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311 South Spring Street Co. v. Dep't of General Services

October 28, 2009

311 SOUTH SPRING STREET COMPANY, PLAINTIFF AND RESPONDENT,
v.
DEPARTMENT OF GENERAL SERVICES, DEFENDANT AND APPELLANT.



APPEAL from an order of the Superior Court of Los Angeles County. Kenneth R. Freeman, Judge. Reversed with directions. (Los Angeles County Super. Ct. No. BC326681).

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

CERTIFIED FOR PUBLICATION

The Department of General Services of the State of California (State) appeals from a postjudgment order denying its request to vacate that portion of a judgment awarding postjudgment interest against State at a rate of 10 percent, which is contrary to article XV, section 1 of the California Constitution, providing for 7 percent interest. We conclude that the order is appealable because it gives effect to that portion of a judgment awarding postjudgment interest which is claimed to be void. Further, we determine that the award in excess of 7 percent interest is void and thus subject to collateral attack because it constitutes relief which the court had no power to grant. Accordingly, on remand the trial court will be directed to vacate that portion of the judgment awarding postjudgment interest in excess of 7 percent.

BACKGROUND

Plaintiff is a commercial landlord who sued State for breach of a lease and obtained a judgment against State for damages of approximately $5.4 million, plus prejudgment interest and postjudgment interest at the rate of 10 percent. Although State filed numerous objections to the proposed judgment, State did not challenge the postjudgment interest rate of 10 percent. State appealed from the judgment but did not challenge the postjudgment 10 percent interest rate on appeal. In May 2008, we upheld the judgment in favor of plaintiff. (See 311 South Spring Street Company v. Department of General Services (May 29, 2008, B195245) [nonpub. opn.].) The remittitur was issued on July 31, 2008.

On August 4, 2008, plaintiff received a check from State for $6,170,681.45. According to plaintiff, the check was short by $440,205.52. State withheld that part of the judgment representing the award of postjudgment interest in excess of 7 percent, claiming that plaintiff is entitled to only a 7 percent rate pursuant to California Constitution, article XV, section 1.*fn1

Plaintiff filed a motion for an order compelling State to satisfy the remainder of the judgment. State filed opposition in which it argued, among other things, that the portion of the judgment awarding postjudgment interest in excess of 7 percent was void and subject to collateral attack at any time. In its reply, plaintiff addressed the issues of whether the trial court had jurisdiction to amend the final judgment and whether State had waived its objection to the amount of postjudgment interest by failing to raise the objection in a timely manner.

At the hearing on the motion, State again contended that the part of the judgment awarding postjudgment interest in excess of 7 percent was void. The motion was heard and granted on September 16, 2008. On September 16, 2008, an order was entered providing that State ―must satisfy the money judgment entered against it in this action by October 1, 2008.‖

State appeals from the September 16, 2008 order, contending that: (1) the trial court acted in excess of its jurisdiction by granting plaintiff's motion because the judgment against State can be enforced only pursuant to the provisions of Government Code section 965.6, which plaintiff did not follow, and (2) the portion of the judgment awarding postjudgment interest at a 10 percent rate is void and subject to collateral attack at any time, even after appeal from the judgment.

Plaintiff filed a motion to dismiss the appeal on the ground that the September 16, 2008 order is not appealable because the instant appeal involves issues that could and should have been raised in the prior appeal from the underlying judgment. State filed opposition to the motion to dismiss, arguing that the September 16, 2008 order is appealable (1) as a postjudgment order under Code of Civil Procedure section 904.1, subdivision (a)(2), and (2) as a void order which gives effect to a portion of the judgment which is void.

DISCUSSION

A. Appealability

We agree with State that the September 16, 2008 order is appealable because it is tantamount to a postjudgment order denying a motion to vacate a portion of a judgment that is claimed to be void. As a preliminary matter, although State's opposition to plaintiff's motion in the trial court was not styled as a request to vacate that portion of the judgment awarding postjudgment interest in excess of 7 percent, the request was unequivocally made by State and addressed in plaintiff's reply papers. State again made the request at the hearing. Under the circumstances, all parties and the trial court were afforded adequate notice of the nature of State's request and the issue before the court.

As explained in Carlson v. Eassa (1997) 54 Cal.App.4th 684: ―[A]n order denying a motion to vacate a judgment is generally not appealable; otherwise, an appellant would receive ‗either two appeals from the same decision, or, if no timely appeal has been made, an unwarranted extension of time in which to bring the appeal.' [Citation.] In this case, the postjugment order did not decide new issues, but merely ‗affirmed' the validity of the judgment. Thus, it initially appears that appeal from the postjudgment order is precluded. [¶] [H]owever, an exception to this general rule applies when the underlying judgment is ...


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