, and the parties seemed to understand, that an award of costs would follow, and the judgment would be changed to reflect how costs ultimately would be disbursed. There was a clerical error made when the court signed the judgment because the court should have stricken all language which made reference to unsettled matters, rather than simply leaving the amount of costs blank.”
Because each party had claimed that it was the prevailing party for purposes of a cost award before the trial court entered the June judgment, the only issue that “had not been raised” by the parties prior to the judgment was the precise amount of the cost award. Accordingly, the trial court, in asserting that it “understood... that an award of costs would follow, and [that] the judgment would be changed to reflect how costs ultimately would be disbursed” (italics added), must be regarded as asserting a belief that leaving the amount of costs unresolved permitted the trial court to change its determination regarding the prevailing party. As in Stevens, this was not clerical error.
We reach the same conclusion regarding the determination in the December order concerning the award of postjudgment interest to Rauvel. On this matter, the December order stated only that the award “should have been stricken from the [] judgment because it is inconsistent with other language in the judgment and the parties’ [pretrial stipulation].” (Italics added.) As the December order does not suggest that the trial court was unaware of the award when it executed the June judgment, or did not, in fact, intend to make the award, the December order does not establish clerical error.
The trial court apparently did not implement this determination in the February judgment, which continued to award statutory postjudgment interest to Rauvel on the balance of the bank funds owed to Rauvel, beginning with the entry of the June judgment. We nonetheless address the determination for the guidance of the trial court and the parties upon remand.
Our conclusions find additional support from another modification the trial court made to the June judgment. Following the December order, the trial court entered the February judgment, which omits any mention of the judgment in Rauvel’s favor contained in the June judgment. As explained below, the entry of judgment in Rauvel’s favor -- which supported the findings regarding the prevailing party and postjudgment interest in the June judgment -- cannot be characterized as clerical error.
Rauvel dismissed its cross-complaint pursuant to the pre-trial stipulation. Ordinarily, a defendant who asserts an offset against the plaintiff’s claims is not entitled to a judgment in its favor on the offset, absent a cross-complaint. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198.) As our Supreme Court has explained, under the provisions of the Code of Civil Procedure applicable to offsets, “[o]ne who has paid a liability in full or in part can allege that payment as a defense to a cause of action, but in that case the defendant merely hopes to defeat the plaintiff’s complaint. If, in addition, the defendant seeks affirmative relief in its favor (such as the recovery of damages), it must file a cross-complaint....” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., supra, 29 Cal.4th at p. 198.)
Although Rauvel dismissed its cross-complaint prior to trial, the June judgment contained a judgment in Rauvel’s favor. The December order does not suggest that the trial court, in executing the June judgment, did not intend to render a judgment in Rauvel’s favor. Rather, the December order stated only that Rauvel’s recovery under the judgment was “fluid.”
On this matter, the December order pointed to the following paragraph regarding the parties’ pretrial stipulation in the June judgment: “Pursuant to the [] stipulation, to the extent that the funds in the account exceed the amount [Lee] has recovered by final judgment in the lawsuit, such excess funds are to be returned to [Rauvel].... Based on the amount ($380,422.47) in the account as of... March 19, 2007,..., this amount is at least $205,422.47 along with any additional accrued interest in subject account since March 19, 2007.” The December order stated: “The language of [this] paragraph above reflects that [Rauvel’s] share of the money retained in the account is fluid. Moreover, the fact that costs would be awarded at a later date[] makes clear that while, as of March 19, 2007, [Rauvel was] entitled to $205,422.47, the sum will change if circumstances of the case change.”
These remarks establish that the presence of the judgment in Rauvel’s favor in the June judgment was not clerical error. The pertinent paragraph in the June judgment states only that Rauvel claimed the balance of the bank funds as of March 19, 2007, plus any accrued bank interest following that date. Moreover, as explained above, Rauvel’s net recovery through the judgment in its favor would ordinarily mandate a determination that it was the prevailing party. The remarks in the December order show only that the trial court, in executing the June judgment, held a contrary view of the implications of the judgment in Rauvel’s favor. Accordingly, the judgment in Rauvel’s favor -- which is intertwined with the findings regarding the prevailing party and postjudgment interest in the June judgment -- was also not clerical error.
Pointing primarily to Dennis v. Overholtzer (1961) 191 Cal.App.2d 791 (Dennis) and Kamper v. Mark Hopkins Inc. (1947) 78 Cal.App.2d 885 (Kamper), Lee contends that the trial court was free to set aside the prevailing party determination in the June judgment, regardless of whether it constituted clerical error. We disagree. As our Supreme Court has explained, the trial court may not order a correction to a judgment “that substantially modifies the original judgment or materially alters the rights of the parties,” unless the correction rectifies a clerical error. (In re Candelario, supra, 3 Cal.3d at p. 705.) Dennis and Kamper stand for the proposition that once the prevailing party has been determined, the trial court may sometimes adjust the cost items awarded without a showing of clerical error, provided that the items are “a mere incident to the judgment already entered.” (Kamper, supra, 78 Cal.App.2d at p. 888; accord, Dennis, supra, 191 Cal.App.2d at p. 797.) Here, the trial court’s amendments to the June judgment constituted substantial modifications of the parties’ rights, rather than changes to “mere incident[s]” of the June judgment (Kamper, supra, 78 Cal.App.2d at p. 888).
Lee also contends that the trial court’s omission of the judgment in Rauvel's favor from the February judgment, and the related amendments to the June judgment directed by the December order, were corrections of clerical error. Her reliance upon Bastajian v. Brown (1941) 19 Cal.2d 209, Doxesee Co. v. All Persons etc. (1935) 3 Cal.2d 609, Martin v. Ray (1946) 74 Cal.App.2d 922, and Wilson v. Wilson (1948) 88 Cal.App.2d 382 is misplaced, as these cases are factually distinguishable.
Lee also relies on Kohlstedt v. Hauseur (1937) 24 Cal.App.2d 60, which was substantially overruled in In re Burnett’s Estate (1938) 11 Cal.2d 259, 263.
In three of these cases, the error in question was properly determined to be clerical, as the record disclosed a clear indication of the intended judgment before the trial court inadvertently entered a materially different judgment. (Bastajian v. Brown, supra, 19 Cal.2d at pp. 210-213 [minute order following bench trial established intended judgment]; Wilson v. Wilson, supra, 88 Cal.App.2d at pp. 382-383 [trial court properly modified judgment to incorporate provision ordered by appellate court, but inadvertently omitted from judgment]; Martin v. Ray, supra, 74 Cal.App.2d at pp. 926-927 [memorandum of opinion following bench trial established intended judgment].) In the remaining case, the trial court properly amended the judgment to cure a clear typographical error, namely, a reversal of the plaintiff's and defendant’s names. (Doxesee Co. v. All Persons etc., supra, 3 Cal.2d at pp. 611-613.) Here, the record establishes that the trial court intended to enter the June judgment, but misapprehended the import of its provisions. As explained, this does not constitute clerical error. In sum, the trial court erred in correcting the June judgment and entering the February judgment.
Lee suggests that the jury’s special verdict provided a clear indication of the intended judgment and identity of the prevailing party. We disagree. The jury’s special verdicts are not, in themselves, evidence regarding the trial court’s intentions in entering the June judgment.
In view of this conclusion, we do not address the issues raised by Lee in connection with her appeals.
DISPOSITION
The December order and February judgment are reversed, and the matter is remanded with directions to the trial court to vacate the February judgment, and to conduct any further proceedings in accordance with this opinion and the previously entered June judgment. Rauvel is awarded its costs on appeal.
We concur: Willhite, Acting P. J., Suzukawa, J.