Opinion ID: 2262399
Heading Depth: 1
Heading Rank: 4

Heading: Accrual of Interest on Judgment After Posting Supersedeas Bond

Text: [¶ 9] SKA secured a monetary judgment against Mr. Dorr and, pursuant to Wyo. Stat. Ann. § 1-16-102(a) (LexisNexis 2009), interest accrued on that judgment: (a) Except as provided in subsections (b) and (c) of this section, all decrees and judgments for the payment of money shall bear interest at ten percent (10%) per year from the date of rendition until paid. Id. [¶ 10] Mr. Dorr posted a supersedeas bond to prevent SKA from executing on the judgment while the case was on appeal. W.R.A.P. 4.02 governs supersedeas bonds and provides in pertinent part: (a) Whenever an appellant so entitled desires a stay on appeal, appellant may present to the trial court a supersedeas bond in such amount as shall be fixed by the trial court and with surety or sureties to be approved by the court or by the clerk of court. The bond shall be conditioned for the satisfaction of the judgment in full together with costs, interest, and damages for delay, if for any reason the appeal is not perfected or is dismissed, or if the judgment is affirmed, and to satisfy in full such modification of the judgment and such costs, interest, and damages as the appellate court may adjudge and award. (b) When the judgment is for the recovery of money not otherwise secured, the amount of the bond shall be fixed at such sum as will cover the whole amount of the judgment remaining and unsatisfied, costs on appeal, and interest, unless the court, after notice and hearing and for good cause shown, fixes a different amount or orders security other than the bond. [¶ 11] Mr. Dorr claims that when he posted the bond, interest stopped accruing on the judgment and release of the bond to SKA satisfied the judgment. Resolution of this issue requires us to interpret the above-referenced statute and court rule. We interpret statutory provisions by employing the following standards: The paramount consideration is to determine the legislature's intent, which must be ascertained initially and primarily from the words used in the statute. We look first to the plain and ordinary meaning of the words to determine if the statute is ambiguous. A statute is clear and unambiguous if its wording is such that reasonable persons are able to agree on its meaning with consistency and predictability. Conversely, a statute is ambiguous if it is found to be vague or uncertain and subject to varying interpretations. If we determine that a statute is clear and unambiguous, we give effect to the plain language of the statute. Kennedy Oil v. Dep't of Revenue, 2008 WY 154, ¶ 10, 205 P.3d 999, 1003 (Wyo.2008). Morris v. CMS Oil and Gas Co., 2010 WY 37, ¶ 26, 227 P.3d 325, 333 (Wyo.2010). Court rules are construed by applying the same principles. MM v. State of Wyoming, Dep't of Family Servs., 2009 WY 28, ¶ 11, 202 P.3d 409, 413 (Wyo.2009). See also, Cotton v. McCulloh, 2005 WY 159, ¶ 14, 125 P.3d 252, 257-58 (Wyo.2005). All of these determinations involve issues of law and are reviewed de novo on appeal. Morris, ¶ 26, 227 P.3d at 333; Nickle v. Bd. of County Comm'rs of Platte County, 2007 WY 115, ¶ 16, 162 P.3d 1208, 1213 (Wyo.2007) (interpreting court rule). [¶ 12] Section 1-16-102(a) states that interest accrues from the date of rendition until paid and Rule 4.02(a) indicates that the bond should be conditioned to account for interest and damages for delay. In V-1 Oil Co. v. People, 799 P.2d 1199, 1203 (Wyo.1990), we confirmed that posting a supersedeas bond does not constitute accomplished payment until an unqualified right to the proceeds accrues after the judgment is affirmed on appeal. If the legislature intended for the filing of a supersedeas bond to stop interest from accruing on the judgment, it would have specified that and not simply stated that interest accrues until the judgment is paid. Section 1-16-102(a). Because payment of the judgment is not achieved by posting a supersedeas bond, the district court properly determined that, under the clear language of § 1-16-102 and Rule 4.02, interest continued to accrue on SKA's judgment after Mr. Dorr posted the bond. [¶ 13] This interpretation is consistent with the stated purpose of post-judgment interest which is to `compensate the successful plaintiff for being deprived of compensation for the loss from the time between the ascertainment of the damages and the payment by the defendant.' Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835-36, 110 S.Ct. 1570, 1589, 108 L.Ed.2d 842 (1990), quoting Poleto v. Consol. Rail Corp., 826 F.2d 1270, 1280 (3d Cir.1987). See also, Rufer v. Abbott Laboratories, 154 Wash.2d 530, 114 P.3d 1182, 1193 (2005) (en banc) (stating that interest is not imposed as a punishment on the judgment debtor but rather a form of compensation for the judgment creditor). If interest did not continue to accrue after a supersedeas bond was posted, the judgment creditor would not be fully compensated and the purpose of the statutory interest requirement would not be served. [¶ 14] Mr. Dorr maintains that, if a judgment creditor is allowed to collect interest during the appeal, he will have an incentive to prolong the proceedings by filing additional appeals in order to collect more interest. This argument is unconvincing. First, there is nothing to prevent a judgment debtor from paying the full amount of the judgment during the appeal which would stop the interest from accruing. In fact, we ruled in Parker v. Artery, 889 P.2d 520, 527-28 (Wyo.1995), that payment of the entire judgment amount into the court after the plaintiff refused to accept payment pending appeal absolved the defendant from further accrual of interest. See also, Crawford v. Amadio, 932 P.2d 1288, 1295 (Wyo.1997); Bartlett v. Heersche, 209 Kan. 369, 496 P.2d 1314, 1317-18 (1972) (holding that when the full amount of a judgment is paid into court, interest is no longer recoverable from the judgment debtor). Unlike when the judgment amount is paid into the court, a supersedeas bond is not available to the judgment creditor and, consequently, interest continues to accrue on the judgment principal to compensate him for the loss of use of the money. [¶ 15] Mr. Dorr also asserts that the language of Rule 4.02 indicates that payment of the bond should be considered full satisfaction of the judgment, even if it does not fully cover the accrued interest. He correctly points out that Rule 4.02 states that the amount of a supersedeas bond shall be sufficient to cover the judgment, costs, interest, and other damages as a result of the delay. See also, 5 Am.Jur.2d Appellate Review § 402 (2010) (the amount of a supersedeas bond typically takes into account the amount needed to satisfy the judgment appealed from, as well as costs, interest, and any damages which might be caused by the stay pending appeal). [¶ 16] However, the fact that the bond should be set in an amount sufficient to cover all aspects of the judgment creditor's damages does not mean that the judgment creditor will be limited to recovery of the amount of the bond. The purpose of a supersedeas bond is to protect nonappealing parties by maintaining the status quo during the appeal and insuring that those who have obtained the judgment under review will not be prejudiced by a stay of the judgment pending final determination of the appeal. Id. In order to prevent the judgment creditor from being prejudiced, he must be allowed to collect the full amount of accrued interest even if the bond amount is insufficient. In fact, we recognized that additional interest may be due SKA in our remand in Dorr IV when we directed the Clerk of the District Court to pay over to SKA all funds held on behalf of [Dorr] in partial satisfaction of the judgment. Dorr IV, 4 P.3d at 876 (emphasis added). [¶ 17] Mr. Dorr argues that Wyoming Bancorporation v. Bonham, 563 P.2d 1382 (Wyo.1977) ( Bonham II ) applies here and dictates that the judgment creditor's recovery is limited to the amount of the bond. In Wyoming Bancorporation v. Bonham, 527 P.2d 432 (Wyo.1974) ( Bonham I ), we affirmed the state examiner's decision to issue a bank charter to Wyoming Security Bank of Sheridan. During the course of that appeal, Wyoming Bancorporation asked for and received a stay on the issuance of the charter pending appeal. The stay prevented Security Bank from moving forward with the opening of its bank during the appeals process. The district court heard evidence on the damages Security Bank would suffer as a result of the delay in issuance of the charter and ordered Wyoming Bancorporation to file a $100,000 bond. Bonham II, 563 P.2d at 1384. Security Bank did not seek modification of the bond amount during the pendency of the appeal. Id. at 1390-91. [¶ 18] After prevailing on appeal, Security Bank filed a motion under the rules of civil procedure pertaining to injunctions and bonds [2] requesting that the district court award it $89,269 in addition to the $100,000 bond to cover its actual damages resulting from the delay in the issuance of the charter. Id. at 1388-89. After a hearing, the district court ordered Wyoming Bancorporation to pay Security Bank $162,488.96. Id. at 1384. [¶ 19] On appeal in Bonham II, Wyoming Bancorporation argued that Security Bank's recovery was limited to the bond amount. We agreed, reasoning that the bond obligation was contractual and, because Security Bank had not objected to the amount of the bond, had not requested modification of the bond amount during the appeal period, and elected to proceed under the abbreviated procedures for recovering under the bond instead of bringing an independent action for damages, its recovery was limited to the amount of the bond. Id. at 1388-91. [¶ 20] Mr. Dorr asserts that the principles employed in Bonham II and injunction bond cases from other jurisdictions [3] should be applied to post-judgment supersedeas bonds and payment of a supersedeas bond to the judgment creditor should be considered full satisfaction of the judgment. The district court aptly noted that the two circumstances are different. In the case of an injunction bond, the amount of damages the enjoined party will suffer as a result of the appeal is not clear. As in Bonham II, the court may hold an evidentiary hearing when setting the bond to attempt to estimate the damages which may arise from the injunction. Nevertheless, the amount due to the enjoined party if the injunction is eventually found to have been issued in error is still subject to differences of opinion. We recognized in Bonham II that, in the event the bond does not cover the injured party's damages, he can institute an independent action for tort damages. Id. at 1389-90. [¶ 21] In contrast, a judgment creditor is entitled, pursuant to § 1-16-102(a), to a specific amount of interest, costs, etc. In setting the supersedeas bond, the court and parties are aware of the amount of the judgment and have only to estimate the interest and costs which will accrue during the appeal. Unlike in the case of an injunction bond, the total amount owed the judgment creditor is liquidated, subject to easy calculation after the appellate ruling is rendered, and a separate tort action is not available to the judgment creditor to collect the delay damages. Moreover, to hold, as Mr. Dorr advocates, that the filing of a supersedeas bond prevents a judgment creditor from collecting interest during the pendency of the appeal would undermine the purpose of post-judgment interest and would deprive the judgment creditor of the value of the money he is owed. The district court properly concluded, as a matter of law, that filing a supersedeas bond does not toll the accrual of interest on a judgment and the judgment creditor's recovery is not limited to the bond amount.