Opinion ID: 2711586
Heading Depth: 1
Heading Rank: 4

Heading: post-decision, prejudgment interest

Text: ON FEE AWARD Strawn asks this court to award him post-decision, prejudgment interest on the appellate attorney fee awards— interest that begins accruing when the fees are granted, not when the appellate judgment issues. Thus, Strawn seeks interest on the Court of Appeals’ attorney fee award beginning January 27, 2010, the date that the Court of Appeals issued its opinion granting those fees. Similarly, Strawn asks that interest on this court’s attorney fee awards begin accruing on the date that this court awards them, not on the date that the appellate judgment issues. Generally, interest cannot be awarded in the absence of either a contract or a statutory provision authorizing it. See Dowling v. Albany Planing Mill, 238 Or 425, 431, 395 P2d 143 (1964) (“[I]n the absence of an agreement to pay interest, interest can be recovered only in those circumstances authorized by statute.” (citation omitted)); Sorenson v. Oregon Power Co., 47 Or 24, 34, 82 P 10 (1905) (“In the absence of a contract to pay interest, the right to exact it must be found in the statute[.]” (citation omitted)). As statutory authority for prejudgment interest here, Strawn invokes ORS 82.010(1)(a), which authorizes an award of interest on “[a]ll moneys after they become due.”26 26 Specifically, ORS 82.010(1) provides: “The rate of interest for the following transactions, if the parties have not otherwise agreed to a rate of interest, is nine percent per annum and is payable on: “(a) All moneys after they become due; but open accounts bear interest from the date of the last item thereof. “(b) Money received to the use of another and retained beyond a reasonable time without the owner’s express or implied consent. 240 Strawn v. Farmers Ins. Co. As we observed in McDowell Welding & Pipefitting v. US Gypsum Co., 345 Or 272, 288-89, 193 P3d 9 (2008), most claims for prejudgment interest arise under ORS 82.010 when the person from whom prejudgment interest is sought has breached a duty to pay money (subsection (1)(a)) or has wrongfully failed to return money to the person to whom it belongs (subsection (1)(b)). Litigation may be necessary to determine that the duty to pay or return money has been breached. But if a plaintiff prevails in such an action, the breach does not occur at the time of judgment. It is, instead, a past event. For litigation of that kind, the question whether the court may order prejudgment interest usually reduces to whether the amount due was readily ascertainable. See, e.g., Public Market Co. v. Portland, 171 Or 522, 625, 138 P2d 916 (1943) (prejudgment interest can be awarded on unliquidated damages for contract breach when “the demand is of such a nature that its exact pecuniary amount was either ascertained, or ascertainable by simple computation, or by reference to generally recognized standards such as market price” (quoting Theodore Sedgwick, 1 A Treatise on the Measure of Damages § 300, 571 (9th ed 1912) (emphasis in original)). An appellate court’s award of attorney fees is not in that posture, however. To be sure, when an appellate court by order or decision awards attorney fees to a party, the amount becomes ascertainable. It does not, however, immediately become due. Rather, by statute, an appellate court attorney fee award is not effective until the appellate judgment issues. See ORS 19.450(2) (“appellate judgment is effective when a copy of the appellate judgment is entered in the [appellate] court’s register and mailed by the State Court Administrator to the court from which the appeal was taken”). In effect, entry of judgment creates a monetary obligation that does not exist until that event occurs. An appellate court decision or order awarding the fees declares that such fees should be paid and sets their amount, but the legal obligation to pay arises only once the court’s appellate judgment is entered in the register. “(c) Money due or to become due where there is a contract to pay interest and no rate specified.” Cite as 353 Or 210 (2013) 241 That result is consistent with the justification for the general rule, reflected in ORS 82.010(1)(a), that interest accrues on money only after it “becomes due.” Once due, the debtor has the use of money to which the debtor is not entitled, while the delay in payment deprives the creditor of that use. See 1 Dobbs Law of Remedies § 3.6(1) at 333 (“Interest is the sum paid or payable for the use or detention of money. Just as rent is money paid for the use of property, interest is money paid for the use of other money.”). To agree with Strawn that Farmers owes prejudgment interest on the appellate court attorney fee awards, we would have to conclude that Farmers was immediately obligated to pay Strawn’s attorney fees once the Court of Appeals set the amount of fees, even though the entire review process remained outstanding. Farmers did not, however, default on any legal obligation to pay Strawn’s attorney fees when it failed to do so on January 27, 2010. As to the fee-shifting award, then, we deny Strawn’s request to award postdecision, prejudgment interest on the attorney fee awards. As to the common fund recovery, we need not decide whether an award of prejudgment interest is authorized and appropriate for an attorney fee to be paid from such a fund.27 We have already compared the amount of courtordered fees Strawn’s attorneys have been awarded to date and compared that amount to what they would recover pursuant to a reasonable percent-of-fund approach. Based on that comparison, we declined to enhance the lodestar fee that we determined to be reasonable to compensate for the risk of nonpayment and delayed payment of the fees. For those same reasons, even assuming (without deciding) 27 Our authority to make that award would arise, not by statute, but under the common-fund doctrine. Again, the common-fund doctrine is an equitable doctrine that is intended to prevent unjust enrichment. See Strunk, 341 Or at 181 (the equitable common-fund doctrine “is primarily ‘employed to realize the broadly defined purpose of recapturing unjust enrichment.’ ” (citation omitted)). We have held that, in equity, courts have discretion to award interest on an amount due and owing when, “under all the circumstances of the case, [it] seems equitable and just.” Emrich v. Emery et al, 216 Or 88, 99, 335 P2d 604, on reh’g, 337 P2d 972 (1959) (alteration in original; citations and internal quotation marks omitted). When the issue is attorney fees for work undertaken on a contingency basis, and prejudgment interest is sought as a way to compensate for delay in the payment of attorney fees, it is difficult to see why that concern is not subsumed within the analysis of whether to apply a multiplier or other enhancement for the contingency nature of the fee. 242 Strawn v. Farmers Ins. Co. that we may, pursuant to our equitable authority, assess prejudgment interest against the common fund class recovery, we decline to do so in this case.