Morava v. COMG

• Decision Date: 27 March 2001
• Docket Number: No. 94,908.,94,908.
• Citation: 2001 OK CIV APP 84,26 P.3d 779
• Parties: Betty Carolyn MORAVA, Personal Representative and Executrix of the Estate of David A. Morava, Deceased, Plaintiff/Appellee, v. CENTRAL OKLAHOMA MEDICAL GROUP, INC., an Oklahoma Professional Corporation, d/b/a COMG, Defendant/Appellant, and Prudential Health Care Plan, Inc., a Texas corporation, d/b/a Prucare of Oklahoma; Prudential Health Care Plan, Inc., d/b/a PruCare, a subsidiary of The Prudential Insurance Company of America The Prudential Insurance Company of America, a New Jersey corporation, Defendants.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

26 P.3d 779

2001 OK CIV APP 84

Betty Carolyn MORAVA, Personal Representative and Executrix of the Estate of David A. Morava, Deceased, Plaintiff/Appellee, v. CENTRAL OKLAHOMA MEDICAL GROUP, INC., an Oklahoma Professional Corporation, d/b/a COMG, Defendant/Appellant, and Prudential Health Care Plan, Inc., a Texas corporation, d/b/a Prucare of Oklahoma; Prudential Health Care Plan, Inc., d/b/a PruCare, a subsidiary of The Prudential Insurance Company of America The Prudential Insurance Company of America, a New Jersey corporation, Defendants.

No. 94,908.

Court of Civil Appeals of Oklahoma, Division No. 4.

Decided March 27, 2001.

Certiorari Denied May 31, 2001.

Howard K. Berry, Jr., Berry & Berry, and Robert E. Manchester, Shannon K. Emmons, Manchester & Pignato, P.C., Oklahoma City, OK, for Plaintiffs/Appellees.

Benjamin J. Butts, Short, Wiggins, Margo & Butts, Oklahoma City, OK, for Defendants/Appellants.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4. RAPP, Judge:

¶ 1 The trial court defendant, Central Oklahoma Medical Group, Inc. (COMG), appeals a judgment in favor of the trial court plaintiff, Betty Carolyn Morava, (Morava) awarding her prejudgment interest on the entire verdict, rather than reducing the interest by taking into account the amount paid by settling co-defendants.

BACKGROUND

¶ 2 This case comes before this Court on a single issue presented by an agreed statement of the record.

¶ 3 Morava filed a medical malpractice action against COMG and the other defendants. The case was tried to a jury with COMG as defendant. COMG requested a jury interrogatory, which was given, asking whether the co-defendants were negligent. The jury found the co-defendants to be negligent and that their negligence contributed to the damages suffered. In addition, the jury returned a verdict for $1,500,000.00. The verdict was returned on March 31, 2000, accepted by the trial court without objection, and the jury was discharged.

¶ 4 Prior to trial and verdict, the defendants other than COMG settled and paid Morava the sum of $1,000,000.00. The settlement checks were tendered on March 31, 2000, the same day as the verdict was returned.¹

¶ 5 The trial court assessed prejudgment interest on the total amount of the verdict.² This amounted to $889,315.89. This sum was added to the verdict for a total judgment of $2,389,315.89 plus uncontested costs of $9,898.95. Then, the $1,000,000.00 paid by the co-defendants was credited, leaving a net judgment against COMG of $1,399,214.84.

¶ 6 COMG appeals because it contends that the trial court should have deducted the $1,000.000.00 paid by co-defendants before calculating the prejudgment interest. COMG has satisfied all but the contested portion of the judgment, which includes the costs, the $500,000.00 balance on the verdict after credit for the co-defendants' payment, and prejudgment interest on the reduced verdict in the sum of $296,319.00. Thus, the issue here is whether COMG should be liable for prejudgment interest of $889,315.89, as calculated and decreed by the trial court, or the sum of $296,319.00, which would be the interest on the verdict after reduction due to credit from the co-defendants' payment of $1,000,000.00.

STANDARD OF REVIEW

¶ 7 This appeal involves the interpretation and application of 12 O.S. Supp. 1999, §§ 727(E) and 832(H)(1). Where the facts are not disputed, an appeal presents only a question of law. Baptist Bldg. Corp. v. Barnes, 1994 OK CIV APP 71, ¶ 5, 874 P.2d 68, 69. The appellate court has the plenary, independent, and nondeferential authority to reexamine a trial court's legal rulings. Neil Acquisition L.L.C. v. Wingrod Inv. Corp., 1996 OK 125, 932 P.2d 1100, n. 1. Matters involving legislative intent present questions of law which are examined independently and without deference to the trial court's ruling. Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991); Keizor v. Sand Springs Ry. Co., 1993 OK CIV APP 98, ¶ 5, 861 P.2d 326, 328.

ANALYSIS AND REVIEW

¶ 8 Prejudgment interest is authorized by statute. 12 O.S. Supp.1999, § 727(E). In part, the statute provides:

E. [I]f a verdict for damages by reason of personal injuries . . . is accepted by the trial court, the court in rendering judgment shall add interest on the verdict at a rate prescribed pursuant to subsection I of this section from the date the suit resulting in the judgment was commenced to the earlier of the date the verdict is accepted by the trial court as expressly stated in the judgment, or the date the judgment is filed with the court clerk . . . . After the computation of all prejudgment interest has been completed, the total amount of prejudgment interest shall be added to the amount of the judgment rendered pursuant to the trial of the action, and the total amount of the resulting judgment shall become the amount upon which post-judgment interest is computed pursuant to subsection A of this section.

¶ 9 Section 832 of Title 12, deals with contribution among joint tortfeasors. Section 832(A) gives the right of contribution to persons jointly and severally liable in tort for the same injury. Here, the parties agree that as a result of the special interrogatory answer by the jury, the settling co-defendants and COMG are jointly and severally liable.³ Subsection 832(H)(1) provides:

H. When a release, covenant not to sue, or a similar agreement is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death:

1. It does not discharge any other tort-feasor from liability for the injury or wrongful death unless the other tort-feasor is specifically named; but it reduces the claim against others to the extent of any amount stipulated by the release or covenant, or the amount of the consideration paid for it, whichever is the greater.

¶ 10 COMG asserts that Morava's "claim" includes the prejudgment interest and is reduced accordingly under Section 832(H)(1). Morava urges that Section 732(E) mandates that the calculation of prejudgment interest be based upon the "verdict" unaffected by the payment from the co-defendants. As this Court views the issue, the question is whether Section 832(H)(1) modifies Section 727(E) because Section 727(E) unequivocally directs that the calculation of prejudgment interest be premised upon the amount of the verdict.

¶ 11 Prejudgment interest must have a statutory authorization. Sisney v. Smalley, 1984 OK 70, ¶ 8, 690 P.2d 1048, 1050. Originally, the statute permitted interest on the judgment and the statute was codified under Title 15, Contracts. Then, in 1971, the statute was amended to provide for prejudgment interest calculated on the verdict and the statute was moved to Title 12, Civil Procedure. Laws 1971, c. 252. Prejudgment interest in applicable tort actions has been said to be "in the nature of" compensation for defendant's use of money to which the plaintiff was entitled. Burwell v. Oklahoma Farm Bureau Mut. Ins. Co., 1995 OK CIV APP 50, ¶ 23, 896 P.2d 1195, 1199. Prejudgment interest serves the function of providing compensation for the loss of use of money due as damages from the time the claim accrues until judgment is rendered. Withrow v. Red Eagle Oil Co., 1988 OK 16, ¶ 8, 755 P.2d 622, 624. The interest is measured by the yearly value of money during the period of deprivation of use from the filing of the petition to the acceptance of the verdict. Bohnefeld v. Haney, 1996 OK CIV APP 141, ¶ 18, 931 P.2d 90, 93.

¶ 12 Here, Section 727(E) provides the authority to compensate Morava for the loss of use of her damages, determined by the jury to be $1,500,000.00. This compensation, or prejudgment interest, is calculated on the verdict. Landrum v. National Union Ins. Co., 1996 OK 18, ¶ 5, 912 P.2d 324, 327. In addition, Landrum held that the plaintiffs there could not receive all of the prejudgment interest because some of their damages had been paid by the workers' compensation insurer. The worker's insurer became entitled to a share of the prejudgment interest because it, not the plaintiffs, had lost the use of the damages to the extent that it had paid plaintiffs.

¶ 13 The clear import of Landrum is that a plaintiff cannot recover excess prejudgment interest. In Woolard v. JLG Industries, Inc., 210 F.3d 1158 (10th Cir.2000), the Court determined that the law of Oklahoma required that prejudgment interest be calculated on the verdict but, given that plaintiff there had settled prior to trial with a co-defendant, the total interest should be adjusted to account for that fact. Id. at 1176.

¶ 14 Landrum makes it clear that Morava would not be allowed to recover excess prejudgment interest if she had received payment at some earlier date. However, she coincidently received a part of those damages on the day the verdict was rendered and, under the facts of this case, did suffer loss of use of the damages until the verdict was rendered.⁴ Moreover, the natural extension of the result under Landrum is exactly as discussed in Woolard. The prejudgment interest is calculated on the verdict regardless of whether the plaintiff is entitled to receive the entire verdict. As applied here, the interest is calculated on Morava's $1,500,000.00 verdict.

¶ 15 However, Landrum does not deal with the effect of Section 832(H)(1). Under Woolard, or any other case using a formula to rebate prejudgment interest, Morava would be paid the full amount because of the coincidental occurrence of payment and verdict. Thus, COMG argues that the verdict must be reduced before prejudgment interest is calculated.

¶ 16 COMG supports its argument with authorities from other jurisdictions. However, in Martinez v. Jesik, 703 P.2d 638 (Colo. App.1985), cited by COMG, the facts involved comparative negligence so that the non-settling defendant was proportionately liable. Thus, the plaintiff there did not experience the loss of use of...