Opinion ID: 886711
Heading Depth: 1
Heading Rank: 5

Heading: issues

Text: ¶ 27 Did the District Court err when it awarded prejudgment interest to AMC? ¶ 28 AMC presented a claim separate and apart from Kelman's claim for liquidated damages. It sought actual damages in the sum of $208,222.00, representing the amount by which Higbees underpaid their 40 percent profit share obligation under the Agreement. However, the jury returned a verdict on this claim for only $82,000.00. The District Court ruled AMC was entitled to prejudgment interest on this sum, pursuant to § 27-1-211, MCA, which reads: Every person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day is entitled also to recover interest thereon from that day except during such time as the debtor is prevented by law or by the act of the creditor from paying the debt. ¶ 29 Higbees argue the amount of recovery was not capable of being made certain prior to the jury's verdict. Higbees cite to the jury's verdict of $82,000.00, pointing out this figure was different than the amount of damages advanced by either party, and substantially less than AMC's claim of $208,222.00. Higbees rely on the proposition that prejudgment interest cannot be given when the awarded damages are less than what the party requested. ¶ 30 AMC, citing to the mathematical formula provided by the Agreement, contends the damages were capable of being made certain. Relying on Price Bldg. Serv. v. Holms (1985), 214 Mont. 456, 693 P.2d 553, AMC contends Higbees' partially successful attempt to offset damages does not defeat a claim for prejudgment interest. ¶ 31 If a claim is certain or can be ascertained by calculation, § 27-1-211, MCA, permits an award of prejudgment interest. In order for prejudgment interest to be awarded pursuant to this statute, three criteria must be met: 1) an underlying monetary obligation exists; 2) the amount of recovery is capable of being made certain by calculation; and 3) the right to recover the obligation vests on a particular day. Morning Star Enters. v. R.H. Grover, Inc. (1991), 247 Mont. 105, 116, 805 P.2d 553, 559. ¶ 32 This Court has declined to allow an award of prejudgment interest in cases where the judgment awarded is less than the claimant sought in damages and was not the result of a readily calculable offset. See Jim's Excavating Serv. v. HKM Assocs. (1994), 265 Mont. 494, 878 P.2d 248 (prejudgment interest not allowed where plaintiff's expert testified at trial damages were $510,899.00 and jury awarded $381,000.00); Northern Mont. Hosp. v. Knight (1991), 248 Mont. 310, 811 P.2d 1276 (prejudgment interest not allowed on counterclaim where jury verdict did not coincide with any amount set out as damages by defendant); Maddux v. Bunch (1990), 241 Mont. 61, 784 P.2d 936 (prejudgment interest not allowed where plaintiff claimed damages of $35,614.08 and jury awarded $23,378.95); McPherson v. Schlemmer (1988), 230 Mont. 81, 749 P.2d 51 (uncertainty of amount of damages shown by difference between what Plaintiff claimed in complaint and at trial, and what jury awarded precluded award of prejudgment interest); Northwestern Natl. Bank v. Weaver-Maxwell, Inc. (1986), 224 Mont. 33, 729 P.2d 1258 (prejudgment interest not allowed where defendants sought $2,000,000.00 in counterclaim, asked for $3,000,000.00 at trial, and jury awarded $300,000.00); Swenson v. Buffalo Bldg. Co. (1981), 194 Mont. 141, 635 P.2d 978 (prejudgment interest not allowed where plaintiff claimed damages of $43,917.15 and jury awarded $25,000.00). This rule applies in breach of contract actions as well. See Carriger v. Ballenger (1981), 192 Mont. 479, 628 P.2d 1106 (amount of damages upon breach of contract action not clearly ascertainable until determined by trial court; therefore, erroneous award of prejudgment interest required remand). ¶ 33 In contrast, if the amount owed is reduced by a valid set-off or counter-claim, which can be determined by calculation, interest is then normally allowed on the balance due after deductions of the offsetting amounts and payments that may already have been made. Price, 214 at 468, 693 P.2d at 559. ¶ 34 Here, we are unable to determine from the record how the jury reached its award of $82,000.00, and the parties are likewise unable to explain it. The difference between the amount AMC requested and the actual award is $126,222.00, an amount which does not correlate to any offset advanced by Higbees. ¶ 35 Since the jury awarded less than AMC claimed it was due, and there is no explanation for the offset the jury applied, the damages were not capable of being made certain by calculation, and thus, the District Court erred when it awarded prejudgment interest to AMC.