Opinion ID: 465256
Heading Depth: 2
Heading Rank: 3

Heading: Interest Award

Text: 20 Merrill Lynch contends that the Panel's award of interest on the compensatory damages--to be calculated at the broker call rate, and to run from August 1, 1982 until the first day of the month in which the damages are paid--was improper. 21 Inasmuch as Merrill Lynch's liability is founded on a violation of California law, we should look to that law first in assessing the Panel's award of interest. Section 3287(a) of the California Civil Code (West 1970) provides for the recovery of interest where damages [are] certain, or capable of being made certain by calculation, and the right to recover ... is vested ... upon a particular day. Here, French's right to recover was vested no later than the date upon which he filed his complaint. Further, his actual damages were capable of being made certain by calculation. By Merrill Lynch's own admission, they equaled the sum he had to pay to cover his short sale of the Heublein options. The fact that liability is contested does not make the sum of damages uncertain within the meaning of the statute. See Bott v. American Hydrocarbon Corp., 458 F.2d 229, 232 (5th Cir.1972). Thus, Merrill Lynch is wrong in arguing that California law limits the availability of interest to circumstances not present here. 7 22 Merrill Lynch further contends that the broker-call rate of interest, ranging from 10% to 12.5%, far exceeds the applicable prejudgment legal rate of 7% per annum. See Cal. Const. Art. 15 Sec. 1 (providing for cap of 7%), cited in Davis & Cox v. Summa Corp., 751 F.2d 1507, 1522 (9th Cir.1985). While Merrill Lynch makes no mention of a limitation on post-judgment interest, California law provides for a maximum of 10% per annum. Accordingly, if the Panel meant to provide for pre- and postjudgment interest qua interest, it should have limited the rates of recovery to 7% and 10% respectively. 23 It is possible, though, that the Panel's award of interest at the broker-call rate was meant as an award of consequential damages--i.e., as a substitute for lost profits apart from, and in addition to, the consequential damages award so labeled. Because an award of consequential damages was within the power of the Panel (see infra Sec. IV), we affirm the confirmation of the whole interest award. 8