Metzler v. Bci Coca-Cola Bottling Co. of L. A., Inc.

• Decision Date: 28 August 2013
• Docket Number: No. 2 CA–CV 2012–0173.,2 CA–CV 2012–0173.
• Citation: 310 P.3d 9,668 Ariz. Adv. Rep. 38,233 Ariz. 133
• Parties: Marisol METZLER, Plaintiff/Appellee, v. BCI COCA–COLA BOTTLING COMPANY OF LOS ANGELES, INC., dba BCI Coca–Cola Bottling Company of Arizona, a foreign corporation doing business in Arizona, Defendant/Appellant.
• Court: Arizona Court of Appeals

233 Ariz. 133

310 P.3d 9

668 Ariz. Adv. Rep. 38

Marisol METZLER, Plaintiff/Appellee,

v.BCI COCA–COLA BOTTLING COMPANY OF LOS ANGELES, INC., dba BCI Coca–Cola Bottling Company of Arizona, a foreign corporation doing business in Arizona, Defendant/Appellant.

No. 2 CA–CV 2012–0173.

Court of Appeals of Arizona, Division 2, Department A.

Aug. 28, 2013.

Hollingsworth Kelly By Louis Hollingsworth, Michael F. Kelly, and John F. Kelly, Tucson, Attorneys for Plaintiff/Appellee.

Renaud Cook Drury Mesaros, PA By Tamara N. Cook and Kevin R. Myer, Phoenix and Lewis and Roca LLP By Susan M. Freeman and William G. Voit, Phoenix, Attorneys for Defendant/Appellant.

OPINION

VASQUEZ, Presiding Judge.

¶ 1 In this personal injury action, appellant BCI Coca–Cola Bottling Company of Los Angeles, Inc. (BCI) appeals from the judgment entered after a jury verdict in favor of appellee Marisol Metzler and following two prior appeals. In this appeal, BCI contends the trial court erred in determining that prejudgment interest imposed as a sanction under Rule 68(g), Ariz. R. Civ. P., was interest on an “obligation” calculated at ten percent per annum pursuant to A.R.S. § 44–1201(A) and not interest “on a judgment” calculated at one percent plus the prime rate pursuant to subsection (B). For the reasons stated below, we affirm the judgment as modified.

Factual and Procedural Background

¶ 2 In August 2009, a jury found BCI liable for Metzler's injuries sustained in a fall at a grocery store and awarded her $1.5 million in damages. On September 2, 2009, the trial court entered judgment in favor of Metzler in the amount of $1,855,398.86, which included prejudgment interest under Rule 68(g) as a sanction against BCI for rejecting a prior, more favorable offer of judgment. On December 8, 2009, the court granted BCI's motion for a new trial on liability but denied a new trial on damages. BCI appealed the court's denial of a new trial on damages, and Metzler cross-appealed the grant of a new trial on liability. This court issued a memorandum decision reversing the grant of a new trial on liability, affirming the denial of a new trial on damages, and remanding the matter for entry of final judgment. Metzler v. BCI Coca–Cola Bottling Co. (Metzler I), No. 2 CA–CV 2010–0023, ¶ 16, 2011 WL 917330 (memorandum decision filed Mar. 16, 2011).

¶ 3 In April 2011, BCI unconditionally tendered, and Metzler accepted, payment of $1,906,690.76. According to BCI, the amount included: the damages award; Rule 68(g) sanctions including prejudgment interest from the date of the offer of judgment through September 2, 2009; post-judgment interest from September 3, 2009, through December 8, 2009; and costs on appeal. After this court's mandate in Metzler I issued on May 11, 2011, BCI filed a motion for a judgment on the mandate. BCI argued prejudgment interest under Rule 68(g) terminated on September 2, the date the trial court originally entered the judgment on the verdict, because that was “clearly the operative judgment.” In response, Metzler maintained that prejudgment interest continued to accrue from the date of the offer of judgment until entry of the judgment on the mandate.

¶ 4 On June 30, 2011, the trial court entered judgment, specifying that prejudgment interest terminated on September 2. Metzler appealed, and this court vacated the judgment. Metzler v. BCI Coca–Cola Bottling Co. (Metzler II), 230 Ariz. 26, ¶ 1, 279 P.3d 1188, 1189 (App.2012). In doing so, we explained that the September 2 judgment had been vacated by the trial court in granting BCI's motion for a new trial, thereby leaving the parties “without a judgment for the comparative purposes of Rule 68(g).” Id. ¶ 8. And, because the June 30 judgment was vacated pursuant to our decision on appeal, prejudgment interest continued to accrue. Id. ¶ 10. Accordingly, we remanded to the trial court for entry of judgment after a redetermination of prejudgment interest. Id. ¶ 11. Our mandate in Metzler II issued on August 6, 2012.

¶ 5 On remand, Metzler lodged a form of judgment with the trial court calculating prejudgment interest pursuant to Rule 68(g) at the rate of ten percent per annum, the same interest rate that had been used in the two prior judgments. BCI objected, asserting that under the recently amended version of § 44–1201, the interest rate should have been calculated at the rate of one percent per annum plus the prime rate or 4.25 percent. After finding the proper interest rate was ten percent, the court entered judgment on October 10, 2012. BCI now appeals from that judgment. We have jurisdiction pursuant to A.R.S. §§ 12–120.21 and 12–2101(A)(1).

Discussion

¶ 6 Rule 68(a) provides that at any time more than thirty days before trial, “any party may serve upon any other party an offer to allow judgment to be entered in the action.” Subsection (g) of the rule states the following:

If the offeree rejects an offer and does not later obtain a more favorable judgment ..., the offeree must pay, as a sanction, reasonable expert witness fees and double the taxable costs, as defined in A.R.S. § 12–332, incurred by the offeror after making the offer and prejudgment interest on unliquidated claims to accrue from the date of the offer.

An award of sanctions pursuant to Rule 68(g) is mandatory. Levy v. Alfaro, 215 Ariz. 443, ¶ 8, 160 P.3d 1201, 1203 (App.2007). The purpose of the rule is to promote settlement and to avoid protracted litigation. Id. ¶ 12;Warner v. Sw. Desert Images, LLC, 218 Ariz. 121, ¶ 52, 180 P.3d 986, 1002 (App.2008). Metzler offered to settle this case before trial for $150,000, but BCI rejected that offer, and the jury later awarded her $1.5 million in damages. BCI does not dispute that Metzler is entitled to an award of sanctions pursuant to Rule 68(g). Indeed, that issue was put to rest by Metzler I, which upheld the jury's liability verdict and damages award in favor of Metzler.

¶ 7 Instead, BCI contends that the trial court erred by calculating prejudgment interest under Rule 68(g) at the rate of ten percent per annum rather than one percent plus the prime rate, or 4.25 percent, pursuant to § 44–1201, as amended. BCI reasons that prejudgment interest, “by its very nature, inherently indicates an award made in the judgment.” Accordingly, it maintains that “prejudgment interest is interest on a judgment” under subsection (B). BCI additionally argues that prejudgment interest “does not change its nature into something else merely because it is awarded as a Rule 68 sanction.” Metzler responds that she is entitled to Rule 68(g) prejudgment interest at ten percent pursuant to § 44–1201(A).¹ She contends that “prejudgment interest pursuant to Rule 68 is a sanction,” which “is more appropriately classified as an ‘obligation’ or ‘indebtedness' ” under subsection (A). The trial court agreed with Metzler, concluding that “the amount of interest owed is an indebtedness or other obligation as set forth in” § 44–1201(A).

¶ 8 We review questions of law, including the interpretation of statutes and court rules, de novo. Town of Marana v. Pima Cnty., 230 Ariz. 142, ¶ 20, 281 P.3d 1010, 1015 (App.2012); Perguson v. Tamis, 188 Ariz. 425, 427, 937 P.2d 347, 349 (App.1996). We can affirm the trial court's ruling if it is correct for any reason. Forszt v. Rodriguez, 212 Ariz. 263, ¶ 9, 130 P.3d 538, 540 (App.2006). “In interpreting the meaning of a statute, we seek to discern the legislature's intent, looking primarily to the statutory language and giving effect to statutory terms in accordance with their commonly accepted meanings.” Sierra Tucson, Inc. v. Pima Cnty., 178 Ariz. 215, 220, 871 P.2d 762, 767 (App.1994); see alsoA.R.S. § 1–213. If a statute's language is clear, it is “the best indicator of the authors' intent and as a matter of judicial restraint we ‘must apply it without resorting to other methods of statutory interpretation, unless application of the plain meaning would lead to impossible or absurd results.’ ” Winterbottom v. Ronan, 227 Ariz. 364, ¶ 5, 258 P.3d 182, 183 (App.2011), quoting N. Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301, ¶ 9, 93 P.3d 501, 503 (2004). See also Fragoso v. Fell, 210 Ariz. 427, ¶ 7, 111 P.3d 1027, 1030 (App.2005) (applying same principles to procedural rules).

¶ 9 Section 44–1201 governs interest on civil judgments generally. In 2011, the legislature amended the statute,² which now provides in relevant part:

A. Interest on any loan, indebtedness or other obligation shall be at the rate of ten per cent per annum, unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to. Interest on any judgment that is based on a written agreement evidencing a loan, indebtedness or obligation that bears a rate of interest not in excess of the maximum permitted by law shall be at the rate of interest provided in the agreement and shall be specified in the judgment.

B. Unless specifically provided for in statute or a different rate is contracted for in writing, interest on any judgment shall be at the lesser of ten per cent per annum or at a rate per annum that is equal to one per cent plus the prime rate as published by the board of governors of the federal reserve system in statistical release H.15 or any publication that may supersede it on the date that the judgment is entered. The judgment shall state the applicable interest rate and it shall not change after it is entered.

And, according to § 44–1201(F), “[i]f awarded, prejudgment interest shall be at the rate described in subsection A or B of this section.” In amending § 44–1201, the legislature expressly stated it was to apply “to all loans that are entered into, all debts and obligations that are incurred and all judgments that are entered on or after the effective date of this act.” 2011 Ariz. Sess. Laws, ch. 99, § 17. The effective date of the act was July 20, 2011, before the current judgment was entered.³

¶ 10 Therefore, the question...