Opinion ID: 2328811
Heading Depth: 1
Heading Rank: 3

Heading: Interest for Late Payment of Post-judgment Interest

Text: Appellant's final contention is that the trial court erred in refusing to award interest on the agreed-upon minimum amount of post-judgment interest during the pendency of the cross-motions for summary judgment on their competing contentions on the applicable interest rate. Appellant's motion urged the court to award post-judgment interest at the statutory variable rate, whereas appellee's motion argued for a fixed three percent. Over the relevant three-year period, the statutory rate was higher than three percent. See note 2, supra. Thus, the judge's ruling on the cross-motions would determine whether a higher amount of interest would be due under the statute than the three percent interest that, the parties agreed, would be the minimum due. The delay for which appellant seeks compensation is measured from March 23, 2007, when appellees paid the judgment (namely the principal amount of $3,364,156.07 on which interest due was to be ascertained) to December 12, 2007, when the trial court granted summary judgment to appellees and ordered payment of interest on the judgment at the reduced rate of three percent. [10] The trial court did not address appellant's claim for this additional component of interest. The crux of appellant's argument is that, once the parties agreed in March 2007 (after this court's decision in the first appeal determined that the Maryland cap applied to non-economic damages) on the judgment amount owed, see note 1, supra, the post-judgment interest was calculable within a range, even if the exact rate of interest was subject to the trial court's decision on the parties' competing cross-motions for summary judgment. Because the parties agreed that, at a minimum, interest at three percent would be due, that amount was capable of precise calculation, and became a liquidated debt. Thus, according to appellant, her request for interest to compensate for the delay in payment of the undisputed post-judgment interest is similar to one for pre-judgment interest for a liquidated debt pursuant to D.C.Code § 15-108. Appellees do not dispute they had agreed that a minimum amount of post-judgment interest at three percent was owing as of March 2007. They counter appellant's claim with a legal argument, that there is no authority to award interest on interest. [11] D.C.Code § 15-108 (2001) provides: In an action in . . . the Superior Court of the District of Columbia to recover a liquidated debt on which interest is payable by contract or by law or usage the judgment for the plaintiff shall include interest on the principal debt from the time when it was due and payable, at the rate fixed by the contract, if any, until paid. We have noted that, as a remedial statute, section 15-108 should be generously construed so that the wronged party can be made whole. Riggs Nat'l Bank v. District of Columbia, 581 A.2d 1229, 1255 (D.C.1990). Nonetheless, we do not think that, even under a generous reading, D.C.Code § 15-108 mandates payment of pre-judgment interest in this case because the statutory conditions are not met. This was not an action to recover a liquidated debt but a suit to establish liability in tort and ascertain compensatory damages. Moreover, the interest appellant claims is not on principal, but on post-judgment interest. Thus, the interest claimed by appellant does not come within the terms of D.C.Code § 15-108. Another statutory provision, D.C.Code § 15-109, authorizes the award of pre-judgment interest in contract actions where the debt is not liquidated, if necessary to fully compensate the plaintiff. Pierce Assoc., 527 A.2d at 310 (noting that trial court has broad discretion to award pre-judgment interest under § 15-109); id. at 311 (noting that courts are gradually giv[ing] up the traditional dichotomy between liquidated and unliquidated debts, as evidenced by the creation of statutes and judicial exceptions, such as that in D.C.Code § 15-109, which give the court discretion to allow prejudgment interest even when the debt amount is unliquidated). D.C.Code § 15-109 (2001) provides: In an action to recover damages for breach of contract the judgment shall allow interest on the amount for which it is rendered from the date of the judgment only. This section does not preclude the jury, or the court, if the trial be by the court, from including interest as an element in the damages awarded, if necessary to fully compensate the plaintiff. In an action to recover damages for a wrong the judgment for the plaintiff shall bear interest. We have interpreted section 15-109 as mandating the award of post-judgment interest in tort actions. See Duggan v. Keto, 554 A.2d 1126, 1140 (D.C.1989). Although the statute does not provide for pre-judgment interest in tort actions, as it does in contract cases, we have concluded that such interest is neither authorized nor forbidden by statute. Id. The question remains, therefore, whether the trial court has equitable discretioneven if not compelled by section 15-108 or expressly authorized by section 15-109to award interest to compensate an injured party for unwarranted delay in payment of an undisputed amount of post-judgment interest. We recognize the force of appellant's argument that, just as in 2004, appellees elected not to pay any part of the jury's verdict, and did not satisfy the judgment until three years later, see note 1, supra, so too in March 2007, appellees elected not to pay any post-judgment interestnot even the minimum amount that was undisputably due at the fixed three percent rate appellees claimed applied rather than the higher fluctuating rate that appellant claimed (and we now hold) the statute mandated. If the delay in payment of the underlying judgment entitles her to post-judgment interest to compensate for the loss of the time-value of the money she was owed, appellant asks, why shouldn't she be similarly compensated for the time during which appellees withheld payment of the agreed-upon minimum amount of interest? Appellant poses an interesting question. We have defined a liquidated debt as one which at the time it arose . . . was an easily ascertainable sum certain. Schwartz v. Swartz, 723 A.2d 841, 843 (D.C.1998) (quoting Pierce Assocs., 527 A.2d at 311). Thus, even though appellant's claim does not come within the mandatory purview of section 15-108, interest at the minimum rate agreed upon is a liquidated debt because it was readily ascertainable in March 2007. Unless there is a prohibition, similar considerations should apply in determining whether interest is appropriate in order to preserve the value of the undisputed amount of interest owed to the plaintiff. Though D.C.Code § 15-108 and, to a lesser extent, D.C.Code § 15-109, may appear to occupy the space in connection with pre-judgment interest, as noted, we have concluded that they do not prohibit the award of pre-judgment interest in tort actions. [12] See Duggan, 554 A.2d at 1140. Significantly, the obligation to pay pre-judgment interest arises under the common law and may be payable even in the absence of a statutory authorization to that effect. See Riggs Nat'l Bank, 581 A.2d at 1254 ([N]o explicit statutory authority is required for an award of pre-judgment interest. . . .); see also In re Huber, 708 A.2d 259, 260 (D.C.1998) (The obligation to pay interest is intertwined with the obligation to make restitution.). Whether to award pre-judgment interest in such circumstances is a determination that lies in the equitable discretion of the trial court. See Riggs Nat'l Bank, 581 A.2d at 1253 ([I]n equity, interest is allowed as a means of compensating a creditor for the loss of the use of his [or her] money.) (quoting United States v. United Drill & Tool Corp., 87 U.S.App.D.C. 236, 237, 183 F.2d 998, 999 (1950)); see also Owen v. Bd. of Directors of Wash. City Orphan Asylum, 888 A.2d 255, 270 (D.C. 2005) (The equitable powers of the trial court to effect remedies are wide and absent an abuse, they should not be circumscribed. (citing Lemon v. Kurtzman, 411 U.S. 192, 200, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973))). We, therefore, clarify that in a tort action a trial court has the equitable power to award pre-judgment interest on that part of an interest award whose validity is undisputed. [13] Because the trial court did not consider appellant's request for this additional component of interest, we remand the case for the court's consideration and exercise of equitable discretion.