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Cadlo v. Metalclad Insulation Corp.

March 30, 2009

MAXLYN CADLO, PLAINTIFF AND APPELLANT,
v.
METALCLAD INSULATION CORPORATION ET AL., DEFENDANTS AND RESPONDENTS.



(San Francisco City and County Super. Ct. No. CGC-02-412325). John J. Conway, Judge.

The opinion of the court was delivered by: Simons, J.

CERTIFIED FOR PUBLICATION

After two defendants in a personal injury case rejected the plaintiffs' offers to compromise (Code Civ. Proc., § 998), the jury returned an award of damages against the defendants that exceeded the plaintiffs' offers. Civil Code section 3291*fn1 provides that if a defendant does not timely accept a Code of Civil Procedure section 998 offer to compromise (hereafter 998 offer) and the plaintiff obtains a more favorable judgment, the plaintiff is entitled to specified annual interest. Relying on section 3291, the trial court determined defendants Metalclad Insulation Corporation (Metalclad) and John Crane Inc. (Crane) (collectively respondents), are jointly and severally liable for prejudgment interest on the judgment. Plaintiff Maxlyn Cadlo (appellant), individually and as successor-in-interest to decedent Anthony Cadlo,*fn2 contends that Metalclad and Crane should each be liable for such prejudgment interest on the entire judgment. We reject the contention and affirm.

BACKGROUND

In September 2002, appellant and Anthony filed a complaint against respondents for Anthony's asbestos-related personal injury and appellant's loss of consortium. On November 19, appellant and Anthony served Metalclad with a 998 offer in the amount of $149,998. On October 29, 2003, appellant and Anthony served Crane with a 998 offer in the amount of $112,498. Respondents rejected the 998 offers and the case proceeded to trial.

On March 22, 2005, the jury returned a special verdict in favor of appellant and Anthony. The jury awarded Anthony $87,304.74 in past medical expenses, $174,000 in future medical expenses, $1,412,400 in non-medical economic damages and $4.0 million in non-economic damages.*fn3 It also awarded appellant $3.0 million in loss of consortium damages. The jury allocated 3 percent of the fault for appellant's and Anthony's injuries to Crane and 4 percent of the fault to Metalclad. On March 25, the court executed a judgment on the special verdict.

Anthony died on March 24, 2005. On September 6, the court entered judgment nunc pro tunc to March 23 in favor of appellant and Anthony. The judgment awarded Anthony $1,673,704.74 in economic damages against respondents jointly and severally, $120,000 in non-economic damages against Metalclad severally, and $160,000 in non-economic damages against Crane severally. The judgment awarded appellant $120,000 in non-economic damages against Metalclad and $90,000 in non-economic damages against Crane.

On September 19, 2005, the court credited respondents for appellant's settlements with other defendants and for the Veterans Administration benefits paid to Anthony prior to his death. The net economic damage award, for which respondents were jointly and severally liable, was $1,362,842.11. The court awarded appellant $68,628.01 in expert witness costs against respondents, jointly and severally, and ruled appellant was entitled to prejudgment interest at the rate of 10 percent per annum, from October 29, 2003, as to Crane, and from November 19, 2002, as to Metalclad, until satisfaction of judgment. (Code Civ. Proc., § 998, subd. (d); Civ.Code § 3291.) The costs and interest were made part of the September judgment entered nunc pro tunc.

Respondents unsuccessfully appealed the judgment on various issues, including the validity of the 998 offers made to them. (Cadlo v. Metalclad Insulation Corp. (2007) 151 Cal.App.4th 1311 (Cadlo I).)

Respondents stipulated to satisfy the joint and several economic damages award by the same allocation ratio made by the jury (4 percent of fault to Metalclad, 3 percent of fault to Crane). Thus, Metalclad agreed to compensate appellant for 57 percent of the economic damages award and Crane agreed to compensate appellant for 43 percent of the economic damages award.

This court's remittitur in Cadlo I issued on October 29, 2007. On that date, Metalclad tendered $1,659,050.02 to appellant along with a demand for satisfaction of the judgment. Metalclad asserted that, of the sum tendered, $1,110,292 represented its share of total liability on the judgment excluding interest,*fn4 and $548,758.02 represented its share of section 3291 prejudgment interest on the judgment from November 19, 2002, the date Metalclad was served with appellant's and Anthony's 998 offer, through October 29, 2007, the date Metalclad tendered full payment.*fn5 On November 2, 2007, Crane tendered $1,170,904.70 to appellant in satisfaction of its share of the judgment. Crane asserted that, of the sum it tendered, $836,360.51 represented its share of total liability on the judgment excluding interest, and $334,544.19 represented its share of section 3291 prejudgment interest on the judgment from October 29, 2003, the date Crane was served with appellant's and Anthony's 998 offer, through October 29, 2007.*fn6 Appellant refused respondents' tenders of payment.

On November 15, 2007, respondents each moved for a determination on the final judgment and for entry of satisfaction of judgment. Appellant argued that respondents are each liable for prejudgment interest under section 3291 on the full amount of the judgment regardless of how they decide to apportion payment of the judgment between themselves. Respondents argued, and the trial court agreed, that they are "jointly and severally liable for prejudgment interest" under section 3291 at an annual rate of 10 percent. In its written order the court expressly "reject[ed appellant's] assertion that [she] is entitled to recover interest on the judgment once from Metalclad and once again from . . . Crane, as such recovery results in double interest." The court found that Metalclad satisfied its share of the judgment on October 29 by tendering payment of $1,659,050.02 to appellant, and prejudgment interest as to Metalclad stopped accruing on that date. The court ordered Crane to retender payment in the amount of $1,170,904.88 to appellant, and found that prejudgment interest as to Crane stopped accruing on the date of its original tender, November 2.

Appellant filed a timely appeal of the court's November 29, 2007 order granting respondents' motions for determination of final ...


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