Wednesday, August 19, 2015
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Plaintiff Whose Award Is Reduced Entitled to Interest From Date of Original Judgment—Panel
By a MetNews Staff Writer
A Los Angeles Superior Court judge erred by failing to provide for post-judgment interest, from the date of the original judgment, in favor of a plaintiff whose recovery was significantly slashed on appeal, the Court of Appeal for this district ruled yesterday.
Rejecting the defendant’s claim that the plaintiff was only entitled to post-judgment interest from the date the trial court entered the reduced judgment, Div. Five yesterday awarded Los Angeles attorney Hillel Chodos 10 percent interest on his recovery of nearly $1.8 million from a former client, from Sept. 19, 2013.
The ex-client, Navabeh Borman, argued that interest should only have run from Nov. 14 of last year.
The opinion is the third in the saga of Chodos’s effort to recover fees for representing Borman in her divorce from Burton Borman. The ex-husband, who was CEO of PennCorp Financial and later of Todd Shipyards, died in 2012 at the age of 84.
He and Navabeh Borman lived together beginning in 1983 and married in 1998.
Chodos and Hugh John Gibson had represented Navabeh Borman between 2007 and 2009. During that time, she sought a divorce, changed her mind and dismissed the action, brought a second divorce action, and sued under Marvin v. Marvin for an interest in a Malibu beach house and other property that Burton Borman owned before they were married.
Chodos, who did not have a statutorily required written fee agreement, sued in quantum meruit. He contended that he had obtained excellent results for his client, obtaining a settlement worth $26 million, and deserved a multiplier of his usual $1,000-per-hour fee.
The acrimonious fee litigation spawned a cross-complaint by Borman against Chodos for malpractice. She claimed that he failed to prepare, persuaded her to enter into an unfavorable settlement by misrepresenting the terms, failed to enforce interim court orders, and otherwise misadvised her.
Chodos in turn filed his own cross-complaint, seeking equitable indemnity from Borman’s subsequent attorneys, Dana Cole, Michael Dempsey, and Stephen Johnson. Chodos claimed that Borman had stopped taking his advice and had retained the cross-defendants, and that if she suffered any malpractice damages, it was their fault, not his, even though he and Gibson had remained counsel of record for a time.
After Chodos prevailed in Chodos v. Cole (2012) 210 C.A.4th 692, in which a divided panel said the cross-complaint did not arise from protected activity under the anti-SLAPP statute, the case went to trial before Los Angeles Superior Court Judge Barbara Ann Meiers.
Jurors awarded Chodoes $7.8 million. Div. Five ruled last year, however, in Chodos v. Borman (2014) 227 Cal.App.4th 76, that Chodos was entitled to no more than the reasonable hourly rate of $1,000 for the nearly 1,800 hours he put in.
Justice Richard Mosk said the amount of the jury award was “excessive and inequitable” and “contrary to public policy,” since it would have rewarded Chodos for not complying with the State Bar Act’s requirement of a written fee agreement. He also said a multiplier was inappropriate because the nature of the representation was not contingent on success.
On remand, Meiers ordered entry of a revised judgment in accord with the Court of Appeal opinion, but failed to provide for post-judgment interest from the date of the original judgment or costs incurred in the trial court.
That was error, Mosk wrote yesterday, because the prior ruling was a “modification,” not a “reversal,” of the original judgment.
“Whether an order by an appellate court is a modification or a reversal depends on the substance and effect of that order,” the justice explained. “…An appellate court order is ‘a reversal in the legal sense’ when it reverses the trial court and remands an issue to the trial court for further hearing and fact-finding necessary to the resolution of the issue forming a basis for appeal….”
In this case, however, the court did not reverse, in the technical sense, but rather sent the case back so that the judgment would be revised to “state what it should have stated on th[e] date” of the original order,” making it a modification.
The case is Chodos v. Borman, B260326.
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