Opinion ID: 870353
Heading Depth: 2
Heading Rank: 2

Heading: Coupe's Request for Prejudgment Interest on Its Attorneys' Fees and Costs for Condemnation 1

Text: As to argument (2), Coupe asserts that the County never argued that [prejudgment] interest [wa]s not properly awardable under [HRS §] 101-27, never contested [Coupe's] calculation of an approximate award nor the applicable rate, and, therefore, has waived any arguments not made[.] Coupe thus contends that [t]he court should not have interposed its own objection [to awarding prejudgment interest], when [the] County made none. (Citing Wong v. Takeuchi, 88 Hawai'i 46, 53, 961 P.2d 611, 618 (1998).). Coupe also maintains that COL 33 [25] of the court's Supplemental FOFCOL on Statutory Damages is erroneous because HRS § 101-27 must include the cost of funds encumbered by a failed condemnation attempt; [t]he loss of the use of [Coupe's] money over nine years of Condemnation 1 must be a recoverable element of [HRS § ] 101-27 damages or else it prevents [Coupe] from being made truly whole (citing Lucas v. Liggert & Myers Tobacco Co., 51 Haw. 346, 348, 461 P.2d 140, 143 (1969)); the governing statute for prejudgment interest in this case is HRS § 101-27 and not the prejudgment interest statute, HRS § 636-16 (1993); [26] even if HRS § 636-16 does apply, the court wrongly rejected[] Coupe's damage claim, because nine years is by any reasonable measure a substantial delay in the proceedings and issuance of judgment (citing Ditto v. McCurdy, 86 Hawai'i 93, 114, 947 P.2d 961, 982 (App.1997)); and that [the court] wrongly placed the burden on [Coupe] to allege `undue delay by Plaintiff County' [27] (quoting COL 33 of the court's Supplemental FOFCOL on Statutory Damages). In reply to the County, Coupe contends that the court's Supplemental FOFCOL on Statutory Damages demonstrate that the County has waived any objection on the issue of encumbered funds [28] and an award will not result in a windfall because [t]he loss of use of funds is per se damage under [HRS §] 101-27, and the Coupes are entitled to be made whole.
Coupe first argues that the denial of prejudgment interest damages cannot be reconciled with FOF 37 [29] and 38 [30] and COL 7 [31] in the court's Supplemental FOFCOL on Statutory Damages, which, according to Coupe, reveal [that the] County waived [the] objection to Coupe's request for prejudgment interest. Coupe urges this court to conclude that the first sentence in Supplemental FOF 38, which states that the County has [] never argued in this [c]ourt that such interest is not properly awardable as damages under [HRS §] 101-27[,] shows that the County has waived its objection. However, Supplemental FOF 38, when read in its entirety, indicates that while the County did not argue that [prejudgment] interest [was] not properly awardable as damages under [HRS §] 101-27[,] the County did instead argue that ` any award under HRS § 101-27 should be limited to amounts paid for the improper delegation of condemnation power defense in the first case.' (Emphasis added.) (Citation omitted.) Thus, the County challenged Coupe's prejudgment interest claim inasmuch as the prejudgment interest was not an amount[] paid for the improper delegation of condemnation power defense in the first case. Consequently, the County's argument that it did object to Coupe's prejudgment interest claim is correct.
Coupe interprets HRS § 101-27 as mandating the recovery of prejudgment interest via the phrase all such damage as may have been sustained by the defendant by reason of the bringing of the proceedings. However, the plain language of HRS § 101-27 indicates that the recovery of damages under HRS § 101-27 is not mandatory, as Coupe asserts, but subject to a reasonableness requirement. Coupe II, 120 Hawai'i at 411, 208 P.3d at 724. As explained in Coupe II, the words in HRS § 101-27, includ[ing] the defendant's costs of court, a reasonable amount to cover attorney's fees paid by the defendant in connection therewith, and other reasonable expenses[]... is essentially a list of items that are to be included in the damage award. Thus, the phrase and other reasonable expenses, assumes that the previous items listed are also types of reasonable expenses[,] ... [because interpreting HRS § 101-27 as commanding the grant of] all costs actually incurred, regardless of reasonableness, renders the term other superfluous. Id. (citing Carlisle v. One (1) Boat, 119 Hawai'i 245, 255, 195 P.3d 1177, 1187 (2008)) (emphases omitted). Hence, a request for prejudgment interest under HRS § 101-27 may be granted if it is an other reasonable expense[]. See HRS § 101-27; Coupe II, 120 Hawai'i at 411, 208 P.3d at 724. However, the plain language of the provision does not clarify whether prejudgment interest is an other reasonable expense[]. Nor does the statute define the term. Therefore, this court may look to the legislative history in construing the statute. See Hawaii Providers Network, Inc. v. AIG Hawaii Ins. Co., 105 Hawai'i 362, 369, 98 P.3d 233, 240 (2004) (recognizing that [w]hen there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of expression used in a statute[,] an ambiguity [exists,] and, thus, courts may take legislative history into consideration in construing a statute) (internal quotation marks, brackets, and citations omitted). The legislative history recognized that, at times [when] condemnation proceedings are instituted but are not prosecuted to final judgment, the owners of the property involved thereby suffer[] loss for which there is no means now provided [by] which they may be compensated. H. Stand. Comm. Rep. No. 622, in 1929 House Journal, at 1400. To remedy this situation, the legislature amended the eminent domain statutes for the purpose of giv[ing] to persons whose property is sought to be condemned, a right of action to recover damages if the condemnation proceedings are dropped before final judgment is reached. Id. Generally, this court has recognized that prejudgment interest at common law is [i]nterest on claims awarded for delay in payment  which is measured from the accrual of the claim for relief to the time of rendition of the judgment[.] Rodrigues v. State, 52 Haw. 156, 168, 472 P.2d 509, 518 (1970) (emphasis added). This court has defined prejudgment interest as `an element of complete compensation[,]' Kalawaia v. AIG Hawai'i Ins. Co., 90 Hawai'i 167, 172, 977 P.2d 175, 180 (1999) (quoting W. Virginia v. United States, 479 U.S. 305, 310, 107 S.Ct. 702, 93 L.Ed.2d 639 (1987) (citation omitted)), that serves to compensate for the loss of use of money due as damages ..., thereby achieving full compensation for the injury those damages are intended to redress[,] id. (quoting W. Virginia, 479 U.S. at 310 n. 2, 107 S.Ct. 702 (citing Comment, Prejudgment Interest: Survey & Suggestion, 77 Nw. U.L.Rev. 192 (1982))) (emphasis added). Thus, it follows that prejudgment interest can be recovered as an other reasonable expense under HRS § 101-27. Our holding as to such prejudgment interest is limited to the specific circumstances of a failed condemnation contemplated by HRS § 101-27.
This court must next address whether the court erred in denying Coupe's request for prejudgment interest under the circumstances of the case. Prejudgment interest is awarded at the discretion of the court. Rodrigues, 52 Haw. at 169, 472 P.2d at 518; see Metcalf v. Voluntary Employees' Benefit Ass'n of Hawai'i, 99 Hawai'i 53, 61, 52 P.3d 823, 831 (2002) (recognizing that it is clearly within the discretion of the circuit court to deny prejudgment interest where appropriate). Accordingly, an award of prejudgment interest under HRS § 101-27 should be reviewed for abuse of discretion. Cf. Tri-S Corp. v. W. Worlds Ins. Co., 110 Hawai'i 473, 489, 135 P.3d 82, 98 (2006) (recognizing that in the context of HRS § 636-16, [a]n award of prejudgment interest is reviewed for an abuse of discretion) (citing Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 136, 839 P.2d 10, 36 (1992)). `[T]o constitute an abuse [of discretion,] it must appear that the court clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the substantial detriment of a party litigant.' Id. (quoting State v. Sacoco, 45 Haw. 288, 292, 367 P.2d 11, 13 (1961)) (brackets in original). Similar to the situation here, Coupe in Coupe II contended that it [was] entitled to [prejudgment] interest from the date of each invoice for attorneys' fees and costs as a form of damage, pursuant to HRS § 101-27 because the purpose of a damage award is to put a party in the position they [sic] would have been in had not harm occurred and that Coupe suffered damage each time it had to pay its lawyers. 120 Hawai'i at 410, 208 P.3d at 723 (brackets and internal quotation marks omitted). In Coupe II, Coupe argued that `[i]nterest from the date of harm is an element of damage and this [c]ourt is authorized to award pre-judgment interest in all civil actions' under HRS § 636-16.  Id. (footnote omitted) (emphasis added). After considering Coupe's arguments, this court denied Coupe's request for prejudgment interest. Id. at 411, 208 P.3d at 724. It was recognized that [p]re-judgment interest may be awarded under HRS § 636-16 in the court's discretion `when the issuance of judgment is greatly delayed for any reason.' Id. (quoting Tri-S Corp., 110 Hawai'i at 498, 135 P.3d at 107) (emphasis in original). However, this court denied Coupe's request for prejudgment interest on its attorneys' fees, costs, and excise tax related to Condemnation 1 claimed on appeal under both HRS §§ 101-27 and 636-16 because [Coupe] ha[d] not asserted ... any lengthy delay in the issuance of the judgment of attorneys' fees or costs[.] Id. Similarly, in the instant appeal, it appears that Coupe did not assert any lengthy delay in the issuance of the judgment of the attorneys' fees or costs at the trial level. Coupe, in its October 11, 2007 Motion, moved for statutory damages pursuant to HRS § 101-27, in the amount of $1,547,748.80 and costs in the amount of $200,226.58, plus tax and prejudgment interest, incurred in [Condemnation 1]. Coupe's only assertion with regard to prejudgment interest in its supporting memorandum stated, Prejudgment interest (10% per annum from date of each bill) on those fees, and the associated costs is [sic] proper because those fees are `damages' under [HRS] § 101-27.  (Emphasis added.) No claim was made in Coupe's October 11, 2007 Motion for statutory damages or in Coupe's supporting memorandum that there had been any undue delay in the proceedings. Accordingly, the court in the instant case properly cited to Coupe II in COL 33 of its Supplemental FOFCOL on Statutory Damages as support for its conclusion that there [wa]s no legal or factual basis for the $276,762.41 in prejudgment interest sought as damages under HRS § 101-27[.] [32] As in Coupe II, Coupe again has not asserted ... any lengthy delay in the issuance of judgment[,] 120 Hawai'i at 411, 208 P.3d at 724, and therefore, Coupe's request for prejudgment interest was properly denied. This denial of prejudgment interest under HRS § 101-27 is also consistent with this court's interpretation of HRS § 636-16. HRS § 636-16, which applies in all civil cases, vests a court with discretion to award prejudgment interest. HRS § 636-16 (stating in part that [i]n awarding interest in civil cases, the judge is authorized to designate the commencement date to conform with the circumstances of each case); Coupe II, 120 Hawai'i at 410, 208 P.3d at 723 (Pre-judgment interest may be awarded under HRS § 63-16 in the court's discretion[.]). Consistent with the general definitions of prejudgment interest stated supra, the purpose of prejudgment interest, in the context of HRS § 636-16, is to `correct injustice when a judgment is delayed for a long period of time for any reason, including litigation delays[,]' Coupe II, 120 Hawai'i at 411, 208 P.3d at 724 (quoting Tri-S Corp., 110 Hawai'i at 498, 135 P.3d at 107 (internal quotation marks and citation omitted)), and to permit more equitable results and to more speedily resolve cases[,] Wiegand v. Colbert, 68 Haw. 472, 477, 718 P.2d 1080, 1084 (1986). According to Tri-S Corp., a finding of fault by one of the parties is not necessary, and a review of an award of interest rests on three factors: (1) if fault is found on the part of the party seeking interest, denial of interest will not be considered an abuse of discretion; (2) if fault is found on the part of the party opposing interest, an award of interest will not be considered an abuse of discretion; and (3) where no fault is found on either side, the trial court may still award or deny prejudgment interest in its discretion, depending on the circumstances of the case. 110 Hawai'i at 498, 135 P.3d at 107 (emphasis added). Moreover, `[a] trial court's denial of prejudgment interest is usually affirmed' if the requesting party caused the delay or the opposing party did not cause the delay. Id. (quoting Page v. Domino's Pizza, Inc., 80 Hawai'i 204, 209, 908 P.2d 552, 557 (App. 1995) (citations omitted)) (brackets in original). However, `a trial court can award prejudgment interest for any substantial delay in the proceedings, and [] no purposeful delay on the part of the non-moving party is required. ' Id. (quoting Ditto, 86 Hawai'i at 114, 947 P.2d at 982) (emphases in original). In any event, because there is no fault found on the part of either Coupe or the County, the court had discretion to deny Coupe's prejudgment interest claim under the circumstances of the case. See id. As discussed above, the record reflects there was no argument to the court below or to this court, that there has been a delay attributable to the County's fault. Moreover, the County did not argue that there has been any delay caused by Coupe. Hence, neither party argued to the court that there was a purposeful delay on the part of any party, nor did the court find such purposeful delay. [33] Furthermore, Coupe did not assert specifically where in the span of nine years the substantial delay occurred. Given the circumstances, it cannot be said that the court clearly exceeded the bounds of reason or disregarded the rules or principles of law or practice to the substantial detriment of [Coupe.] Id. (quoting Sacoco, 45 Haw. at 292, 367 P.2d at 13). The court's denial of Coupe's request for prejudgment interest was not an abuse of discretion, and thus, the court did not err in denying Coupe's request for prejudgment interest under HRS § 101-27.