Medical Acquisition Company, Inc. v. Tri-City Healthcare District

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 25, 2024
• Docket: 24-152
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 25 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MEDICAL ACQUISITION CO., INC., No. 24-152 D.C. No. Plaintiff - Appellant, 3:23-cv-01454-CAB-KSC v. MEMORANDUM* TRI-CITY HEALTHCARE DISTRICT,

Defendant - Appellee.

Appeal from the United States District Court for the Southern District of California Cathy Ann Bencivengo, District Judge, Presiding

Submitted October 23, 2024** Pasadena, California

Before: TALLMAN, R. NELSON, and BRESS, Circuit Judges.

Tri-City Healthcare District (Tri-City) filed a proof of claim in Medical

Acquisition Company’s (MAC) Chapter 11 bankruptcy proceedings. Tri-City’s

claim was based on a $4,042,754.84 judgment that it obtained against MAC in

California state court. During post-judgment proceedings, the state trial court

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). awarded Tri-City another $1,135,083.12 in pre-judgment interest.

In MAC’s Chapter 11 bankruptcy, Tri-City filed a proof of claim for these

amounts (minus certain offsets), plus post-judgment interest. MAC objected to one

aspect of Tri-City’s claim, contending that Tri-City should not be allowed to obtain

post-judgment interest on the $1,135,083.12 pre-judgment interest award. The

bankruptcy court overruled MAC’s objection to Tri-City’s proof of claim, and the

district court affirmed. We review a bankruptcy court’s legal conclusions de novo

and its factual determinations for clear error. See In re First T.D. & Inv., Inc., 253

F.3d 520, 526 (9th Cir. 2001). We have jurisdiction under 28 U.S.C. § 158, and we

affirm.

California law provides that “interest accrues at the rate of 10 percent per

annum on the principal amount of a money judgment remaining unsatisfied.” Cal.

Civ. Proc. Code § 685.010(a)(1). Tri-City was entitled to pre-judgment interest in

the amount of $1,135,083.12 on the $4,042,754.84 damages award. See Cal. Civ.

Proc. Code § 1255.280(b)(2). MAC does not dispute that the pre-judgment interest

award was valid or that pre-judgment interest can be part of the judgment. Instead,

MAC’s argument is that the $1,135,083.12 in pre-judgment interest was never made

part of the state court judgment, and thus that post-judgment interest on the pre-

judgment interest award is not available under § 685.010(a)(1). The bankruptcy

court correctly rejected this argument, as did the district court.

2 24-152 California Rule of Court 3.1802 provides that “[t]he clerk must include in the

judgment any interest awarded by the court.” There is no reason Tri-City’s pre-

judgment interest award should not be regarded as part of the state court’s judgment.

See Felczer v. Apple Inc., 63 Cal. App. 5th 406, 415 (2021) (explaining that “any

judgment that establishes one party owes the other payment is a money judgment for

the purposes of section 685.020, even if the precise amount owed has yet to be

determined”). Here, Tri-City’s judgment established its right to pre-judgment

interest, which was eventually awarded. Cal. Civ. Proc. Code § 1255.280(b)(2).

MAC identifies no authority conditioning Tri-City’s recovery of post-judgment

interest on the state court undertaking any further formalities with respect to the

award of pre-judgment interest. So, the bankruptcy court’s analysis was correct that

Tri-City’s pre-judgment interest award was part of the state court judgment, and the

district court was correct in affirming that judgment.

AFFIRMED.

3 24-152