Opinion ID: 1226636
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Heading: Principles for Awarding Interest on Money Judgments

Text: The consideration of this issue requires reference to the principles of Alaska law on awarding interest to judgment creditors. When a cause of action arises, the injured party becomes immediately entitled to be made whole, and the amount later adjudicated as damages becomes due. State v. Phillips, 470 P.2d 266, 274 (Alaska 1970). Therefore, [a]ll damages ... should carry interest from the time the cause of action accrues. [3] Id. This is because Alaska law recognizes the economic fact that money awarded for any reason is worth less the later it is received. Id. at 273 (footnote omitted). The allowance of prejudgment interest in Phillips could have been read narrowly so as to apply only when the state is the defendant. [4] However, it later became clear that the principle that judgment creditors are entitled to the time value of the compensation for their injuries would be recognized by this court in all civil cases. Beech Aircraft Corp. v. Harvey, 558 P.2d 879, 888 n. 30 (Alaska 1976); Nordin Constr. Co. v. City of Nome, 489 P.2d 455, 474 (Alaska 1971); Fairbanks Builders, Inc. v. Morton DeLima, Inc., 483 P.2d 194, 195 (Alaska 1971). In Phillips we acknowledged the argument that since the plaintiff actually suffers the loss of use of money rightfully his between accrual of his claim and judgment, the deprivation of interest is a consequential injury. 470 P.2d at 273 n. 27. This thought was explicitly recognized in Davis v. Chism, 513 P.2d 475, 480-81 (Alaska 1973), where we held that prejudgment interest is compensation and not a cost of litigation.