If you are fortunate to have obtained a judgment from a California court, you may wonder how interest on the principal amount of the judgment and interest on prejudgment and postjudgment costs are calculated. Interest on the principal amount of judgment is calculated at the rate of 10 percent per annum. It is calculated on the principal amount of the judgment from the date of entry.
For example, if your judgment is $5,000 and it was entered 100 days ago the total interest owed is calculated as follows:
$ 5,000 (principal amount of judgment)
x .10 (10% interest)
= $500 (yearly interest)
Divide by 365:
$ 500 (yearly interest)
÷ 365 (days in a year)
= $1.37 (daily interest)
$ 1.37 (daily interest)
x 100 (days unpaid)
= $137 (total interest owed)
The San Diego County Superior Court has a Judgment Interest Calculator. You will find it useful in calculating interest on your judgment, especially if you have received payments or incurred costs.
Prejudgment Costs to Prevailing Party. As a general rule, the prevailing party may recover certain statutory costs incurred in the litigation up to and including entry of judgment. These costs may include attorney fees if authorized by contract, statute, or case law. These costs are usually obtained by filing a cost memorandum, although attorney fees require a separate noticed motion. Where costs are established by the judgment, but the amount of the award is ascertained at a later time (as in the usual case), the court clerk enters the costs on the judgment after the amount is determined. Those costs incurred prejudgment are incorporated into the judgment. Therefore, interest ordinarily begins to accrue on the prejudgment cost and attorney fees portion of the judgment as of the same time it begins to accrue on all other monetary portions of the judgment—upon entry of judgment.
Postjudgment Enforcement Costs. In addition to attorney fees and costs imposed as a result of prevailing in the action, postjudgment costs of enforcing the judgment may also be recovered. Some costs, such as fees incurred in regard to abstracts of judgment or notice of judgment liens, may be claimed as a matter of right. Other enforcement expenses incurred by a judgment creditor are recoverable if, upon noticed motion, the court determines they were reasonable and necessary costs of enforcing a judgment. When postjudgment enforcement costs are allowed, they become part of the principal amount of the judgment. However, postjudgment interest on such awards runs from the date the amount of the cost or fee award is fixed, not from the date of the original judgment.
Appellate Court Order of Costs on Appeal. If an appeal is taken from the judgment, the party prevailing in the Court of Appeal is usually entitled to costs on appeal. The award of costs is included in the Remittitur, although the amount of the award is determined in the trial court. These costs are not added to the trial court judgment, but constitute a separate judgment. Interest thereon begins to run from the date of the entry of the trial court’s award.
Trial Court Order of Costs on Appeal. In some circumstances a party may also obtain an award of costs, including attorney fees, from the trial court where it has, for example, successfully defended on appeal the trial court’s grant of its anti-SLAPP motion to strike. In this circumstance the trial court’s award of costs and fees incurred on appeal do not constitute separate judgments. Rather, they are incorporated into the original trial court judgment as are all other awards of costs and fees and, as with all other such postjudgment awards, earn interest from the date the awards are entered.
For a complete discussion of these issues and for additional matters that may affect the calculation of principal and interest in any given case Lucky United Properties Investments, Inc v. Lee is instructive.
I consult with clients and accept cases involving the collection of judgments. For other types of cases I accept, please consult the My Practice page. If you are seeking a legal consult or representation, call 818.971.9409. – Michael Daymude