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American Samoa Government v. Factory Mutual Insurance Co.11/19/2002
rican Samoa Government is entitled to postjudgment interest on the punitive award from the date of the original judgment, September 28, 1995, through and including the date of satisfaction of judgment."
A timely notice of appeal was filed by Factory Mutual from entry of the judgment.
DISCUSSION
Factory Mutual contends that the ruling by the trial court is at complete odds with its understanding of the law as set forth in Stockton Theatres, Inc. v. Palermo (1961) 55 Cal.2d 439 (Stockton Theatres). Focusing on the procedural setting here, it argues that the original judgment for punitive damages was flawed because it resulted from improper admission of Allendale's financial records without the necessary finding that Allendale was the alter ego of Affiliated. It concludes that postjudgment interest can run only from the new judgment following remand, when alter ego was first established. We disagree.
In Stockton Theatres, Stockton Theatres, Inc. (Stockton) obtained a judgment in its favor in 1949. Both sides appealed and Stockton prevailed on its appeal with directions that it be awarded its costs on appeal. Upon remand, it filed its memorandum of costs on appeal. One of the items it sought to recover was the amount of $6,980.49 it paid for a surety bond to preclude an attachment pending appeal, pursuant to Code of Civil Procedure section 1035. The trial court struck that portion of the memorandum of costs on December 17, 1954, concluding as a matter of law that Code of Civil procedure section 1035 was not applicable to costs on appeal. On appeal, the Supreme Court concluded that the trial court was wrong, that section 1035 did apply to costs on appeal, but it remanded for a further hearing on whether the challenged expenditure was "necessary," a foundational finding before the cost could be allowed. Upon remand, both parties put on evidence of the necessity of the bond at a hearing on April 12, 1957. The trial court concluded that the expenditure was unnecessary and disallowed it. The Supreme Court again reversed the trial court with directions that upon remand the amount be allowed as costs. That order was made effective January 20, 1959.
The issue then turned to when interest would accrue on the amount of the bond premium. Stockton argued it should relate back to the date of December 17, 1954, when the trial court originally struck the amount. The defendant argued that it should begin accruing only upon entry of the most recent order, January 20, 1959. The Supreme Court adopted the date of April 12, 1957, from which interest should accrue. The result was explained as follows: "That is the date the trial court entered its order denying the bond premium as an item of costs based on its finding that such expenditure was unnecessary. On the resulting appeal this court in 51 Cal.2d 346, . . . determined that on that date, as a matter of law, the trial court should have allowed the item involved." (Stockton Theatres, supra, 55 Cal.2d at p. 442.)
Stockton Theatres did not deal with an issue of amendment of a judgment based on alter ego, as we have here. "Judgments are often amended to add additional judgment debtors on the grounds that a person or entity is the alter ego of the original judgment debtor. [Citations.] This is an equitable procedure based on the theory that the court is not amending the judgment to add a new defendant but is merely inserting the correct name of the real defendant. [Citations.] `Such a procedure is an appropriate and complete method by which to bind new individual defendants where it can be demonstrated that in their capacity as alter ego of the corporation they in fact had control over the previous litigation, and thus
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