Court Opinion

ID: 9630823
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:21:56.555658+00
Date Added: 2024-06-11T11:46:08.572891
License: Public Domain

Forrest, J.*
(concurring) — I concur in the majority’s disposition of the case and with the reasoning except for the discussion of prejudgment interest. The Majority, at 487, states the standard of review as follows: "a trial court’s award of prejudgment interest is reviewed for *492abuse of discretion.” I disagree. The dispositive issue in this case is whether discretion was necessarily exercised to determine damages, not whether the discretion was abused. If discretion is necessarily exercised by either judge or jury to determine damages, Washington law does not permit prejudgment interest whether or not the discretion may have been abused.14
On the other hand, when damages are liquidated,15 the claimant is entitled to prejudgment interest as a matter of right. The trial court’s discretion need not be invoked.16
No Washington case has found it necessary to explicitly state that once it has determined that damages are liquidated, the trial court has no discretion to deny prejudgment interest. But the right to prejudgment interest is uniformly treated as following as a matter of law.17
I have found no Washington case holding that the trial court has discretion to deny prejudgment interest on a liquidated claim.18
*493Although the majority unequivocally states that an award of prejudgment interest is reviewed for abuse of discretion, Majority at 487, it is not altogether clear that it actually applied this standard in this case. In correctly holding that Ernst’s claim was a liquidated claim, the court makes the following statement: "In the instant case, the trial court was not required to rely on opinion or to exercise discretion to determine Ernst’s damages — back rent was readily calculated in accord with the fixed-rent terms of the lease and the period of vacancy prior to trial.” Majority at 488. There is a fundamental difference between the exercise of discretion in determining substantive damages and the exercise of discretion in awarding prejudgment interest in addition thereto. As to prejudgment interest, abuse of discretion is a pseudo-issue. If discretion is necessarily exercised to determine damages, prejudgment interest is precluded as a matter of law. Mall Tool Co. v. Far West Equip. Co., 45 Wn.2d 158, 169, 273 P.2d 652 (1954); Hanson v. Rothaus, 107 Wn.2d 468. If discretion were abused in calculating damages, a remand would be required to recalculate the damages, not to award or disallow prejudgment interest.
Curtis v. Security Bank,19 relied upon by the majority, is not persuasive. In Curtis, the plaintiff was awarded back wages plus prejudgment interest. In affirming, the court unsurprisingly held that the wages were liquidated since the trial court did not need to determine what was reasonable, and that prejudgment interest was therefore appropriate. Although the court enunciated the rule that an award of prejudgment interest is reviewed for abuse of discretion, Curtis, 69 Wn. App. at 20, that statement was not necessary to the decision. There was no analysis or discussion of the exercise of discretion, or how it would apply to the allowance of prejudgment interest. Rather, the court merely cited Pannell v. Food Servs. of Am., 61 Wn. *494App. 418, 810 P.2d 952 (1991), review denied, 118 Wn.2d 1008 (1992).
In Pannell the jury was instructed to find the reasonable value of. the wages, bonus and benefits lost. Applying well-established rules as to what constitutes liquidated damages, e.g., Hanson v. Rothaus, 107 Wn.2d 468, the court held that the damages were not liquidated and hence prejudgment interest was not available as a remedy. Although this holding was dispositive as to the prejudgment interest issue, the opinion went on to make the following statement:
Under these circumstances, the trial court’s denial of prejudgment interest is in accordance with Washington law. Since the federal law also permits the exercise of discretion, especially where the amount of the recovery is not readily ascertainable and, therefore uncertain, there is no basis for finding an abuse of discretion by the trial court in denying prejudgment interest.
Pannell, 61 Wn. App. at 449.
As in Curtis, there is no analysis or discussion in Pannell of the circumstances in which the trial court could properly exercise discretion in awarding prejudgment interest or what factors should guide such exercise. Under Hanson, clearly the court had no discretion to award prejudgment interest where the damages are not liquidated. If the damages are liquidated, I see no reason, and no Washington court has given any reason, that we should treat some claimants differently by awarding prejudgment interest on liquidated damages and failing to award prejudgment interest to other claimants with liquidated damages.
In my view, this court should explicitly reject the abuse of discretion standard for review of prejudgment interest awards for which there is no sound basis in Washington law and simply reverse the trial court for an error of law in failing to award prejudgment interest on Ernst’s claim for back rent which is clearly liquidated.

Marshall Forrest is serving as a judge pro tempore for the Court of Appeals, pursuant to CAR 21(c).

Hansen v. Rothaus, 107 Wn.2d 468, 472, 730 P.2d 662 (1986); Rutcosky v. Tracy, 89 Wn.2d 606, 612, 574 P.2d 382 (1978); Prier v. Refrigeration Eng’g Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968).

In Washington, prejudgment interest can be awarded only in those cases where the claim is liquidated, meaning where the claim is for a fixed sum or where the evidence provides a basis for computing the recovery with exactness, without reliance on opinion or discretion. Hansen v. Rothaus, 107 Wn.2d at 472.

Hansen, 107 Wn.2d at 472-73; Smith v. Olympic Bank, 103 Wn.2d 418, 425, 693 P.2d 92 (1985).

See, e.g., Smith v. Olympic Bank, 103 Wn.2d at 425; Petersen v. Graham, 7 Wn.2d 464, 475, 110 P.2d 149 (1941); Bremerton Concrete Prods. Co. v. Miller, 49 Wn. App. 806, 812, 745 P.2d 1338 (1987); Burgeson v. Columbia Producers, Inc., 60 Wn. App. 363, 368, 803 P.2d 838, review denied, 116 Wn.2d 1033 (1991).

At first blush, In re Stenshoel, 72 Wn. App. 800, 866 P.2d 635 (1993) might seem to the contrary. Stenshoel was a dissolution case where the trial court awarded interest of six percent on certain delayed payments made by one party to the other as part of the overall division of the community property. On appeal, the court held that fixing the interest rate at six percent rather than at the lower statutory rate without giving good reasons therefor constitutes an abuse of discretion. Since a trial court’s property division is reviewed for abuse of discretion, I do not find that this holding supports a general proposition that the decision to award prejudgment interest on liquidated claims lies within the discretion of the trial court.

 69 Wn. App. 12, 847 P.2d 507, review denied, 121 Wn.2d 1031 (1993).