In Khazan v. Braynin, 2012 DJDAR 7124 (2012), the California Court of Appeal for the First Appellate District clarified the rule on when interest begins to run on a fee award which is the subject of an appeal. The court of appeal clarified the applicable rule in the situation involving an appeal and a remand for further proceedings. In those situations, the court held that interest begins to run not from the date of the original judgment, but from the date the fee award is rendered after the case is remanded for further proceedings and decided.
The plaintiff sued the defendant on a promissory note, claiming there was a default. The plaintiff prevailed on most claims in the litigation.
The trial court issued an order awarding the plaintiff contractual attorney fees of over $1.3 million. In an earlier appeal, the court affirmed the judgment on the merits and reversed and remanded the case for further proceedings relating to the amount of attorney fees which were the subject of the award.
On remand, the trial court reduced the fee award. The trial court also ordered that the interest would accrue on the award from the date of the modified judgment reflecting that order. The plaintiff challenged the trial court’s ruling on when interest on the award should begin to accrue. The plaintiff contended that interest should run from the date of the original judgment on the merits.
The court of appeal affirmed the lower court’s decision. The court stated that in these situations, interest on the fees runs from the date of the modified order awarding the amount of fees, not from the date of the original judgment. When a judgment is reversed on appeal, the new award bears interest only from the date of the new judgment.