Opinion ID: 2519630
Heading Depth: 3
Heading Rank: 1

Heading: Denial of Pre-Judgment Interest

Text: The Commissioner claims that the circuit erred in denying pre-judgment interest on the basis that it is not provided for by Article 15. Specifically, the circuit court ruled, The [Commissioner's] requests for [pre-judgment] interest and attorneys' fees are DENIED on the ground that Article 15 of the Insurance Code does not provide for the allowance of pre-judgment interest or for attorneys' fees. Pre-judgment interest is designed to allow the court to designate the commencement date of interest in order to correct injustice when a judgment is delayed for a long period of time for any reason, including litigation delays. Schmidt v. Board of Directors of Ass'n of Apartment Owners of Marco Polo Apartments, 73 Haw. 526, 534, 836 P.2d 479, 483 (1992) (quoting Leibert v. Finance Factors, Ltd., 71 Haw. 285, 293, 788 P.2d 833-838 (1990)) (internal quotation marks omitted). [T]he purpose of prejudgment interest is to discourage `recalcitrance and unwarranted delays in cases which should be more speedily resolved.' Calleon v. Miyagi, 76 Hawai`i 310, 322, 876 P.2d 1278, 1290 (1994) (citation omitted). However, it is clearly within the discretion of the circuit court to deny prejudgment interest where appropriate, for example, where: (1) the defendant's conduct did not cause any delay in the proceedings, see Amfac, Inc. [v. Waikiki Beachcomber Investment Co. ], 74 Haw. [85], 137, 839 P.2d [10,] 36 [(1992)]; (2) the plaintiff himself has caused or contributed to the delay in bringing the action to trial, see Schmidt v. Board of Directors of the Ass'n of Apartment Owners of the Marco Polo Apartments, 73 Haw. 526, 534-35, 836 P.2d 479, 484 (1992); or (3) an extraordinary damage award has already adequately compensated the plaintiff, see Leibert v. Finance Factors, Ltd., 71 Haw. 285, 293, 788 P.2d 833, 838 (holding that it was an abuse of discretion for the circuit court to award prejudgment interest to a treble damages award), reconsideration denied, 71 Haw. 664, 833 P.2d 899 (1990). Roxas v. Marcos, 89 Hawai`i 91, 153, 969 P.2d 1209, 1271 (1998), reconsideration denied, 89 Hawai`i 91, 969 P.2d 1209 (1999). The statutory basis for pre-judgment interest is HRS § 636-16 (1993), which provides that, [i]n awarding interest in civil cases, the judge is authorized to designate the commencement date to conform with the circumstances of each case, provided that the earliest commencement date in cases arising in tort, may be the date when the injury first occurred and in cases arising by breach of contract, it may be the date when the breach first occurred. Under HRS § 636-16, courts in all civil cases have the discretion to award pre-judgment interest. Sussel, 74 Haw. at 618, 851 P.2d at 320 (citing McKeague v. Talbert, 3 Haw.App. 646, 658 P.2d 898 (1983)). As the Commissioner's suit against VEBAH was a civil case, nothing in the statute prohibits awarding pre-judgment interest. Accordingly, the circuit court based its ruling on an erroneous view of the law and, therefore, abused its discretion by failing to consider the Commissioner's request for pre-judgment interest. Accordingly, we vacate the circuit court's denial of pre-judgment interest and remand this case for a determination whether an award of pre-judgment interest is appropriate. We express no opinion regarding the propriety of such an award.