Seaward Const. Co., Inc. v. Bradley

• Decision Date: 23 September 1991
• Docket Number: No. 90SC305,90SC305
• Parties: SEAWARD CONSTRUCTION COMPANY, INC., and William D. Guess, Petitioners, v. Richard BRADLEY, Respondent.
• Court: Colorado Supreme Court

Page 971

817 P.2d 971

SEAWARD CONSTRUCTION COMPANY, INC., and William D. Guess, Petitioners, v. Richard BRADLEY, Respondent.

No. 90SC305.

Supreme Court of Colorado En Banc.

Sept. 23, 1991.

Rehearing Denied Oct. 21, 1991.

Tilly & Graves, P.C., John W. Grund, John M. Seebohm, Denver, for petitioner Seaward Const. Co., Inc.

Hugh D. Wise, III, Aspen, for petitioner William D. Guess.

Nicholas W. Goluba, Jr., Glenwood Springs, for respondent.

Justice LOHR delivered the Opinion of the Court.

The issue presented by this case is whether a plaintiff who is awarded punitive damages in a personal injury action is entitled to prejudgment interest on those damages. The district court ruled that prejudgment interest cannot be assessed on such an award of punitive damages. The Colorado Court of Appeals reversed. Bradley v. Guess, 797 P.2d 749 (Colo.App.1989). Based on construction of the controlling statute, we conclude that prejudgment interest cannot be awarded on punitive damages in a personal injury action and therefore reverse the judgment of the court of appeals and direct that the judgment of the district court be affirmed.

I.

Richard Bradley filed this action in the District Court for Rio Blanco County seeking damages for injuries sustained in a fight at a Christmas party sponsored by Seaward Construction Company, Inc. The party was held at a tavern near Meeker, Colorado, in December 1982. Bradley was a member of a country and western band that provided entertainment at the Christmas party. William D. Guess, an employee of Seaward, was responsible for arranging and supervising the gathering. During the party, Guess and other Seaward employees engaged in a fight with Bradley, causing him serious injuries. Bradley alleged that Seaward and Guess were negligent, wanton, and reckless in supervising the party and that such misconduct caused Bradley's injuries. The case was tried to a jury. The jury found for Bradley and determined that he had suffered $300,000 in compensatory damages, that his own negligence accounted for twenty-five percent of the total negligence that produced his injuries, and that he should receive $533,000 in punitive damages because the conduct of Seaward and Guess was wanton and reckless. Bradley moved for entry of judgment, asserting under sections 13-21-101 and -102, 6A C.R.S. (1987), that the judgment should include interest on the punitive damages award from the date of his injuries to the date the judgment is paid. The district court denied the request for prejudgment interest on punitive damages, citing Jacobs v. Commonwealth Highland Theatres, Inc., 738 P.2d 6, 13 (Colo.App.1986). The district court entered judgment including prejudgment interest on the compensatory damages but not on the punitive damages. The Colorado Court of Appeals, in a decision by a divided panel, reversed the denial of prejudgment interest on punitive damages, specifically declining to follow Jacobs. Bradley, 797 P.2d at 751. We granted certiorari to resolve whether prejudgment interest can be assessed on a punitive damages award in a personal injury case.

II.

Prejudgment interest on damages awarded in a personal injury action is specifically authorized by statute. Allstate Ins. Co. v. Starke, 797 P.2d 14, 19 (Colo.1990). The governing statute is section 13-21-101, 6A C.R.S. (1987), which states in relevant part:

(1) In all actions brought to recover damages for personal injuries sustained by any person resulting from or occasioned by the tort of any other person, corporation, association, or partnership, whether by negligence or by willful intent of such other person, corporation, association, or partnership and whether such injury has resulted fatally or otherwise, ... it is lawful for the plaintiff in the complaint to claim interest on the damages claimed from the date the action accrued. When such interest is so claimed, it is the duty of the court in entering judgment for the plaintiff in such action to add to the amount of damages assessed by the verdict of the jury, or found by the court, interest on such amount calculated at the rate of nine percent per annum on actions filed on or after July 1, 1975, ... and calculated from the date such suit was filed to the date of satisfying the judgment and to include the same in said judgment as a part thereof. [Detailed provisions concerning the manner of calculation of interest follow.]

Our primary goal in interpreting a statute is to determine the intent of the legislature and to give effect to that intent. Danielson v. Castle Meadows, Inc., 791 P.2d 1106, 1111 (Colo.1990); Kane v. Town of Estes Park, 786 P.2d 412, 415 (Colo.1990). To determine the intent, we look first to the plain language of the statute. Danielson, 791 P.2d at 1111; Kane, 786 P.2d at 415. When the statutory language is ambiguous, we must consider the underlying purpose for the statute in order to ascertain the intent of the legislature. Danielson, 791 P.2d at 1111; Griffin v. S.W. Devanney & Co., Inc., 775 P.2d 555, 559 (Colo.1989).

A.

Prior to addressing the specific language of section 13-21-101, it is useful to bear in mind that punitive or exemplary damages are a distinct form of damages awarded for a particular purpose. Punitive damages are available in Colorado only pursuant to statute. Kaitz v. District Court, 650 P.2d 553, 556 (Colo.1982); Ark Valley Alfalfa Mills, Inc. v. Day, 128 Colo. 436, 440, 263 P.2d 815, 817 (1953). The applicable statute is section 13-21-102, 6 C.R.S. (1973), ¹ which provided in pertinent part (1)(a) In all civil actions in which damages are assessed by a jury for a wrong done to the person, or to personal or real property, and the injury complained of is attended by circumstances of fraud, malice or insult, or a wanton and reckless disregard of the injured party's rights and feelings, the jury, in addition to the actual damages sustained by such party, may award him reasonable exemplary damages.

We have stated that "[e]xemplary damages are allowed, not as compensation to the injured party for the wrong done, but as a punishment of the wrongdoer as an example to others." Ark Valley, 128 Colo. at 440, 263 P.2d at 817 (1953). Accord Mortgage Finance, Inc. v. Podleski, 742 P.2d 900, 903 (Colo.1987); Palmer v. A.H. Robins Co., Inc., 684 P.2d 187, 220 (Colo.1984); Mince v. Butters, 616 P.2d 127, 129 (Colo.1980). While we have noted that "a claim for exemplary damages ... can be entered only in conjunction with an underlying and successful claim for actual damages," Kirk v. The Denver Publishing Co., 818 P.2d 262, 265, (Colo.1991), we continue to recognize the distinct purpose of exemplary damages--"to punish and deter," Kirk, at 266. Thus, whereas compensatory damages flow from the injury itself and are intended to make the injured party whole, punitive damages flow from the conduct of the defendant and are intended to punish the defendant and deter similar future acts by the defendant or others.

B.

Turning to the language of the prejudgment interest statute, section 13-21-101 does not expressly include punitive damages in, or exclude punitive damages from, its scope. Instead, the scope of authorized prejudgment interest is prescribed by the following terms: "[i]n all actions brought to recover damages for personal injuries sustained [as a result of a tort] ... it is lawful for the plaintiff in the complaint to claim interest on the damages claimed ...." § 13-21-101(1), 6A C.R.S. (1987) (emphasis added). Furthermore, the interest is to be added "to the amount of damages assessed by the verdict of the jury ...." Although the type of action in which interest is authorized by section 13-21-101(1) is one brought to recover damages that flow from the injury itself--i.e., "damages for personal injuries sustained," which are compensatory in nature--it is not clear whether the interest authorized "on the damages claimed" and "assessed by the verdict of the jury" is limited to those compensatory damages or includes all damages claimed and assessed in an action, including punitive damages. ²

Bradley asserts that construction of section 13-21-101 as a whole leads to the conclusion that prejudgment interest is authorized on both compensatory and punitive damages. He supports this argument by quoting language in subsection (2)(b) which states that "[t]his interest shall be payable on the amount of the final judgment." ³ Reading this statement in context, we cannot agree with Bradley's conclusion. Subsection 13-21-101(2) authorizes interest in the event of an appeal by the judgment debtor. Under subsection (2)(a), if the judgment is simply affirmed, interest is calculated from the date the action accrued until the date the judgment is satisfied. Under subsection (2)(b), if the judgment is modified on appeal, interest is calculated over the same period, but is applied only to the modified award--i.e. the "final judgment." Use of the term "final judgment" merely clarifies that interest will not be applied for any period to the amount awarded in the trial court and considered by the appellate court to be erroneous. Subsections (2)(a) and (2)(b) govern the period during which interest will accrue and the rate of interest that will apply when a judgment for money in a personal injury action is affirmed or modified on appeal. These subsections do not address the issue of whether interest is payable on the punitive damages included in such a judgment. Although we agree that section 13-21-101 is not a model of clarity (see Cairns and Tredennick, Collecting Pre- and Post-Judgment Interest in Colorado: A Primer, 15 Colo.Law. 753, 756 (1986) ("CRS § 13-21-101 ... has been amended several times, resulting in language which overlaps and, in some cases, appears contradictory.")), we cannot construe subsections (2)(a) and (2)(b) as an express authorization for assessing prejudgment interest on punitive damages. Nor do we find these subsections of assistance in resolving the...