Court Opinion

ID: 9657198
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:17:21.556836+00
Date Added: 2024-06-11T18:13:42.091562
License: Public Domain

HENDERSON, Justice
(dissenting).
There was considerable dispute concerning the amount of damages. Thus, such dispute underscores the tenuousness of the majority’s position.
In Meyer v. Dixon, 369 N.W.2d 658, 659 (S.D.1985), we emphasized that three conditions must be met before a party could recover prejudgment interest:
(1) It must be clear that the plaintiff is entitled to recover a sum certain, or that the damages sought are capable of being made certain by calculation;
(2) The right to recover must be vested in the plaintiff on a particular day; and
(3) The debtor must not have been prevented by the plaintiff or by law from paying the debt.
See Cole v. Melvin, 441 F.Supp. 193, 210 (D.S.D.1977). See also Hanson v. Funk Seeds Int’l, 373 N.W.2d 30, 36 (S.D.1985); Subsurfco, Inc. v. B-Y Water Disk, 369 N.W.2d 129,131 (S.D.1985). The basic statute controlling is SDCL 21-1-11.
These three conditions, establishing a requirement for prejudgment interest to be awarded, have an underlying reason which was set forth in Beka v. Lithium Corp. of America, 77 S.D. 370, 375, 92 N.W.2d 156, 159-60 (1958): “The reason for denying interest on a claim is that where the person liable does not know what sum he owes, he cannot be in default for not paying.”
Let us examine the shaky underpinnings of the majority opinion by examining the facts. Defendants were not advised of certain repairs, performed in 1981, totaling $13,688, until trial. There was some subsequent mental fluctuation and figure changing, for on January 19, 1982, Amert Construction Company estimated the cost of repairs to be $36,705. Some eight months later, on September 28, 1982, Amert Con*893struction Company changed the estimated cost of repairs to $95,505, which approximated three times the amount of the original estimate. Then, very shortly before trial, Amert Construction Company amended its claim for damages to $141,543.09.
Query: Can Ziebarth be faulted for not knowing exactly what sum it owes when the plaintiff does not know the extent of its claim? Thus, under Beka, defendant/Zie-barth should not be charged with prejudgment interest because it, as the debtor, could not know or reasonably ascertain the exact sum owing. See Hanson, 373 N.W.2d at 36; Meyer, 369 N.W.2d at 659; Subsurfco, 369 N.W.2d at 131. My viewpoint is also supported by State ex rel. Farmers State Bank v. Ed Cox & Son, 81 S.D. 165, 132 N.W.2d 282 (1965).
Then, on the very morning of trial, Amert Construction Company amended again, and went back to the $95,505 amount. If this is not the straw that breaks the camel’s back on uncertainty, consider that Amert Construction Company’s own expert testified that the costs of repair (damages) were somewhere between $210,000 and $280,000. Furthermore, during the trial, there was evidence that costs of repair would total between $25,000 and $30,000 if repairs had been made when the damage was first noticed.
With all of these facts and figures and circumstances before it, the jury ultimately returned a verdict of $95,505 which assessed: 3% of the verdict against Ziebarth Construction Company, 91% of the verdict against U.S. Fiber Corporation, and 6% of the verdict against Amert Construction Company. Whereupon, the trial court entered judgment without awarding prejudgment interest. As I believe that the trial court was right and the majority opinion is wrong, I would affirm and not reverse the trial court.
“When the exact sum of the indebtedness is known or can be readily ascertained the reason for the denial of interest does not exist.” Beka, 77 S.D. at 375, 92 N.W.2d at 160. Here, however, appel-lee/Ziebarth was besought with claims of varying amounts, changed even on the morning of trial, and it should not be held in default for not paying an unascertaina-ble sum which it knew that it owed.
This case is distinguishable from Gearhart v. Hyde, 39 S.D. 273, 164 N.W. 58 (1917), which stands for the proposition that “[t]he mere fact that the claim is disputed does not defeat the allowance of interest.” Beka, 77 S.D. at 375, 92 N.W.2d at 159 (citing Corcoran v. Halloran, 20 S.D. 384, 107 N.W. 210 (1906)). If, indeed, a plaintiff is filled with uncertainty as to what it has coming, how can the defendant be filled with certainty regarding what is owing?