Wednesday, June 22, 2011

Gunderson v. Wall (Cal. Ct. App. - June 22, 2011)

I think this decision is totally correct.  It's probably correct even without a statute that expressly allows the court to consider equitable considerations.  But particuarly given the presence of that statute, I couldn't agree more with Justice Zelon.

Sure, normally, when the other side has collected on a trial court's judgment and part of that judgment is reversed on appeal, you should get interest on the part of the judgment that's reversed.   So if, as in this case, plaintiff obtains a judgment of $1.7 million for compensatory damages and $800,000 for punitive damages, defendant eventually pays $2.6 million in an attempt to satisfy the judgment, and the punitive damages award is subsequently reversed on appeal, I'd normally give 'em the $800,000 back and tack on some interest.  That seems fair.  (I'm not at all sure I'd award statutory interest at 10%, but the appropriate rate's another question.)

But where, as here, the defendant's sleazy efforts to evade a prior judgment (by illegally transferring assets) were the reason for the judgment in the first place, and then defendant continued its sleazy efforts to avoid the new judgment, I agree that equity doesn't at all require interest on the reversed punitive damages award.  Yes, defendant, if you'd like, you can secret away all your computers and financial documents when a receiver gets appointed, you can go into hiding to avoid service of a subpoena, and you can even refuse to appear in court once they catch you, but if you do, don't come whining to me about "missing interest" when you get the punitive damages award reversed.

In life, we call that karma.  In law, we call it equity.