Court Opinion

ID: 9751615
Source: CourtListenerOpinion
Date Created: 2023-08-28 16:39:19.662409+00
Date Added: 2024-06-11T07:26:52.759706
License: Public Domain

Justice SAYLOR,
concurring and dissenting.
I agree with the majority that the service charge served the role of interest while the parties’ contract remained extant, see Majority Opinion, at 559-562, 39 A.3d at 259-61, and with its position that a mitigation overlay is inconsistent with the manner in which interest is otherwise treated under Pennsylvania law. See id. at 564-566, 567-569, 39 A.3d at 262-63, 264-65. I differ, however, with the majority position that contractual interest should be regarded as different in character from prejudgment interest. See id. at 561-563, 39 A.3d at 260-61. I also respectfully disagree with the majority’s holding that additional fact finding is necessary to determine the interest rate to be applied to the period of time after termination of the Retail Member Agreement. See id. at 569, 39 A.3d at 265.
From my reading of the long line of decisions pertaining to the award of interest in breach-of-contract cases, Pennsylvania law incorporates a series of judicial rules which generally favor the award of prejudgment interest where damages are reasonably ascertainable, whether or not the parties to a contract incorporated an interest rate into their agreement. See W. Republic Mining Co. v. Jones & Laughlins, 108 Pa. 55, *57168 (1885) (“The right to interest upon money owing upon contract depends not on discretion, but upon legal right.” (citation omitted)); Pittsburgh Constr. Co. v. Griffith, 834 A.2d 572, 590-91 (Pa.Super.2003) (collecting cases). See generally 10 Standard Pennsylvania Practice § 60:74 (2011). These rules include potent subsidiary propositions, such as that prejudgment interest should be awarded by a court even if a jury has failed to do so upon the matter being submitted to it. See Peyton v. Margiotti, 398 Pa. 86, 95, 156 A.2d 865, 869-70 (1959).
In this landscape, I do not see any benefit in distinguishing between contractual and prejudgment interest on damages for breach of contract. Rather, in my view, contractual interest is best conceptualized as a subset of prejudgment interest. Contractual interest serves the role of prejudgment interest where it has been made part and parcel of the underlying agreement; whereas a default rule of prejudgment interest is merely supplied by the judicial rules in the absence of contractual prescription.
While the decisional law favors the award of interest, in the interest of fairness, I believe the statutory rate should be applied in the absence of a clear expression of intention, in the parties’ written agreements, to specify a higher rate. See generally 25 Williston on Contracts § 66:116 (4th ed.2011) (“Where the contract between the parties makes no provision for interest, if any is allowed, it will normally be given at the statutory or ‘legal’ rate; and the same is true where the contract ... provides for interest but does not specify the interest rate.”).1 Presently, I do not regard the Retail Member Agreement as clearly extending the eighteen percent rate of interest into the period following its termination.2 Thus, I would hold that the statutory rate pertains in that time period.
*572Finally, while I am circumspect about depriving fact finders of the ability to engage in an equitable assessment concerning the appropriateness of mitigation, I find the majority’s treatment to be entirely consistent with the practice of allowing less flexibility in the interest arena to minimize the difficulties in administration once liability and the underlying damages for breach are determined. Cf. Stonehedge Square LP v. Movie Merchants, Inc., 552 Pa. 412, 417-18, 715 A.2d. 1082, 1085 (1998) (explaining, in rejecting a mitigation-of-loss approach for commercial leases, that the “potential for complexity, expense, and delay is unwelcome and would adversely affect the existing schema utilized to finance commercial development”). Notably, the policies favoring interest awards and the disfavor for mitigation gain some additional justification, since the defendant retains the use of the principal monies in question through the date of judgment.
Chief Justice CASTILLE joins this concurring and dissenting opinion.

. Like other bright-line rules, the judicial rules pertaining to interest may not yield the most just outcome in every individual case. It is therefore important that such rules be measured ones.

. Compare Retail Member Agreement at 2 (listing the financial obligations of the Member, which includes paying a monthly one and one-half percent "service charge” on "past due balance accounts,” and noting that the Member must immediately pay "all amounts due” upon *572termination of the contract), with id. at 5 (stating that the Company is entitled to the recovery of, inter alia, "interest” in the event that it initiates proceedings to recover amounts due by the Member).