Court Opinion

ID: 9657279
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:18:39.003057+00
Date Added: 2024-06-11T18:13:42.788330
License: Public Domain

SABERS, Justice
(concurring in part and dissenting in part).
The majority opinion presents some good news and some bad news. The good news is very good. The law of prejudgment interest in South Dakota has taken a remarkable turn for the better. The law of prejudgment interest is now settled in that this court has unanimously determined that the trial court erred in refusing to grant prejudgment interest under SDCL 21-1-11 for damages sustained on Heers’ hogs. In other words, my dissent in South Dakota Building Authority v. Geiger-Berger Associates, 414 N.W.2d 15, 27 (S.D.1987) (Sabers, J., concurring in part and dissenting in part), and joined by Justice Morgan, is the law of this case.
The bad news is that the opinion refuses to apply this prejudgment interest law to personal property damages of $132,562.06 and real property of $81,113.82. For this reason, I agree with this opinion in every respect except this one. I would reverse the trial court on its denial of prejudgment interest on the personal and real property because these damages were certain, or capable of being made certain by calculation through reference to prevailing markets for labor, materials, or values. Under SDCL 21-1-11, the plaintiff “is entitled,” and the right to recover was vested in the plaintiff on a particular date, i.e., the date of the damage or the date the repair costs or values were fixed.
As I previously stated in Geiger-Berger, supra at 27:
The fact that the plaintiff did not treat these damages as certain until late in the game is relevant, but not determinative. Likewise, the fact that the jury verdict did not treat them as such is not the issue under the statute. The right to prejudgment interest under SDCL 21-1-11 is not determined by the amount claimed in the complaint, the amended complaint, or even the amount determined in the verdict. It is a question of *569whether the proof reflects the elements of SDCL 21-1-11. If the proof does, then the court should mathematically compute the prejudgment interest.
Under the language of the statute, the question is whether the damages are “certain, or capable of being made certain by calculation[.]” In interpreting this phrase, this court has used a test first set forth in Beka v. Lithium Corp., 77 S.D. 370, 375, 92 N.W.2d 156, 159 (1958). The Beka court held that damages meet the certainty requirement of SDCL 21-1-11 “if there exists established or reasonably ascertainable market prices or values of the subject matter by reference to which the amount due may be determined by computation.” Id. Thus, even though damages may be unliq-uidated, if readily ascertainable values exist for damaged or destroyed property, “the general and better considered rule is to allow interest, at least in the absence of strong equities to the contrary.” Aetna Casualty & Surety Co. v. United States, 365 F.2d 997, 1007 (8th Cir.1966) (applying SDCL 21-1-11), cited with approval in Arcon Constr. Co. v. South Dakota Cement Plant, 405 N.W.2d 45, 47-48 (S.D.1987); Amert v. Ziebarth Constr. Co., 400 N.W. 2d 888, 890 (S.D.1987). It is unnecessary that the defendant actually know the amount owed. If the defendant can compute the amount from “reasonably available information,” the court should award prejudgment interest. Hageman v. Van-der Vorste, 403 N.W.2d 420, 422 (S.D.1987); Amert, supra at 891.
1. Personal Property
Within six weeks of the flood, a representative of the State went to the Heer farm “to work with them in attempting to establish what their damages were.” The representative spoke with the Heers about their damages, and even obtained estimates to repair or replace the demolished hog confinement building, the Heer home, the shop building, and a corn bin. He obtained a list of the Heers’ damaged or destroyed vehicles and figures on the number of hogs the Heers lost. Nearly three years before trial and the State’s admission of liability, information was not only “reasonably available” to the State, but its own representative had actually gathered information upon which it could compute the amount of damages. In addition, defense counsel introduced no evidence at trial on the Heers’ personal property damage. Much of Heers’ evidence on their personal property damage was essentially undisputed. These undisputed items included:
Items Exhibit No. Amount
Pipe fittings 62 $ 356.97
Feed system parts on hand 71 2,555.38
Shop supplies and parts 57 22,942.29
Damaged shell corn 67 1,765.58
Lost hog feed and medication 53 7,058.25
Seed loss 35 and 59 5,151.29
Herbicide and insecticide loss 59 7,486.06
“Miscellaneous items” 60 11,201.58
Automotive parts 44 15,357.60
Money and coins 50 260.00
Miscellaneous machinery 69 16,602.00
Fuel injection inventory 45 7,784.90
Trailer repairs 42 1,739.30
Troy Muchmore’s property 109 877.88
Food 64 1,959.25
Appliances 47 and 48 9,051.89
Office supplies 58 274.41
Furniture 46 15,237.02
Lost paints and cleaners 63 849.25
Clothing 61 2,784.96
Jewelry 49 1,189.80
TOTAL $132,485.66
Even if all of these items are not substantially certain or capable of being made certain by calculation through reference to existing markets, the trial court should have determined those that were and submitted the remainder to the jury.
2. Hogs
As indicated in the majority opinion, the Heers computed the number of hogs lost by relying upon their purchase and sales records. They determined the average weight by using carcass weights of dead hogs picked up by a rendering plant after the flood and multiplied that by the market price at the time of the flood. This figure came to $50,382.90. The State’s representative used the same method of calculation two and one-half years before trial.
3. Real Property
The State’s own witness, Mr. Payne, computed the fair market value of Heers’ real property before and after the flood. He concluded that with the cost of various repairs and clean-up, the damage to the *570Heers’ real property totalled $81,113.82 (Exhibit A). Thus, the State cannot claim that these damages were not certain or capable of being made certain by reference to markets. Nor does the fact that there was a difference of opinion as to damages preclude prejudgment interest as a matter of law for real property damages. See Arcon, supra; Kellogg v. Rowett, 408 N.W.2d 334 (S.D.1987).
As stated by the Minnesota Supreme Court in ICC Leasing Corp. v. Midwestern Machinery Co., 257 N.W.2d 551, 556 (Minn.1977):
A bona fide dispute as to the amount of damages should not bar the accrual of interest in all circumstances or a plaintiff’s right to interest would depend merely upon the reasonableness of the defendant.... In determining whether interest should be allowed the question was not whether the parties agreed on the amount of damages but whether [the defendant] could have determined the amount of its potential liability from a generally recognized objective standard of measurement.... Mere difference of opinion as to the exact amount of damages was not sufficient to excuse [defendant] from compensating [plaintiff] for loss of the use of its money from July 1970 until the judgment in 1975.
The majority opinion purports to deny prejudgment interest because it is impossible for a defendant to reasonably know what it should pay a plaintiff. As stated in Amert, the defendant should not be able to avail himself of this argument unless he has in fact tendered payment or made an offer of payment. The language of the statute provides, “except during such time as the debtor is prevented by law, or by the act of the creditor, from paying the debt.” In this case, the State, as a debtor, does not even claim that they were prevented by law, or by the act of the creditor, from paying the debt. In fact, the State continually and vigorously persisted in their right to resist the debt. Obviously, a debtor has the right to resist the debt, but in the mean time, he has had the use of the money and should pay interest on the obligation in accordance with SDCL 21-1-11, Meyer v. Dixon Brothers, Inc., 369 N.W.2d 658 (S.D.1985); Amert, supra; and Geiger-Berger, supra.
As stated in Geiger-Berger, supra at 28:
The reference in SDCL 21-1-11 is to the right to recover upon a particular day. As soon as damages are certain or capable of being made certain by calculation by reference to prevailing markets for labor and materials, then damages are vested and interest begins to run. Interest should be awarded from the date each item of expense was incurred. The trial court denied prejudgment interest because it believed it could not ascertain a definite date when interest began to accrue. There may have been some difficulty, but it was certainly possible here. The only time there is a tolling of the reasonable period before interest runs is if the debtor tried to pay and the creditor refused to accept. SDCL 21-1-11. As stated above, it is a question of whether the proof reflects the elements of SDCL 21-1-11. If the proof does, and it does in this case, then the court should mathematically compute the prejudgment interest.
Therefore, under SDCL 21-1-11, the trial court should have awarded prejudgment interest on personal property of $132,-485.66, hogs of $50,382.90, and real property of $81,113.82 for a total of $263,982.38. From the interest computed on this amount, the trial court should subtract any interest previously computed under the jury verdict on personal and real property.
I would reverse and remand for this purpose.