THIS OPINION HAS BEEN REVERSED
Holds that although judgment interest is prime-plus-one, pre-judgment interest is 10%.
This personal injury case has run through several appeals, first on liability and damages, then on the dates when prejudgment interest would apply, and now on the prejudgment interest rate. BCI had to pay prejudgment interest because the plaintiff’s judgment beat her rejected OJ.
Metzler argued that prejudgment interest is an “obligation” under 42-1201(A) (“loan, indebtedness, or other obligation” pays 10%). BCI argued for the judgment interest rate, prime-plus-one (42-1201(B)). The trial court ruled prime-plus-one. The Court of Appeals reverses.
The court, having determined that statutory intent depends on the common meaning of “obligation,” rules that prejudgment interest is an “obligation.” “Interest accruing during the prejudgment period pursuant to Rule 68(g) cannot be interest on the judgment later entered.” That’s an interesting way to put it – as though interest were in fact accruing before the judgment. BCI said that the judgment is the source of the interest. The court disagrees; “the source of prejudgment interest imposed as a sanction under Rule 68(g) is the rule itself, not the judgment.” The court does not explain why that is so even though by the terms of the rule there is nothing owed if there is no judgment, and for that matter one of a particular kind: more favorable than the offer. The court seems to think of prejudgment interest as an inchoate “something” that has some real, though hidden, existence even before the judgment allows it to reveal itself.
The court says in a footnote that because it holds prejudgment interest an “obligation” it need not decide if it is an “indebtedness.” We had thought ejusdem generis still the rule but its apparently not; the court doesn’t mention, at any rate, any inclination to look at “obligation” in light of “loan” and “indebtedness.”