Burke v. Groover, s. 07–CV–1407

• Decision Date: 21 July 2011
• Docket Number: 07–CV–1420.,Nos. 07–CV–1407,s. 07–CV–1407
• Citation: 26 A.3d 292
• Court: D.C. Court of Appeals
• Parties: Sharon K. BURKE, Appellant,v.GROOVER, CHRISTIE & MERRITT, P.C., et al., Appellees.

26 A.3d 292

Sharon K. BURKE, Appellant,

v.GROOVER, CHRISTIE & MERRITT, P.C., et al., Appellees.

Nos. 07–CV–1407

07–CV–1420.

District of Columbia Court of Appeals.

Argued March 12, 2009.Decided July 21, 2011.

Patrick A. Malone, with whom Raymond B. Herschthal, Washington, DC, was on the brief, for appellant.Alfred F. Belcuore, Washington, DC, for appellees.Before RUIZ and BLACKBURNE–RIGSBY, Associate Judges, and Ferren, Senior Judge.RUIZ, Associate Judge:

After suffering a stroke in October of 2000, appellant sued appellees for medical malpractice. Following a jury verdict and judgment for appellant on March 19, 2004, appellees challenged application of District of Columbia law to the amount of non-economic damages allowed; and, on appeal, we agreed that the Maryland cap on non-economic damages applied to appellant's claim. See Drs. Groover, Christie & Merritt, P.C. v. Burke, 917 A.2d 1110, 1119 (D.C.2007). Following the first appeal, the judgment was paid on March 23, 2007, three years after the original jury verdict was entered.¹ This appeal concerns the interest owed as a result of this three-year delay in satisfaction of the judgment and subsequent delay in payment of the post-judgment interest due.

On appeal, appellant presents three arguments:

(1) As a matter of law, the rate of post-judgment interest made applicable to the judgment by D.C.Code § 28–3302(c) is variable, not fixed;

(2) The trial court abused its discretion in applying the statutory exception in D.C.Code § 28–3302(c) by finding “good cause” to reduce the statutory rate of post-judgment interest; and

(3) The trial court failed to address, and thus erred in disallowing, appellant's claim to interest on the undisputed amount of post-judgment interest unpaid for the period between the date the judgment was satisfied (March 23, 2007) and the date the post-judgment interest was ordered by the court (December 12, 2007).

We agree with appellant on the first two points and reverse the judgment on that basis; on the third issue, we remand for further proceedings consistent with this opinion.

I. D.C.Code § 28–3302(c): The Statutory Rate

Judgment for the plaintiff in a tort action “shall bear interest.” D.C.Code § 15–109. The interest rate applicable to judgments against private parties in the District of Columbia is measured by reference to the Internal Revenue Code, as provided in D.C.Code § 28–3302(c) (2001). That section provides, in relevant part:

The rate of interest on judgments and decrees, where the judgment or decree is not against the District of Columbia, ... or where the rate of interest is not fixed by contract, shall be 70% of the rate of interest set by the Secretary of the Treasury pursuant to section 6621 of the Internal Revenue Code of 1986 ... for underpayments of tax to the Internal Revenue Service, rounded to the nearest full percent, or if exactly 1/2 of 1%, increased to the next highest full percent; provided, that a court of competent jurisdiction may lower the rate of interest under this subsection for good cause shown or upon a showing that the judgment debtor in good faith is unable to pay the judgment....

Section 6621 of the Internal Revenue Code (I.R.C.) in turn defines the Treasury rate applicable to the underpayment of tax: the sum of the Federal short-term rate, as determined by the Secretary of the Treasury “the first month in each calendar quarter,” plus three percentage points. I.R.C. § 6621(a) & (b) (2006).

The parties agree (as the statute makes clear) that the applicable rate of interest is based on the variable Treasury Rate for the underpayment of taxes, absent a reduction under the “good cause” exception, which we discuss in the next section. See D.C.Code § 28–3302(c); I.R.C. § 6621 (2006). Where they differ is on how that rate is to be applied to a particular judgment during the time that the judgment amount remains unpaid.² Appellant argues that the rate fluctuates, consistent with the variable nature of the referenced I.R.C. rate. Appellees contend that the applicable rate is variable only in the sense that it is not a number set by statute, and that although it is based on the fluctuating federal short-term rate, it is fixed as of the time judgment is entered.

Whether § 28–3302(c) provides for a rate of interest that is fixed as of the date of judgment, or one that fluctuates along with the I.R.C. rate during the period from entry of judgment to satisfaction of the judgment, is an issue of first impression.³ It is a question of statutory construction we review de novo. See Carlson Constr. Co. v. Dupont West Condo., Inc., 932 A.2d 1132, 1134 (D.C.2007). In doing so,

[w]e first look at the language of a statute to interpret a statute. We are required to give effect to a statute's plain meaning if the words are clear and unambiguous. The literal words of a statute, however, are not the sole index to legislative intent, but rather, are to be read in the light of the statute taken as a whole, and are to be given a sensible construction and one that would not work an obvious injustice.Id. (quoting District of Columbia v. Bender, 906 A.2d 277, 281–82 (D.C.2006)). “In the interest of maintaining the cohesion between this court's statutory interpretation and the policy initiatives behind the legislation, we also consult the legislative history of a statute for guidance as necessary.” Robert Siegel, Inc. v. District of Columbia, 892 A.2d 387, 393 (D.C.2006) (citing Jeffrey v. United States, 878 A.2d 1189, 1193 (D.C.2005)).

Both parties argue that the statute's plain language necessitates a holding in their favor. See Varela v. Hi–Lo Powered Stirrups, Inc., 424 A.2d 61, 64–65 (D.C.1980) (“The primary and general rule of statutory construction is that the intent of the lawmaker is to be found in the language that he [or she] has used.” (quoting United States v. Goldenberg, 168 U.S. 95, 102–03, 18 S.Ct. 3, 42 L.Ed. 394 (1897))). Appellant's contention is straightforward: D.C.Code § 28–3302(c) incorporates the I.R.C. rate, which is variable in nature. Appellees, on the other hand, assert that even though the interest rate established by D.C. law is based on the I.R.C.'s variable rate, it is to be fixed as of the date of judgment. They point to the D.C. statute's use of the term “ the rate of interest,” rather than the rates of interest, which, they claim, reveals the legislature's intent to apply a fixed rate of interest upon the entry of judgment. We find appellee's argument less persuasive, however, because use of the singular term “rate” does not preclude a variable rate, which is defined as “[ a ] n interest rate that varies at preset intervals in relation to the current market rate.” Black's Law Dictionary 888 (9th ed.2009) (emphasis added). The I.R.C. rate that § 28–3302(c) uses as a reference point is “a variable rate.” See I.R.C. § 6621(a). Further, other sections of the D.C.Code refer to a “variable rate ” in the singular, see, e.g., D.C.Code § 31–1371.02(82)(A)(ii)(III) (2001) (“fixed or variable rate”); D.C.Code § 2–1217.06 (2001) (“any fixed or variable rate”); D.C.Code § 26–1113(a)(2)(c) (2001) (“variable rate”), while others refer to a “variable rate or rates.” See, e.g., D.C.Code § 28:3–112(b) (2001) ( “Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates.”).

Moreover, the rate of interest in D.C.Code § 28–3302(c) is calculated based upon the rate “set by the Secretary of the Treasury pursuant to § 6621 of the Internal Revenue Code.” That section of the I.R.C. refers to the Federal short-term rate determined by the Secretary of the Treasury “the first month in each calendar quarter.” I.R.C. § 6621(a)(2) & (b). Therefore, the use of the singular “rate” in § 28–3302(c) by definition refers to potentially different rates, depending on the quarter for which it is set by the Secretary of the Treasury. Moreover, regulations issued pursuant to I.R.C. § 6621 provide examples of its application that make clear that the rate of interest continues to float during the period of non-payment of tax, and is not fixed as of the date the tax became due. See 26 C.F.R. § 301.6621–1(d) (2010) (illustrating in example 6 that the interest rate applicable under I.R.C. § 6621 continues to float during the period the tax remains outstanding). In short, when viewed in the context of the dictionary definition, usage in other statutes and the regulation interpreting the application of the I.R.C. rate, we think the better interpretation of the legislature's use of the singular term “rate” in D.C.Code § 28–3302(c) is one that distinguishes use of the plural “rates” to refer to different types of rates rather than to one variable rate that can fluctuate over time.

This conclusion is supported by an additional inference we draw from another provision of the statute. Subsection (b) provides that “[i]nterest, when authorized by law, on judgments or decrees against the District of Columbia, or its officers, or its employees acting within the scope of their employment, is at the rate of not exceeding 4% per annum.” D.C.Code § 28–3302(b). We find it significant that judgments against the government are set at a fixed rate, while at the same time, “where the judgment or decree is not against the District of Columbia,” id. § 28–3302(c), the rate of interest is variable. Indeed, it is easy to extrapolate a principled basis upon which this distinction was drawn. The District of Columbia must have the benefit of knowing far in advance how much it will owe on any obligation it incurs, lest the administration of and budgeting for a large and multi-faceted bureaucracy become unwieldy—a concern not as commonly applicable to private parties.

“Usually ‘[w]hen the plain meaning of the statutory language is unambiguous, the intent of the legislature is clear, and judicial inquiry need go no further.’ ” District of Columbia v. Place, 892 A.2d...