Opinion ID: 2510478
Heading Depth: 1
Heading Rank: 5

Heading: Prejudgment interest on contractual payments after suit and before trial

Text: We now turn to whether State Drywall should have been awarded prejudgment interest on the two payments Rhodes made to State Drywall after State Drywall filed its complaint but before trial. Rhodes contends that the district court correctly denied prejudgment interest on those payments because they are not technically part of the judgment. However, Rhodes relies solely on NRS 17.130(2). Because we have concluded that NRS 99.040(1)and not NRS 17.130(2)governs the prejudgment interest calculation in this case, the issue must be reviewed under that statute's terms. When a statute's language is plain and unambiguous, and its meaning is clear and unmistakable, we may not look beyond the statute for a different meaning or construction. [10] The plain language of NRS 99.040(1) states that for cases falling under its purview, interest must be allowed upon all money from the time it becomes due. The statute in no way limits prejudgment interest only to amounts contained within the court's ultimate judgment. Rather, prejudgment interest should be calculated for all money owed under the contract from the date it becomes due until the date it is paid or an offer of judgment is made. Our prior case law and Nevada public policy also support this conclusion. In First Interstate Bank v. Green, we concluded that prejudgment interest under NRS 99.040(1) should be added to money paid before trial where the defendant deliberately deprives the plaintiff of the money's use for some specified time. [11] In that case, a suit to recover an overpayment was filed, but before trial, the plaintiff consented to the defendant's offer of judgment for the amount overpaid, plus interest thereon and attorney fees. [12] The defendant paid the amount due but did not pay interest or attorney fees. [13] Although the district court had determined that interest was not recoverable, [14] we reversed, holding that [w]here a party is entitled to repayment on a certain date, and payment is not made, interest is recoverable from the date due. [15] The rationale for our holding in First Interstate Bank was that the defendant deprived the plaintiff of money to which the plaintiff was entitled. Therefore, in order to compensate the plaintiff adequately for the time it was deprived of its funds, the defendant was required to pay interest. In addition to the adequate compensation rationale expressed in First Interstate Bank, our conclusion that prejudgment interest is owed on contract amounts paid during litigation also serves an important public policy goal. If interest were not recoverable on amounts owed to the plaintiff and paid by the defendant after the complaint was filed but before trial, then a defendant worried about losing at trial could pay some or all of the money before trial and avoid paying interest on that amount. Such a result is fundamentally unfair. A defendant in a collection case could then avoid interest, yet still delay payment until just before trial. Permitting this tactic would circumvent the mandates of our prejudgment interest statutes. Here, the special master deducted Rhodes's December 1999 and October 2002 payments from the total amount due, at the latest, on January 21, 1999, to arrive at the $106,502.01 total amount owed. Implicit in the special master's calculation is the idea that the two prior payments would have been included in the final judgment had Rhodes not paid those amounts before trial. Therefore, State Drywall is entitled to prejudgment interest, which should be added to the final judgment in this matter, calculated on: (1) $26,500 from January 21, 1999, to December 1, 1999; and (2) $81,250.02 from January 21, 1999, to October 15, 2002.