Opinion
A148333
01-24-2017
Estate of JOSEPH F. SILVEIRA, Deceased. LORRAINE F.SILVEIRA, as Trustee, etc., Petitioner and Appellant, v. KEVIN SILVEIRA, as Executor, etc., Respondent and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Marin County Super. Ct. No. PR 032446)
In a previous appeal, this court affirmed an amended judgment setting the amount, under the terms of a "tontine" partnership agreement, at which petitioner Lorraine F. Silveira, trustee of the Anthony F. Silveira and Lorraine F. Silveira 2002 trust and executor of the estate of Anthony F. Silveira (petitioner), could elect to purchase the interest of Joseph F. Silveira in the Silveira Ranches Partnership. In the present appeal, Kevin Silveira, as executor of the estate of Joseph F. Silveira (the estate), contends the trial court erred in calculating the amount of interest that has accrued on the now settled buyout amount. We find no error and, thus, shall affirm the court's order.
We refer to Lorraine F. Silveira in her representative capacity as "petitioner" because these proceedings were commenced by a petition filed in probate court by Anthony F. Silveira.
Factual and Procedural Background
On March 22, 2010, the trial court entered a judgment under which petitioner was awarded the right to acquire Joseph's partnership interest from the estate for $971,433, less any amounts already paid. The court rejected the estate's request for prejudgment interest on the full amount of the judgment, finding that prior to entry of judgment the value of Joseph's interest was not certain or capable of being made certain by calculation within the meaning of Civil Code section 3287. The estate was awarded prejudgment interest, however, on the amount that petitioner had tendered prior to the litigation ($471,311.25).
In December 2012, this court affirmed the judgment insofar as it awarded petitioner the right to purchase Joseph's interest in the partnership at book value. We concluded, however, that the court erred in calculating the book value of the partnership and accordingly reversed and remanded for recalculation. (Estate of Silveira (Dec. 12, 2012, A128800) [nonpub. opn.].) We also affirmed the trial court's award of interest on the tendered amount only. We explained, "Since Joseph's death, Tony has acknowledged that the estate was entitled to Joseph's share of the book value of the partnership. The amount that Tony offered the estate was acknowledged to be due the estate and this amount was not uncertain. The prejudgment interest awarded by the court properly compensates the estate for use of those funds during the period it was deprived of that amount. The court did not, however, abuse its discretion in refusing to award prejudgment interest on the remaining portion of the award, the precise amount of which, even at this point, remains uncertain." (Ibid.)
On December 31, 2013, the trial court entered an amended judgment which provided, "The judgment entered March 22, 2010 is amended, relating back to March 22, 2010, at paragraph 2 thereof, to substitute the sum of $4,056,665 in place of the sum of $971,433, and shall now read as follows: 'The book value of the partnership interest of Joseph F. Silveira at the time of his death is determined to be $4,056,665. Lorraine Silveira, in her representative capacity, and as successor to the original petitioner, may complete the exercise of her right to acquire the partnership interest of Joseph Silveira by paying this sum forthwith, plus pre- and post-judgment interest thereon, less any setoff for amounts already paid, to Kevin Silveira, successor executor of the respondent estate.' "
In August 2015, this court affirmed the amended judgment. (Estate of Silveira (Aug. 31, 2015, A141310) [nonpub. opn.].) The remittitur on appeal issued on November 3, 2015.
On December 2, 2015, the estate filed an amended petition for declaratory relief seeking clarification of the amount of the payment necessary to acquire Joseph's partnership interest. The estate argued that it is entitled to postjudgment interest at 10 percent per annum on the buyout amount commencing March 22, 2010 or, alternatively, that the estate is entitled to prejudgment interest at a rate of 7 percent per annum on that value from March 22, 2010 through December 31, 2013, and postjudgment interest at the higher rate thereafter.
In response, petitioner acknowledged that the estate is entitled to interest on the $471,311.25 initially tendered in 2004. She argued, however, that no additional interest is owed because the judgment in this case is not a money judgment.
Following a hearing, the trial court awarded the estate interest at 7 percent per annum on the tendered amount through November 2, 2015, offset by payments already received, and interest at 7 percent on the full buyout amount from November 3, 2015 forward. The court explained that Code of Civil Procedure section 685.010, subdivision (a), which provides for 10 percent interest on money judgments is not applicable because the judgment in this case does not require the payment of money. The court explained further that Joseph's estate was not entitled to interest on the full buyout amount until the order setting that amount became final on November 3, 2015.
The estate timely filed a notice of appeal.
Discussion
Under Code of Civil Procedure section 685.010, subdivision (a), "Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied." A money judgment is that "part of a judgment that requires the payment of money." (Code Civ. Proc., § 680.270.) The amended judgment in this case does not require the payment of money. Rather, it determines the amount petitioner must pay in order to purchase Joseph's interest in the partnership. Although petitioner's predecessor has already exercised the right to purchase, the judgment did not compel him to do so or to pay any amount to the estate. The judgment is not a money judgment within the meaning of the Code of Civil Procedure. (Cf. Estate of Kampen (2011) 201 Cal.App.4th 971, 986-987.)
Civil Code section 3287 is also not applicable in this instance. Section 3287, subdivision (a) "authorizes an award of interest when a person is entitled to recover damages certain, or capable of being made certain by calculation (liquidated). Section 3287, subdivision (b) applies when the damages cannot be so determined (unliquidated). While the two subdivisions make a distinction between damages that are liquidated and unliquidated, they have one key word in common—damages." (Union Pacific Railroad Co. v. Santa Fe Pac. Pipelines, Inc. (2014) 231 Cal.App.4th 134, 199.) Damages are defined under section 3281 as follows: "Every person who suffers detriment from the unlawful act or omission of another, may recover from the person in fault a compensation therefor in money, which is called damages." The judgment in this case does not award the estate "damages" to compensate for detriment caused by petitioner's "unlawful act or omission." This does not mean, however, as petitioner now asserts, that the estate is entitled to no prejudgment interest.
Civil Code section 3287 provides: "(a) A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt. . . . [¶] (b) Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed." All further statutory references are to the Civil Code unless otherwise noted.
Petitioner's argument on appeal directly contradicts the argument made in the first appeal in which petitioner insisted that Civil Code section 3287, subdivision (a) governed the award of prejudgment interest in this case. Although we previously upheld the trial court's interest award, we did not adopt petitioner's argument that Civil Code section 3287, subdivision (a) governed this action. Rather, as discussed post, we found no abuse of discretion in the trial court's award, which was based in part on the finding that the full amount of the buy-out was too uncertain to support an award of prejudgment interest.
In our December 2012 opinion, we upheld the trial court's exercise of discretion to award prejudgment interest on the portion of the buy-out amount that was undisputed as compensation to the estate "for use of those funds during the period it was deprived of that amount." (Estate of Silveira (Dec. 12, 2012, A128800) [nonpub. opn.].) We explained, "While it is generally acknowledged that ' "where an accounting is required in order to arrive at a sum justly due, interest is not allowed," ' courts have not 'foreclose[d] the possibility of prejudgment interest in an accounting action where equity demands such an award.' (Chesapeake Industries, Inc. v. Togova Enterprises, Inc. (1983) 149 Cal.App.3d 901, 908-909; see also Luchs v. Ormsby (1959) 171 Cal.App.2d 377, 388 ['A partner may collect interest where partnership funds have been wrongfully withheld']; Lacy Mfg. Co. v. Gold Crown Mining Co. (1942) 52 Cal.App.2d 568, 579 [where a dispute exists with regard to part but not all of a claim, that dispute does not render the amount of the claim uncertain and the debtor can avoid liability for interest by tendering the amount actually due].)" (Estate of Silveira (Dec. 12, 2012, A128800) [nonpub. opn.].) Whether equity requires an award of prejudgment interest "present[s] a question calling for judicial discretion in determining what equity require[s]." (Stockton Theatres, Inc. v. Palermo (1953) 121 Cal.App.2d 616, 632.)
In this case, the partnership agreement included provisions requiring any departing partner, or the estate of any deceased partner, to sell that partner's interest back to the remaining partners for book value if the remaining partner(s) elected to purchase that interest. Shortly after Joseph's death in 2003, Anthony Silveira notified the estate that he was exercising his right to purchase Joseph's interest at book value. The estate refused to sell Joseph's interest for less than fair market value, causing Anthony to file the present action to enforce the terms of the partnership agreement. (Estate of Silveira (Dec. 12, 2012, A128800) [nonpub. opn.].) Because both parties were actively disputing the terms of the contract and the amount required to complete the purchase, the court reasonably determined that no prejudgment interest should be awarded on the uncertain amount. In making the final interest order, at issue in this appeal, the trial court again reasonably concluded as a matter of equity that interest should not begin to accrue on the full buyout amount until the remittitur issued and the amount became final.
Contrary to the estate's argument, the court's order is consistent with the plain language of the amended judgment insofar as it provides generally for the inclusion of "pre- and post-judgment interest" on the amount petitioner must pay for Joseph's partnership interest. The judgment does not specify the amount of interest or how any interest should be calculated, leaving resolution of any such dispute to a later date. --------
Disposition
The order awarding interest is affirmed. The parties shall bear their respective costs on appeal.
/s/_________
Pollak, Acting P.J. We concur: /s/_________
Siggins, J. /s/_________
Jenkins, J.