Sherman, In re, 87-260

• Decision Date: 09 November 1989
• Docket Number: No. 87-260,87-260
• Citation: 565 A.2d 870
• Parties: In re Paul K. SHERMAN. Appeal.
• Court: Rhode Island Supreme Court

Page 870

565 A.2d 870

In re Paul K. SHERMAN.

No. 87-260 Appeal.

Supreme Court of Rhode Island.

Nov. 9, 1989.

Lauren E. Jones, Joes & Aisenberg and Thomas Hutton, Hutton Law Associates, Ltd., Providence, for plaintiff.

James E. O'Neil, Atty. Gen., Robin E. Feder, and David D. Prior, Asst. Attys. Gen., for defendant.

Before FAY, C.J., and KELLEHER, WEISBERGER, MURRAY and SHEA, JJ.

OPINION

MURRAY, Justice.

This case is before the court on appeal by the defendant, the State of Rhode Island, from a November 19, 1987 order of the Superior Court granting the estate of Paul K. Sherman pre- and postjudgment interest on an April 22, 1987 judgment rendered against the State in a civil suit. The defendant also appeals a November 19, 1987 order of the Superior Court allowing the guardian ad litem's attorney to collect a fee of 45 percent of the gross verdict. We find that the April 22, 1987 order constituted a final judgment and is therefore, reinstated without the additional interest. We also find that the order allowing the guardian ad litem's attorney to collect 45 percent of the gross verdict rather than 45 percent of the actual judgment is unreasonable as a matter of law.

The issues at bar arise from the culmination of three Superior Court cases. On May 24, 1983, Hope Sherman filed a petition in the Superior Court to be appointed guardian ad litem of her son, Paul K. Sherman, for the purpose of pursuing a civil action for damages against the State of Rhode Island. Paul K. Sherman (Paul) remains in a persistent vegetative state after attempting suicide while in the custody of the State at the Adult Correctional Institutions. On May 31, 1983, the trial justice entered an order appointing Hope Sherman guardian ad litem. Ms. Sherman thereafter filed a civil tort action against the State of Rhode Island on June 28, 1983. Meanwhile, the General Assembly passed a private act allowing Ms. Sherman to recover up to $1 million. 1984 R.I. Acts & Resolves 130, May 17, 1984. The General Assembly later passed a private act allowing her to recover $3 million, in excess of the $100,000 limitation. 1985 R.I. Acts & Resolves 143, June 28, 1985.

A trial was held before another trial justice and jury in 1987. The jury returned a verdict against the State, and the justice amended the judgment from $1,007,000 to $595,527.36 in order to account for medical treatment costs owed to the State. This reduction was performed pursuant to 1985 R.I. Acts & Resolves 143, § 3 June 28, 1985, which required "if judgment is rendered against the state the value of any and all hospital and medical services rendered by it to the claimant shall be deducted from such judgment." The trial justice also denied plaintiff's claim for prejudgment interest because the private act did not specifically allow it. The 1985 act provided that the limitation on recovery of $3 million "shall include any interests and costs," but did not specifically authorize payment of pre- and postjudgment interest, as did the final private act that was approved by the General Assembly on July 3, 1987. Neither party appealed from this judgment and the order became final ten days after judgment was entered on April 22, 1987. ¹

On May 1, 1987, plaintiff filed two motions in the guardianship case in order to clarify and confirm the attorney's-fee arrangement to which she had agreed. On May 19, 1987 the Superior Court entered an order approving the fee agreement as well as authorizing her to make disbursements from the judgment. The state filed a notice of appeal from this order on May 28, 1987. ²

On June 8, 1987, the Superior Court entered an order consolidating the guardianship case, the tort case, and the interpleader case. ³ While further action was pending the General Assembly passed another private act in 1987, specifically providing for pre- and postjudgment interest on the jury verdict in this case. ⁴ After this court ordered a limited remand for consideration of certain postjudgment motions on August 31, 1987, a hearing was held in Superior Court on October 26, 1987. The trial justice filed a decision and entered an order on November 19, 1987, providing that the State shall pay pre- and postjudgment interest pursuant to 1987 R.I. Acts & Resolves 187. In addition, the order specified that the registrar shall pay out all attorney's fees and costs. The trial justice sua sponte partially stayed the order pending resolution of the issues raised on appeal.

I Pre- and Postjudgment Interest

We have long held that the court will strictly construe statutes that award interest on judgments against the State. Andrade v. State, 448 A.2d 1293, 1294 (R.I.1982); Gott v. Norberg, 417 A.2d 1352, 1357 (R.I.1980); Atlantic Refining Co. v. Director of Public Works, 104 R.I. 436, 441, 244 A.2d 853, 856 (1968). Under the common law the State has sovereign immunity that may only be waived if such waiver is deliberate. We therefore presume that the Legislature did not intend to deprive the State of any sovereign power "unless the intent to do so is clearly expressed or arises by necessary implication from the statutory language." Andrade, 448 A.2d at 1295 (citing Brown University v. Granger, 19 R.I. 704, 36 A. 720 (1897)). This rule of strict statutory interpretation applies with equal force when interpreting a private act that purports to extend the limits of liability. In fact, a private act requires even closer scrutiny than a statute because a private act not only deviates from the common law, but also deviates from the common statutory scheme. If the Legislature intends to expose the State treasury to the additional financial burden of pre- and postjudgment interest, it could easily so provide.

We find that the private act of June 28, 1985, made no provision for pre- and postjudgment interest. The purpose and language of the act was to extend the liability of the State beyond its $100,000 limit and not to provide that interest specifically be awarded. The trial justice was correct in his finding that the language of the 1985 private act did not provide a clear expression of the Legislature's intent to waive the State's immunity from paying interest on the judgment.

The fact that the Legislature later enacted the 1987 act to provide specifically for the payment of interest on the judgment does not change our decision. If the Legislature intends to allow a party to collect interest on a judgment against the State, the Legislature must act before the entry of final judgment in order to benefit the intended party. ⁵ If the court later reconsiders the issue of interest on the judgment, the action is invalid under the doctrine of res judicata. Res judicata serves as an "absolute bar to a second cause of action where there exists identity of parties, identity of issues, and finality of judgment in an earlier action." Beirne v. Barone, 529 A.2d 154, 157 (R.I.1987). The basis of the doctrine is that an issue should be judicially determined only once. Silva v. Silva, 122 R.I. 178, 184, 404 A.2d 829, 832 (1979). In this case the justice had fully considered the issue of pre- and postjudgment interest when he denied it, and judgment was entered on April 22, 1987. As the judgment became final, res judicata bars reconsideration of the same issues decided in the earlier case.

In the recently decided Cardi case, this court allowed the trial court to add interest to a Superior Court judgment. Cardi Corp. v. State, 561 A.2d 384 (R.I.1989). Unlike the Cardi case, however, the Legislature allowed the Cardi Corporation to collect interest from the State before the entry of final judgment. See id. at 385. ⁶ Only before the entry of final judgment is the awarding of interest on a judgment a "ministerial act." Id. at 387. Once a judgment becomes final the calculation of interest on the original judgment will not be reconsidered.

We find that the judgment in the instant case became final ten days after the clerk's entry of the judgment on April 22, 1987. Rule 59(e). As the issue of pre- and postjudgment interest was fully considered, and neither party appealed the judgment, the identical issue could not be relitigated. ⁷

II Attorney's Fees

The second issue we address is that of the reasonableness of the guardian ad litem's fee agreement with her attorney. We usually decline to address the matter of attorney's fee agreements...