Opinion ID: 880774
Heading Depth: 1
Heading Rank: 10

Heading: 4(e Moratory Interest Versus Pre-Judgment Interest.

Text: Shenkin's testimony indicated that the Clinic had been forced to make $834,533 in higher interest payments from January, 1983 to August, 1988. He increased this amount to $976,609, by adding in the present value as of August 1, 1988 (the date of trial), of the past interest payments. The present value calculation was $142,076. The Peat Marwick defendants contend that this item is pre-judgment interest, for which there is no statutory authority. They state that under § 27-1-210, MCA, and § 27-1-211, MCA, pre-judgment interest is available only if the damages are capable of being made certain by calculation. Peat Marwick contends that this Court interprets that language narrowly, Carriger v. Ballenger (Mont. 1981), 628 P.2d 1106, 1110, and that pre-judgment interest is routinely denied when there is conflicting evidence on the amount of damages, Castillo v. Franks (1984), 213 Mont. 232, 244, 690 P.2d 425, 431; Swenson v. Buffalo Building Company (Mont. 1981), 635 P.2d 978, 985; and Callihan v. Burlington Northern Inc. (1982), 201 Mont. 350, 359, 654 P.2d 972, 977. On the basis that the future interest damages were not a sum certain or capable of being made certain by calculation, but required expert testimony, Peat Marwick asserts that the award of $142,076 as a present value calculation for additional future interest was unwarranted. In reply, the Clinic states that the Peat Marwick argument misconstrues the item of damages. The Clinic contends that the jury award was moratory rather than prejudgment interest. In support, the Clinic cites the testimony of Shenkin that the Clinic actually paid $834,533 more in interest between January 1983 and July 1988 than it would have paid if the IRB had been issued. Because the Clinic had to make higher periodic payments, Shenkin testified that the Clinic lost the opportunity to use those funds for other purposes, to increase its cash flow, or to invest those funds. Thus in addition to the actual loss of the dollars, the lost use of those moneys cost the doctors something. Shenkin calculated the additional amount that each of the monthly payments would have gained up to the date of trial if invested in an investment at a rate of return equal to the fifteen-year average of the one-year Treasury Bond Index. In effect, the item claimed was for the loss of use by the Clinic of the increased costs it had already paid because of the failure of the IRB bonds. When viewed from the prospect of the loss of use of the increased interest expense which the Clinic had to pay, the amount claimed as moratory interest does not exceed the limitation of damages for the breach of an obligation set forth in § 27-1-303, MCA, that no person can recover a greater amount of damages for the breach of an obligation than he or she could have gained by the full performance thereof on both sides. Again, the increased interest already incurred at the time of trial appears to be reasonably certain, and is capable of reasonable calculation. Accordingly, we find no error on this item.