Title: Subsurfco, Inc. v. BY Water Dist.

State: south-dakota

Issuer: South Dakota Supreme Court

Document:

369 N.W.2d 129 (1985) SUBSURFCO, INC., Plaintiff, Defendant on counterclaim of B-Y Water District, and Appellee, v. B-Y WATER DISTRICT, Defendant, Counterclaimant, Cross-Claimant, and Appellant, v. SEABOARD SURETY COMPANY, Defendant on Cross-Claim of B-Y Water District and Appellee. No. 14744. Supreme Court of South Dakota. Considered on Briefs, March 18, 1985. Decided June 5, 1985. *130 Woods, Fuller, Schultz & Smith, P.C., and F.M. Smith, Sioux Falls, for appellee Subsurfco, Inc. Thomas E. Alberts, Avon, for appellant B-Y Water Dist. KEAN, Circuit Judge. This is an appeal from an order denying a motion for prejudgment interest after B-Y Water District (appellant) received a jury verdict of $2,714,157.24 on its counterclaim and cross-claim. We affirm the order. This is the second appeal involving these litigants. Previously, this court set aside a jury verdict in favor of appellant and remanded the proceedings for a new trial particularly upon the issue of damages. The background facts are adequately recited in Subsurfco, Inc. v. B-Y Water Dist., 337 N.W.2d 448 (S.D.1983). The second trial again resulted in a jury verdict for appellant for $2,714,157.24. Subsurfco, Inc. and Seaboard Surety Company (appellees) were allowed a setoff of $775,789.17 against the jury verdict, which represented the unpaid balance on the contract between Subsurfco, Inc. and B-Y Water District. No appeal was taken from the verdict and that portion of the case is now settled. Appellant claims it is entitled to prejudgment interest for the following "line items"[*] of the jury verdict: Appellant does not claim any prejudgment interest on the remainder of the "line item" damages awarded by the jury. As noted by the trial court in its memorandum opinion denying the motion for prejudgment interest: It is from this order denying prejudgment interest that this appeal is taken. Three statutes are involved in this single issue appeal. SDCL 21-1-11 provides: It is also provided by SDCL 21-1-1 and SDCL 21-2-1, respectively: The criteria for awarding prejudgment interest by SDCL 21-1-11 are twofold. First, the damages must be certain, or capable of being made certain, by calculation. Arcon Const. Co. v. S.D. Cement Plant, 349 N.W.2d 407 (S.D.1984); Fullerton Lumber Co. v. Reindl, 331 N.W.2d 293 (S.D.1983). The fact liability as disputed is immaterial. Cole v. Melvin, 441 F. Supp. 193 (D.S.D.1977); Simpson v. Norwesco, Inc., 583 F.2d 1007 (8th Cir.1978) (both cases interpreting SDCL 21-1-11). Second, there actually must be some damages upon which to predicate the interest. SDCL 21-1-11. The term "damages" is not defined within SDCL 21-1-11 and its meaning must be found in other statutes depending, of course, upon the nature of the proceedings which, in this breach of contract case, is SDCL 21-2-1. The cases that have interpreted damages for a breach of contract have held no person can receive a greater amount in damages for breach of contract than he could have gained by full performance on both sides. See, e.g., Hickok v. W.E. Adams Co., 18 S.D. 14, 99 N.W. 77 (1904). This does not mean, however, that interest may not be awarded upon the breach of a contract, see Beka v. Lithium Corporation of America, 77 S.D. 370, 92 N.W.2d 156 (1958), Arcon Const. Co. v. S.D. Cement Plant, supra; nor does it mean that interest should be precluded by the fact that the party against whom it is asserted may have put forward an unliquidated setoff or counterclaim. Knutson v. Lasher, 219 Minn. 594, 18 N.W.2d 688 (1945). The cases cited above, however, and annotated under SDCL 21-1-11, do not address the peculiar circumstances of this case. In this case, the jury awarded plaintiff the sum of $2,714,157.24 in damages. Of this figure, appellant concedes that it has no right to prejudgment interest on $2,422,932.00 (the first figure less $291,225.24). Yet, when the setoff was made, it was applied to the whole of the judgment, not just the part for which no prejudgment interest was due. The setoff of $775,789.17, the unpaid balance of the contract, was more than adequate to liquidate the items for which prejudgment interest was requested. The purpose of prejudgment interest has been explained in this manner: 22 Am.Jur.2d Damages § 179 (1965). As appellant owed appellee $775,789.17, it is difficult to perceive how appellee owes appellant any prejudgment interest. There was no unlawful detention of money. Since there was a sum still due on the contract for appellee's benefit, no funds were due appellant and no money was improperly retained, detained, or withheld. Thus, as no damages are due, pursuant to SDCL 21-2-1, no prejudgment interest can be awarded under SDCL 21-1-11. The order of the trial court is affirmed. MORGAN and HENDERSON, JJ., WUEST, Acting J., and TALBOTT, Circuit Judge, concur. *132 KEAN, Circuit Judge, sitting for FOSHEIM, C.J., disqualified. TALBOTT, Circuit Judge, sitting for WOLLMAN, J., disqualified. [*] As to the necessity of using a line item jury verdict in certain cases, see American State Bank v. List-Mayer, 350 N.W.2d 44 (S.D.1984), where prejudgment interest was denied on a general jury verdict.