Court Opinion

ID: 9535751
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:52:32.553755+00
Date Added: 2024-06-11T13:33:19.338464
License: Public Domain

STATON, Judge,
dissenting.
I dissent from the Majority's denial of prejudgment interest. Without the award of prejudgment interest Sonnenburg and the other mental patients will never be made whole or completely compensated for the forced labor demanded from them by the State. The Majority has tortured Arti cle I, Section 21 of the Indiana Constitution to arrive at the result of no prejudgment interest. The Majority is mistaken in its *208interpretation of the Indiana Constitution. The facts of the case before this Court have nothing to do with "payments due for services rendered." The facts concern the concept of "particular services taken," and the constitutional concept of "just compensation." The award of prejudgment interest by the trial court is supported by Indiana law and federal law. I would affirm the entire judgment of the trial court.
The Majority maintains that sovereign immunity precludes an award of prejudgment interest against the State. However, eminent domain proceedings are conceded by the Majority as an exception to the sovereign immunity preclusion. While leaning on sovereign immunity, the Majority concludes that "just compensation" for "particular services taken" does not include prejudgment interest. This conclusion falls by its own irrationality.
The award of prejudgment interest in eminent domain proceedings stems from the concept of "just compensation" as included in the second clause of Article I § 21 of the Indiana Constitution.
No person's property shall be taken by law, without just compensation;
Ind. Const. Art. I § 21. However, the Majority conveniently chooses to ignore the first clause of that section, which is identical to the second:
No person's particular services shall be demanded, without just compensation. No person's property shall be taken by law, without just compensation;
Id.
Yet, despite the identical use of the phrase "just compensation" in the same section, the Majority audaciously states:
This Court perceives an immediate distinction between just compensation for property and just compensation for particular services.
This conclusion completely ignores the rules of statutory construction in Indiana.
As early as 1984, our Supreme Court stated, "the same rules of construction should be applied to constitutional provisions as to statutory provisions...." In re Todd (1935), 208 Ind. 168, 190, 193 N.E. 865, 873.
Accordingly, the following rule of statutory construction is applicable here. In the words of Judge Hoffman, "[tlerms contained in a statute will be construed consistently...." (Emphasis added.) Wilson v. Brown (1984), Ind.App., 461 N.E.2d 1162, 1164, reh. granted 464 N.E.2d 1332, trans. denied.
Consequently, the phrase "just compensation" must be construed consistently within Article I § 21 of the Indiana Constitution. Indiana recognizes an exception to the concept of sovereign immunity in eminent domain proceedings, and allows the recovery of prejudgment interest. The same rationale applies when "particular services" are taken.
In addition to proper statutory construction, state and federal case law also support the award of prejudgment interest; to support its claim that "the State is not liable for interest on payments due unless it binds itself by contract or statute to pay interest," the Majority relies on two cases: State v. Scott Construction Co. (1931), 97 Ind.App. 652, 174 N.E. 429, and Indiana Dep't of Public Welfare v. Chair Lance Service, Inc. (1988), Ind., 523 N.E.2d 1373. However, when reading these cases in their entirety, along with the seminal case from which these cases stem, i.e., United States v. State of North Carolina (1890), 136 U.S. 211, 10 S.Ct. 920, 34 L.Ed. 336, as well as the meager line of cases which culminate in Chair Lance, it is readily apparent that these cases all involved agreements whereby dollars would be paid. Consequently, these cases have no bearing on the case before us.
In Scott, the State contracted with the Scott Co. for the construction of a highway. The question before the court was whether interest could be added to the money due under the contract. Contrary to the Majority's interpretation, Scott actually stated:
where the state promises to pay a sum of money but does not promise to pay interest ..., the right to recover is strict ly limited by the terms of the contract. (Emphasis added.)
*209Scott, supra, 174 N.E. at 431. Thus, Scott actually determined whether pay due under a contract could go beyond the terms of the contract.
Similarly, Chair Lance also involved a dispute over the amount of money due pursuant to an agreement. Here, the Indiana Department of Public Welfare was-to reimburse Chair Lance for the transportation of wheelchair patients; when the money was withheld, Chair Lance sought prejudgment interest to compensate for the loss of the use of the money. However, in denying prejudgment interest, our Supreme Court noted that Ind.Code 4-22-1-18(c), the statute upon which the trial court ruled, only authorized the court to "compel ageney action." Thus, our Supreme Court concluded that "[t)his statute, ..., does not authorize the court to compel a state ageney to pay interest on money unlawfully withheld." Chair Lance, supra, 523 N.E.2d at 1379.
Our Supreme Court then noted that the State was "not liable for interest on payments due unless it binds itself by contract or statute to pay interest." Id. However, here again, the State had agreed to pay a certain amount of money to another party via a contract; the question was whether interest could be awarded absent such a provision in that contract.
The above cases have their origin in North Carolina, supra. In this case, the question was "whether, as a matter of law, the principal of the bonds bore interest after maturity,. ..." North Carolina, supra, 10 S.Ct. at 922. Therefore, while the Court may have concluded that interest is not to be awarded against the State absent a contract or statute, crucial to that pronouncement is the fact that the case involved money due via a contract to pay on bonds.
Contrary to the Majority's basic premise, this case is not contractual in nature: it does not involve "payments - due for service-es rendered." The State and patients of the Mental Institutions did not make a private agreement whereby the State would reimburse them for their forced labor.
Instead, the rights of the mental patients were infringed upon when their "particular services were demanded" without "just compensation," contrary to the Indiana Constitution. Accordingly, the line of cases beginning with North Carolina, including Scott, and culminating in Chair Lance, have no bearing upon the case before us.
Furthermore, the Majority states that "one's free use and enjoyment of the property or one's rights and interests in the property ... traditionally have been accorded special protection," referring to 63A Am.Jur.2d Property § 42 (1984). Yet, upon reading § 42, it is apparent that this section singles out the "right of property" as being important only insofar as it is one of the fundamental rights. Section 42 does not refer to any "special protection" af-. forded to property rights over and above other, personal, rights. The Constitutional right to be justly compensated for the taking of "particular services" by the State has equal protection.
Unlike the United States Constitution, which protects one from being "deprived of life, liberty, or property, without due process of law," and prohibits "private property [from] befing] taken for public use, without just compensation," U.S. Const., 5th Amend., the Indiana Constitution adds an additional protection. Our State Constitution protects one's liberty by specifically prohibiting the demanding of one's "particular services" without "just compensation." Consequently, while federal case law discusses the protection of liberty, it necessarily does so without being bound to protect its "taking" by "justly compensating" the party whose "particular services" were taken.
Nonetheless, even without specific authority protecting the taking of "particular services" with "just compensation," federal case law has recently noted that special protection is necessary to "fully compensate" one for the loss suffered in these instances.
On more than one occasion, the United States Supreme Court determined that interest should be allowed to fully compen*210sate injured parties. In Waite v. United States (1931), 282 U.S. 508, 51 S.Ct. 227, 75 L.Ed. 494, the Court ruled upon what constituted "entire" compensation to a party whose patented invention had been used by the government without authorization. The Court stated: "[the statute grants 'recovery of his reasonable and entire compensation for such use.' We are of opinion that interest should be allowed in order to make the compensation 'entire.'" Waite, supra, 51 S.Ct. at 227. See also, General Motors Corp. v. Devex Corp. (1983), 461 U.S. 648, 657, 103 S.Ct. 2058, 2063, 76 L.Ed.2d 211.
More recently, the Court reiterated its conviction that full compensation can require prejudgment interest. In West Virginia v. United States (1987), 479 U.S. 305, 107 S.Ct. 702, 93 L.Ed.2d 639, the Supreme Court determined that West Virginia was not immune from paying prejudgment interest to the federal government as the "States have no sovereign immunity as against the Federal Government." West Virginia, supra, 107 S.Ct. at 707. The Court stated that "[pJrejudgment interest is an element of complete compensation," and, in a footnote, explained its reasoning as follows:
[pirejudgment interest serves to compensate for the loss of use of money due as damages from the time the claim accrues until judgment is entered, thereby achieving full compensation for the injury those damages are intended to redress. (Further reference omitted.)
West Virginia, supra, at 706, and n. 2. Surely, compensation cannot be "just" if it is not "entire" as well as "complete."
The Seventh Cireuit recently advanced reasons for awarding prejudgment interest with an award of back pay. In Hunter v. Allis-Chalmers Corp., Engine Div. (7th Cir.1986), 797 F.2d 1417, the court noted that there is "time value" attached to money, stating that "full compensation requires recognition of the time value of money." Hunter, supra, at 1426.
Later, in Williamson v. Handy Button Mach. Co. (7th Cir.1987), 817 F.2d 1290, a § 1981 suit was before the court,. The Seventh Circuit allowed the award of prejudgment interest, and supported its decision with the following reasons.
[Pjrejudgment interest is necessary to make the award fully compensatory.... The award should make the victim whole....
We have held that prejudgment interest is part of full compensation under other statutes, necessary to carry out the federal policies of compensation and deterrence. ... Money today is simply not a full substitute for the same sum that should have been paid some time ago. Prejudgment interest therefore must be an ordinary part of any award of back pay (or other incurred expense) under § 1981.
Williamson, supra, at 1297.
Although the amount of back pay owed was ascertainable in that case, the Court nonetheless disposed of the "uncertainty" argument.
The award of back pay under Title VII is an "equitable" rather than a "legal" remedy, however, and the common law requirement of certainty has never been applied to it.... No purpose would be served by allowing the wrongdoer to keep the entire time value of the money, just because the exact amount is subject to fair dispute. Once we know that back pay is at least some minimum, it is safe to award interest on that amount. (Emphasis added.)
Williamson, supra, at 1299.
When Sonnenburg and the other mental patients in his class were certified by the trial court, the court stated:
"All patient workers who have labored in the State of Indiana Institutions for the Mentally Handicapped or Mentally Retarded from May 23, 1970 to December 31, 1974."
R. p. 86, 11. 26-28. For almost fifteen years, the patients have been waiting to be paid their $1.60 per hour. To deny them prejudgment interest, would be to deny them a complete monetary recovery for their labor. To deny them prejudgment interest would be to deny them their constitutional right to "just compensation."
*211I would affirm the entire judgment of the trial court.