Opinion ID: 1333278
Heading Depth: 1
Heading Rank: 5

Heading: The 10% Interest

Text: In addition, however, Chafin contends that the circuit court committed error in awarding Lewis prejudgment interest upon her share of the equitable distribution. As stated above, the family law master and the circuit court awarded Lewis prejudgment interest at the rate of 10% accruing from the date the divorce action was filed. [16] As W.Va. Code, 56-6-31 [1981], concerning prejudgment interest, provides in part: [I]f the judgment or decree, or any part thereof, is for special damages, as defined below, or for liquidated damages, the amount of such special or liquidated damages shall bear interest from the date the right to bring the same shall have accrued, as determined by the court. Special damages includes lost wages and income, medical expenses, damages to tangible personal property, and similar out-of-pocket expenditures, as determined by the court. Chafin relies, inter alia, upon Hamstead v. Hamstead, 184 W.Va. 272, 400 S.E.2d 280 (1990), wherein this Court held that a wife, who was entitled to a distribution of ½ the net worth of her former husband's legal corporation and ½ the value of his pension plan following divorce, was not entitled to prejudgment interest upon those amounts. Specifically, this Court, in Hamstead, observed: In the present case, the issues involve the distribution of property, and not the award of special or liquidated damages as contemplated by W.Va.Code, 56-6-31. 184 W.Va. at 277, 400 S.E.2d at 285. Thus, according to Mr. Chafin, inasmuch as the equitable distribution herein did not consist of special or liquidated assets, prejudgment interest should not have been permitted. Chafin further argues that marital property in this action subject to equitable distribution included various non-liquid items, such as the parties' motor vehicles. Lewis, on the other hand, points out: (1) that the overwhelming measure of the marital property consisted of investment accounts owned by the parties and (2) that those accounts had an actual growth rate in excess of 11% as of October 1993 when the action was filed. See, n. 13, supra. Thus, the non-liquid assets notwithstanding, Lewis asserts that, in fact, she should have been awarded the actual interest earned upon the marital property (in excess of 11%), rather than the 10% interest designated by the family law master and circuit court. In that regard, Lewis suggests that the actual interest earned was itself marital property and not in the nature of prejudgment interest. In any event, Lewis contends that the award of 10% interest by the family law master and the circuit court did not constitute an abuse of discretion. Upon review, this Court observes that the Hamstead case is not dispositive of the interest issue. Here, as the opinion of the circuit court indicated, Lewis was denied the use of the investment accounts from October 1993 to the date of judgment. The Hamstead case, however, did not involve an issue concerning investment accounts and did not involve an issue concerning the lack of use of funds. In the action before this Court, although the marital property did include non-liquid assets, the property consisted substantially of accounts earning interest at a rate which was subject to reasonable calculation, i.e., in excess of 11%. In Hardman Trucking, Inc. v. Poling Trucking Co., 176 W.Va. 575, 346 S.E.2d 551 (1986), this Court noted that losses capable of being rendered certain by reasonable calculation may be subject to prejudgment interest. 176 W.Va. at 580, 346 S.E.2d at 556. Moreover, as this Court held in syllabus point 1 of Buckhannon-Upshur County Airport Authority v. R & R Coal Contracting, Inc., 186 W.Va. 583, 413 S.E.2d 404 (1991): Prejudgment interest, according to West Virginia Code, 56-6-31 (1981) and the decisions of this Court interpreting that statute, is not a cost, but is a form of compensatory damages intended to make an injured plaintiff whole as far as loss of use of funds is concerned. Accordingly, in view of Lewis' lack of access to the investment accounts during the pendency of this action before the circuit court, this Court is of the opinion that the award of prejudgment interest at the rate of 10% accruing from the date the divorce action was filed constituted a fair resolution of the interest controversy and was within the discretion of the family law master and the circuit court.