Court Opinion

ID: 2714085
Source: CourtListenerOpinion
Date Created: 2014-08-06 15:20:11.89644+00
Date Added: 2024-06-11T12:42:29.407330
License: Public Domain

130 Nev., Advance Opinion     5
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                ERNESTO TORRES AND LEONOR                         No. 60904
                TORRES, INDIVIDUALLY, AND
                ERNESTO TORRES, AS SPECIAL
                ADMINISTRATOR FOR ANDRES
                TORRES, DECEASED; ERNESTO
                                                                       FILED
                TORRES FOR ARMANDO TORRES                               JAN 30 2014
                AND CRYSTAL TORRES, MINORS,                            TRAQ/E K. L/NDEMAN
                REPRESENTED AS THEIR GUARDIAN                       CLE - • SU - RE   pp

                AD LITEM; VICTORIA CAMPE, AS                       BY  'at 0 .17
                                                                          DEP
                SPECIAL ADMINISTRATOR OF
                FRANK ENRIQUEZ, DECEASED;
                PATRICIA JAYNE MENDEZ, FOR
                JOSEPH ENRIQUEZ, JEREMY
                ENRIQUEZ, AND JAMIE ENRIQUEZ,
                MINORS, REPRESENTED AS THEIR
                GUARDIAN AD LITEM; AND MARIA
                ARRIAGA FOR KOJI ARRIAGA,
                REPRESENTED AS HIS GUARDIAN
                AD LITEM,
                Appellants,
                vs.
                GOODYEAR TIRE & RUBBER
                COMPANY,
                Respondent.

                           Appeal from a post-judgment order refusing to award
                compound post-judgment interest. Eighth Judicial District Court, Clark
                County; Stefany Miley, Judge.
                           Affirmed.

                Cap & Kudler and Allen A. Cap, Las Vegas; Albert D. Massi, Ltd., and
                Albert D. Massi, Las Vegas,
                for Appellants.
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                Lewis Roca Rothgerber, LLP, and Daniel F. PoIsenberg and Joel D.
                Henriod, Las Vegas,
                for Respondent.

                BEFORE THE COURT EN BANC.

                                                  OPINION

                By the Court, SAITTA, J.:
                            After obtaining a jury verdict awarding damages for personal
                injuries and multiple deaths caused by a single vehicle accident, members
                of the Torres and Enriquez families and Koji Arriaga (the appellants)
                sought compound post-judgment interest on the judgment. At issue here
                is whether the appellants are entitled to compound interest on the
                judgment awarded to them. We hold that they are not. "As a general rule,
                compound interest is not favored by the law and is generally allowed only
                in the presence of a statute or an agreement between the parties allowing
                for compound interest."     Campbell v. Lake Terrace, Inc., 111 Nev. 1329,
                1333, 905 P.2d 163, 165 (1995), overruled on other grounds by Aviation
                Ventures, Inc. v. Joan Morris, Inc., 121 Nev. 113, 115, 110 P.3d 59, 60-61
                (2005). NRS 17.130(2), the statute that provides a default interest rate for
                judgments, directs that the interest rate will be adjusted biannually,
                although the statute does not authorize compound interest. Because it
                does not authorize compound interest, NRS 17.130(2) only allows for the
                award of simple interest on judgments.
                                 FACTS AND PROCEDURAL HISTORY
                            The underlying facts of this case were before this court in
                Bahena t). Goodyear Tire & Rubber Co., 126 Nev.       , 235 P.3d 592 (2010),
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                   and Bahena v. Goodyear Tire & Rubber Co., 126 Nev.          , 245 P.3d 1182
                   (2010). The appellants, along with members of the Bahena family, were
                   traveling in a rental vehicle whose tire separated while on a highway in
                   Utah. As a result, the vehicle rolled over. Several people were killed and
                   several others were severely injured.
                                 The district court struck Goodyear's answer for failure to
                   properly conduct discovery and entered a default liability judgment
                   against Goodyear. After a jury verdict and post-trial motions on the issue
                   of damages, the district court entered a judgment awarding damages to
                   the appellants and the other plaintiffs. The parties then reached a
                   settlement in which the appellants preserved their right to seek compound
                   interest. Goodyear paid the settlement amount and simple interest to the
                   appellants.
                                 The appellants then filed a motion to recover compound
                   interest on the judgment. The district court denied their motion because it
                   concluded that NRS 17.130 only allowed simple interest. This appeal
                   followed.
                                                    DISCUSSION
                                 The sole issue in this appeal is whether NRS 17.130, which
                   provides a statutory right for interest on judgments, authorizes an award
                   of compound interest. We review the award of interest upon a judgment
                   for error. Schiff v. Winchell,   126 Nev. „ 237 P.3d 99, 100 (2010).
                   Moreover, because the parties dispute the meaning of NRS 17.130, we use
                   a de novo standard of review as we interpret the statute.    Kerala Props.,
                   Inc. v. Familian, 122 Nev. 601, 604, 137 P.3d 1146, 1149 (2006).
                                 "When interpreting a statute, we give words their plain
                   meaning unless attributing the plain meaning would violate the spirit of
                   the statute." Banks ex rel. Banks v. Sunrise Hosp., 120 Nev. 822, 846, 102
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                 P.3d 52, 68 (2004). If the statute is unambiguous, we are "not permitted
                 to look beyond the statute itself when determining its meaning" Westpark
                 Owners' Ass'n v. Eighth Judicial Dist. Court, 123 Nev. 349, 357, 167 P.3d
421, 427 (2007). A statute "is ambiguous when it is capable of more than
                 one reasonable interpretation." Orion Portfolio Servs. 2, L.L.C. v. Cnty. of
                 Clark ex rel. Univ. Med. Ctr. of S. Nev., 126 Nev. , 245 P.3d 527,
                 531 (2010).
                               Simple interest is "Nnterest paid on the principal only and not
                 on accumulated interest."      Black's Law Dictionary 887 (9th ed. 2009).
                 Compound interest is thiterest paid on both the principal and the
                 previously accumulated interest."      Id.   When not provided for by an
                 agreement, compound interest on a judgment is only permissible if
                 authorized by statute.     Campbell, 111 Nev. at 1333, 905 P.2d at 165.
                 Because there is no agreement that provides for compound interest on the
                 appellants' judgment, NRS 17.130 must authorize compound interest for it
                 to be applied to their judgment instead of simple interest.
                               NRS 17.130(2) dictates the method of determining the interest
                 rate. It provides that the default interest rate on judgments shall be
                 based on the prime rate at Nevada's largest bank and be adjusted
                 biannually:
                               When no rate of interest is provided by contract or
                               otherwise by law, or specified in the judgment, the
                               judgment draws interest from the time of service
                               of the summons and complaint until satisfied,
                               except for any amount representing future
                               damages, which draws interest only from the time
                               of the entry of the judgment until satisfied, at a
                               rate equal to the prime rate at the largest bank in
                               Nevada as ascertained by the Commissioner of
                               Financial Institutions on January 1 or July 1, as
                               the case may be, immediately preceding the date
SUPREME COURT                  of judgment, plus 2 percent. The rate must be
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                             adjusted accordingly on each January 1 and July
                             I thereafter until the judgment is satisfied.
                NRS 17.130(2) (emphasis added).
                             The parties disagree about the meaning of the last sentence in
                the statute: "The rate must be adjusted accordingly on each January 1 and
                July 1 thereafter until the judgment is satisfied." NRS 17.130(2). They
                also dispute whether the term "per annum" is necessary to denote the use
                of simple interest.
                             The appellants argue that the term "adjusted accordingly" in
                the last sentence of NRS 17.130(2) means that every time the interest is
                adjusted, the judgment's principal must be adjusted to include the interest
                accrued during the prior six-month period. However, this interpretation
                takes the phrase "adjusted accordingly" out of context. Statutes must be
                interpreted as a whole, and the appellants fail to read the two sentences of
                the statute together.   See Arguello v. Sunset Station, Inc., 127 Nev.
252 P.3d 206, 209 (2011) (explaining that provisions of a statute must
                be read as a whole). As used in this statute, "adjusted accordingly"
                instructs the reader that the interest rate must be adjusted every six
                months to a rate that is two percent higher than the prime rate at
                Nevada's largest bank. The statute does not state that the amount of
                principal is to be adjusted, or that interest is to accrue on interest that has
                already been accumulated. Therefore, the phrase "adjusted accordingly"
                does not authorize compound interest.'

                      'Additionally, the use of a variable interest rate in a statute does not
                necessarily imply the use of compound interest. See D.E. Shaw Laminar
                Portfolios, L.L.C. v. Archon Corp., 755 F. Supp. 2d 1122, 1128-29 (D. Nev.
                2010) (applying a statutory interest rate that adjusts every six months to
                calculate an award of simple interest), affd mem., 483 F. App'x 358 (9th
                                                                  continued on next page . . .
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                                The appellants also argue that the phrase "per annum"
                    designates that the interest is to be simple. The failure to use this term in
                    MRS 17.130(2), they argue, authorizes an award of compound interest.
                    Cases from other jurisdictions demonstrate that "per annum" can
                    designate the application of simple interest. See, e.g., Am. Say. Bank v.
                    Michael, 474 N.Y.S.2d 300, 303 (App. Div. 1984) ("[W]hen an interest rate
                    is . . . expressed as a percent per annum, it should be understood as
                    indicating a simple annual rate rather than one that is compounded."),
                    modified, 477 N.E.2d 430 (N.Y. 1985). Although the use of the term "per
                    annum" in a statute about interest rates may be sufficient to dictate the
                    use of simple interest, it is not a necessary term for requiring the use of
                    simple interest. See Burlington N. R.R. Co. v. Whitt, 611 So. 2d 219, 223
                    (Ala. 1992) (stating that using an annual interest rate has no bearing on
                    whether the interest is simple or compound). Therefore, the failure to use
                    this term in the statute does not prohibit the application of the statute's
                    plain meaning which, in the absence of language authorizing compound
                    interest, unambiguously authorizes the award of simple interest only. 2

                    . . continued

                    Cir. 2012); see also Fendi Adele S.R.L. v. Burlington Coat Factory
                    Warehouse Corp., 689 F. Supp. 2d 585, 626 (S.D.N.Y. 2010) (applying the
                    federal underpayment rate found in the Internal Revenue Code but
                    requiring the calculation of simple interest).

                          2We have also considered the parties' policy arguments. In light of
                    the plain meaning of this unambiguous statute, we need not address these
                    arguments. See Westpark Owners' Ass'n, 123 Nev. at 357, 167 P.3d at 427.

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                                                       CONCLUSION
                                    Interest is simple unless otherwise stated in a contract or
                 statute. Because NRS 17.130(2) does not provide for compound interest,
                 interest awarded under this statute is simple. Thus, the district court did
                 not err in denying the appellants' motion for compound interest.
                 Therefore, we affirm the judgment of the district court.

                                                                                       J.
                                                             Saitta

                 We concur:

                                                        CA.
                 Gibboics

                              Piek24.              , J.
                 Pickering

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                 Hardesty
                            rA.A.   Lcsi-am        ,   J.

                  arraguirre

                                       Aca         ,    J.
                 Douglas

                 Cherry

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