Opinion ID: 2363683
Heading Depth: 2
Heading Rank: 2

Heading: Yeiser's Pre-Judgment Interest Award

Text: Pre-judgment interest on damage awards not involving personal injury, such as property damage, is governed by section 5-12-102, C.R.S. (2010). Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d 821, 824-25 (Colo.2008). In particular, interest begins to accrue upon the date that money is wrongfully withheld, or not paid, to the plaintiff to compensate him for his damages. Id. at 825. Here, the trial court awarded Yeiser pre-judgment interest for the entire $314,323.21 verdict amount for the 366 days that passed between the initial damage to Yeiser's house and when Ferrellgas paid Farmers $176,654.47 to settle Farmers's subrogation claim, for a running total of $339,543.46. Only then did the court deduct the $212,071.94 amount that Farmers paid Yeiser, imposing interest on the running total of $127,471.52 for the time period stretching from the subrogation settlement to the court's entry of an order of costs, for a total judgment of $176,654.47 prior to entry of Ferrellgas's cost award. The court of appeals generally upheld the trial court's method of calculating the interest, but ordered the trial court to recalculate the interest on remand based on the reduced setoff of the $176,657.55 amount that Ferrellgas paid Farmers rather than the $212,071.94 amount that Farmers paid Yeiser and her contractors. The line of reasoning invoked by the lower courts, however, again fails to account for the subrogation arrangement between the parties. As previously discussed, Ferrellgas's settlement of Farmers's subrogation claim effectively constituted a partial settlement of Yeiser's claim, extinguishing Yeiser's interest in collecting the $212,071.94 amount from Ferrellgas. [5] To the extent that Ferrellgas wrongfully withheld payment of the $212,071.94 amount for the 366 days between the damage to Yeiser's house and Ferrellgas's payment to Farmers, any obligation on the part of Ferrellgas to pay interest on the $212,071.94 amount was extinguished when Ferrellgas settled Farmers's subrogation claim. It was Farmers's prerogative to resolve the issue of interest within the context of the subrogation settlement, and there is no evidence before us that that issue was not resolved. Nor could we disturb the results of the settlement in any event, because Farmers is not a party to this case. Accordingly, we hold that the trial court erred by not deducting the $212,071.94 amount prior to calculating pre-judgment interest. We also note that in Goodyear, announced shortly after the court of appeals' decision in this case, this Court interpreted section 5-12-102, holding that the date upon which pre-judgment interest begins to accrue for failure to reimburse the victim of damage to property depends on the measure of damages. 193 P.3d at 827. In particular, this Court recognized two measures of damages with different accrual dates: diminution in value and cost of repair or replacement. Id. When damage is measured by diminution in value, interest begins to accrue as of the date that the plaintiff suffered injury to his property, because the plaintiff will be unable to earn a return on the amount of damages. Id. at 827-28. On the other hand, when damage is measured by cost of repair or replacement, interest does not begin to accrue until the plaintiff actually spends money on the repair or replacement, because the plaintiff is able to earn a return on the money until he spends it. Id. at 828. In this case, Yeiser's damage award potentially implicates both of the Goodyear damage measures. The jury was instructed to calculate damages for the reasonable cost of repair and for diminution in value through the loss of use and rental income. The jury, however, returned only a general verdict that did not reflect the apportionment of damages between the reasonable cost of repair and diminution in value. Because we lack any basis to distinguish between the amount of damages awarded for reasonable cost of repair and diminution in value, we affirm in general the trial court's method of calculating interest dating from the time that Yeiser's house was initially damaged. We nonetheless reverse the trial court's decision not to deduct the $212,071.94 amount for the entire period over which it calculated pre-judgment interest, and instruct it on remand to recalculate the appropriate amount of pre-judgment interest owed by Ferrellgas after deducting the $212,071.94 amount from the $314,323.21 verdict for the entire period of accrual. After calculating the appropriate amount of pre-judgment interest, the trial court can then re-evaluate whether Ferrellgas is entitled to coststhe issue to which we now turn.