In Lucky United Properties Investments Inc. v. Lee, 2013 DAR 1614 (2013), the California Court of Appeal for the First Appellate District decided when interest begins to accrue on an award of prejudgment interest in the attorney fee context. The ultimate holding in the case is that interest on a prejudgment award of attorney fees accrues upon the entry of judgment. A different rule is applicable for postjudgment interest.
The case arose from complex and lengthy litigation. Initially, the plaintiff filed a malicious prosecution complaint against the defendant arising from a lawsuit over real property. The defendant responded by filing a cross‑complaint for malicious prosecution against the plaintiff.
Both parties subsequently filed special motions to strike under the anti‑SLAPP statute. The trial court granted specific relief and also awarded the plaintiff’s attorney costs and attorney fees in connection with the anti‑SLAPP motion. The plaintiff and the defendant continued to litigate the proper fees which were the subject of the award. The litigation continued on for several years. (See prior discussion of the case here.)
The trial court issued an order containing a computation of the interest the defendant owed to the plaintiff based on outstanding judgments. The plaintiff’s attorney challenged the trial court’s calculation, arguing that the trial court had miscalculated the appropriate amount of interest owed on the attorney fee award.
The court of appeal reversed the trial court’s decision. The court reiterated that if costs are established by a judgment, but the full amount of the award is later ascertained, the court clerk enters the costs on the judgment after the amount is determined.
Based on the foregoing, interest will typically accrue on the prejudgment costs and attorney fees portion of the judgment upon the entry of the judgment.