Prejudgment Interest: Oliver vs. Hilliard, COA, NPO, 3/1/2013

OLIVER (ROBERT C.)
VS.
HILLIARD (J.J.B.), ET AL.
OPINION AFFIRMING IN PART, REVERSING IN PART AND REMANDING
CLAYTON (PRESIDING JUDGE)
COMBS (CONCURS) AND THOMPSON (DISSENTS)
2010-CA-001138-MR
2010-CA-001236-MR;
2010-CA-001428-MR;
2010-CA-001479-MR
NOT TO BE PUBLISHED
JEFFERSON

Note that in addition to addressing prejudgment interest, COAKY took a look at emotional distress not being admissible for punitive damages and the propriety of the tender following the verdict and judgment.

CLAYTON, JUDGE: The Appellant/Cross-Appellee, Robert Oliver, appeals several rulings by the trial court and Appellee/Cross-Appellant J.J.B. Hilliard, W.L. Lyons, Inc. (Hilliard Lyons) also appeals the decision of the trial court. Based upon the following, we affirm in part, reverse in part and remand.

In Church & Mullins Corp. v. Bethlehem Minerals Co., 887 S.W.2d 321, 325 (Ky. 1992), the Kentucky Supreme Court held that “[t]he determination as to whether or not to award prejudgment interest is based upon the foundation of equity and justice. It is a determination to be made by the trial court and to be disturbed by an appellate court only upon a showing of an abuse of discretion.” In Nucor Corp. v. Gen. Elec. Co., 812 S.W.2d 136, 144 (Ky. 1991), the Court set forth that the determination of prejudgment interest was a decision the judge would make, not a jury. The Court went on to cite the Restatement (Second) of Contracts § 354 as follows:

Id.

The award of prejudgment interest, as it would apply to the contract theory in this case, is covered in the Restatement (Second) of Contracts § 354, “Interest as Damages,” as follows:

(1) If the breach consists of a failure to pay a definite sum in money or to render a performance with fixed or ascertainable monetary value, interest is recoverable from the time for performance on the amount due less all deductions to which the party in breach is entitled. (2) In any other case, such interest may be allowed as justice requires on the amount that would have been just compensation had it been paid when performance was due.

Thus, where the subject matter of the breach of contract claim falls under subsection (1) above, interest is due as a matter of course, and where, as in this case, it falls under subsection (2) above, interest “may be allowed as justice requires.” Both subsections presuppose the trier of fact, judge or jury, has decided both the question of breach of contract and the amount due for the breach before reaching the question of interest as damages.

Subsection (1) is applicable in this situation. Oliver was terminated from his position of employment. His agreement with his employer was that he would continue on with his employment for the transition period for a specific sum of money. The jury found that Hilliard Lyons did not fire Oliver for cause and that he was entitled to the monies the parties had agreed to. Thus, we conclude that the trial court abused its discretion in failing to award prejudgment interest in this case.

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