2023 New Mexico Statutes › Chapter 56 - Commercial Instruments and Transactions › Article 8 - Money, Interest and Usury › Section 56-8-4 - Judgments and decrees; basis of computing interest.

A. Interest shall be allowed on judgments and decrees for the payment of money from entry and shall be calculated at the rate of eight and three-fourths percent per year, unless:
(1) the judgment is rendered on a written instrument having a different rate of interest, in which case interest shall be computed at a rate no higher than specified in the instrument; or
(2) the judgment is based on tortious conduct, bad faith or intentional or willful acts, in which case interest shall be computed at the rate of fifteen percent.
B. Unless the judgment is based on unpaid child support, the court in its discretion may allow interest of up to ten percent from the date the complaint is served upon the defendant after considering, among other things:
(1) if the plaintiff was the cause of unreasonable delay in the adjudication of the plaintiff's claims; and
(2) if the defendant had previously made a reasonable and timely offer of settlement to the plaintiff.
C. Nothing contained in this section shall affect the award of interest or the time from which interest is computed as otherwise permitted by statute or common law.
D. The state and its political subdivisions are exempt from the provisions of this section except as otherwise provided by statute or common law.
History:
Laws 1851-1852, p. 255; C.L. 1865, ch. 79, § 5; C.L. 1884, § 1735; C.L. 1897, § 2551; Code 1915, § 3526; C.S. 1929, § 89-104; 1941 Comp., § 53-604; 1953 Comp., § 50-6-4; Laws 1977, ch. 293, § 1; 1980, ch. 68, § 2; 1983, ch. 254, § 2; 1993, ch. 112, § 1; 2004, ch. 41, § 7.
ANNOTATIONS
The 2004 amendment,
effective May 19, 2004, inserted at the beginning of Subsection B "Unless the judgment is based on unpaid child support".
The 1993 amendment,
effective June 18, 1993, in Subsection A, substituted "eight and three-fourths percent" for "fifteen percent"; and in Subsection A(1), substituted "no higher than specified" for "specified in the instrument".
Compiler's notes.
— Annotations to decisions under former 56-8-3 NMSA 1978 and its predecessors, which contained provisions concerning interest on judgment and decrees, appear in the annotations to decisions under this section.
I. GENERAL CONSIDERATION.
Discretion of court.
— An interest award under 56-8-4 NMSA 1978 is not an absolute right, but rather is a matter to be left to the discretion of the trial court.
Gonzales v. N.M. Dep't of Health
, 2000-NMSC-029, 129 N.M. 586, 11 P.3d 550.
Section 52-1-9.1 NMSA 1978 prevails.
— The legislative design demonstrates that the specific provisions of 52-1-9.1(G) NMSA 1978 must prevail over the more general application of 56-8-4(B) NMSA 1978.
Pipkin v. Daniel
, 2009-NMCA-006, 145 N.M. 398, 199 P.3d 301.
Federal claims filed in state court.
— The state and its political subdivisions are not exempt from post-judgment interest because the legislature plainly intended interest to be awarded "as otherwise provided by statute", 56-8-4D NMSA 1978, and a federal statute, 28 U.S.C. § 1961, provide for post-judgment interest in 42 U.S.C. § 1983 actions. The legislature intended the interest rate set forth in 28 U.S.C. § 1961 to apply to 42 U.S.C. § 1983 actions filed in state court.
Albuquerque Commons P'ship v. City Council
, 2011-NMSC-002, 149 N.M. 308, 248 P.3d 856.
Tortious conduct includes negligence and the post-judgment interest rate of 15% applies to judgments awarding damages for negligent conduct.
Sandoval v. Baker Hughes Oilfield Operations, Inc.
, 2009-NMCA-095, 146 N.M. 853, 215 P.3d 791.
Section 1983 claim.
— Post-judgment interest is not recoverable in a Section 1983 case filed in state court.
Albuquerque Commons P'ship v. City Council
, 2009-NMCA-065, 146 N.M. 568, 212 P.3d 1122, cert. granted, 2009-NMCERT-007, 147 N.M. 361, 223 P.3d 358,
rev'd
, 2011-NMSC-002, 149 N.M. 308, 248 P.3d 856.
Insurance companies are not liable
for fifteen percent interest based on the tortious conduct of an uninsured motorist.
Bird v. State Farm Mutual Auto. Ins. Co.
, 2007-NMCA-088, 142 N.M. 346, 165 P.3d 343, cert. denied, 2007-NMCERT-007, 142 N.M. 329, 165 P.3d 326.
1983 amendment applies prospectively.
North v. Public Serv. Co.
, 1983-NMCA-124, 101 N.M. 222, 680 P.2d 603, cert. quashed, 101 N.M. 11, 677 P.2d 624 (1984).
Six percent interest rate in pre-1980, noncontract cases.
— The amount of interest that may be awarded on judgments in cases filed prior to the 1980 amendment of former 56-8-3 NMSA 1978 is six percent per annum.
Navajo Tribe v. Bank of N.M.
, 700 F.2d 1285 (10th Cir. 1983).
Subsection A relates to postjudgment interest,
not prejudgment interest.
State Farm Mut. Auto. Ins. Co. v. Barker
, 2004-NMCA-105, 136 N.M. 211, 96 P.3d 336.
Postjudgment interest mandatory.
— Following the 1983 amendment to this section, postjudgment interest on an award of punitive damages is mandatory.
Weststar Mortg. Corp. v. Jackson
, 2002-NMCA-009, 131 N.M. 493, 39 P.3d 710,
rev'd on other grounds
, 2003-NMSC-002, 133 N.M. 114, 61 P.3d 823.
Post-judgment interest on reconsideration of punitive damage award should run from the date of the new judgment.
— Where plaintiffs brought claims against defendants for breach of a mortgage contract, wrongful foreclosure, breach of the covenant of good faith and fair dealing, violations of the Unfair Practices Act, violations of the Home Loan Protection Act (HLPA), and for attorney fees and punitive damages, in connection with a mortgage accidental death insurance policy and defendants' related misapplication of payments and foreclosure on the insured mortgage, and where, following a bench trial, the district court found in favor of plaintiffs on all claims except the HLPA claim, and awarded actual damages and costs as well as punitive damages, and where the New Mexico court of appeals found that the procedures used to reach the punitive damages award were lacking, set aside the punitive damages award and remanded to the district court for reconsideration of its award, and where, on remand, the district court awarded plaintiffs $2,500,000 in punitive damages and post-judgment interest of 15% to run from the date of the original judgment, the court of appeals held that post-judgment interest should not accrue from the date of the original judgment, but as a matter of law, should run from the date of the second judgment. If an appellate determination only requires modification of a former judgment, interest accrues at the date of the original judgment, but if a remand requires new findings and new computation of an award, then interest accrues from the date of the new judgment.
Dollens v. Wells Fargo Bank
, 2021-NMCA-039.
Rate of post-judgment interest.
— Where the open account credit agreement between the supplier of materials and a subcontractor on a municipal construction project provided for interest at 18% per year, post-judgment interest was awardable as a sum justly due under 13-4-19 NMSA 1978 at the rate of 18% per year against the surety on the payment bond for the project.
State ex rel. Solsbury Hill, LLC v. Liberty Mut. Ins. Co.
, 2012-NMCA-032, 273 P.3d 1, cert. granted, 2012-NMCERT-003.
Award was not based on culpable conduct.
— Where plaintiff, who purchased a commercial greenhouse operation to hydrophonically grow tomatoes, contracted with defendant for electrical power; the greenhouse was destroyed in a fire; before the fire and without notifying plaintiff, defendant disconnected electrical power to the greenhouse for nonpayment of bills which prevented plaintiff from pumping water from its wells to quench the fire; plaintiff sued defendant for breach of contract; the district court found that defendant did not act maliciously, willfully, wantonly, fraudulently or in bad faith toward plaintiff prior to the fire; and the district court did not find any pre-fire breach of contract that caused plaintiff damages other than the failure to provide advance notice of the disconnect of electrical power; and the district court did not find that defendant's alleged threat that the fire chief would be liable if defendant reconnected electrical power during the fire was a breach of any particular contract provision or that if the conduct was a breach of contract that the conduct caused any damages to defendant, the district court did not abuse its discretion in denying plaintiff's request for a fifteen percent interest award.
Sunnyland Farms, Inc. v. Central N.M. Elec. Coop., Inc.
, 2011-NMCA-049, 149 N.M. 746, 255 P.3d 324, cert. granted, 2011-NMCERT-005, 150 N.M. 667, 265 P.3d 718.
Action against state.
— Plaintiff in wrongful death action was not entitled to postjudgment interest on a prior judgment obtained against the New Mexico State Highway Department (State).
Fought v. State
, 1988-NMCA-088, 107 N.M. 715, 764 P.2d 142,
overruled in part on other grounds by
Folz v. State
, 1993-NMCA-066, 115 N.M. 639, 857 P.2d 39, cert. denied, 115 N.M. 602, 856 P.2d 250.
Plaintiff was not entitled to postjudgment interest following an award of damages for wrongful termination against a school district.
Franco v. Carlsbad Mun. Schs.
, 2001-NMCA-042, 130 N.M. 543, 28 P.3d 531.
Applicability.
— Subsection B of this section applies to all actions and is not limited to certain or specific actions, such as those based on contract or in which damages are ascertainable before trial.
Southard v. Fox
, 1992-NMCA-045, 113 N.M. 774, 833 P.2d 251.
Applicability to workers' compensation awards.
— Where worker was awarded damages under the Workers' Compensation Act because the employer intentionally retaliated against worker for filing a workers' compensation claim, the actions of the employer constituted bad faith, and the employer's actions amounted to fraud, malice, oppression or willful, wanton or reckless disregard of the rights of the worker, the employer was required to award the worker post-judgment interest at the highest rate of fifteen percent.
Martinez v. Pojoaque Gaming, Inc.
, 2011-NMCA-103, 150 N.M. 629, 264 P.3d 725, cert. denied, 2011-NMCERT-009, 269 P.3d 903.
Date interest accrues on worker's compensation awards.
— Post judgment interest begins to accrue on the date that an order is filed awarding a partial lump-sum payment.
Massengill v. Fisher Sand & Gravel Co.
, 2013-NMCA-103, cert. denied, 2013-NMCERT-010.
Where worker had reached maximum medical improvement and was receiving permanent partial disability, but a final determination of worker's permanent partial disability benefits had not been made; the worker's compensation judge entered an order granting worker a partial lump-sum payment and mailed the order to the parties; and employer claimed that pursuant to 52-5-7(C) NMSA 1978, the order was not operative until thirty days after it was mailed to the parties and that because worker's permanent partial disability benefits had not been determined, the order awarding a partial lump-sum payment was not a final order, post-judgment interest on the compensation award began to run on the date the order was filed, 52-5-7(C) NMSA 1978 does not provide a thirty day grace period to pay a compensation award, and the pending decision on the worker's unresolved permanent partial disability benefits did not render the partial lump-sum award a non-final decision.
Massengill v. Fisher Sand & Gravel Co.
, 2013-NMCA-103, cert. denied, 2013-NMCERT-010.
There is a legislative intent to apply this section to final compensation orders in workers' compensation cases.
Sanchez v. Siemens Transmission Sys.
, 1991-NMCA-028, 112 N.M. 236, 814 P.2d 104,
rev'd on other grounds
, 1991-NMSC-093, 112 N.M. 533, 817 P.2d 726.
Postjudgment interest under subsequent injury act.
— The court in its discretion may allow postjudgment interest on compensation benefits payable by the subsequent injury fund and awarded to an injured or disabled workman. Allowance of interest, however, is limited to that portion of a judgment against the fund in favor of an injured worker, and the fund is not liable for the payment of interest on that portion of reimbursement payable by the fund to an employer or its carrier. Additionally, any award of postjudgment interest does not commence to run upon compensation benefits until the time fixed for their payment.
Mares v. Valencia Cnty. Sheriff's Dep't
, 1988-NMCA-003, 106 N.M. 744, 749 P.2d 1123.
Interest is element of damages to be considered by trial court.
— As such, it is left to the discretion of the trial court.
Kennedy v. Moutray
, 1977-NMSC-109, 91 N.M. 205, 572 P.2d 933;
Trujillo v. Beaty Elec. Co.
, 1978-NMCA-021, 91 N.M. 533, 577 P.2d 431,
see
Weststar Mortgage Corp. v. Jackson
, 2002-NMCA-009, 131 N.M. 493, 39 P.3d 710,
rev'd on other grounds
, 2003-NMSC-002, 133 N.M. 114, 61 P.3d 823 (concerning the distinction between pre and postjudgment interest after the 1983 amendment to this section).
Interest generally not allowed on a judgment awarding costs.
— The general rule regarding interest on costs is that in the absence of statutory authorization, interest may not be allowed on a judgment awarding costs.
Aquifer Science, LLC v. Verhines
, 2023-NMCA-020, cert. denied.
This section authorizes post-judgment interest on an award of costs.
— Where applicant, a limited liability company formed to obtain water for the Campbell ranch master plan project, a multiple use development consisting of four villages with residential, commercial, and resort elements spread among Bernalillo county, Sandoval county, and Santa Fe county, sought a permit to appropriate groundwater from the Sandia underground water basin, and where the district court denied plaintiff's application because the magnitude of likely impairment to existing water rights was significant and the application was contrary to conservation of water, and where the district court granted the costs requested by the prevailing party opposing the application for groundwater, and where applicant argued that an award of costs is neither a judgment nor a decree, and, as such, the prevailing party was not entitled to post-judgment interest on their award of costs, the district judge did not err in awarding interest on costs in this case, because an award of costs is a judgment for the payment of money as authorized by 56-8-4(A) NMSA 1978.
Aquifer Science, LLC v. Verhines
, 2023-NMCA-020, cert. denied.
Trial judge has discretion to allow or withhold interest under this section.
Moorhead v. Stearns-Roger Mfg. Co.
, 320 F.2d 26 (10th Cir. 1963).
Determination of intention or willfulness.
— If a plaintiff wants to insure that a judgment is assessed the higher 15 percent interest rate in a case not based in tort or bad faith, the plaintiff must specifically request that the factfinder make a finding of intention or willfulness; however, if such a finding is not made, and the evidence indicates that the defendant acted with a culpable mental state approximating intention or willfulness, the award of the higher interest rate will be left to the sound discretion of the trial court.
Public Serv. Co. v. Diamond D Constr. Co.
, 2001-NMCA-082, 131 N.M. 100, 33 P.3d 651.
Rate at time of filing is determinative.
— The statutory rate of interest in effect at the time a breach of contract suit is filed, not that in effect at the time the contract is executed, is applicable to determine prejudgment and postjudgment interest.
City of Farmington v. Amoco Gas Co.
, 777 F.2d 554 (10th Cir. 1985).
A change in interest affects the rights or remedies of the parties, even if these rights or remedies are purely statutory, and therefore the statutory rate of interest in effect when a claim became a pending case is applicable to that case even if the rate of interest is changed prior to judgment.
Hillelson v. Republic Ins. Co.
, 1981-NMSC-048, 96 N.M. 36, 627 P.2d 878;
Archuleta v. Jacquez
, 1985-NMCA-077, 103 N.M. 254, 704 P.2d 1130.
Postjudgment interest at the rate of 15% was inappropriate where at the time of the filing of the lawsuit the applicable interest rate was 10%.
Lopez v. Smith's Mgt. Corp.
, 1986-NMCA-054, 106 N.M. 416, 744 P.2d 544), cert. quashed, 106 N.M. 405, 744 P.2d 180 (1987).
Interest recoverable from time of actual taking.
— United States instituted condemnation proceedings to appropriate for reclamation purposes land already actually taken. In making awards, interest was properly included at 6% from time of actual taking to time of deposit of awards in court in payment of same.
United States v. Rogers
, 255 U.S. 163, 41 S. Ct. 281, 65 L. Ed. 566 (1921).
Interest as element of damage considered upon breach.
— The date on which the contract of insurance is breached - the date when insurance company denies liability - is the date when interest, as an element of damage, might be considered.
O'Meara v. Commercial Ins. Co.
, 1962-NMSC-160, 71 N.M. 145, 376 P.2d 486.
Allowance from breach not matter of right.
— The allowance of interest as an element of the total damage is a matter of discretion in the trier of the facts, and not a matter of right under the statute.
O'Meara v. Commercial Ins. Co.
, 1962-NMSC-160, 71 N.M. 145, 376 P.2d 486.
No prejudgment interest without request.
— In a suit in quantum meruit for services rendered by a litigant who does not include a request for interest in the complaint, the court cannot add interest from the date of complete rendition of services to the date of entry of the judgment.
United States Potash Co. v. McNutt
, 70 F.2d 1003 (10th Cir. 1934).
Interest must be claimed in lower court.
— An appellate court will not grant interest unless the subject of interest has been under consideration in the court below.
United States Potash Co. v. McNutt
, 70 F.2d 1003 (10th Cir. 1934).
Interest awarded not to exceed legal rate.
— Where interest is awarded as damages at law, it cannot be granted in excess of the legal rate.
Shaeffer v. Kelton
, 1980-NMSC-117, 95 N.M. 182, 619 P.2d 1226.
Defendants not entitled to fifteen percent rate of postjudgment interest.
— Where plaintiff filed a complaint alleging that when defendants signed a petition and actively supported plaintiff's recall from the Taos school board, such acts constituted malicious abuse of process, civil conspiracy, and prima facie tort, and where defendants filed special motions to dismiss pursuant to § 38-2-9.1 NMSA 1978, alleging that plaintiff's complaint infringed on defendants' first amendment rights, and where the district court granted defendants' special motions to dismiss, granted defendants' request for attorney fees, and awarded postjudgment interest at a rate of 8.75 percent, finding that defendants' support of plaintiff's recall from the Taos school board invoked the substantive protection of the first amendment and the procedural and remedial provisions of the anti-SLAPP statute, the district court did not err in denying defendants' request for postjudgment interest at the rate of fifteen percent because defendants failed to demonstrate that the filing of plaintiff's complaint constituted conduct that was tortious, intentional, or in bad faith as required by § 56-8-4(A)(2) NMSA 1978.
Cordova v. Cline
, 2021-NMCA-022.
Apportionment of postjudgment interest.
— In awarding postjudgment interest, the portion of the judgment that awarded damages for bad faith should bear interest at the rate of 15%, however, that portion of damages awarded as measured by standard contract law should bear interest at eight and three quarters percent.
Teague-Strebeck Motors, Inc. v. Chrysler Ins. Co.
, 1999-NMCA-109, 127 N.M. 603, 985 P.2d 1183, cert. denied, 127 N.M. 391, 981 P.2d 1209,
overruled in part on other grounds by
Sloan v. State Farm Mut. Auto. Ins. Co.
, 360 F.3d 1220 (10th Cir. N.M. 2004).
Error to award variable rate of interest.
— When a p.o.d. (paid on death) beneficiary of a joint account was mistakenly paid the money in the account upon the death of one of the two joint tenants and was, thus, unjustly enriched at the bank's expense, the court erred by awarding the bank postjudgment interest calculated at a variable rate equal to the rate paid by the bank to the federal reserve bank for funds borrowed. Postjudgment interest on judgments and decrees for payment of money is mandatory and accrues at the statutory rate from the date of entry of judgment, unless the judgment is based on a written instrument bearing a different rate. The judgment in this case was not rendered on a written contract, and therefore postjudgment interest should have been calculated at the statutory rate of fifteen percent in effect at the time the complaint was filed.
Sunwest Bank v. Colucci
, 1994-NMSC-027, 117 N.M. 373, 872 P.2d 346 (decided prior to 1993 amendment).
Allowance of excess interest reversible error.
— It is error to allow a greater rate than that legally allowed, for which a reversal will be granted unless defendant remits the excess of interest.
Romero v. Desmarais
, 1889-NMSC-011, 5 N.M. 142, 20 P. 787.
Affirmance conditioned on remission of excess allowable.
— Where judgment, otherwise correct, has awarded 10% interest, it will be affirmed on condition of the remission of the excess interest.
Romero v. Desmarais
, 1889-NMSC-011, 5 N.M. 142, 20 P. 787;
Hopkins v. Orr
, 124 U.S. 510, 8 S. Ct. 590, 31 L. Ed. 523 (1888).
Allowance of excess modifiable.
— In view of this section, the court is not authorized to allow 8% interest on the award of a commission sued for, and such allowance will be modified by the supreme court.
Taylor v. Sarracino
, 1940-NMSC-053, 44 N.M. 469, 104 P.2d 742.
Upon remand on damages, interest accrues from new judgment.
— Where reviewing court's opinion only requires a modification of the former judgment (such as remittitur or additur), interest accrues at the date of the original judgment; but if that court has reversed the former judgment, insofar as damages are concerned, and remanded for new findings and computation of the award, such as here, then interest accrues from the date of the new judgment.
Varney v. Taylor
, 1969-NMSC-175, 81 N.M. 87, 463 P.2d 511.
Absent abuse district court award stands.
— The district court exercises discretion in awarding prejudgment interest, and absent abuse, the court's decision should be allowed to stand. For a finding of abuse of discretion, an appellant bears the burden of proving the district court's decision is contrary to all logic and reason.
Delisle v. Avallone
, 1994-NMCA-012, 117 N.M. 602, 874 P.2d 1266, cert. denied, 117 N.M. 773, 877 P.2d 579.
Interest on child support arrearages award.
— Because each unpaid installment was a final judgment, mother's claim was to post-judgment, not pre-judgment, interest, and payment is mandatory.
Bustos v. Bustos
, 2000-NMCA-040, 128 N.M. 842, 999 P.2d 1074.
Workers' compensation cases.
— There is nothing which indicates that Subsection A should not apply in workers' compensation cases.
Candelaria v. General Elec. Co.
, 1986-NMCA-016, 105 N.M. 167, 730 P.2d 470, cert. quashed, 105 N.M. 111, 729 P.2d 1365.
Interest against state.
— Subsection D does not bar appellants from recovering interest against the state under the circumstances of this case because the present causes of action were pending prior to the effective date of Subsection D in 1983.
Folz v. State
, 1993-NMCA-066, 115 N.M. 639, 857 P.2d 39, cert. denied, 115 N.M. 602, 856 P.2d 250.
Section 41-4-19 NMSA 1978, when read in pari materia with Subsection D of this section, prohibits the awarding of post-judgment interest on tort judgments against the state and its subdivisions.
Trujillo v. City of Albuquerque
, 1998-NMSC-031, 125 N.M. 721, 965 P.2d 305.
Legislature waived immunity for post-judgment interest in the Whistleblower Protection Act.
— Where plaintiff sued defendant Northern New Mexico College (NNMC) pursuant to the New Mexico Whistleblower Protection Act (WPA), NMSA 1978, §§ 10-16C-1 to -6, and where plaintiff offered evidence at trial that NNMC removed her from her position as director of NNMC's campus in El Rito, New Mexico, transferred her to another position, and then terminated her employment in retaliation for her communications to NNMC's administrators about NNMC's failure to approve expenditures necessary for the successful implementation of a plan to revitalize the El Rito campus, and where the jury concluded that NNMC violated the WPA and found by special verdict form that plaintiff had communicated to defendant about the occurrence of an improper act, that there was a reasonable basis in fact for the improper act, and that defendant retaliated against plaintiff because of a communication about that improper act, and where the jury awarded plaintiff $239,000 in backpay and $180,000 to compensate her for emotional distress, the trial court erred in denying plaintiff's motion for post-judgment interest, because by explicitly making public employers liable for interest on back pay in NMSA 1978, § 10-16C-4, the legislature waived sovereign immunity for post-judgment interest pursuant to Subsection D of this section.
Velasquez v. Regents of Northern N.M. Coll.
, 2021-NMCA-007, cert. denied.
II. PREJUDGMENT INTEREST.
Construction with Section 56-8-3 NMSA 1978.
— Prejudgment interest assessed from the date the claim accrued was consistent with an award under 56-8-3 NMSA 1978, not this section; as a result, the appeals court should not review the award as a matter of discretion, but as an award as of right pursuant to 56-8-3 NMSA 1978.
Gilmore v. Duderstadt
, 1998-NMCA-086, 125 N.M. 330, 961 P.2d 175.
Because of the separate policies furthered by the two sections, it cannot be said that the language of Subsection D exempts a city from prejudgment interest under 56-8-3 NMSA 1978, which is silent as to the assessment of interest against political subdivisions.
City of Carlsbad v. Grace
, 1998-NMCA-144, 126 N.M. 95, 966 P.2d 1178.
Valid judgment required.
— Subsection B of this section presupposes a valid judgment; therefore, a judgment that has been set aside for want of jurisdiction cannot be the basis for an award of prejudgment interest.
Martinez v. Friede
, 2003-NMCA-081, 133 N.M. 834, 70 P.3d 1273,
rev'd on other grounds
, 2004-NMSC-006, 135 N.M. 171, 86 P.3d 596.
Purpose of prejudgment interest.
— Prejudgment interest serves two purposes, promoting early settlements and compensating persons. Interest is awarded to make the tort victim whole, and has no bearing on the question of punishing the tortfeasor.
Morga v. FedEx Ground Package Sys.,
2018-NMCA-039
, aff'd on other grounds by
2022-NMSC-013
.
The district court did not abuse its discretion in awarding prejudgment interest.
- In a wrongful death, personal injury, and loss of consortium case, where plaintiff's claims arose from a catastrophic automobile accident which caused the death of his wife and daughter and seriously injured his son, and where the jury returned a verdict for more than $165 million in compensatory damages, the district court did not abuse its discretion in awarding prejudgment interest where the district court concluded that defendants' sole settlement offer was unreasonable and that defendants lacked an appreciation or concern about the potential results of a trial.
Morga v. FedEx Ground Package Sys.,
2018-NMCA-039,
aff'd on other grounds by
2022-NMSC-013.
Damages need not be fixed or ascertainable.
— Subsection B is not limited by whether damages are fixed or ascertainable. Because the language in Subsection B is general, the legislature must have intended that, to foster timely settlements, a discretionary award of prejudgment interest is allowed in all cases.
Lucero v. Aladdin Beauty Colls., Inc.
, 1994-NMSC-022, 117 N.M. 269, 871 P.2d 365.
Higher interest rate allowable when debtor notified by written instrument.
— Allowance of 18% on a judgment until the debt is paid is proper only where there is "a written instrument," of which the debtor possesses a copy, having a different rate of interest than the 15% permitted by this section.
N.M. Tire & Battery Co. v. Ole Tires, Inc.
, 1984-NMSC-063, 101 N.M. 357, 683 P.2d 39.
Higher rate by agreement of parties.
— Where the open account credit agreement between the supplier of materials and a subcontractor on a municipal construction project provided for interest at 18% per year, prejudgment interest was awardable as a sum justly due under 13-4-19 NMSA 1978 at the rate of 18% per year against the surety on the payment bond for the project.
State ex rel. Solsbury Hill, LLC v. Liberty Mut. Ins. Co.
, 2012-NMCA-032, 273 P.3d 1, cert. granted, 2012-NMCERT-003.
Award of prejudgment interest within court's discretion.
— The award of prejudgment interest is a question of law solely within the sound discretion of the court.
Navajo Tribe v. Bank of N.M.
, 700 F.2d 1285 (10th Cir. 1983).
This section provides authority for an award of prejudgment interest at the discretion of the trial court.
State Farm Mut. Auto. Ins. Co. v. Barker
, 2004-NMCA-105, 136 N.M. 211, 96 P.3d 336.
The trial court has discretion as to prejudgment interest under this section;
thus, where the district court necessarily exercised such discretion in making its award, the appellate court would not disturb the award absent a showing of abuse of discretion.
Kennedy v. Dexter Consol. Schs.
, 1998-NMCA-051, 124 N.M. 764, 955 P.2d 693,
rev'd on other grounds
, 2000-NMSC-025, 129 N.M. 436, 10 P.3d 115.
Prejudgment interest awarded under 56-8-4 B NMSA 1978 is not damages that must be determined by the jury and the legislature could properly entrust such determinations to the trial court.
Southard v. Fox
, 1992-NMCA-045, 113 N.M. 774, 833 P.2d 251.
Review of award.
— An award of prejudgment interest is reviewed under an abuse of discretion standard.
State Farm Fire & Cas. Co. v. Farmers Alliance Mut. Ins. Co.
, 2004-NMCA-101, 136 N.M. 259, 96 P.3d 1179.
Denial of prejudgment interest was not an abuse of discretion.
— Where a fire destroyed plaintiff's hydroponic tomato facility; the day before the fire, defendant shut off electricity to the facility for nonpayment; defendant failed to give plaintiff the customary fifteen-day notice to pay the overdue bill before defendant suspended service; plaintiff's pumps were powered by electricity and without power, firefighters could not access well water to suppress the fire; plaintiff recovered contract and tort damages against defendant; the district court refused to award prejudgment interest; and the case involved difficult, complex legal issues concerning causation, comparative fault and estimation of lost profits; and the parties had genuine differences of opinion on the strength of plaintiff's case and failed to settle, the district court did not abuse its discretion in denying prejudgment interest.
Sunnyland Farms, Inc. v. Central N.M. Elec. Coop., Inc.
, 2013-NMSC-017, 301 P.3d 387,
aff'g
2011-NMCA-049, 149 N.M. 746, 255 P.3d 324.
Findings for denial of interest not required.
— When an award of prejudgment interest is in the trial court's discretion and not a matter of right under 56-8-3 NMSA 1978, the court does not need to make specific factual findings; the reasons for denying interest need only be ascertainable from the record and not contrary to logic; in addition, the two factors listed in this section are not exclusive and the court should take into account all relevant equitable considerations.
Gonzales v. Surgidev Corp.
, 1995-NMSC-036, 120 N.M. 133, 899 P.2d 576.
No interest for seller causing contract's nonperformance.
— A seller is not entitled to interest on the unpaid portion of the purchase price when the seller causes nonperformance of a contract.
Smith v. McKee
, 1993-NMSC-046, 116 N.M. 34, 859 P.2d 1061.
Interest on interest not authorized.
— Absent either a contract or statutory provision authorizing interest on interest prior to judgment, such may not be recovered.
Southern Union Exploration Co. v. Wynn Exploration Co.
, 1981-NMCA-006, 95 N.M. 594, 624 P.2d 536, cert. denied, 95 N.M. 593, 624 P.2d 535, and cert. denied, 455 U.S. 920, 102 S. Ct. 1276, 71 L. Ed. 2d 461 (1982).
Monthly compounding incorrect.
— The trial court incorrectly computed a prejudgment interest award from a calculation incorporating monthly compounding. The result was an award of interest in excess of the statutory rate.
Consolidated Oil & Gas, Inc. v. Southern Union Co.
, 1987-NMSC-055, 106 N.M. 719, 749 P.2d 1098, cert. denied, 484 U.S. 1063, 108 S. Ct. 1021, 98 L. Ed. 2d 986 (1988).
Prejudgment interest rate set when action becomes pending.
— The rate of prejudgment interest to be granted is that rate in effect when an action becomes pending.
Grynberg v. Roberts
, 1985-NMSC-040, 102 N.M. 560, 698 P.2d 430.
When contract silent on interest, prejudgment interest allowable.
— Where a contract does not specifically preclude interest, an award of prejudgment interest under this section is within the sound discretion of the trial court.
City of Farmington v. Amoco Gas Co.
, 777 F.2d 554 (10th Cir. 1985).
Not legally required in negligent misrepresentation action.
— The court was not required as a matter of law to award prejudgment interest in an action for negligent misrepresentation, even though the damages were allegedly readily ascertainable. Prejudgment interest should be awarded as a matter of right only when the defendant has breached a contract to pay a definite sum of money.
Charter Servs., Inc. v. Principal Mut. Life Ins. Co.
, 1994-NMCA-007, 117 N.M. 82, 868 P.2d 1307.
Prejudgment interest upheld where discretion not abused.
— Since it is within the discretion of a court to award prejudgment interest when the amount of damages in question is ascertainable, if no abuse of that discretion is shown, an award of prejudgment interest will be upheld.
United Nuclear Corp. v. Allendale Mut. Ins. Co.
, 1985-NMSC-090, 103 N.M. 480, 709 P.2d 649.
Denial of prejudgment interest.
— Where a fire, that was negligently caused by defendant, destroyed plaintiff's household goods and personal effects in a mobile home that plaintiff rented from defendant; both sides aggressively litigated the case and engaged in extensive motions practice; defendant did not offer to settle until nine months after plaintiff filed suit; defendant contested liability for two and one half years before changing its position and stipulating to liability; and defendant made a number of offers, each of which met or exceeded the jury award, the district court did not abuse its discretion in denying plaintiff's request for pre-judgment interest.
Behrens v. Gateway Court, L.L.C.
, 2013-NMCA-097, cert. granted, 2013-NMCERT-009.
Where worker was awarded damages for bad faith and wrongful termination under the Workers' Compensation Act and the employer did not cause any unreasonable delay in the workers' compensation proceedings or make any unreasonable settlement offers prior to trial, the trial court did not abuse its discretion in denying the worker's request for prejudgment interest.
Martinez v. Pojoaque Gaming, Inc.
, 2011-NMCA-103, 150 N.M. 629, 264 P.3d 725, cert. denied, 2011-NMCERT-009, 269 P.3d 903.
Since the plaintiffs did not request prejudgment interest until after entry of the final judgment, and, in addition, the defendant was not responsible for a delay between the jury verdict and entry of judgment and had made settlement offers which were not unreasonable as a matter of law, the trial court did not abuse its discretion in denying the plaintiffs' motion for prejudgment interest.
Gonzales v. Surgidev Corp.
, 1995-NMSC-036, 120 N.M. 133, 899 P.2d 576.
When initiation of action delayed, no interest.
— The court's decision denying the plaintiff's prejudgment interest did not constitute an abuse of discretion, given the "great lapse of time" since the initiation of the action.
Charter Servs., Inc. v. Principal Mut. Life Ins. Co.
, 1994-NMCA-007, 117 N.M. 82, 868 P.2d 1307.
Prejudgment interest not considered insurance "claim".
— Prejudgment interest is not included within the definition of "covered claims" in 59A-43-4C NMSA 1978 so as to be limited or excluded by the Property and Casualty Insurance Guaranty Law liability cap of $100,000 per occurrence on individual "covered claims." Also, no specific authority within the Guaranty Law is necessary to award prejudgment interest. The trial court has that authority under either 56-8-3 or 56-8-4B NMSA 1978.
Aztec Well Servicing Co. v. Property & Cas. Ins. Guar. Ass'n
, 1993-NMSC-023, 115 N.M. 475, 853 P.2d 726.
Award of prejudgment interest was inappropriate in workmen's (workers') compensation
case where, at the time the complaint was filed, neither this section nor the Workmen's (Workers') Compensation Act, Chapter 52, Article 1 NMSA 1978, allowed for such an award.
Lopez v. Smith's Mgmt. Corp.
, 1986-NMCA-054, 106 N.M. 416, 744 P.2d 544, cert. quashed, 106 N.M. 405, 744 P.2d 180 (1987).
Interest appropriate where proceedings delayed.
— Trial court was within its discretion to assess prejudgment interest against husband, where he rejected wife's offers of settlement, and delayed proceedings on the grounds that he was going to call numerous witnesses whom he did not call.
Trego v. Scott
, 1998-NMCA-080, 125 N.M. 323, 961 P.2d 168, cert. denied, 125 N.M. 322, 961 P.2d 167 (1998).
Defendant entitled to prejudgment interest.
— In a negligence action, where it was determined that defendant had not been the source of unreasonable delay and there were difficult legal issues to be decided which would probably preclude settlement and which were worthy of full briefing and argument, it was not an abuse of discretion to refuse to award prejudgment interest.
Abeita v. Northern Rio Arriba Elec. Coop.
, 1997-NMCA-097, 124 N.M. 97, 946 P.2d 1108.
Exemption for state in workers' compensation action.
— Subsection D contains an express exemption for the state from awards of prejudgment interest in favor of an injured worker in a workers' compensation action.
Montney v. State ex rel. State Hwy. Dep't
, 1989-NMCA-002, 108 N.M. 326, 772 P.2d 360, cert. denied, 108 N.M. 197, 769 P.2d 731.
Award allowed under Occupational Disease Disability Law.
— Subsection B does not apply to decisions made pursuant to the Occupational Disease Disability Law. However, such interest is allowed under Workers' Compensation Division Rules, WCD 89-4(V)(A)(3) (now 11.4.4.13D(3)), promulgated under 52-5-4A NMSA 1978 (authority of director to adopt rules and regulations).
Bryant v. Lear Siegler Mgmt. Servs. Corp.
, 1993-NMCA-052, 115 N.M. 502, 853 P.2d 753.
Nonpecuniary losses.
— This section permits the trial court to award prejudgment interest on judgments for tort actions, including those amounts for nonpecuniary and unliquidated losses.
Southard v. Fox
, 1992-NMCA-045, 113 N.M. 774, 833 P.2d 251.
Punitive damage award was not subject to prejudgment interest.
Weidler v. Big J Enters., Inc.
, 1998-NMCA-021, 124 N.M. 591, 953 P.2d 1089.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
45 Am. Jur. 2d Interest and Usury §§ 59 to 62, 73, 74, 87 to 110.
Correction of clerical error as to interest in judgment, 10 A.L.R. 526, 67 A.L.R. 828, 126 A.L.R. 956, 14 A.L.R.2d 224.
Court's power to add interest to verdict returned by jury, 72 A.L.R. 1150.
Law of the forum as governing right to and rate of interest on judgments, 78 A.L.R. 1063.
Interest on damages for period before judgment for detention of property, 96 A.L.R. 18, 36 A.L.R.2d 337.
Interest as element of damages recoverable for destruction of, or injury to, trees or shrubbery, 161 A.L.R. 549, 69 A.L.R.2d 1335.
Commercial vehicle, interest as element of damages in action for destruction of or injury to, 169 A.L.R. 1080.
Interest on recovery for period before judgment in action for money loss caused by duress, 171 A.L.R. 816.
Interest on amount recovered by owner from holder of invalid tax title on account of rents and profits for use and occupation, 173 A.L.R. 1179.
Retrospective application and effect of statutory provision for interest or changed rate of interest, 4 A.L.R.2d 932, 40 A.L.R.4th 147, 41 A.L.R.4th 694.
Interest as element of damages recoverable in action for breach of contract for sale of commodity, 4 A.L.R.2d 1388.
Rate of interest after maturity on obligation which fixes rate of interest expressly until maturity, 16 A.L.R.2d 902.
Rights of one entitled to contribution to recover interest, 27 A.L.R.2d 1268.
Right to interest on unpaid alimony, 33 A.L.R.2d 1455.
Rate of interest for damages for period before judgment for injury to, or detention, loss or destruction of, property, 36 A.L.R.2d 337.
Treatment of interest on judgment or award in determining attorney's contingent fee, 82 A.L.R.2d 953.
Prejudgment interest on wrongful death damages, 96 A.L.R.2d 1104.
Right to interest, pending appeal, of judgment creditor appealing unsuccessfully on grounds of inadequacy, 15 A.L.R.3d 411, 11 A.L.R.4th 1099.
Allowance of prejudgment interest on builder's recovery in action for breach of construction contract, 60 A.L.R.3d 487.
Insured's right to recover from insurer prejudgment interest on amount of fire loss, 5 A.L.R.4th 126.
Running of interest on judgment where both parties appeal, 11 A.L.R.4th 1099.
Validity and construction of state statute or rule allowing or changing rate of prejudgment interest in tort actions, 40 A.L.R.4th 147.
Retrospective application and effect of state statute or rule allowing interest or changing rate of interest on judgments or verdicts, 41 A.L.R.4th 694.
Prejudgment interest awards in divorce cases, 62 A.L.R.4th 156.
Right to prejudgment interest on punitive or multiple damages awards, 9 A.L.R.5th 63.
Liability of insurer for prejudgment interest in excess of policy limits for covered loss, 23 A.L.R.5th 75.
47 C.J.S. Interest and Usury; Consumer Credit §§ 4, 21, 41 to 69.