Opinion ID: 1369316
Heading Depth: 1
Heading Rank: 2

Heading: in the past, interest rates have been based on whether the right to receive interest on the judgment is a vested right or merely a ministerial mathematical mode of procedure.

Text: There are four leading cases in Oklahoma which have discussed the problem of the rate of interest to be impressed on a judgment after the statute setting the rate has been amended: Timmons v. Royal Globe Ins. Co., 713 P.2d 589, 594 (Okl. 1985); Fields v. Volkswagen of America, Inc., 555 P.2d 48, 63 (Okl. 1976); Benson v. Blair, 515 P.2d 1363, 1365 (Okl. 1973); and Sunray DX Oil Co. v. Great Lakes Carbon Corp., 476 P.2d 329, 346 (Okl. 1970). These cases reached inconsistent results perhaps because Timmons and Sunray were cases arising from contract while Fields and Benson each involved actions for personal injuries. In Timmons v. Royal Globe Insurance Co., 713 P.2d 589 (Okl. 1985), damages were awarded against the insurer for its bad faith refusal to pay a valid claim. One of the issues on appeal was whether the prejudgment and postjudgment interest rates in effect at the time of judgment could be varied by subsequent legislative amendments. The Timmons court held that the rate, until the date of payment, was the one in effect at the time of judgment because Royal Globe was vested with a constitutionally-shielded accrued or vested right in the adjudicated obligation. [4] Timmons cited Sunray DX Oil Co. v. Great Lakes Carbon Corp., 476 P.2d 329, 346 (Okl. 1970), for the proposition that subsequent changes in the statutory rate should not vary the rate of interest to be paid on a judgment. On rehearing in Sunray, the question was raised concerning whether the postjudgment interest rate on a judgment for breach of a written contract was changed by a subsequent amendment to the ratesetting statute. The Sunray court held that the interest rate on the pre-existing judgment should not be changed, because to do so would apply the statute retrospectively. The court applied the rule that a statute should operate prospectively in the absence of clear legislative intent or contrary implication. [5] Although this is an established rule of statutory construction, an exception for statutes involving modes of procedure is also recognized. An Oklahoma example is Benson v. Blair, 515 P.2d 1363, 1365 (Okl. 1973). Benson also focused on the application of 12 O.S. 1971 § 727, although prejudgment rather than postjudgment interest was involved. There the court found that the legislative intent expressed or implied by the language used required retrospective application of the interest rate. [6] Benson adopted the rationale expressed in the leading postjudgment interest case, Foster v. Quigley, 179 A.2d 494-95 (R.I. 1962), [7] that interest on a judgment in an action for damages to person or property is not of the substance of the right of action but attaches to the judgment after the substantive right has been adjudicated. The Benson court noted the similarity to the imposition of costs, and held that the legislative directive to the trial court to add interest to the judgment was merely a ministerial mode of procedure. [8] The Timmons court, after finding there was a vested right in the amount of interest impressed upon an adjudicated obligation, distinguished Benson on the grounds that it failed to address the question of whether the challenged interest was a vested or accrued right. Nonetheless, Benson held that the addition of interest was a procedural duty of the trial court not a substantive right.