Court Opinion

ID: 8915015
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:40:06.807288+00
Date Added: 2024-06-11T17:08:53.813641
License: Public Domain

NEWMAN, Circuit Judge
(concurring):
Pre-judgment interest, like all other components of a damage award, compensates for some aspect of loss caused by the defendant.1 When a plaintiff suffers partial damage to property, his principal loss is the diminished value of his property. There may be cases where the infliction of that loss causes some additional loss. When repairs are made, the plaintiff has lost the income that could have been earned on the money spent to make the repairs from the date the repairs were paid for until the date of reimbursement by the defendant. Whether or not repairs are made, there may be some cases where the existence of the loss due to partial damage to property has caused additional loss during all or some portion of the period prior to reimbursement. That may occur if the diminution in value of the property has in some economic sense been realized. Perhaps the par dal damage has diminished the owner’s capacity to make profits, or has reduced the price of the property upon sale. If such losses are suffered and not otherwise compensated, for example, by a specific award for lost profits, pre-judgment interest may be appropriate as a rough approximation of an additional element of damage that might not be readily provable. But unless the loss due to the partial property damage has caused some additional element of loss, it is hard to think of any reason why pre-judgment interest should be allowed.
When pre-judgment interest is awarded to compensate for some element of loss, I agree that the District Court has discretion to determine an appropriate starting date for such interest, a date that should reflect *28the nature of the additional loss for which the interest is awarded. In exercising its discretion in cases involving repairs to damaged property, the Court may consider whether to award pre-judgment interest from a date prior to the date of repairs, but I think it will be a rare case when such an award makes economic sense. If the interest is awarded solely to compensate for the income the plaintiff could have earned on the money spent for repairs, then it would make no sense at all to award such interest for any time prior to the expenditure.

. As we have observed, the rationale for prejudgment interest is “the desire to make whole the injured party.” O’Donnell Transp. Co. v. City of New York, 215 F.2d 92, 95 (2d Cir. 1954) (Harlan, J.). See generally Annot., 36 A.L.R.2d 337 (1954). Pre-judgment interest, or interest as damages, is to be distinguished from interest on a judgment. See generally Interest on Judgments in the Federal Courts, 64 Yale L.J. 1019 (1955).