Opinion ID: 1259099
Heading Depth: 2
Heading Rank: 2

Heading: Damages and Prejudgment Interest

Text: Because MTL's remaining contentions all involve the award of damages to Calleon premised on the trial court's judgment in his favor on the implied contract, defamation, and the IIED/NIED claims, and because the judgment on all three of these claims must now be vacated and remanded, MTL's remaining contentions are all necessarily moot. However, because these issues will undoubtedly surface on remand, we shall discuss them here. MTL contends that the jury should not have been able to consider compensatory damages for Calleon based on any wages he might have earned after December 1991, when MTL lost the contract for the City's bus system. MTL argues that because Calleon was a senior executive, he necessarily would not have been re-hired by the new company taking over the bus contract. However, as Calleon correctly points out, the jury was presented evidence that the new company could have decided to retain certain senior executives because of their experience, or for other reasons. For example, there was testimony that other former MTL managerial personnel had, in fact, been retained by OTS. It was therefore proper for the jury to determine whether, and for how long, Calleon might have remained employed even after MTL had lost the contract and to calculate a damage award based on that determination. However, because of our holding on the liability aspect of Calleon's claim, the instant compensatory damage award must be vacated and remanded. MTL argues that the punitive damages awarded to Calleon by the jury were not supported by the requisite clear and convincing evidence and that remittitur was necessary. Given the disposition of this case, MTL's punitive damages argument is simply moot, and the instant punitive damages award must be vacated and remanded. Finally, MTL claims that the trial court erroneously awarded prejudgment interest to Calleon, citing our decision in Leibert v. Finance Factors, Ltd., 71 Haw. 285, 788 P.2d 833, reconsideration denied, 71 Haw. 664, 833 P.2d 899 (1990), for the proposition that where punitive damages have been awarded in an amount in excess of the applicable amount of prejudgment interest, such interest should not be awarded. MTL notes that a total of $150,000.00 in punitive damages was awarded in this case, as opposed to $135,000.00 in prejudgment interest. However, as Calleon correctly points out, Leibert specifically concerned a treble damages award pursuant to HRS chapter 480 in a lawsuit involving unfair and deceptive business practices and not a punitive damages award. See Stand.Comm.Rep. No. 661, in 1969 House Journal, at 882-885 (purpose of this bill is to encourage those who have been victimized by persons engaging in unfair or deceptive acts or practices to prosecute their claims by establishing a minimum recovery of $1,000 from persons violation Chapter 480 of the [HRS]); see also Conf.Comm.Rep. No. 19, in 1961 Senate Journal, at 1054 (Chapter 480 is not intended to be punitive in nature). Leibert thus cannot stand for the general proposition claimed by MTL. Moreover, the purpose of prejudgment interest is to discourage recalcitrance and unwarranted delays in cases which should be more speedily resolved. Conf.Comm.Rep. No. 67, 1979 Sen. Journal at 984. Awarding prejudgment interest on compensatory damages... ensures that just compensation to the tort victim is not eroded by the dilatory tactics of the tortfeasor, and comprises a sanction wholly separate from any punitive damages awarded. Digital & Analog Design Corp. v. North Supply Company, 63 Ohio St.3d 657, 660-61, 590 N.E.2d 737, 741 (1992) (emphasis added). Thus, we cannot accept MTL's contention that prejudgment interest should not be awarded simply because the amount of punitive damages in this cases exceeded the applicable amount of prejudgment interest. Although a litigant is not entitled to prejudgment interest on the punitive damages portion of a judgment, id. at 660, 590 N.E.2d at 740 (emphasis in original), he or she is entitled to be compensated for the delay in receiving compensation for the injuries suffered, even if that plaintiff has been awarded punitive damages in an amount that otherwise would be sufficient to compensate him [or her] for such delay. Id. Consequently, the trial court was within its discretion when it awarded prejudgment interest to Calleon. In any event, the issue is moot, and the instant award of prejudgment interest must also be vacated and remanded.