Court Opinion

ID: 3762889
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:18:35.12884+00
Date Added: 2024-06-11T18:04:33.542912
License: Public Domain

I concur with the majority opinion and its ruling with regard to the first assignment of error and agree that the first assignment of error is without merit.
I disagree with the majority's finding that the second assignment of error is without merit. It is my opinion that the trial court erred in concluding that the amount owed by the appellants to the appellees after July 31, 1988 was liquidated and that prejudgment interest in the amount of ten percent began to accrue at that time.
The court's primary focus in determining whether an appellee is entitled to prejudgment interest is the extent to which the aggrieved party has been fully compensated. Royal Elec. Constr.Corp. v. Ohio State Univ. (1995), 73 Ohio St.3d 110,652 N.E.2d 687.
It has long been the law in Ohio when a debt is determined to be liquidated and no interest rate stipulated that interest accrues at the legal rate when payment becomes due. PrepaktConcrete Co. v. Koski Constr. Co. (1989), 60 Ohio App.3d 28,573 N.E.2d 209. Whether or not the amount owed was liquidated is not in and of itself determinative, but it is very relevant in determining when the amount payable was due. Where an amount is unascertainable, or unliquidated, payment cannot possibly be due until the sum is ascertained. Therefore, a *Page 515 
determination as to an award of prejudgment interest must rely upon a determination as to when the amount owed became a sum certain.
An award of prejudgment interest is intended to act as compensation to the aggrieved party, not as punishment to the party responsible for the underlying damages. Royal Elec.Constr. Corp., supra.
In Mahon-Evans Realty, Inc. v. Spike (1986), 33 Ohio App.3d 268,  515 N.E.2d 953, the court stated that where trial testimony demonstrates that both parties to the contract hold different views as to the amount owing and where the amount cannot be determined by reference to the parties' agreement, the debt is unliquidated. The compensatory theory of prejudgment interest requires that if the amount is determined to be unliquidated, the statutory interest should accrue from the day of the trial court's judgment. To award an aggrieved party prejudgment interest on a truly disputed sum would be punitive.
There was obviously a disagreement between the parties as to the commencement of the interest rate of fifteen percent per annum owing on the original mortgage note herein. Appellants argued that it started to accrue on October 30, 1984. Appellees argued that it began to accrue on November 1, 1994. This major dispute led appellants to believe that they were entitled to $41,600. Appellees on the other hand argued that the note was to be interest-free until 1994.
There were totally different views as to the amount owing because of a total disagreement on the term of interest. The trial court eventually held that the interest was not to begin until November 1, 1994 and that appellants owed appellees the amount of $32,728.39 plus prejudgment interest. This was based on the trial court's taking of testimony, review of exhibits, and reliance upon case law stated in the journal entry.
In addition, appellees themselves did not ascertain that there was an overpayment until 1991. Although the courts have previously held that a mere denial of liability for a debt that is otherwise clear and ascertainable is not adequate to defeat a claim for prejudgment interest, Nursing Staff of Cincinnati,Inc. v. Sherman (1984), 13 Ohio App.3d 328, 13 OBR 406,496 N.E.2d 1031; Braverman v. Spriggs (1980), 68 Ohio App.2d 58, 22 O.O.3d 47, 426 N.E.2d 526, it is apparent in this case that the debt was not readily ascertainable and the question raised was whether or not appellees or appellants were entitled to payment.
Because a court decision was necessary to interpret this note and to clarify the issue of the amount owing between the parties, it cannot be said that the debt in question was a sum certain. Since the sum was not certain until the date of the trial court's judgment entry, it cannot follow that payment was due prior to that date. An award of prejudgment interest would therefore be punitive. *Page 516 
The parties had a legitimate difference in opinion, which required a trial and a judicial decision to clarify. Thus, the award of prejudgment interest is unwarranted and punitive. I would hold that appellants' second assignment of error has merit and that the judgment of the trial court should be reversed in part.