Opinion ID: 1171472
Heading Depth: 3
Heading Rank: 4

Heading: Interest Calculations.

Text: HT argues that the interest component of the final judgment was incorrectly computed in two ways. First, HT argues that the trial court erroneously compounded post-judgment interest on the pre-judgment interest element of the judgment in favor of Stevens. The Stevens judgment was for $3,000,000 in principal plus $1,619,876.72 in pre-judgment interest plus costs and attorney's fees. HT claims that when the trial court calculated the pre-judgment interest on the Bohna judgment against HT, no interest on the $1,619,876.72 component should have been awarded. This argument is without merit. Pre-judgment interest is an element of compensation. Farnsworth v. Steiner, 638 P.2d 181, 184 (Alaska 1981). When a judgment is entered, pre-judgment interest becomes part of the judgment. After pre-judgment interest is added to the principal amount found by the court or jury, Civil Rule 82 attorney's fees are calculated based on the total award, referred to in Civil Rule 82 as the money judgment. Id. at 185. It follows that pre-judgment interest is also part of the judgment on which post-judgment interest is calculated. HT argues that the court erred by continuing to accrue pre-judgment interest on Bohna's judgment against HT after October 27, 1989, when Stevens gave Bohna a partial satisfaction of judgment for $4 million. The date of the partial satisfaction is not relevant. If Bohna were a wealthy man and had paid Stevens $4 million of his own funds in exchange for a partial satisfaction, the partial satisfaction of judgment would clearly not signal an end to the accrual of pre-judgment interest on Bohna's claim against HT. The fact that the $4 million in this case came from Allstate rather than Bohna does not alter this conclusion. However, independent of the satisfaction, when Bohna received the $4 million from Allstate which reduced Bohna's claim against HT by $4 million under AS 09.16.040(1), he was not thereafter entitled to receive pre-judgment interest on that amount from HT. Thus, pre-judgment interest should have been calculated on $4,569,876.72 [37] until October 19, 1989, when the $4 million settlement was paid to Bohna. Thereafter, pre-judgment interest should have been calculated on $569,876.72.