Opinion ID: 1176472
Heading Depth: 2
Heading Rank: 3

Heading: Was Schade Entitled to Prejudgment Interest on the Unpaid Severance Benefits and, if so, From What Date?

Text: The trial court awarded Schade prejudgment interest from March 6, 1983, the date on which he completed work on the Congress. The court of appeals disagreed. Because it enforced Diethrich's promise on the basis of promissory estoppel, it emphasized the discretionary nature of its judgment and held that Schade's claim was unliquidated until that judgment was entered. We disagree. In Arizona a party's entitlement to prejudgment interest generally depends on whether his or her claim is liquidated. Arizona Title Insurance & Trust Co. v. O'Malley Lumber Co., 14 Ariz. App. 486, 496, 484 P.2d 639, 649 (1971). `A claim is liquidated if the evidence furnishes data which, if believed, makes it possible to compute the amount with exactness, without reliance upon opinion or discretion.' Id., quoting C. McCORMICK, DAMAGES § 54 (1935). If a claim is found to be liquidated, then prejudgment interest is a matter of right. Fleming v. Pima County, 141 Ariz. 149, 155, 685 P.2d 1301, 1307 (1984). Schade maintains that his claim was liquidated when the Committee issued its recommendation on December 14, 1982. Diethrich argues that the Committee's action could have had no such result because it involved the exercise of opinion and discretion. A similar dispute confronted this court in La Paz County v. Yuma County, 153 Ariz. 162, 735 P.2d 772 (1987). In that case, La Paz County claimed prejudgment interest on assets awarded to it from Yuma County following the former's creation out of the latter, like Eve from Adam's rib. Genesis 2:21-22 (King James). Before the dispute arose, Yuma had filed an accounting showing it owed La Paz $433,427.55, an amount based on the property valuations of Yuma's own appraiser. Once the dispute arose, however, Yuma retained another appraiser and offered his lower appraisals as the basis for dividing the county's assets. The special master appointed by this court determined that La Paz was entitled to the $433,427.55. In adopting the special master's report to this effect, we wrote: We find that the sum of $433,427.55 Yuma conceded was due La Paz is a liquidated amount. The values for the property were determined by Yuma's own appraiser, and were adopted by the special master.... [T]his sum was computed with exactness, and therefore prejudgment interest on this amount is appropriate. La Paz County, 153 Ariz. at 168, 735 P.2d at 778. We similarly find, in the case at bar, that the value of a fair and equitable severance package was determined by Diethrich's own appraiser, the Foundation-appointed Committee. The recommendation of this group of businessmen, expert in executive compensation plans, involved no greater degree of opinion or discretion than did the valuations of Yuma County's appraiser. Just as the appraiser's valuations were adopted by the special master in La Paz, the Committee's recommendation was adopted by the trial court below. Following La Paz, we hold that Schade's claim was liquidated on December 14, 1982, when the Committee issued its recommendation. However, Schade did not complete the work he had contracted to perform until March 6, 1983. It was not until then that the sum promised became due. Therefore, we agree with the trial court that prejudgment interest did not accrue until that date. Of course, prejudgment interest is calculated only on the actual severance pay, not on the penalty amount.