Court Opinion

ID: 5156487
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:22:33.647171+00
Date Added: 2024-06-11T08:25:22.751185
License: Public Domain

Justice EID,
dissenting.
Today the majority allows an award of exemplary damages under section 18-21-102(1)(a), C.R.S. (2011), to be set at the amount of the jury's award of actual damages plus prejudgment interest on that amount as awarded by the court. In my view, the majority's interpretation is misguided for two reasons. First, it conflicts with the language of section 18-21-102(1)(a), which caps exemplary damages at the amount of actual damages awarded by the "jury," not the court. Second, it permits prejudgment interest to be paid on exemplary damages in direct conflict with our holdings in Lira v. Davis, 832 P.2d 240 (Colo.1992), and Seaward Construction Company, Inc. v. Bradley, 817 P.2d 971 (Colo.1991). For these reasons, I respectfully dissent from the majority opinion.
Section 18-21-102(1)(a) provides that:
In all civil actions in which damages are assessed by a jury for a wrong done to the person ..., and the injury complained of is attended by cireumstances of fraud, malice, or willful and wanton conduct, the jury, in addition to the actual damages sustained by such party, may award him reasonable exemplary damages. The amount of such reasonable exemplary damages shall not exceed an amount which is equal to the amount of the actual damages awarded to the injured party.
(Emphasis added). Under this language, the "amount of such reasonable exemplary damages" is to be equal to "the amount of the actual damages awarded." The question here is whether the "amount of the actual damages awarded" is the amount awarded by the jury, or the amount of the jury award together with prejudgment interest on that award set by the court. In my view, the statutory language compels the former result, and precludes the latter.
The language of section 13-21-102(1)(a) makes plain that the "amount of the actual damages awarded to the injured party" referred to in the last sentence is the amount set by the jury. Indeed, the first sentence of the section refers to "damages ... assessed by a jury for a wrong done to the person," and again refers to "the jury" in describing the cireumstances under which exemplary damages may be awarded. The entire seetion, then, is grounded in the award as determined by the "jury." Thus, the "amount of the actual damages awarded to the injured party" in the last sentence naturally refers to the damage award set by the jury in the first sentence.
In contrast, it is the duty of the court to determine the amount of prejudgment interest that is due on the award. The prejudgment interest statute, section 18-21-101(1), instructs that "[wlhen such [prejudgment] interest is so claimed, # is the duty of the court in entering judgment for the plaintiff in such action to add to the amount of damages assessed by the verdict of the jury ... interest on such amount...." § 13-21-101(1), C.R.S. (2011) (emphasis added). Because the court, rather than the jury, assesses prejudgment interest and adds that amount to the jury award, such prejudgment interest should not be included in the "amount of the actual damages awarded to the injured party" that serves as the cap on exemplary damages. Nothing in the language of section 13-21-102(1)(a) suggests that an add-on amount assessed by the court should be included in the "amount of the actual damages awarded to the injured party" by the jury; indeed, the term "court" does not even appear in the section.
The majority comes to the opposite conclusion, however, and holds that the jury's award plus the court-set prejudgment interest amount should define the benchmark for exemplary damages. Importantly, absent from the majority's analysis is any attempt to interpret the actual language of section 13-21-102(1)(a), or to consider its repeated references to the "jury." Instead, the majority relies on our decision in Lira v. Davis for the proposition that the "amount of the actual damages awarded to the injured party" is the amount that the defendant is "ultimately ordered to pay." Maj. op. at 393. This interpretation of Litra does not, in my view, withstand closer serutiny.
Lira examined whether the cap on exemplary damages should be set at the amount awarded by the jury, or that amount adjusted to take into account the jury's determina*396tion of comparative negligence and pro rata liability. We concluded that exemplary damages should be assessed according to the jury's award as adjusted for comparative negligence and pro rata liability. 832 P.2d at 246. Significantly, however, we did not hold that the "amount of the actual damages awarded to the injured party" means the amount after the court has made any and all adjustments to the award, as the majority suggests. Instead, the particular adjustments made in Lirga-that is, to accommodate the jury's determination of comparative negligence and pro rata liability-were an integral part of the jury's award. See id. at 241 (describing the percentage of negligence allocated by the jury); id. at 242 (noting that "each defendant will be liable for the percentage of the total actual damages in accordance with the fault apportioned him by the jury"). Thus, we recognized that it was necessary for the court to adjust the jury's gross award by the jury's apportionment of fault to determine the "amount of the actual damages awarded to the injured party." Id. at 245 (noting that "the reference to damages awarded equates to the reduced compensatory amount"). The important lesson from Lira is that the jury's gross award had to be reduced by the jury's apportionment of fault.1
The majority opinion not only fails to accord with section 13-21-102(1)(a)'s language, it runs afoul of the second holding of Lira-that "prejudgment interest does not apply to punitive damages." Id. at 246; see also id. ("exemplary damages are not subject to prejudgment interest"). In coming to this conclusion, we cited to our earlier case of Seaward Construction Company, Inc. v. Bradley in which we discussed the rationale for finding prejudgment interest inapplicable to exemplary damage awards-namely, "[blecause the purpose of a punitive damage award is not to compensate the plaintiff, and [because] a right to punitive damages does not exist until such damages are awarded by a trier of fact...." 817 P.2d at 976. The practical effect of the majority's approach is that prejudgment interest is assessed on exemplary damages. For example, if a jury assesses $100 in actual damages, and the court adds $10 in prejudgment interest to the actual damage award, under the majority's approach, exemplary damages would be capped at $110. To put it differently, it is as if the defendant is paying $100 in exemplary damages and $10 in prejudgment interest on those exemplary damages-directly in conflict with Lira and Seaward. The majority suggests that the legislature, through adopting the language of section 13-21-102(1)(a), "in no way altered the validity of Seaward's determination that prejudgment interest is not separately owed on exemplary damages," but it did "alter the impact of prejudgment interest on exemplary damage awards in some cases." Maj. op. at 394. However, the majority's perceived legislative limitation on Seaward's principle is simply a product of its own misreading of section 13-21-102(1)(a) as "capping exemplary damages at an amount equal to the compensatory damages actually owed by the defendant," id., and, hence, is wholly unnecessary.
Finally, as the majority correctly points out, prejudgment interest is necessary to make the injured party whole, as it compensates her for the fact that the injury occurred long before the damages are paid. Id. at 393; Seaward, 817 P.2d at 975; Allstate Ins. Co. v. Starke, 797 P.24 14, 19 (Colo.1990). But the fact that prejudgment interest is "an element of compensatory damages," Allstate, 797 P.2d at 19, does not change the language of section 18-21-102(1)(a), which caps exemplary damages at the award as set by the jury, not the court. Because the majority opinion reads the references to the "jury" out of section 13-21-102(1)(a), and assesses prejudgment interest on exemplary damages in clear conflict with Seaward and Lira, I respectfully dissent from its opinion.

. Thus, although the dissenting opinion in Lira was correct that "actual damages awarded to the injured party" in section 13-21-102(1)(a) "means those damages assessed and awarded by the jury," 832 P.2d at 247 (Erickson, J., dissenting), application of that meaning to the jury award at issue in Lira would include, as the majority opinion in the case holds, adjustment of the award to reflect the jury's apportionment of fault.