Opinion ID: 1308968
Heading Depth: 1
Heading Rank: 5

Heading: preverdict interest

Text: [26] The insurers assert they are entitled to preverdict interest running from the date of the fire until the date of the verdict. We disagree. The question of whether a party is entitled to preverdict interest is a question of law, which we review without deference to the circuit court. See Ball v. District No. 4, Area Board, 117 Wis. 2d 529, 537, 345 N.W.2d 389 (1984). [27, 28] Ever since Laycock v. Parker, 103 Wis. 161, 79 N.W. 327 (1899), we have followed the common-law rule that a party can recover preverdict interest only on damages that are either liquidated or determinable by a reasonably certain standard of measurement.... Laycock, 103 Wis. at 186. If the damages are liquidated or determinable, a defendant can avoid the accrual of interest by tendering the amount of the damages to the plaintiff. Johnson v. Pearson Agri-Systems, Inc., 119 Wis. 2d 766, 771, 350 N.W.2d 127 (1984). As we explained in Wyandotte Chemicals Corp. v. Royal Electric Mfg., 66 Wis. 2d 577, 225 N.W.2d 648 (1975), the cases that have followed Laycock have staked out a middle ground between two competing policies. Wyandotte, 66 Wis. 2d at 583. One policy views interest as a penalty for wrongfully withholding damages legally due. Id. at 582. The other views interest as an element of compensation. Id. This second policy is premised on the concept of the time value of money theory, id., which is based on the fact that a dollar received today is worth more than a dollar received sometime in the future. Johnson, 119 Wis. 2d at 774. [29] A line of our cases has established the principle that courts do not grant preverdict interest when the existence of multiple defendants prevents any single defendant from knowing prior to trial the precise amount of his ultimate liability. Id. at 781; Wyandotte, 66 Wis. 2d at 585; City of Franklin v. Badger Ford Truck Sales, 58 Wis. 2d 641, 657, 207 N.W.2d 866 (1973). This principle applies even if the plaintiff's damages are stipulated, Wyandotte, 66 Wis. 2d at 580, or easily determined or determinable. Johnson, 119 Wis. 2d at 781 (fixed medical expenses). The rationale for this rule is that it is impossible for any single defendant in a multiple-defendants case to determine the amount to tender to the plaintiff so that interest will not accrue. Wyandotte, 66 Wis. 2d at 587. [30] In addition to the common-law rules regarding preverdict interest, the legislature has provided conditions under which plaintiffs may receive preverdict interest on both liquidated and nonliquidated damages. Section 807.01(4), Stats. This statute is designed to encourage settlements. See Johnson, 119 Wis. 2d at 773. In Johnson, we declined to modify the common-law rules which govern preverdict interest, in part because doing so might thwart the legislature's efforts to encourage settlements. In Nicholson v. Home Ins. Cos., 137 Wis. 2d 581, 608-09, 405 N.W.2d 327 (1987), we again declined to modify our common-law rules and decided to leave the subject to the legislature. [31] The insurers never served a written offer of settlement on the defendants pursuant to sec. 807.01(3), Stats., and thus have no statutory right to preverdict interest. [32] What of the insurers' common-law right to preverdict interest? We agree with Pinky and WEPCO that the City of Franklin, Wyandotte, and Johnson multiple-defendants line of cases preclude preverdict interest under the common law. Even assuming that all of plaintiffs' damages were liquidated or determinable, the existence of multiple defendants precludes an award of preverdict interest. Johnson, 119 Wis. 2d at 781; Wyandotte, 66 Wis. 2d at 584-87; City of Franklin, 58 Wis. 2d at 657. [33] The insurers ask us to distinguish this case from City of Franklin because in this case, unlike City of Franklin, the jury apportioned fault between the defendants. We decline this invitation and apply the rule that a plaintiff suing multiple defendants cannot recover preverdict interest because damages are not determinable until fault is apportioned. See Wyandotte, 66 Wis. 2d at 585. The insurers also attack the rationale of this line of cases, saying it is in irreconcilable conflict with Wisconsin law. The cases the insurers cite Nelson v. Travelers Ins. Co., 102 Wis.2d 159, 306 N.W.2d 71 (1981); Moldenhauer v. Faschingbauer, 33 Wis. 2d 617, 148 N.W.2d 112 (1967); and Fehrman v. Smirl, 25 Wis. 2d 645, 131 N.W.2d 314 (1964)dealt with post verdict, not pre verdict, interest and thus have limited relevance to the case at hand. Nelson, it is true, criticized the rationale of the multiple-defendants line of cases. Nelson, 102 Wis. 2d at 166-70. But Nelson dealt with postverdict interest under sec. 814.04(4), Stats., and its discussion of cases dealing with preverdict interest was unnecessary. Despite Nelson's criticisms, we reaffirmed City of Franklin and Wyandotte in Johnson, a case we decided after Nelson. The insurers also question whether there is a meaningful difference between allocating negligence between a plaintiff and a single defendant and allocating negligence between a plaintiff and multiple defendants. We addressed this argument in Wyandotte: While a reasonable argument is made by the plaintiffs that Franklin provides an inequitable rule in that it differentiates between a case where the plaintiff sues multiple parties rather than just a single party, on the other hand, it must be recognized that the plaintiff exercises initial control over the number of parties against whom suit is brought, thus no great inequity results. Moreover, it is only by acceptance of the view that injured parties' rights to full compensation are of paramount consideration that the result argued for by the plaintiffs can be justified. However, this court has never subscribed to that belief. Wyandotte, 66 Wis. 2d at 586-87. This discussion in Wyandotte also answers the insurers' argument that the multiple-defendants line of cases should be rejected because they conflict with the policy of making the plaintiff whole and the doctrine of joint and several liability. The rights of both the plaintiff and the defendant deserve consideration when determining whether to award preverdict interest. Id. at 582-83. The insurers make an extended argument based on the time value of money theory. However, we have considered such arguments previously and have previously decided that the subject is best left to the legislature. Nicholson, 137 Wis. 2d at 609; Johnson, 119 Wis. 2d at 773-74, 781-82. We do so again today.