Opinion ID: 2510478
Heading Depth: 1
Heading Rank: 4

Heading: Determination of the proper statute to calculate prejudgment interest

Text: Before reaching State Drywall's arguments, however, we must first determine which of two statutes governs the calculation of prejudgment interest. State Drywall contends that the general prejudgment interest provision for contractual matters, NRS 99.040(1), is controlling because this is a contract dispute and Rhodes owed its payment to State Drywall on a particular date. Conversely, Rhodes argues that NRS 17.130(2), the general statute for calculating interest [w]hen no rate of interest is provided by contract or otherwise by law, governs because NRS 99.040(2)(b) states that NRS 99.040(1) does not apply to money owed [b]y a contractor to his subcontractor pursuant to NRS 624.630. Rhodes contends that because it was a general contractor and State Drywall was a subcontractor, subsection (2)(b) precludes the calculation of prejudgment interest under NRS 99.040(1). The district court calculated interest under NRS 99.040(1), as is evident from the court's conclusion of law that prejudgment interest should be calculated from January 21, 1999, the date that Rhodes's final payment was due to State Drywall. [5] We review a district court's statutory interpretations de novo. [6] The district court properly concluded that NRS 99.040(1) governs prejudgment interest in this case. NRS 99.040(2)(b) provides that the statute is inapplicable to a contractor's payments owed under NRS 624.630. NRS 624.630 governs the timing of payments made to subcontractors out of funds received by a contractor from an owner. Thus, NRS 99.040(2)(b) only limits the application of that statute when a contractor's failure to pay its subcontractor is the direct result of not having received the necessary funds from the owner. Here, Rhodes's reason for withholding payment to State Drywall was not the result of an owner's failure to pay Rhodes. Consequently, NRS 624.630 is inapplicable to this case, and calculating prejudgment interest under NRS 99.040(1) is not limited by NRS 99.040(2)(b). NRS 99.040(1) addresses how to calculate interest when no express contractual provision fixes an interest rate. [7] Under that statute, interest is calculated upon all money from the time it becomes due. [8] Thus, in a breach of contract action, NRS 99.040(1) applies to the calculation of interest when the amount is due on an ascertainable date. [9] Because this case involves a contractual amount for which an ascertainable due date exists, NRS 99.040, not NRS 17.130(2), applies.