Sperry v. Field

Citations: 205 P.3d 365; 2009 WL 975852Docket: No. 08SC438

Court: Supreme Court of Colorado; April 13, 2009; Colorado; State Supreme Court

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Justice MARTINEZ delivered the Opinion of the Court regarding the appeal by Petitioner Brenda Sperry, who sought to recover damages for personal injuries. The court of appeals had determined that under section 13-21-101, C.R.S. 2008, a judgment creditor is entitled to post-judgment interest from the date the judgment is entered until it is satisfied. Sperry contended that post-judgment interest should instead begin from the date her claim accrued, referencing the language of the statute and the precedent set in Rodriguez v. Schutt. The court found this interpretation inconsistent with the common understanding of "post-judgment interest" and contrary to the objectives of section 13-21-101, leading to affirmation of the court of appeals' decision.

In the factual background, Sperry sustained injuries from a car accident caused by Respondent Sherry Field on November 24, 1997. She initiated a lawsuit for damages, receiving a jury award of $387,000, which included pre-judgment interest. Field's appeal focused on evidentiary issues and the lack of a pre-judgment interest request in Sperry's complaint. The court of appeals ruled against Field’s evidentiary claims but concluded that pre-judgment interest was improperly awarded. Following a denial of certiorari by the supreme court, Sperry sought a modified judgment for post-judgment interest based on section 13-21-101.

While both parties agreed on the entitlement to post-judgment interest, they disagreed on its commencement date. The trial court ultimately granted post-judgment interest from the date of judgment entry, which Field settled on December 15, 2006. Sperry's appeal, asserting that post-judgment interest should apply from the date of the accident, was rejected by the court of appeals, leading to the current appeal.

Section 13-21-101 specifies that if a judgment for personal injury damages is appealed, interest is calculated from the date the action accrued, with specific conditions under subsections (2)(a) and (2)(b) regarding affirmed or modified judgments. The statute outlines a market-based approach for interest calculation in subsections (3) and (4).

Judgment debtors who do not appeal are required to pay pre-judgment and post-judgment interest at a rate of nine percent, whereas those who appeal pay interest at the market-determined rate, according to section 13-21-101. In Rodriguez v. Schutt, the court found that distinguishing between appealed and non-appealed judgments for pre-judgment interest lacks a rational basis and violates equal protection; however, such a distinction for post-judgment interest is deemed permissible. The court subsequently severed certain language in section 13-21-101(1), stipulating that if a judgment for money in a personal injury action is appealed, post-judgment interest is calculated from the date the action accrued and includes annual compounding from the filing date. 

Sperry argues that the statute entitles her to post-judgment interest from when the claim accrued, asserting that the revised statute clarifies her entitlement. Conversely, Field contends this interpretation is absurd, as "post-judgment" interest should logically commence only after judgment is entered. Field also argues that Sperry's claim for interest between the accident and judgment dates is an indirect attempt to claim pre-judgment interest, which she forfeited by not requesting it in her complaint. 

Statutory interpretation is a legal question subject to de novo review, and interest statutes must be strictly construed given they derogate from common law. A reviewing court starts with the statute's plain language, only exploring further if the language is ambiguous. In its current form, subsection 13-21-101(1) suggests that interest is calculated from the action's accrual date, which is defined as when the plaintiff is aware of the injury and its cause. However, the term "post-judgment interest" typically indicates interest calculated after a judgment is entered, as supported by other statutory definitions and legal dictionaries.

Section 13-21-101(1) is identified as ambiguous due to conflicting interpretations of "post-judgment interest," which is stated to be calculated from the "date the action accrued," contradicting its established definition in similar statutes. The legislative history reveals that in 1975, the statute was amended to allow interest from the date a personal injury suit is filed until satisfaction. In 1979, this was modified to permit claims for interest from the date the action accrued. The 1982 amendment introduced "pre-judgment" and "post-judgment" interest, defining their application specifically to judgments appealed by the debtor, aiming to ensure judgment creditors receive the time value of their money during appeals.

The interpretation suggested by Sperry would allow a judgment creditor to receive post-judgment interest from the accrual date to satisfaction, effectively leading to a double payment of pre-judgment interest when it is already included in the judgment. This would result in "post-judgment" interest compounding on pre-judgment interest, contrary to legislative intent to eliminate financial incentives for appealing. Although Sperry claims her interpretation wouldn't result in double compensation since she wasn't awarded pre-judgment interest, it would still permit post-judgment interest calculations from a date prior to judgment, which the legislature likely did not intend.

Sperry's interpretation of the statute suggests she is entitled to interest from the accrual date to the judgment date, which she labels as "post-judgment" interest. However, since she did not request pre-judgment interest, she is ineligible to receive any interest for that time period. Sperry references the court's previous decision in Rodriguez, arguing that a modification to section 13-21-101(1) necessitates the award of post-judgment interest from the accrual date. The court clarifies that changes made in Rodriguez merely heightened existing ambiguities in the statute and that awarding interest based on a judgment debtor's appeal status would violate equal protection principles. 

The court emphasizes that regardless of terminology, interest earned between the accrual of the action and judgment entry is fundamentally pre-judgment interest. The Rodriguez ruling aimed to address unequal treatment of appealing versus non-appealing judgment debtors, but inadvertently altered the statute's meaning, complicating its interpretation. The court highlights that severing unconstitutional aspects of a statute can unintentionally obscure its original intent, as evidenced by the changes made in Rodriguez, which did not intend to address the timing of post-judgment interest accrual. This case underscores the potential pitfalls of judicial alterations to statutory language.

The personal injury interest statute aims to eliminate financial incentives or disincentives for appealing judgments and ensure that the judgment creditor receives the time value of their money. Section 13-21-101 specifies that post-judgment interest should accrue from the date the original judgment is entered until satisfaction, which prevents disincentives for judgment debtors to appeal and ensures creditors do not receive double recovery if pre-judgment interest is not claimed. The court affirmed the appellate court's judgment, noting that prior judicial modifications to the statute created confusion regarding the timing of interest calculation. A concurrence emphasized that legislative clarification is necessary but asserted that since the plaintiff did not seek pre-judgment interest in her original complaint, she cannot claim it post-appeal. Previous rulings established that interest must be requested before judgment to be collectible. The discussion also referenced earlier court decisions regarding the interpretation of section 13-21-101, indicating a need for consistent application of terms relating to interest before and after judgment. The constitutionality of the statute's distinctions was not addressed in this case.