DISCUSSION

Code of Civil Procedure section 908 provides that, upon reversal or modification of a judgment, “the reviewing court may direct that the parties be returned so far as possible to the positions they occupied before the enforcement of or execution on the judgment or order. In doing so, the reviewing court may order restitution on reasonable terms and conditions of all property and rights lost by the erroneous judgment or order. . . . ” “[A] trial court whose order or judgment has been reversed on appeal has inherent authority to afford similar relief. [Citations.]” (Gunderson v. Wall (2011) 196 Cal.App.4th 1060, 1065 (Gunderson).) “‘The fundamental rule guiding the court [in awarding restitution under Code of Civil Procedure section 908] [i]s, so far as possible, to place the parties in as favorable a position as they could have been in had the judgment[] not been enforced pending appeal.’ [Citation.]” (Gunderson, supra, 196 Cal.App.4th at p. 1065.) An interest award routinely is part of restitution following the reversal of a money judgment unless such an award would be inequitable under the circumstances. (Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061, 1085 (Textron), disapproved on other grounds in Zhang v. Superior Court (2013) 57 Cal.4th 364, 377-379.) Courts “generally reason[] that []payment of interest is appropriate because a plaintiff who collects his judgment pending appeal assumes the risk that it may have to repay the award, along with interest, if the defendant prevails in that appeal. [Citations.]” (Gunderson, at pp. 1066-1067.) The decision whether to award interest as restitution is a question of “judicial discretion in determining what equity require[s].” (Stockton Theatres, Inc. v. Palermo (1953) 121 Cal.App.2d 616, 632; see also Textron, at p. 1085.) Denying interest here did not place Financial “‘in as favorable a position as [it] could have been in had the judgment[] not been enforced pending appeal.’” (Gunderson, supra, 196 Cal.App.4th at p. 1065.) Financial lost the time value of its money between the time it paid the judgment to the County and the date the County returned its money

3 after our reversal of the judgment. Although the County demanded payment of the judgment pursuant to Penal Code section 1306, which under subdivision (f) gives it two years from entry of judgment for enforcement, payment of interest fulfills the purpose of Code of Civil Procedure section 908 to return Financial to the position it occupied before enforcement of the judgment that we reversed on appeal. No evidence exists that Financial acted inequitably in postjudgment proceedings to render the denial of interest an appropriate act of discretion. (See Gunderson, supra, 196 Cal.App.4th at pp. 1067-1068 [denial of interest affirmed because defendant who ultimately paid judgment pending appeal engaged in inequitable postjudgment conduct that caused plaintiff to incur substantial costs in enforcing the judgment].) Under these circumstances, an award of interest as restitution is appropriate pursuant to Code of Civil Procedure section 908. (Textron, supra, 118 Cal.App.4th at pp. 1085-1086 [interest awarded as restitution when defendant had paid judgment based on plaintiff’s threat to execute on it and no evidence existed that defendant had acted inequitably in postjudgment proceedings].) We, therefore, reverse the denial of interest and remand the matter for the trial court to determine a reasonable interest rate and award interest from the date Financial paid the judgment (April 10, 2012) through the date the County returned the money (December 17, 2013).1

1 We note that interest rates are, and have been, low. (See, e.g., Department of the Treasury, Resource Center, Daily Treasury Yield Curve Rates [treasury yield curve rate on 10-year United States treasury bond 2.19 percent as of June 1, 2015].) Although Financial asks for interest at a rate of 10 percent per annum pursuant to Civil Code sections 3287 and 3289, those provisions do not govern a restitution award under Code of Civil Procedure section 908. In addition, Financial has not demonstrated that an interest rate of 10 percent would be the appropriate interest rate to restore it to as favorable a position as it could have been in had the judgment not been enforced pending appeal.

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DISPOSITION

The order insofar as the trial court denied interest is reversed and remanded with directions. On remand, the court shall determine a reasonable interest rate to restore Financial to its former position and award Financial that interest on the amount of $101,493.29 from April 10, 2012 through December 17, 2013. Financial is entitled to recover its costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur:

CHANEY, J.

JOHNSON, J.

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