Opinion ID: 877791
Heading Depth: 1
Heading Rank: 3

Heading: is the state exempt from paying interest for two years?

Text: Section 2-9-317, MCA, provides: No interest if judgment paid within two years. If a governmental entity pays a judgment within 2 years after the day on which the judgment is entered, no penalty or interest may be assessed against the governmental entity. Plaintiff contends that this statute violates Article II, Section 18, of the 1972 Montana Constitution, which we have previously set forth, in that it has the effect of limiting the plaintiff's recovery. In Leaseamerica v. State (1981), Mont., 625 P.2d 68, 38 St.Rep. 398, we held that the constitutional provision abolishing governmental immunity did not render invalid the statute exempting the State from paying interest upon a judgment. However, we based that decision upon the fact that the constitutional provision was intended to apply only to torts and that since the subject matter of Leaseamerica v. State was a contract, the constitutional provision had no application. We did not decide whether the State could be freed from paying interest on a tort judgment. In the past this Court has treated interest as something apart from the cause of action. In Stanford v. Coram (1903), 28 Mont. 288, 72 P. 655, the Court said: ... The judgment is itself a creation of law. It bears no interest unless granted by legislative enactment ... A party is not entitled to interest merely because he has a judgment, but solely because the legislature, in its discretion, has said he may charge interest. 28 Mont. at 292, 72 P. at 655. This Court has also stated that interest is a damage for delay in payment of the principle obligation. See State Highway Commission v. Marsh (1978), 175 Mont. 460, 575 P.2d 38. We hold that interest on a judgment is not an integral part of the cause of action itself. We find that section 2-9-317, MCA, does not offend Article II, Section 18, of the Montana Constitution. We do not here decide whether the State can be treated differently from other tort-feasors concerning the subject of damages which are part of the cause of action itself. We rather hold that interest, not being a detriment arising from the wrongful act, can be suspended by statute as was done here. The judgment of the District Court is affirmed in its entirety. HASWELL, C.J., and DALY, WEBER and SHEEHY, JJ., concur.