Title: Upper Occoquan Sewage Authority v. Blake Construction Co.

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
UPPER OCCOQUAN SEWAGE AUTHORITY 
 
 
 
OPINION BY 
v.  Record No. 062719  
JUSTICE LAWRENCE L. KOONTZ, JR. 
 
 
 
January 11, 2008 
BLAKE CONSTRUCTION CO., INC./POOLE 
 & KENT, A JOINT VENTURE 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Randy I. Bellows, Judge 
 
This appeal concerns the continuing litigation of claims 
arising from a multi-million dollar contract subject to the 
Virginia Public Procurement Act (“VPPA”), Code §§ 2.2-4300 
through –4377,1 originally executed in December 1996 and subject 
to numerous modifications and changes during the course of the 
contractor’s performance.  The principal issues we consider 
relate to the circuit court’s determination regarding the 
application of, and percentage rate for, pre-judgment and post-
judgment interest on various elements of the damages awarded to 
the contractor in two separate jury verdicts.  Additionally, we 
consider whether the circuit court correctly determined that the 
appellant, the defendant below, timely designated the allocation 
of a payment made on the judgments. 
                     
1 At the time the first claims under this contract arose in 
the circuit court, the VPPA was codified at Code § 11-35 et 
seq., but was recodified at Code § 2.2-4300 et seq. by the 
General Assembly in 2001.  As applied to the issues raised in 
this appeal, the recodification did not materially alter any 
relevant provision of the Act and, accordingly, we will refer to 
the current Code sections in this appeal. 
 
2
BACKGROUND 
The arduous history of the litigation arising from the 
public contract that is the genesis of this case has been 
previously recounted in detail in two prior appeals arising from 
earlier stages of that litigation.  See Blake Construction Co. 
v. Upper Occoquan Sewage Authority, 266 Va. 564, 568-570, 587 
S.E.2d 711, 713-14 (2003); Upper Occoquan Sewage Authority v. 
Blake Construction Co., 266 Va. 582, 584-87, 587 S.E.2d 721, 
722-23 (2003).  Accordingly, we need not recite that background 
here.  It will suffice to state that Blake Construction Company, 
Inc. and Poole & Kent Corporation (collectively, “the Joint 
Venture”) formed a partnership to bid on a public contract with 
the Upper Occoquan Sewage Authority (“UOSA”), a public authority 
created pursuant to the Virginia Water and Waste Authorities 
Act, Code §§ 15.2-5100 through –5158, for construction of a 
waste water treatment facility to be located in Fairfax County 
(“the Project”).  The Joint Venture was the successful bidder on 
the Project and was awarded the contract on December 10, 1996.  
The oversight of the Project by UOSA was contentious and 
resulted in the litigation that was the subject of the prior 
cases decided by this Court in 2003. 
The present case arises from a “Petition for Declaratory 
Judgment and Appeal” filed by the Joint Venture in the Circuit 
Court of Fairfax County on August 13, 2002 while the former 
 
3
appeals were pending in this Court.  Therein, the Joint Venture 
sought to be permitted to terminate the December 1996 contract 
based on UOSA’s alleged multiple material breaches of the 
contract.  The Joint Venture also appealed certain 
administrative decisions of UOSA denying claims by the Joint 
Venture regarding the contract and to have determined the 
amounts owed under those claims as well as to be awarded 
compensatory damages, most of which were for undisputed 
liquidated amounts, on numerous claims for work already 
performed.  The Joint Venture also sought to be awarded “finance 
charges” it contended were due under terms of the contract 
governed by the prompt payment provisions of the VPPA, Code 
§§ 2.2-4347 through –4356 (“the Prompt Payment Act”), for the 
amounts it claimed were owed to it by UOSA as of various dates.2 
The case was first tried to a jury in November 2003 (“the 
First Trial”), and at the conclusion of the Joint Venture’s 
case-in-chief, the circuit court sustained UOSA’s motion to 
strike all or part of eighteen of the Joint Venture’s claims.  
The remaining issues were submitted to the jury.  As relevant to 
                     
2 Because the parties and the circuit court have each 
referred to the statutes comprising Article 4 of the VPPA as 
being the “Prompt Payment Act,” we will likewise employ that 
short form reference to refer to those statutes in this opinion. 
 
 
4
one of the principal issues in this appeal, the jurors were 
instructed that  
the terms of the contract do not provide for a rate of 
interest.  In any situation where you determine that 
interest is due under [Code § 2.2-4352 of] the 
Virginia Prompt Payment Act, you must determine the 
payment amount subject to interest, the payment date 
when payment is due, and the interest rate, which by 
statute is not to exceed 1% per month. 
 
The jury rendered its verdict on November 6, 2003, using an 
interrogatory verdict form.  In accord with the circuit court’s 
instruction, the jury made express findings of the specific 
amounts due the Joint Venture and the dates on which those 
amounts had become due.  The jury also determined that on all 
those amounts interest at a rate of 1% per month was to apply, 
but the jury did not calculate the amount of interest thus due.  
The correctness of the jury’s findings and verdicts on the Joint 
Venture’s various claims are not at issue in this appeal, nor is 
there any dispute as to the amount of compensatory damages 
awarded to the Joint Venture in those verdicts, which in 
aggregate totaled $5,165,195. 
In accord with the jury’s findings in the First Trial, the 
circuit court awarded pre-judgment interest at the rate of 1% 
per month on the compensatory damages to the Joint Venture from 
the dates of the various claims to the date of the jury’s 
verdict, which the court calculated to be $1,832,652.  The 
parties also do not dispute the accuracy of this figure. 
 
5
The beginning of the subsequent dispute between the parties 
in the case originated with an order of the circuit court dated 
November 19, 2003, but entered nunc pro tunc to November 6, 
2003, the date of the jury’s verdict.  The order recited the 
particulars of the court’s decision to strike certain of the 
Joint Venture’s claims, the jury’s findings and verdicts on the 
remaining claims, and the amount of compensatory damages awarded 
by the jury in the First Trial.  The order also recited the 
court’s calculation of the “Total Interest due under the Prompt 
Payment Act through November 6, 2003.”  The court also entered a 
declaratory judgment in favor of the Joint Venture, finding that 
UOSA had materially breached the contract. 
Although the circuit court styled the November 19, 2003 
order as a “final order,” and despite having entered the order 
“nunc pro tunc” to the date of the jury’s verdict, in the 
concluding paragraphs the court expressly suspended the 
effective date of the order until January 20, 2004 to permit the 
parties to file “post trial [m]otions,” and included a briefing 
schedule for those motions.  The court also expressly stated in 
the concluding paragraph that it would retain “jurisdiction to 
reconsider all aspects of this judgment, including whether this 
Order should be a ‘Final Order,’ and to consider and rule upon 
such post trial [m]otions as may be filed pursuant to the 
provisions of this Order, and to modify, vacate, or further 
 
6
suspend this Order until January 20, 2004, or such later date as 
may be established by further Order of this Court.” 
On November 26, 2003, the Joint Venture filed a motion 
pursuant to Code § 8.01-186 asserting that it was entitled to 
additional compensatory damages.  This statute permits a court 
to award “[f]urther relief based on a declaratory judgment order 
or decree . . . whenever necessary or proper.”  UOSA opposed the 
motion, and the circuit court conducted a hearing thereon on 
January 7, 2004.  By order dated January 15, 2004, the court 
determined that it would grant the motion and consider awarding 
the Joint Venture additional compensatory damages for UOSA’s 
material breaches of the contract. 
Also on January 15, 2004, the circuit court entered an 
amended order that vacated the November 19, 2003 order, 
reimposed the judgments under the same terms that had been 
stated therein, but provided that “any execution . . . is 
suspended and stayed as to the [November 19, 2003] judgments 
. . . pending further order of this Court.”  This order further 
provided, however, “that the right is reserved to UOSA to 
satisfy the judgments rendered [in the order] in whole or in 
part.”  The order also expressly continued the case on the 
court’s docket. 
Following an extended jury trial limited to the issue of 
the compensatory damages to be awarded for the material breaches 
 
7
of the contract (“the Second Trial”), the jury determined the 
total value of the benefit conferred on UOSA by the work 
performed by the Joint Venture to be $210,234,000.  The jury’s 
verdict was rendered on March 11, 2005. 
Using the figure determined by the jury, the circuit court, 
in a final order dated June 27, 2005, awarded the Joint Venture 
additional compensatory damages in the amount of $7,509,239.62 
and also awarded $1,453,192 in pre-judgment interest on this 
amount.3  In that same order, the court also lifted the January 
15, 2004 order’s suspension of the judgment from the First 
Trial. 
The parties filed cross-appeals from the June 27, 2005 
final order, challenging various aspects of the two judgments 
and the circuit court’s conduct of the case.  On behalf of UOSA, 
Wachovia Bank issued an irrevocable letter of credit for 
$16,717,658.88 in favor of the Joint Venture as a suspension 
bond for UOSA’s appeal.  This Court refused those appeals, Blake 
Construction Co. v. Upper Occoquan Sewage Authority, Record No. 
052001 (February 23, 2006) and Upper Occoquan Sewage Authority 
v. Blake Construction Co., Record No. 052003 (February 23, 
                     
3 The circuit court did not award an express amount in pre-
judgment interest in this order, but provided a formula for its 
calculation.  The parties do not dispute that the amount of pre-
judgment interest under this formula is $1,453,192. 
 
 
8
2006), and denied subsequent petitions for rehearing filed by 
the parties, Blake Construction Co. v. Upper Occoquan Sewage 
Authority, Record No. 052001 (May 4, 2006) and Upper Occoquan 
Sewage Authority v. Blake Construction Co., Record No. 052003 
(May 4, 2006).  Accordingly, the judgments became final and due 
on May 4, 2006 upon entry of the orders denying the petitions 
for rehearing. 
On May 8, 2006, UOSA wired to counsel for the Joint Venture 
a payment of $16,616,472.11, which it contended represented 
payment in full for all amounts due under the June 27, 2005 
order, including pre-judgment interest and post-judgment 
interest to the date of payment.4   Counsel for the Joint Venture 
requested that counsel for UOSA provide details as to how it 
arrived at the $16,616,472.11 figure.  In a letter dated May 10, 
2006, counsel for UOSA provided an itemized calculation of the 
payment, which UOSA contended was adequate to satisfy the total 
                     
4 The actual amount wired on May 8, 2006 was $16,613,386.17.  
During subsequent communications between the parties, the Joint 
Venture noted that UOSA had failed to include in its payment 
$1,984.20 in costs that had been awarded to the Joint Venture.  
UOSA subsequently made an additional payment to the Joint 
Venture to cover this amount and to correct another 
miscalculation that was not disputed.  For purposes of this 
appeal, these discrepancies and the remedial payment by UOSA are 
not germane to the issues under consideration, and the Joint 
Venture has stipulated that the total amount paid by UOSA, 
$16,616,472.11, can be treated as if it were received on May 8, 
2006. 
 
 
9
amount due under the June 27, 2005 order.  In that letter, UOSA 
requested that the Joint Venture file a satisfaction of judgment 
and return the letter of credit given as security for UOSA’s 
appeal. 
In a letter to UOSA’s counsel dated May 16, 2006, counsel 
for the Joint Venture contended that $16,616,472.11 represented 
only a “partial payment” of the total amount due under the June 
27, 2005 order.  Specifically, the Joint Venture maintained that 
UOSA had improperly failed to include additional interest on the 
compensatory damages awarded in the First Trial for the period 
between the November 6, 2003 jury verdict and the entry of the 
June 27, 2005 order,5 that UOSA had incorrectly calculated post-
judgment interest on the compensatory damages awarded in the 
First Trial after June 27, 2005 at 6% per year, the then 
effective rate of post-judgment interest under Code § 6.1-
330.54, rather than the 1% per month rate under the Prompt 
Payment Act, and that UOSA had failed to calculate post-judgment 
interest on the amount of pre-judgment interest related to the 
                     
5 The parties disagree as to the character of the interest, 
as either pre-judgment or post-judgment, that the Joint Venture 
sought to collect on the compensatory damages from the First 
Trial for the November 6, 2003 to June 27, 2005 period.  As this 
issue is to be resolved by our consideration of this appeal, we 
will avoid making any distinction within our recitation of the 
facts, and refer to this element of the First Trial claim as 
“additional interest.” 
 
 
10
compensatory damages awarded in both the First Trial and the 
Second Trial. 
In an exhibit attached to the May 16, 2006 letter, the 
Joint Venture presented its own calculations for the additional 
interest payments it alleged were due and also how it would 
allocate the $16,616,472.11 “partial payment” to the amounts as 
it had calculated them.6 
On May 19, 2006, in response to the Joint Venture’s 
assertion that the $16,616,472.11 payment did not represent the 
full amount due under the June 27, 2005 order, UOSA filed in the 
circuit court a motion for satisfaction of the judgment pursuant 
to Code § 8.01-455.  In supporting memoranda, UOSA contended 
that the amount of pre-judgment interest on the compensatory 
damages awarded to the Joint Venture in the First Trial under 
the Prompt Payment Act had been fixed by the November 19, 2003 
order at $1,832,652 and that the November 19, 2003 order was 
subsequently incorporated into the January 15, 2004 order and 
                     
6 Throughout the subsequent litigation of the issues 
concerning the amount of interest due, the parties constantly 
revised and restated their calculations, resulting in a 
considerable amount of confusion in the record as to the amounts 
being claimed and contested.  Because the issues raised in this 
appeal relate to the applicability of pre-judgment and post-
judgment interest, and not to the calculation of that interest, 
we will not express any view as to the correctness of the Joint 
Venture’s calculations or any alternative calculation asserted 
by UOSA. 
 
 
11
confirmed by the June 27, 2005 final order without modifying 
that amount of interest or providing for the continuation of 
pre-judgment interest until entry of the final order on June 27, 
2005.  UOSA maintained that the court lost jurisdiction to 
modify the June 27, 2005 order 21 days after its entry and, 
therefore, no additional pre-judgment interest on the 
compensatory damages awarded in the First Trial was due for the 
period between the November 6, 2003 nunc pro tunc date of entry 
of the November 19, 2003 order and the entry of the June 27, 
2005 final order.  UOSA further contended that following the 
entry of the final order post-judgment interest would accrue on 
the compensatory damages only at the then effective statutory 
rate of interest of 6% per year. 
UOSA also contended that the Joint Venture was improperly 
seeking to have post-judgment interest applied to the 
pre-judgment interest on the compensatory damages awarded in 
both the First Trial and the Second Trial because there was no 
authority for the Joint Venture’s assertion that post-judgment 
interest would accrue on an award of pre-judgment interest.  
Finally, UOSA contended that if it was deemed to owe additional 
amounts to the Joint Venture, it had a right to allocate the 
$16,616,472.11 payment previously made first to those portions 
of the judgment debt that it contended were subject to accrual 
of interest, and that it had in fact made such an allocation by 
 
12
providing the Joint Venture with UOSA’s calculation of the total 
amount due by the attachment to the May 10, 2006 letter. 
On June 2, 2006, the Joint Venture filed a memorandum 
opposing the entry of an order of satisfaction of the judgment.  
The Joint Venture contended that under the terms of Code § 8.01-
382 and the Prompt Payment Act, interest on the compensatory 
damages awarded in the First Trial continued to accrue on any 
unpaid portion of the judgment at 1% per month, including the 
period between November 6, 2003 and June 27, 2005, until the 
compensatory damages awarded by the jury were paid in full.  The 
Joint Venture further contended that it was entitled to post-
judgment interest on the amount of pre-judgment interest related 
to the compensatory damages awarded in both the First Trial and 
the Second Trial from the dates those two judgments were 
rendered. 
In a supplemental memorandum filed June 16, 2006, the Joint 
Venture contended that UOSA had not made a timely allocation of 
the May 8, 2006 payment.  Thus, the Joint Venture contended that 
the calculation of the amounts due and the allocation of the 
payment to those amounts in its letter of May 16, 2006 was the 
proper allocation of the May 8, 2006 payment. 
On June 30, 2006, the circuit court issued an opinion 
letter in which it addressed the issues raised in UOSA’s motion 
for satisfaction of the June 27, 2005 judgment and the parties’ 
 
13
supporting memoranda.  The court first opined that, under Code 
§ 8.01-382, post-judgment interest accrued on the compensatory 
damages awarded in the First Trial from November 6, 2003 until 
paid at an annual rate of 6%, the statutory rate of interest 
then applicable under Code § 6.1-330.54 as in effect on June 27, 
2005.  The court further opined that “it is necessary to apply 
post-judgment interest to the entire award” and, thus, the court 
concluded that the jury’s award of pre-judgment interest in the 
First Trial and the pre-judgment interest awarded by the court 
in the Second Trial were subject to accrual of post-judgment 
interest at the 6% statutory rate also.  Finally, the court 
determined that the attachment to UOSA’s May 10, 2006 letter to 
the Joint Venture was effective as an “essentially 
contemporaneous” directive to the Joint Venture to allocate the 
May 8, 2006 payment in accord with UOSA’s calculations. 
In an order dated June 30, 2006, which incorporated by 
reference the circuit court’s opinion letter of the same date, 
the court entered judgment in accord with the views articulated 
in that letter.  The circuit court did not expressly address 
UOSA’s contention that the June 27, 2005 order was a final order 
and not subject to modification by an award of additional 
interest not expressly called for in that order, but implicitly 
rejected that contention by determining that additional interest 
 
14
was due on the compensatory damages awarded in the First Trial 
for the period between November 6, 2003 and June 27, 2005. 
On July 12, 2006, the Joint Venture filed a motion for 
reconsideration of the June 30, 2006 order.  The Joint Venture 
contended that the circuit court erred in applying the 6% 
statutory annual rate of interest to the compensatory damages 
awarded in the November 6, 2003 jury verdict.  The Joint Venture 
maintained that under the provisions of the Prompt Payment Act, 
it was entitled to 1% interest per month on the compensatory 
damages awarded in the First Trial until the judgment was paid, 
and not merely as pre-judgment interest after which the 
statutory rate of interest would apply for the imposition of 
post-judgment interest.  In the alternative, the Joint Venture 
contended that the correct rate of statutory interest as to the 
compensatory damages awarded in the First Trial, and to the pre-
judgment interest thereon, was 9% per year because that was the 
applicable rate of interest under Code § 6.1-330.54 as it was in 
effect on the date of the jury’s verdict in the First Trial.  
The Joint Venture did not request that the circuit court 
reconsider the determination that UOSA had made a timely 
designation of the allocation of the May 8, 2006 payment, nor 
did it contest that the 6% statutory annual rate of interest was 
proper as to the compensatory damages and pre-judgment interest 
awarded in the Second Trial. 
 
15
In response to the Joint Venture’s motion for 
reconsideration, UOSA reiterated its prior position that no 
interest was due on the compensatory damages awarded in the 
First Trial for the period from November 6, 2003 to June 27, 
2005, but that if interest was due, the circuit court had 
properly set that rate of interest based on the then effective 
annual rate of interest of 6% established by Code § 6.1-330.54.  
UOSA further contended that even if a 9% annual rate were to 
apply based on the former provisions of Code § 6.1-330.54 as in 
effect at the time of the jury’s verdict in the First Trial, the 
subsequent amendment of the statute as effective July 1, 2004 
lowering the annual rate of interest to 6% should apply to any 
interest due on and after that date.  UOSA also continued to 
contest the award of post-judgment interest on the awards of 
pre-judgment interest in both the First Trial and the Second 
Trial. 
On August 8, 2006, the circuit court issued a further 
opinion letter in which it disagreed with the Joint Venture that 
the court had improperly applied the statutory rate of interest 
to the compensatory damages awarded in the First Trial instead 
of the Prompt Payment Act rate of 1% per month.  In reaching 
this conclusion, the court relied upon Code § 8.01-382 for the 
proposition that unless otherwise provided for in the order, a 
judgment “shall bear interest at the judgment rate of interest 
 
16
as provided for in [Code] § 6.1-330.54 from its date of entry or 
from the date that the jury verdict was rendered.” 
The circuit court agreed, however, that it should have 
applied the 9% annual rate of interest, the rate effective on 
January 15, 2004, to both the compensatory damages and the pre-
judgment interest awarded in the First Trial.  The court further 
opined that this rate of interest would continue despite the 
amendment of Code § 6.1-330.54 effective July 1, 2004 lowering 
the statutory annual rate of interest to 6%.  In doing so, the 
court recognized that a subsequent amendment to that Code 
section effective July 1, 2005 included the addition of the 
following language: 
The rate of interest for a judgment shall be the 
judgment rate of interest in effect at the time of 
entry of the judgment and shall not be affected by any 
subsequent changes to the rate of interest stated in 
this section. 
 
The court reasoned that this provision, while not applicable to 
the June 27, 2005 order, was merely declarative of existing law, 
and ruled that an award of statutory post-judgment interest is 
fixed at the rate in effect at the time the judgment is 
rendered. 
By an order entered August 8, 2006, the circuit court, 
adopting the reasoning of the opinion letter of that date, 
entered judgment for the Joint Venture modifying the post-
judgment interest rate on the compensatory damages and pre-
 
17
judgment interest awarded in the First Trial verdict to 9% per 
year from November 6, 2003 until paid.  At the request of the 
parties, in part because both the June 30, 2006 and August 8, 
2006 orders had been entered without endorsement by counsel 
under Rule 1:13, on September 29, 2006 the court entered a 
further order clarifying and reiterating the effect of the two 
prior orders addressing UOSA’s motion for satisfaction of the 
June 27, 2005 judgment.  The order was endorsed by counsel for 
both parties, with each party reserving all arguments and 
objections raised during the course of the proceedings on the 
motion for satisfaction of the judgment. 
UOSA appealed the circuit court’s judgment, presenting 
seven assignments of error, and the Joint Venture assigned 
cross-error to two additional issues in its brief in opposition 
to UOSA’s petition for appeal.  By an order dated April 11, 
2007, we awarded UOSA an appeal and also awarded an appeal on 
the assignments of cross-error. 
DISCUSSION 
As our recitation of the background of the protracted 
litigation in this case reflects, the issues raised here relate 
to proceedings in the circuit court beginning with an initial 
jury verdict on November 6, 2003 in favor of the Joint Venture, 
the entry of an order on January 15, 2004 establishing the 
amount of principal and pre-judgment interest due as of the date 
 
18
of the jury’s verdict, a second jury verdict in favor of the 
Joint Venture and a final order entered on June 27, 2005 
establishing the amount of principal and pre-judgment interest 
due on that verdict as well as confirming the January 15, 2004 
judgment amounts, a payment by UOSA on May 8, 2006 purporting to 
satisfy the amounts due the Joint Venture under the June 27, 
2005 final order, and the order entered on September 29, 2006 
addressing UOSA’s motion for satisfaction of the June 27, 2005 
judgment.  For clarity, the following charts illustrate which 
aspects of the two judgments are not disputed, and are no longer 
subject to review given this Court’s refusal of the petitions 
for appeal previously filed by both parties, and the amounts and 
rates of interest ultimately awarded by the circuit court which 
the parties dispute. 
Table 1:  Judgment Items Not Disputed 
 
JUDGMENT ITEM 
AMOUNT 
Compensatory damages awarded in the First Trial effective as of 
the November 6, 2003 jury verdict 
$ 5,165,195 
Pre-judgment interest on the compensatory damages awarded in the 
First Trial effective as of the November 6, 2003 jury verdict 
$ 1,832,652 
Compensatory damages awarded in the Second Trial effective as of 
the June 27, 2005 order of judgment 
$ 7,509,240 
Pre-judgment interest on the compensatory damages awarded in the 
Second Trial effective as of the June 27, 2005 order of judgment 
$ 1,453,192 
Post-judgment interest on the compensatory damages awarded in 
the Second Trial verdict from June 27, 2005 to May 8, 2006 
$    387,600 
 
 
 
 
Table 2:  Disputed Judgment Items 
 
JUDGMENT ITEM 
CIRCUIT 
COURT 
JOINT 
VENTURE 
UOSA 
Additional interest on the 
compensatory damages awarded 
in the First Trial from November 
6, 2003 to May 8, 2006 
$ 1,162,805 
(calculated at 9% 
per year) 
$ 1,550,408 
(calculated at 1% 
per month) 
$ 266,606 
(calculated at 6% 
per year from June 
27, 2005) 
 
19
Post-judgment interest on pre-
judgment interest on the 
compensatory damages awarded 
in the First Trial from November 
6, 2003 to May 8, 2006 
$    412,573 
(calculated at 9% 
per year) 
$ 412,573 
(calculated at 9% 
per year) 
       - 0 -  
Post-judgment interest on pre-
judgment interest on the 
compensatory damages awarded 
in the Second Trial from June 27, 
2005 to May 8, 2006 
$      75,009 
(calculated at 6% 
per year) 
$    75,009 
(calculated at 6% 
per year) 
       - 0 - 
Amount due as of May 8, 2006 
$1,383,778 
$1,771,380 
       - 0 - 
 
UOSA contends that no interest is due on the judgment from 
the First Trial for the period between November 6, 2003 and June 
27, 2005 and the circuit court erred in awarding post-judgment 
interest on the pre-judgment interest awarded in both trials.  
UOSA further contends that the court should have applied the 6% 
per year statutory rate of interest on the compensatory damages 
awarded in the First Trial, rather than a 9% rate, between June 
27, 2005 and May 8, 2006 when payment was made.  Accordingly, 
UOSA contends that there is no balance due and, thus, the 
circuit erred in not granting its motion for satisfaction of the 
judgment. 
The Joint Venture contends that the amount remaining due 
under its calculation reflects the continuing accrual of post-
judgment interest at a rate of 1% per month on the compensatory 
damages awarded in the First Trial.  Alternately, if the circuit 
court’s calculation is correct and the determination that UOSA 
made a timely allocation of the May 8, 2006 payment is affirmed, 
the Joint Venture concedes that the amount due reflects only 
unpaid post-judgment interest. 
 
20
The issues we are required to resolve in this case, under 
the assignments of error and cross-error, may be summarized as 
follows: 
1. 
Whether the circuit court had jurisdiction to 
determine that additional interest not expressly 
called for in the June 27, 2005 order was due to 
the Joint Venture; 
2. 
Whether the circuit court erred in determining 
that additional interest accrued on the 
compensatory damages awarded in the First Trial 
from November 6, 2003 until paid at the rate of 
9% per year rather than 1% per month; 
3. 
Whether the circuit court erred in determining 
that post-judgment interest accrues on pre-
judgment interest; 
4. 
Whether the circuit court erred in determining 
that UOSA’s letter of May 10, 2006 was a timely 
directive allocating the May 8, 2006 payment; 
and, 
5. 
Whether the circuit court erred in not granting 
UOSA’s motion for satisfaction of the judgment. 
Each of these issues, which we will address in the 
order outlined above, presents a question of law.  
Accordingly, we review the circuit court’s judgment de 
novo.  PMA Capital Ins. Co. v. US Airways, Inc., 271 Va. 
352, 357-58, 626 S.E.2d 369, 372 (2006). 
Jurisdiction 
UOSA first contends that the circuit court, in considering 
UOSA’s 2006 motion for satisfaction of the judgment, erred in 
awarding any additional interest on the compensatory damages of 
the First Trial to the Joint Venture beyond the express amounts 
provided for in the January 15, 2004 order as incorporated in 
 
21
the June 27, 2005 order.  This is so, UOSA maintains, because 
the June 27, 2005 order was a final order that was not modified, 
vacated or suspended within 21 days of its entry and which was 
subsequently affirmed by this Court’s refusal of the petitions 
for appeal and petitions for rehearing filed by UOSA and the 
Joint Venture.  Thus, UOSA contends that the court lacked 
jurisdiction to modify that order by determining that additional 
interest was due and then awarding that interest. 
More specifically, UOSA contends that the January 15, 2004 
order fixed the amount of pre-judgment interest on the 
compensatory damages of the First Trial at $1,832,652 and that 
the court’s subsequent award of $762,892, as calculated by UOSA, 
of additional interest for the period of November 6, 2003, the 
date of the jury’s verdict, to June 27, 2005, the date of the 
final order, was an impermissible modification of the judgment 
more than 21 days after its entry.  We disagree. 
It is not disputed that the June 27, 2005 order was the 
final order with respect to the declaratory judgment action 
filed by the Joint Venture on August 13, 2002.  “Generally 
speaking, a final order for purposes of Rule 1:1 ‘is one which 
disposes of the whole subject, gives all the relief 
contemplated, . . . and leaves nothing to be done in the cause 
save to superintend ministerially the execution of the order.’ ”  
James v. James, 263 Va. 474, 481, 562 S.E.2d 133, 137 (2002) 
 
22
(quoting Daniels v. Truck & Equipment Corp., 205 Va. 579, 585, 
139 S.E.2d 31, 35 (1964)).  Thus, UOSA is correct in asserting 
that because the June 27, 2005 order was the final order in the 
declaratory judgment action, the circuit court’s jurisdiction to 
modify, vacate or suspend that order expired 21 days after the 
entry of that order under this Court’s Rule 1:1.  This rule, 
however, does not resolve the matter. 
When, as in this case, a judgment debtor files a motion 
pursuant to Code § 8.01-455 to have the appropriate circuit 
court “mark” a judgment satisfied, that motion necessarily 
invokes the continuing jurisdiction of the court “to superintend 
ministerially the execution of the order” in which the judgment 
was granted.  Contrary to the view asserted by UOSA, the court’s 
jurisdiction in such matters is not limited to merely granting 
or denying the relief requested based solely on the facts 
asserted in the motion and the judgment debtor’s claim that its 
payment represents the totality of the judgment debt.  Rather, a 
motion for satisfaction of a judgment, at a minimum, requires 
the court to determine the amount of the judgment including any 
interest that would have accrued in the interim between the 
entry of the judgment and the alleged date of satisfaction.  
Moreover, in making that determination, the court may be 
required to resolve questions of law and disputed issues of 
fact.  See, e.g., Virginia Polytechnic Inst. & State Univ. v. 
 
23
Interactive Return Service, 271 Va. 304, 308, 626 S.E.2d 436, 
438 (2006) (determination of whether circuit court erred in 
denying motion to have judgment marked satisfied required 
interpretation of other statutes); Smock v. Dade, 26 (5 Rand.) 
Va. 639, 645 (1826) (requests for satisfaction of a judgment 
involve questions of fact that may be submitted to a jury).  In 
such cases the burden of proof as to entitlement to relief under 
Code § 8.01-455 rests with the judgment debtor.  Leasing Service 
Corp. v. Justice, 243 Va. 441, 444, 416 S.E.2d 439, 441 (1992). 
Additionally, it is a well-established principle in our 
jurisprudence that circuit courts have the authority to 
interpret their own orders.  Fredericksburg Construction Co. v. 
J.W. Wyne Excavating, Inc., 260 Va. 137, 143-44, 530 S.E.2d 148, 
152 (2000).  Here, by filing the motion pursuant to Code § 8.01-
455 to have the judgments obtained by the Joint Venture marked 
satisfied, UOSA was requesting that the circuit court interpret 
the June 27, 2005 final order, and by logical extension the 
January 15, 2004 order that was made effective by that final 
order, to determine the total amount that had been awarded to 
the Joint Venture and whether that award had been satisfied by 
the payment tendered by UOSA on May 8, 2006.  UOSA may, and 
indeed does, take exception to the circuit court’s 
interpretation of the order and has the right to seek review of 
that action on appeal.  See id. at 144, 530 S.E.2d at 152 
 
24
(holding that a circuit court’s interpretation of its own orders 
is subject to review, but that deference is owed to the court’s 
interpretation).  Nevertheless, the court acted within its 
jurisdiction to make that interpretation and, thus, to determine 
the factual issue of whether the judgment was fully satisfied by 
UOSA.  Accordingly, we hold that when a circuit court is called 
upon under Code § 8.01-455 to determine whether a judgment 
awarded in a final order has been satisfied, it acts within its 
jurisdiction to interpret that order and, where a proper 
interpretation warrants, to determine whether any additional 
interest is due on the judgment. 
Accrual of Additional Interest on the 
Suspended Judgment of the First Trial 
UOSA contends that in interpreting the January 15, 2004 
order, the circuit court erred in finding that the order 
required additional interest, which it characterizes as “pre-
judgment interest,” to accrue on the compensatory damages 
awarded in the First Trial while execution of that order was 
suspended.  UOSA contends that there was no provision in the 
January 15, 2004 order for additional pre-judgment interest on 
the compensatory damages awarded in the First Trial beyond the 
$1,832,652 calculated by the circuit court.  UOSA asserts that 
this was a lump sum award made by the jury in the November 6, 
2003 verdict and, thus, the court could not award additional 
 
25
pre-judgment interest for the period during which execution on 
the judgment was suspended.  UOSA further contends that because 
the January 15, 2004 order was interlocutory and not subject to 
appeal, neither could post-judgment interest begin to accrue on 
the compensatory damages until the suspension of the judgment 
was lifted by the final order on June 27, 2005. 
In support of these contentions, UOSA relies on Code 
§ 8.01-382,7 which in relevant part provides: 
In any action at law or suit in equity, the verdict of 
the jury, or if no jury the judgment or decree of the 
court, may provide for interest on any principal sum 
awarded, or any part thereof, and fix the period at 
which the interest shall commence.  The judgment or 
decree entered shall provide for such interest until 
such principal sum be paid.  If a judgment or decree 
be rendered which does not provide for interest, the 
judgment or decree awarded or jury verdict shall bear 
interest at the judgment rate of interest as provided 
for in § 6.1-330.54 from its date of entry or from the 
date that the jury verdict was rendered. 
 
The Joint Venture responds that the interest which the 
circuit court imposed on the compensatory damages awarded in the 
First Trial for the period between November 6, 2003 and June 27, 
2005 is properly characterized as “post-judgment interest” and 
that the court did not err in interpreting the judgment of the 
January 15, 2004 order as being subject to accrual of such 
                     
7 Code § 8.01-382 was amended effective July 1, 2004 and, in 
accord with UOSA’s choice on brief, we have quoted the current 
version of the statute here. 
 
 
26
interest even though execution of the judgment was suspended 
until entry of the final order.8  This is so, the Joint Venture 
maintains, because Code § 8.01-382 imposes post-judgment 
interest from the “date of entry [of the judgment] or from the 
date that the jury verdict was rendered” and there is no 
requirement of finality of a judgment before post-judgment 
interest can accrue.  The Joint Venture further contends that to 
deny it interest on the judgment entered on the jury’s November 
6, 2003 verdict during the period in which execution on that 
judgment was suspended would provide a windfall to UOSA and 
penalize the Joint Venture for seeking to enforce its right to 
additional compensatory damages in the Second Trial for the 
material breaches of the contract. 
The justification for the award of interest on damages – 
whether pre-judgment, post-judgment, or both – in a civil 
lawsuit, has been recognized since the earliest days of this 
Commonwealth:  “[N]atural justice [requires] that he who has the 
use of another’s money should pay interest for it.”  Jones v. 
Williams, 6 Va. (2 Call) 102, 106 (1799); see also J.W. Creech, 
Inc. v. Norfolk Air Conditioning Corp., 237 Va. 320, 325, 377 
                     
8 The Joint Venture notes that it nonetheless contends that 
the circuit court erred in determining the rate of interest for 
the compensatory damages awarded in the First Trial, which we 
will consider, infra. 
 
 
27
S.E.2d 605, 608 (1989) (quoting Jones with approval).  The terms 
“pre-judgment interest” and “post-judgment interest” are not 
defined in the Code or in our case law.  Nonetheless, the 
principal distinction between pre-judgment and post-judgment 
interest is that the decision whether to award pre-judgment 
interest is discretionary with the trier of fact, while the 
application of post-judgment interest for all money judgments is 
mandatory.  Code § 8.01-382; Dairyland Ins. Co. v. Douthat, 248 
Va. 627, 631, 449 S.E.2d 799, 801 (1994).  As we stated in 
Dairyland Ins., “[u]nderlying this distinction is the principle 
that [p]rejudgment interest is normally designed to make the 
plaintiff whole and is part of the actual damages sought to be 
recovered.  In contrast, postjudgment interest is not an element 
of damages, but is a statutory award for delay in the payment of 
money actually due.”  Id. at 631-632, 449 S.E.2d at 801 
(internal citations and quotation marks omitted). 
Given that an award of pre-judgment interest is 
discretionary, but that application of post-judgment interest is 
mandatory, the necessity for establishing the point at which the 
former, when it has been awarded, ceases to accrue, and when the 
latter will begin to accrue is self-evident.  As the present 
case amply demonstrates, clear guidelines as to the calculation 
of such interest will resolve disputes regarding the amount of 
the pre-judgment or post-judgment interest whenever there is a 
 
28
delay between the rendering of a jury verdict, the entry of an 
order confirming that verdict, the entry of an order ending the 
cause if later than the order confirming the verdict, the 
finality of the judgment following the exhaustion of appeals, 
and the date tender of payment in satisfaction of the judgment 
debt is made. 
We are of opinion that Code § 8.01-382 is clear and 
unambiguous as to when, and how, the application of post-
judgment interest begins.  In simplest terms, that statute 
provides that post–judgment interest shall begin to accrue on 
the date that a fixed amount of a judgment debt is rendered by 
the factfinder charged with making that determination.  Thus, if 
a jury determines through its verdict that money damages are 
owed to a plaintiff, without regard to whether the jury has also 
awarded pre-judgment interest, post-judgment interest will 
accrue from the date of the verdict until the judgment is paid.9  
Similarly, if a trial court sitting without a jury renders a 
judgment for money damages, the rendition of that award in an 
                     
9 It should be self-evident that if in confirming the jury’s 
award of damages a trial court properly reduces the award 
because of a statutory cap or to bring the award into 
conformance with the ad damnum of the complaint, post-judgment 
interest shall accrue only on the amount of the award to which 
the plaintiff is legally entitled.  Nonetheless, the interest 
shall accrue on that amount from the date of the verdict, not 
the date of the trial court’s order confirming the adjusted 
amount of the award. 
 
29
order or decree shall fix the date upon which post-judgment 
interest begins to accrue as to that award, even if the order or 
decree rendering the award does not conclude the cause or 
otherwise stays an immediate execution on the judgment. 
As a corollary to this rule, it follows that if the 
verdict, order or decree calls for an award of pre-judgment 
interest, accrual of that interest will be for the period fixed 
by the trier of fact until the date of the verdict, order or 
decree.  In effect, where a trier of fact exercises the 
discretion to award pre-judgment interest, the result is to 
extend the period for which interest accrues on the damages 
awarded from the date of the verdict, order or decree back to 
the date fixed by the trier of fact for the commencement of pre-
judgment interest. 
In this context, the designation of interest on an award of 
damages as “pre-judgment” or “post-judgment” is merely a 
reference to the date, before, upon or after the date of the 
verdict, order or decree awarding the damages, on which the 
interest accrued.  Thus, where a verdict, order or decree 
provides for an award of “pre-judgment interest,” the effect is 
simply to impose interest on the award of damages from a date 
certain prior to the award, rather than as of the date of the 
award as would otherwise be the case under Code § 8.01-382. 
 
30
In the present case, the jury’s verdict in the First Trial 
established that interest was to accrue on the compensatory 
damages awarded therein from the dates specified for each claim 
until those damages were paid.  The circuit court’s calculation 
of the interest due as of the date of the verdict did not fix 
the amount of interest due.  Rather, it merely recited the 
amount of interest due as a result of the jury’s discretionary 
act in awarding interest to the Joint Venture for the time 
preceding the entry of the verdict.  Thereafter, interest would 
accrue on the award of compensatory damages as a matter of law, 
and it was not necessary for the court to recite this in its 
order.  Accordingly, we hold that the circuit court did not err 
in determining that post-judgment interest accrued on the 
compensatory damages awarded in the First Trial from the 
November 6, 2003 jury verdict, rather than from the June 27, 
2005 final order, until paid. 
We now turn to the question whether the circuit court erred 
in setting the rate for the post-judgment interest on the 
compensatory damages awarded in the First Trial at 9% per year.  
The Joint Venture contends that as to the compensatory damages 
awarded in the First Trial, the circuit court should have 
applied the Prompt Payment Act 1% per month rate of interest 
under Code § 2.2-4352, the rate of interest awarded by the jury.  
UOSA responds that the 1% monthly rate of interest cannot be 
 
31
applied as post-judgment interest on the compensatory damages 
for the various breaches of the December 1996 contract.  UOSA 
maintains that this is so because the contract contained no 
provision for interest, the 1% monthly rate was established by 
the Prompt Payment Act, and the jury’s verdict applied that rate 
only for pre-judgment interest.  Accordingly, UOSA contends that 
the circuit court should have looked to the third sentence of 
Code § 8.01-382 and applied “the judgment rate of interest as 
provided for in § 6.1-330.54” in effect on the date of the final 
order. 
UOSA’s contention is in error for two reasons.  First, the 
Joint Venture’s right to seek interest of up to 1% per month 
under the Prompt Payment Act, while not recited as a term in the 
December 1996 contract, was a term to be implied in the contract 
under Code § 2.2-4352, and the jury was so instructed.  Thus, 
contrary to UOSA’s contention, the 1% per month rate of interest 
awarded by the jury in the November 6, 2003 verdict was a 
contract rate of interest. 
Second, the jury found that the compensatory damages were 
subject to the Prompt Payment Act rate of interest, and, as we 
have just demonstrated, under the provisions of the first and 
second sentences of Code § 8.01-382 that rate of interest found 
by the jury was to apply “until such principal sum be paid,” not 
merely as pre-judgment interest.  Accordingly, we hold that the 
 
32
circuit court erred in not applying the 1% per month rate of 
interest awarded by the jury on the compensatory damages in the 
First Trial as the rate of post-judgment interest on those 
damages from the date of the jury’s verdict until those damages 
are paid.10 
For these reasons, we will reverse the circuit court’s 
award of $1,162,805 in post-judgment interest on the 
compensatory damages of the First Trial, and we will remand the 
case to the circuit court for a recalculation of the interest 
actually due on those damages from November 6, 2003 to May 8, 
2006 at the rate of 1% per month. 
Accrual of Post-Judgment Interest on Pre-Judgment Interest 
UOSA contends that the circuit court erred in determining 
that post-judgment interest was to accrue not only on the 
compensatory damages awarded by the January 15, 2004 and June 
27, 2005 orders, but on the pre-judgment interest awarded in 
those orders as well.  Again relying on Code § 8.01-382, UOSA 
contends that post-judgment interest applies only to “any 
principal sum awarded.”  UOSA, further relying on an Opinion of 
                     
10 Because we hold that Joint Venture is entitled to post-
judgment interest of 1% per month on the compensatory damages 
from the First Trial, we need not address UOSA’s additional 
assignment of error in which it contended that the circuit court 
should have awarded only the statutory rate of interest in 
effect on June 27, 2005, or in the alternative, a variable rate 
of interest based on changes in the statutory rate of interest. 
 
33
the Attorney General, asserts that the “principal sum awarded” 
in this case is limited to the compensatory damages awarded by 
the jury in the First Trial and the calculation by the circuit 
court of compensatory damages for the material breaches in the 
Second Trial.  Thus, UOSA maintains that post-judgment interest 
is not to be applied to amounts awarded for pre-judgment 
interest because these are not part of the “principal sum 
awarded.”  See 2004 Op. Att’y Gen. 26, 28.  UOSA further asserts 
that this interpretation of the statute is correct because the 
plain and ordinary meaning of “principal” as used in this 
context, refers to “[t]he amount of a debt . . . not including 
interest.”  Black’s Law Dictionary, 1231 (8th ed. 2004). 
The Joint Venture responds that the circuit court correctly 
ruled that the “principal sum awarded” in a trial is the total 
amount of the damages awarded, including any award of pre-
judgment interest on compensatory damages.  The Joint Venture 
contends that UOSA’s reliance on the Opinion of the Attorney 
General is misplaced because that opinion failed to take into 
account multiple decisions of this Court which establish that 
pre-judgment interest is an element of the damages and, thus, is 
part of the “principal sum awarded” to a plaintiff. 
While we agree with the Joint Venture that pre-judgment 
interest may be sought by a plaintiff as part of the damages it 
seeks to recover, see, e.g., Shepard v. Capitol Foundry of Va., 
 
34
Inc., 262 Va. 715, 722, 554 S.E.2d 72, 76 (2001), we do not 
agree that an award of pre-judgment interest is part of the 
“principal sum awarded” as that term is used in Code § 8.01-382.  
To the contrary, we agree with UOSA that the “principal sum 
awarded” as contemplated by Code § 8.01-382 is that element of 
the plaintiff’s damages that compensates the plaintiff for the 
actual harm sustained, but not any pre-judgment interest on 
those damages that the trier of fact might also award.  Rather, 
as we have just resolved, supra, pre-judgment interest is merely 
a discretionary award establishing the interest applied to an 
award of damages to a date certain prior to the entry of the 
verdict, order or decree awarding such damages.  Accordingly, we 
hold that the circuit court erred in determining that post-
judgment interest would accrue on that portion of the damages 
awarded in the First Trial and the Second Trial that constituted 
pre-judgment interest on the principal sums awarded. 
For these reasons, we will reverse the circuit court’s 
award of $412,573 in post-judgment interest on the pre-judgment 
interest of the First Trial and the award of $75,009 in post-
judgment interest on the pre-judgment interest of the Second 
Trial. 
UOSA’s Allocation of the May 8, 2006 Payment 
The Joint Venture contends that the circuit court erred in 
its determination that UOSA’s letter of May 10, 2006 reflecting 
 
35
its calculation of the payment made on May 8, 2006 was a timely 
directive as to the allocation of that payment.  The Joint 
Venture contends that because UOSA wired the payment to the 
Joint Venture’s counsel without any instructions on how the 
payment was to be applied, the subsequent letter and its 
attached calculations were insufficient to act as a directive of 
allocation because they were untimely.   
UOSA responds that a debtor has the right to specify how a 
payment is to be applied to the debt.  By promptly responding to 
the Joint Venture’s request to explain the manner in which UOSA 
had calculated the amount of the debt, UOSA contends it made a 
contemporaneous directive to allocate the payment in accord with 
the amounts it asserted were due on the various elements of the 
two judgments and the interest thereon.  Because the Joint 
Venture did not initially dispute the amount due or indicate 
that it would use its own calculation to determine the 
allocation of the payment before UOSA indicated its basis for 
calculating the different elements of the judgments, and by 
consequence allocate the payment in those amounts, UOSA contends 
that the circuit court correctly ruled that the May 10, 2006 
letter constituted a timely directive to allocate the payment in 
accord with UOSA’s calculations. 
The principles of law that govern the right to direct the 
application of a payment by a debtor to a debt or debts owed to 
 
36
a creditor are as ancient and venerable as the principle that 
natural justice requires the debtor to pay interest to the 
creditor until the debt is paid.  The first of these principles 
is that where there is but a single debt between debtor and 
creditor, no directive to allocate is necessary by the debtor, 
as “[t]he very idea of election supposes something to elect 
between.”  Donally v. Wilson, 32 Va. (5 Leigh) 329, 331 (1834).  
But if the debt owed has different elements of principal and 
interest, “[t]he debtor . . . has a right to say whether [the 
payment] shall be applied to the principal or to the interest of 
the debt due,” Howard v. McCall, 62 Va. (21 Gratt.) 205, 209 
(1871), or if more than one debt is owed between the parties, 
the debtor “may direct the application of [the payment], because 
it is his:  if he gives no direction, the creditor may apply it 
to which of the two debts he chooses.”  Donally, 32 Va. (5 
Leigh) at 331.  Inherent in these decisions is the concept that 
a debtor has, at least initially, the right to have a partial 
payment applied to his debts in the manner most advantageous to 
him if he timely elects to do so, absent any applicable 
statutory or contractual provision to the contrary. 
Similarly, the creditor has the right to allocate the 
payment to his advantage if the debtor fails to exercise this 
election, but that right is not absolute.  As this Court 
observed in one of its first cases, “if the debtor neglect[s] to 
 
37
make the application at the time of payment, the election is 
then cast upon the creditor, yet it is incumbent upon the 
latter, in such a case, to make a recent application, by entries 
in his books or papers, and not to keep parties and securities 
in suspense, changing their situation, from time to time, as his 
interest, governed by events, might dictate.”  Hill v. 
Southerland, 1 Va. (1 Wash.) 128, 133 (1792). 
In Chapman v. Commonwealth, 66 Va. (25 Gratt.) 721 (1875), 
we summarized the law with regard to allocation of a partial 
payment among several debts:  
A payment by a debtor who owes several debts to a 
creditor, is to be applied to one or the other of the 
debts; first, as the debtor may direct at or before 
the time of making such payment; and such direction 
may be given expressly or by implication.  Secondly, 
if the debtor give no such direction then the creditor 
may make the application, according to his pleasure; 
and he may make it, either at the time of such 
payment, or afterwards, before the commencement of any 
controversy on the subject. 
 
Id. at 750 (emphasis added).11  
It is not contested that the attachment to UOSA’s letter of 
May 10, 2006 was an implicit attempt to allocate the May 8, 2006 
payment according to UOSA’s calculation of the judgment debt.  
                     
11 The application of these principles in the present case 
impacts whether UOSA’s payment to the Joint Venture is to be 
applied to the satisfaction of the compensatory damages awarded 
in the First Trial and the Second Trial so as to prevent the 
continued accrual of post-judgment interest thereon. 
 
 
38
Moreover, in the May 16, 2006 letter from its counsel, the Joint 
Venture made an express attempt to allocate the May 8, 2006 
payment to its advantage.  Thus, the crux of the issue is 
whether the circuit court erred in ruling that the May 10, 2006 
letter was “essentially contemporaneous” with the May 8, 2006 
payment such that it was a directive of the debtor made “at or 
before the time of making such payment,” and, if not, whether 
the Joint Venture’s attempt to allocate the payment to its 
advantage occurred “before the commencement of any controversy 
on the subject.”   
The circumstances surrounding UOSA’s tendering of payment 
on its judgment debt to the Joint Venture are not in dispute.  
The funds were wired to the account of the Joint Venture’s 
counsel on May 8, 2006.  At 3:46 P.M. on that day, counsel for 
UOSA sent an email to counsel for the Joint Venture asking for 
him to “[p]lease verify that you have received the funds.”  
Counsel for the Joint Venture responded to this email at 5:10 
P.M. requesting UOSA’s counsel to “please provide the 
calculation of the amount paid, including the interest 
calculations, so that we can understand how the amount was 
determined.”  (Emphasis added.)  This email is a de facto 
acknowledgement that the payment had been received, but also 
evidenced that the judgment creditor did not yet accept that the 
debt was fully satisfied. 
 
39
UOSA’s counsel responded by mailing the May 10, 2006 letter 
and its attached exhibit and sending copies of these to counsel 
for the Joint Venture by telefacsimile.  That letter expressly 
stated the position of UOSA that the judgment debt was fully 
satisfied and, by implication, that it would contest any claim 
by the Joint Venture that additional moneys were due.  The Joint 
Venture responded to this communication in the May 16, 2006 
letter from its counsel with its own calculation of the judgment 
debt, asserting that the May 8, 2006 payment was not sufficient 
to cover that debt, and purporting to allocate the “partial 
payment” in a manner advantageous to the Joint Venture. 
In light of the sequence of events between May 8 and May 
16, 2006, we find that the record is abundantly clear that UOSA 
did not attempt to make an allocation of its payment, either 
expressly or by implication, “at or before the time of making 
such payment.”  Thus, any action taken by UOSA thereafter to 
justify its calculation of that payment in response to the query 
from the Joint Venture cannot be treated as a timely allocation 
because the payment had already been tendered and accepted.  
Accordingly, we hold that the circuit court erred in finding 
that the May 10, 2006 letter was an “essentially 
contemporaneous” directive to allocate the May 8, 2006 payment 
according to the calculations in the attachment to the letter.  
 
40
On brief, the Joint Venture contends that its calculation 
of the judgment debt, as expressed in the exhibit attached to 
its May 16, 2006 letter to counsel for UOSA, was a timely 
allocation of the May 8, 2006 payment to the debt.  However, 
because the circuit court ruled that UOSA’s May 10, 2006 
calculation constituted a timely allocation by the debtor, the 
court never reached the question whether the Joint Venture’s 
calculation would have constituted a timely allocation by the 
creditor in the absence of an allocation by the debtor.  Thus, 
the court was not called upon to decide whether the Joint 
Venture made its allocation “before the commencement of any 
controversy on the subject.”  Moreover, in light of our holding 
that certain of the awards made by the circuit court were in 
error, neither of the calculations advanced by the parties 
regarding their alleged allocations will be germane to the 
judgment debt once it has been recalculated in accord with the 
views expressed herein. 
Accordingly, we will remand the case to the circuit court 
with direction that it first recalculate the amount of the 
judgment debt as of May 8, 2006.  The court will then determine 
whether the Joint Venture’s May 16, 2006 letter constitutes a 
timely allocation of the May 8, 2006 payment, and, if so, 
whether and how that allocation may be applied to the 
recalculated debt.  If the court determines that there was no 
 
41
timely allocation by the Joint Venture, or that the calculations 
of the May 16, 2006 letter, though a timely allocation, cannot 
practicably be applied to the recalculated debt, then the court 
shall apply the May 8, 2006 payment to the recalculated debt in 
accord with the principle of law that, in the absence of an 
effective allocation by either debtor or creditor, the courts 
will apply the payment to the debts in order of age, starting 
with the oldest.  Northern Virginia Savings & Loan Ass’n v. 
J. B. Kendall Co., 205 Va. 136, 145, 135 S.E.2d 178, 185 (1964); 
Pope v. Transparent Ice Co., 91 Va. 79, 85, 20 S.E. 940, 942 
(1895). 
Failure to Grant Motion for Satisfaction of the Judgment 
As we stated at the outset, the burden of proof as to 
entitlement to relief under Code § 8.01-455 rests with the 
judgment debtor, here UOSA, asserting that the judgment debt has 
been paid and should be marked satisfied.  Leasing Service Corp, 
243 Va. at 444, 416 S.E.2d at 441.  Because UOSA has not 
prevailed in this Court on the issue of whether interest was to 
accrue during the period between November 6, 2003 and June 27, 
2005 and the Joint Venture has prevailed on the issue that post-
judgment interest on the compensatory damages from the First 
Trial accrued at the rate of 1% per month, it is clear that 
UOSA’s contention that it has fully satisfied the judgment debt 
is no longer tenable.  Accordingly, we need not address further 
 
42
UOSA’s assignment of error asserting that the circuit court 
erred in not granting UOSA’s motion for satisfaction of the 
judgment.  UOSA is not yet entitled to such relief. 
CONCLUSION 
In summary, we have determined that: (1) the circuit court 
had jurisdiction to determine what interest was due to the Joint 
Venture under the court’s June 27, 2005 judgment pursuant to 
UOSA’s motion for satisfaction of that judgment; (2) the circuit 
court did not err in determining that interest was to accrue on 
the compensatory damages awarded in the First Trial between 
November 6, 2003 and June 27, 2005, but it erred in setting the 
rate of that interest at 9% per year, rather than the rate of 1% 
per month provided for in the jury’s verdict; (3) the circuit 
court erred in determining that post-judgment interest was to 
accrue on the pre-judgment interest awarded in the First Trial 
and the Second Trial; (4) the circuit court erred in determining 
that UOSA made a timely allocation of the May 8, 2006 payment on 
the judgment debt; and, (5) the circuit court did not err in 
denying UOSA’s motion for satisfaction of the judgment. 
Because we have determined that the circuit court erred in 
awarding post-judgment interest on the pre-judgment interest and 
also erred in not applying the 1% per month rate of interest to 
calculate the post-judgment interest on the compensatory damages 
awarded by the jury in the First Trial, we will remand the case 
 
43
to the circuit court in order that, consistent with the views 
expressed in this opinion, the court can make a proper 
calculation of the judgment debt, determine the proper 
allocation of the May 8, 2006 payment to that debt, and 
determine the remaining balance due to the Joint Venture. 
Affirmed in part, 
reversed in part, 
 
and remanded. 
 
 
JUSTICE KINSER, with whom JUSTICE AGEE joins, concurring. 
 
I agree with the majority’s conclusions on the issues 
before us, but I write separately to discuss in more detail the 
provisions of Code § 8.01-382 in relation to the concepts of 
“pre-judgment interest” and “post-judgment interest.”  I do so 
because I disagree with the majority’s use of the labels “pre-
judgment interest” and “post-judgment interest” in the context 
of Code § 8.01-382 and the implication that, when a trier of 
fact provides for interest on the principal sum awarded and 
fixes the period at which the interest commences, such interest 
consists of only “pre-judgment interest.” 
The provisions of Code § 8.01-382 do not include the terms 
“pre-judgment interest” or “post-judgment interest.”  Instead, 
the statute addresses two scenarios with regard to the accrual 
of interest on a jury verdict or judgment of a trial court, when 
the trier of fact elects to provide for interest on any 
 
44
principal sum awarded and when it chooses not to do so.  The 
first two sentences of Code § 8.01-382 address the initial 
circumstance, and the third sentence pertains to the latter. 
The first sentence of Code § 8.01-382 allows a jury or a 
court, sitting without a jury, to “provide for interest on any 
principal sum awarded . . . and [to] fix the period at which the 
interest shall commence.”  Contrary to the labels used by the 
majority, such interest is not just “pre-judgment interest” that 
ceases to accrue on the date of the jury verdict or court’s 
judgment.  The time which the trier of fact may fix for interest 
to commence is not limited by the statute and thus may be 
before, at or after the rendering of judgment.  The second 
sentence of the statute directs that, when the trier of fact 
does provide for such interest, the judgment or decree entered 
“shall provide for such interest until such principal sum be 
paid.”  Code § 8.01-382.  If the period thus fixed for the 
commencement of interest predates the jury verdict or judgment 
of the court, the interest that accrues before the date of the 
jury verdict or court’s judgment is commonly referred to as 
“pre-judgment interest,” and the interest accruing after that 
date is commonly denominated as “post-judgment interest.”  
However, the trier of fact could fix the commencement of the 
running of interest, including the rate of interest, at or after 
judgment, which would also commonly be referred to as “post-
 
45
judgment interest,” but under the plain terms of Code § 8.01-382 
would not be controlled by Code § 6.1-330.54. 
The third sentence of Code § 8.01-382 addresses the 
situation when a jury or a court, sitting without a jury, elects 
not to provide for any interest on the principal sum awarded.  
It directs that, when “a judgment or decree be rendered which 
does not provide for interest, the judgment or decree awarded or 
jury verdict shall bear interest at the judgment rate of 
interest as provided for in § 6.1-330.54 from its date of entry 
or from the date that the jury verdict was rendered.”  Code 
§ 8.01-382.  In other words, when a jury or court does not 
provide for interest on any principal sum awarded, the judgment, 
as a matter of law, will nevertheless bear interest at the rate 
set forth in Code § 6.1-330.54 from the date of either the jury 
verdict or entry of the judgment or decree.  See Board of 
Supervisors v. Safeco Ins. Co., 226 Va. 329, 339, 310 S.E.2d 
445, 451 (1983) (under Code § 8.01-382, if the fact-finder does 
not provide for interest on any principal sum awarded, “the 
judgment bears interest at the judgment rate from date of 
entry”).  Obviously, interest in this circumstance accrues only 
during the “post-judgment” period. 
In the First Trial, the jury, acting pursuant to the first 
sentence of Code § 8.01-382, provided for interest on the 
various principal sums awarded to the Joint Venture, fixed the 
 
46
rate at one percent, and set the date from which the interest 
commenced to accrue on each principal sum awarded.  All those 
dates preceded the November 6, 2003 jury verdict.  Thus, the 
jury awarded the Joint Venture interest that commenced to accrue 
during the “pre-judgment” period and continued to accrue until 
UOSA paid the principal sums awarded to the Joint Venture.  In 
accordance with the jury verdict, the circuit court, in its 
orders of November 19, 2003, and January 15, 2004 (which was 
incorporated into the final order of June 27, 2005), calculated 
the amount of interest that had accrued on each principal sum 
awarded from the date the one percent began to accrue through 
November 6, 2003, the date of the jury verdict.  The total 
accrued interest as of that date was $1,832,652. 
When UOSA filed its motion for satisfaction of the judgment 
pursuant to Code § 8.01-455, the circuit court decided, among 
other things, at what rate interest continued to accrue on the 
principal sums awarded after November 6, 2003.  In answering 
that question, the circuit court concluded that the January 15, 
2004 order did not comport with the second sentence of Code 
§ 8.01-382 because that order did not specifically provide for 
the one percent interest to continue to accrue until UOSA paid 
the principal sums awarded to the Joint Venture.  In other 
words, the court decided that the January 15, 2004 order did not 
provide for interest and was therefore “squarely on point with 
 
47
the third sentence” of Code § 8.01-382.  For that reason, the 
circuit court held that interest accrued after November 6, 2003 
at the rate set forth in Code § 6.1-330.54. 
In my view, the circuit court failed to correctly apply its 
January 15, 2004 order.  By setting forth in that order the one 
percent rate of interest and fixing the date at which such 
interest began to accrue on each principal sum, all in 
accordance with the jury verdict, the circuit court’s order 
provided for the continued accrual of that interest until UOSA 
paid the various principal sums as a matter of law.  Stated 
differently, the order did not fail to provide for interest, and 
the judgment, therefore, did not fall within the ambit of the 
third sentence of Code § 8.01-382.* 
Thus, I conclude that the Joint Venture was entitled 
to interest on the principal sums awarded in the First 
Trial at the rate of one percent per month from the 
date fixed by the jury for the commencement of the 
interest on each principal sum until such sum was 
paid.  I recognize that the majority reaches the same 
conclusion, but in my view, its use of the labels 
“pre-judgment” and “post-judgment” when discussing 
interest provided by the trier of fact pursuant to the 
                     
* 1 If the circuit court’s January 15, 2004 order had failed 
to provide for the interest awarded by the jury in the First 
Trial until UOSA paid the principal sums, but instead had fixed 
the amount of interest the Joint Venture was entitled to 
receive, such an order would not have been in accordance with 
the jury verdict and the requirements of Code § 8.01-382.  The 
Joint Venture would have been required to raise that error on 
direct appeal.  To do so now under the guise of responding to 
UOSA’s motion for satisfaction of judgment under Code § 8.01-455 
would violate the requirements of Rule 1:1. 
 
48
first two sentences of Code § 8.01-382 is confusing 
because, under this statute, such interest necessarily 
accrues until the principal sum is paid. 
 
I further conclude that the circuit court’s failure to 
interpret correctly its January 15, 2004 order and the 
provisions of Code § 8.01-382 led to its erroneous award of 
“post-judgment interest” on “pre-judgment interest.”  As the 
majority noted, a plaintiff may seek as part of its damages an 
award of interest commencing on a date prior to a jury verdict 
or court’s judgment, i.e. “pre-judgment interest.”  See 
Dairyland Ins. Co. v. Douthat, 248 Va. 627, 631, 449 S.E.2d 799, 
801 (1994) (the purpose of pre-judgment interest is to make a 
plaintiff whole and is part of the damages a plaintiff may seek 
to recover).  But, when the trier of fact provides for interest 
on any principal sum awarded, that interest continues to accrue 
until the principal sum is paid.  Code § 8.01-382.  It is not a 
lump sum award of damages, nor does it consist of only “pre-
judgment interest,” as the majority suggests.  Thus, it 
compensates a plaintiff for the lost use of its money from the 
date fixed by the trier of fact for the commencement of the 
interest until the principal sum is paid.  Stated differently, 
interest provided pursuant to the first sentence of Code § 8.01-
382 compensates a plaintiff “ ‘for the loss sustained by not 
receiving the amount to which he was entitled at the time he was 
 
49
entitled to receive it.’ "  Marks v. Sanzo, 231 Va. 350, 356, 
345 S.E.2d 263, 267 (1986) (quoting Employer-Teamsters Joint 
Council No. 84 v. Weatherall Concrete, 468 F.Supp. 1167, 1171 
(S.D. W.Va. 1979)).  But, a plaintiff is entitled to be 
compensated for that particular loss only once.  By awarding 
“post-judgment interest” on “pre-judgment interest,” the circuit 
court, however, compensated the Joint Venture twice for that 
loss during the “pre-judgment” period. 
Furthermore, the term “principal” is defined as “[t]he 
amount of a debt . . . not including interest.”  Black’s Law 
Dictionary, 1231 (8th ed. 2004).  Thus, I conclude that the 
phrase “principal sum awarded” as used in Code § 8.01-382 does 
not include “pre-judgment interest” provided by a trier of fact.  
Instead, the “principal sum awarded” refers to the amount that a 
plaintiff was initially entitled to receive as damages from the 
party in breach of some obligation or duty and is the monetary 
figure on which interest, if provided for by the trier of fact 
under Code § 8.01-382, accrues. 
For these reasons, I respectfully concur.