Opinion ID: 1603599
Heading Depth: 1
Heading Rank: 2

Heading: prejudgment interest on loss-of-use damages.

Text: Summit Court moved for prejudgment interest on the loss-of-use damages award just after the trial to determine those damages and prior to entry of judgment. At that trial, the parties stipulated to the amounts of monthly fixed, unabatable overhead costs for real estate taxes, mortgage interest, license fees and insurance premiums during the period of restoration. The final jury award included not only these amounts but also amounts for legal and accounting fees as well as other fixed costs. NSP had challenged the propriety of the inclusion of the legal and accounting fees. Summit Court sought prejudgment interest from the time that the building was restored and those costs had become verifiable bookkeeping items. There were two issues at trial: (a) whether Summit Court would have had sufficient gross income to cover the fixed costs if the explosions had never occurred and (b) the length of time reasonably needed to restore the building. Both issues were extensively litigated. The jury found that Summit Court would have had sufficient income to cover the fixed costs and awarded $209,679 in loss-of-use damages, a figure approximately midway between Summit Court's claim for $353,928 and NSP's suggested amount of $41,237. The amount of the award was based on the number of months the jury determined that it reasonably took for restoration. A plaintiff is entitled to prejudgment interest on a final judgment where the damages claim is liquidated or, if unliquidated, where the damages were readily ascertainable by computation or reference to generally recognized standards such as market value and not where the amount of damages depended upon contingencies or upon jury discretion (as in actions for personal injury or injury to reputation). Potter v. Hartzell Propeller, Inc., 291 Minn. 513, 518, 189 N.W.2d 499, 504 (1971). [1] The question here is whether the loss-of-use damages were readily ascertainable prior to trial or whether the final amount depended on jury discretion. The issues of liability and apportionment of liability between NSP and Grudem Brothers had been determined long before the trial on the amount of loss-of-use damages. To support denial of prejudgment interest in this case, NSP relies on Northern Petrochemical Co. v. Thorsen & Thorshov, Inc., 297 Minn. 118, 211 N.W.2d 159 (1973). There, we held that interest was appropriately denied because neither the total amount of damages nor the apportionment of damages was readily ascertainable before trial. 297 Minn. at 132, 211 N.W.2d at 169. That case concerned complex breach-of-contract issues relating to delays in construction, interpretation of a liquidated-damages clause, how to measure damages, the availability of loss-of-use damages under the terms of the contract, the effect of a waiver agreement, implied waiver, defective design, negligence and apportionment of damages between the defendants. The jury exercised considerable discretion in sorting through all of those issues and arriving at a final determination. Here, the jury had to determine, based on the figures presented by both Summit Court and NSP, whether Summit Court would have had sufficient gross income to cover the fixed costs in the absence of damage to the building and how many months it reasonably took to restore the building. Neither of those issues involves so much jury discretion that Summit Court is precluded from receiving prejudgment interest on these fixed costs. The parties stipulated to the amount of the monthly fixed, unabatable costs, although NSP argued against the inclusion of the accounting and legal fees in loss-of-use damages. The fixed costs were bookkeeping figures and were clearly ascertainable prior to trial. See Polaris Industries v. Plastics, Inc., 299 N.W.2d 414, 418 (Minn.1980). The issue as to gross income was not particularly complicated. The only complicating factor in determining the number of months required for restoration was that the building was not restored to its previous use and condition but was improved and converted to another use. Thus, the actual restoration time could not be used to determine the final loss-of-use damages due to the explosions and fire. NSP and Summit Court each argued a different length of time. The jury used very little discretion to arrive at a final figure. We hold that Summit Court is entitled to the prejudgment interest it requested on the loss-of-use damages award where the damages, based on fixed, unabatable costs, were readily ascertainable prior to trial and little jury discretion was involved in arriving at the final award. We affirm as to the denial of prejudgment interest on the property damages award, and reverse as to the denial of prejudgment interest on the loss-of-use damages award. Affirmed in part; reversed in part. COYNE, J., took no part in the consideration or decision of this case.