Summit Court, Inc. v. Northern States Power Co., CX-83-375

• Decision Date: 31 August 1984
• Docket Number: No. CX-83-375,CX-83-375
• Citation: 354 N.W.2d 13
• Parties: ., Appellant, v. NORTHERN STATES POWER COMPANY, et al., Respondent. Supreme Court of Minnesota
• Court: Minnesota Supreme Court

Page 13

354 N.W.2d 13

SUMMIT COURT, INC., Appellant, v. NORTHERN STATES POWER COMPANY, et al., Respondent.

No. CX-83-375.

Supreme Court of Minnesota.

Aug. 31, 1984.

Syllabus by the Court

1. Where a plaintiff accepts payment of a judgment in its favor and executes a release and satisfaction of that judgment, it may not later claim prejudgment interest on the damage award underlying the judgment.

2. Appellant is entitled to the prejudgment interest it requested on the loss-of-use damages award where the damages, based on fixed, unabatable costs, were readily ascertainable prior to trial and little jury discretion was involved in arriving at the final award.

John E. Castor, Austin D. Ditzler, Minneapolis, for appellant.

Clyde F. Anderson, Robert E. Salmon, Laura Underkuffler, Minneapolis, for respondent.

Considered and decided by the court en banc without oral argument.

WAHL, Justice.

This appeal, by Summit Court, Inc., involves the propriety of awarding prejudgment interest on two separate damage awards arising out of the 1978 gas explosions and fire at the Commodore Hotel in St. Paul. We affirmed the jury's award of property damages in In re Commodore Hotel Fire and Explosion Cases, 324 N.W.2d 245 (Minn.1982), and remanded the case for a determination of loss-of-use damages during the period of restoration Ramsey County District Court, in orders dated February 16, 1983, and March 1, 1983, denied prejudgment interest on both the property damages and the loss-of-use damages award. We affirm as to the property damages award and reverse as to the loss-of-use damages award.

I. PREJUDGMENT INTEREST ON PROPERTY DAMAGES AWARD.

Gas explosions on February 15, 1978, substantially damaged the Commodore Hotel and forced it to cease operation. Summit Court's estimate of restoration damages was $1,373,824.61. Its insurance company estimated damages at $1,036,270.14. The two finally agreed on $1,140,000 as the cost of repairs and then subtracted $288,889, the agreed upon figure representing "betterment" as the result of the repairs. The actual cash value loss agreed on was $851,721. Because the hotel was underinsured, it recovered only $742,750 from the insurer, leaving $108,971 as a loss for Summit Court.

Summit Court then brought the original tort action against Northern States Power Company (NSP) who provided and Grudem Brothers who installed the gas service to the building. Uncompensated property damages and lost profits were sought. Although Summit Court tried to obtain a greater amount of property damages, the defendants were successful in using Summit Court's agreement with its insurer to set the amount of damages, and the jury awarded the exact amount uncompensated by insurance benefits, $108,971.61. Summit Court appealed, and we affirmed. In re Commodore Hotel, 324 N.W.2d at 245. On October 8, 1982, NSP and Grudem Brothers sent Summit Court's attorney two checks totaling $139,277.08, which represented the property damages award plus costs and postjudgment interest. On October 14, 1982, Summit Court's attorney sent a Satisfaction of Judgment in the amount of $107,061.25 to the defendant's attorney and cashed the checks. On February 1, 1983, just prior to the second trial to determine loss-of-use damages, Summit Court presented a motion to the trial court requesting prejudgment interest on the property damages award that had been satisfied the previous October.

The first issue, then, is whether Summit Court was entitled to prejudgment interest on the property damages award. A preliminary issue, however, and one we find dispositive, is whether, even if Summit Court was so entitled, it waived its right to any further amount based on the property damages award by negotiating the checks sent by defendants in satisfaction of the judgment and executing a release and satisfaction. Along with the checks, the defendants sent a release and satisfaction form to be signed by Summit Court's appropriate officer. The accompanying letter stated, "We forward the checks with the understanding that they will not be released from your possession or presented for payment unless and until the release and satisfaction has been properly executed and returned to us." The release and satisfaction finally executed by Summit Court stated that the judgment was thereby "acknowledged to be paid and satisfied in full."

Summit Court argues that, because its claim for prejudgment interest was completely separate from its property damages claim, the release and satisfaction cannot function to bar its claim for interest. We do not agree. Prejudgment interest is bound up with the underlying damages award. It is part of the damages suffered by plaintiff where the defendant could have readily ascertained the damages and tendered them prior to trial. In this case, the litigation had spanned several years by the time the judgment was satisfied. If Summit Court thought that the damages amount was erroneous because it did not include prejudgment interest, the time to contest it was before accepting payment and executing the release and satisfaction. In Jones v. Atteberry, 77 Ill.App.3d 463, 471, 33 Ill.Dec. 28, 34, 396 N.E.2d 104, 110 (1979), the court held that where the record showed that the judgment had been satisfied and released, the plaintiffs were precluded from recovery of additional interest on the amount of the judgment, because the release barred further action in the case. Satisfaction of a judgment is the last act of a proceeding. As the Colorado Supreme Court noted, "It extinguishes the judgment for all purposes and thereby promotes the interests of certainty and repose." Dooley v. Cal-Cut Pipe & Supply, Inc., 197 Colo. 362, 364, 593 P.2d 360, 362 (1979). We agree and hold that where a plaintiff accepts payment of a judgment in its favor and executes a release and...