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Armstrong v. Jack's Inc.

United States District Court, S.D. California

March 20, 2017

ROBERT ARMSTRONG, Plaintiff,
v.
JACK'S INC., et al., Defendants.

          ORDER DENYING IN PART, GRANTING IN PART, DEFENDANT ROY GAYHART'S MOTION TO VACATE RENEWAL OF JUDGMENT OR, ALTERNATIVELY, CORRECT THE JUDGMENT [DOC. NO. 84]

          Hon. Marilyn L. Huff United States District Judge.

         On January 19, 1993, Plaintiff Robert Armstrong (“Plaintiff”) and Defendant Roy Gayhart (“Defendant”) stipulated to a judgment of $6, 500 in favor of Plaintiff, payable by Defendant. (Doc. No. 62.) On Plaintiff's motion, the Court renewed the judgment on May 21, 2002. (Doc. No. 70.) The Court also subsequently renewed the judgment on Plaintiff's motion on November 7, 2007, (Doc. No. 72), July 11, 2008, (Doc. No. 76), and June 3, 2015, (Doc. No. 82). Defendant did not participate in these proceedings.

         On January 25, 2017, Defendant brought the present motion seeking to vacate the previous renewals of judgment or, alternatively, correct the judgment amount. (Doc. No. 84.) On February 28, 2017, Plaintiff opposed the motion. (Doc. No. 94.) Defendant replied on March 2, 2017. (Doc. No. 86.) On March 6, 2017, the Court heard arguments on the matter. (Doc. No. 97.) Defendant was represented by Attorney Jeremy Golden and Plaintiff proceeded pro se. (Id.)

         BACKGROUND

         This case arises from a $6, 500 stipulated judgment from 1993. (Doc. No. 62.) Since that time, Defendant has not paid the judgment and Plaintiff has asked the Court to renew it from time to time. (Doc. Nos. 70, 72, 76, 82.) Most recently, Plaintiff moved to renew the judgment on May 7, 2015. (Doc. No. 78.) In his motion to renew the judgment, Plaintiff claimed that interest was accruing at the rate of 10% per year. (Id.) The Court ordered supplemental briefing on why the 10% interest rate was appropriate. (Doc. No. 79.) Plaintiff filed supplemental briefing on June 1, 2015, asserting the 10% interest rate was appropriate because the parties had agreed to it at the time of the stipulation and Defendant subsequently acknowledged the rate was proper. (Doc. No. 80.) Defendant did not participate in these proceedings. On June 3, 2015, the Court renewed the judgment as requested, but reserved the right to alter the interest rate at a later date. (Doc. No. 82.)

         ANALYSIS

         Defendant argues the Court should adjust the judgment amount because the appropriate federal postjudgment interest rate is 3.67%. (Doc. No. 84-1 at 5-6.) Defendant also argues the judgment renewals should be vacated because he did not receive notice. (Doc. No. 84-1 at 4.) Finally, in the alternative, Defendant argues the Court should deem Plaintiff's judgment satisfied because Plaintiff has collected payments from other defendants totaling more than the amount in the original complaint. (Id. at 6.)

         I. AMOUNT OF JUDGMENT

         Defendant's original judgment of $6, 500 has been accruing interest since 1993. (Doc. No. 62.) Defendant made payments totaling $700 in 1994 but stopped making payments after experiencing financial difficulties. (Doc. No. 84-1 at 2.) In May 2002, Plaintiff renewed the judgment in the amount of $11, 324.99. (Doc. No. 70.) This included the remaining principal of $5, 800 and accrued postjudgment interest of $5, 524.99. (Id.) Plaintiff filed a certificate of service, certifying he served Defendant with a notice of the renewal of judgment via U.S. mail. (Doc. No. 71.) Plaintiff next renewed the judgment in November 2007. (Doc. No. 72.) Plaintiff had received no payments from Defendant during the period and the additional accrued interest was $6, 134, for a total judgment of $17, 460.00. (Id.) Plaintiff attempted to serve Defendant notice but the mail was returned as undeliverable. (Doc. No. 74.) Because of the wrong address, Plaintiff renewed the judgment again in 2008, this time for the amount of $18, 403.12. (Doc. No. 76; see Doc. No. 88.) Plaintiff most recently attempted to renew the judgment on May 7, 2015. (Doc. No. 78.) Plaintiff had received no payments from Defendant and claimed an additional $12, 347.74 had accrued in interest. (Id.) On May 11, 2015, the Court requested additional briefing regarding the proper interest rate. (Doc. No. 79.) On June 1, 2015, Plaintiff filed supplemental briefing explaining that the appropriate interest rate was 10% because that was what the parties had agreed to at the time of the settlement. (Doc. No. 80.) In light of Plaintiff's representations, and absent objection from Defendant, the Court granted the renewal of judgment on June 3, 2015, but reserved the right to alter the interest at a later date. (Doc. No. 82.)

         Postjudgment interest rates are governed by federal law. Fid. Nat. Fin. Inc. v. Friedman, 602 F.3d 1121, 1123 (“Interest accruing on an unpaid federal judgment is governed by federal law-even in diversity cases.”). The U.S. Code provides that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(1). By default, “[s]uch interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity yield . . . for the calendar week preceding the date of the judgment.[1]Id. However, parties may agree to contractually waive the application of 28 U.S.C. § 1961. See Fidelity Fed. Bank, FSB v. Durga Ma Corp, 387 F.3d 1021, 1023 (9th Cir. 2004); Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 1108 (9th Cir. 1998) (“We agree with the district court that the parties contractually waived their right to have post-judgment interest calculated at the federal statutory rate.”).

         Defendant argues the Court should amend the judgment against him to reflect the applicable federal postjudgment interest rate, rather than the 10% interest rate the Court previously applied. (Doc. No. 84-1 at 5-6.) Federal Rule of Civil Procedure 60(b) allows a court to modify a previous order for the following reasons:

(1) Mistake, inadvertence, surprise, or excusable neglect;
(2) Newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) Fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct ...

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