Thompson v. State

• Decision Date: 19 August 1981
• Docket Number: No. 1-1080A291,1-1080A291
• Citation: 425 N.E.2d 167
• Parties: Gary D. THOMPSON, Appellant-Plaintiff, v. STATE of Indiana, Appellee-Defendant.
• Court: Indiana Appellate Court

Page 167

425 N.E.2d 167

Gary D. THOMPSON, Appellant-Plaintiff, v. STATE of Indiana, Appellee-Defendant.

No. 1-1080A291.

Court of Appeals of Indiana, First District.

Aug. 19, 1981.

C. Richard Marshall, Robert L. Stevenson, Stevenson & Marshall, Columbus, Tom G. Jones, Jones & Loveall, Franklin, for appellant-plaintiff.

Linley E. Pearson, Atty. Gen., Robert S. Spear, Deputy Atty. Gen., Indianapolis, for appellee-defendant.

RATLIFF, Judge.

STATEMENT OF THE CASE

Gary D. Thompson appeals the Johnson Circuit Court's overruling of his Motion for Order and Judgment Compelling Payment by Defendant of Interest Upon Judgment. We affirm.

STATEMENT OF THE FACTS

Thompson, who sustained injuries in 1973, obtained a $1.24 million tort judgment against the State of Indiana in July 1976. The state unsuccessfully appealed that judgment, and the Indiana Supreme Court denied transfer on October 9, 1979. See State v. Thompson, (1979) Ind.App., 385 N.E.2d 198, trans. denied. On November 5, 1979, the state paid the principal amount of the judgment into court. Thompson filed his Motion for Order and Judgment Compelling Payment by Defendant of Interest Upon Judgment which the trial court overruled on February 6, 1980.

ISSUES

I. Is subsection 17 of Acts 1974, P.L. 1942, § 1, pp. 602-603 ambiguous?

II. Does the denial of interest in this case permit an unconstitutional taking of Thompson's property by the state without just compensation and thus constitute denial of due process of law?

III. Does the denial of interest pending the state's appeal of Thompson's favorable tort judgment amount to a denial of equal protection of the law?

IV. Is Ind.Code 34-4-16.5-17 a special law resulting in the granting of privileges and immunities to certain classes of citizens such as is prohibited by the Indiana Constitution?

DISCUSSION AND DECISION

Issue One Ambiguity of the Statute

On February 19, 1974, the Indiana Tort Claims Act (the Act), Ind.Code 34-4-16.5-1 et seq., became effective. Subsection 17, concerning interest which may be obtained on judgments rendered against a governmental entity, read as follows:

"A claim or suit settled by, or a judgment rendered against, a governmental entity shall be paid by it not later than one hundred eighty (180) days after settlement or judgment, unless there is an appeal, in which case not later than one hundred eighty (180) days after a final decision is rendered. If payment is not made within one hundred eighty (180) days, the governmental entity is liable for interest from the date of settlement or judgment at an annual rate of eight percent (8%)."

Acts 1974, P.L. 142, § 1, pp. 602-603.

On March 3, 1980, IC 34-4-16.5-17 was amended:

"SECTION 1. IC 34-4-16.5-17 is amended to read as follows: Sec. 17. A claim or suit settled by, or a judgment rendered against, a governmental entity shall be paid by it not later than one hundred eighty (180) days after the date of settlement or judgment, unless there is an appeal, in which case not later than one hundred eighty (180) days after a final decision is rendered. If payment is not made within one hundred eighty (180) days after the date of settlement or judgment, the govermental entity is liable for interest from the date of settlement or judgment at an annual rate of eight percent (8%). The governmental entity is liable for interest at that rate and from that date even if the case is appealed, provided the original judgment is upheld.

"SECTION 2. (a) Notwithstanding the conflicting provisions of IC 34-4-16.5-17, for any case on appeal on the effective date of this act upon which a final decision has not been rendered or a final settlement has not been reached, any interest required to be paid by IC 34-4-16.5-17 accrues and accumulates only from the effective date of this act.

(b) Because an emergency exists, this act takes effect upon passage."

Acts 1980, P.L. 198, p. 1630.

Thompson contends that the second sentence of the 1974 version of subsection 17 of the Act is patently ambiguous and should be interpreted to allow eight percent interest upon his judgment from the date thereof even though an appeal had been taken. The state argues, correctly we believe, that this question has already been decided adversely to Thompson by the interpretation of the statute given by this court in Speidel v. State, (1979) Ind.App., 386 N.E.2d 180, trans. denied, Glick v. Department of Commerce, (1979) Ind.App., 387 N.E.2d 74, trans. denied, and Holt v. City of Bloomington, (1979) Ind.App., 391 N.E.2d 829, trans. denied. In all three of these cases, this court found the "final decision" language of the statute to be unambiguous. In Speidel, the "final decision" was held to be the denial of transfer by the supreme court. In Glick, it was the appellate court's decision because no further petitions were filed; Judge Lybrook implicitly dismissed the idea of ambiguity in the statute at 387 N.E.2d 77:

"Although the trial court rendered judgment in the original action on September 28, 1976, the State appealed the case to the Indiana Court of Appeals. Thereafter, the appeal was exhausted when this court affirmed the trial court's decision on February 13, 1978, since procedures for rehearing and transfer were never instituted.

"Statutes are to be construed to give effect to the ordinary and plain meaning of the words used. If the intent of a statute is unmistakable and its meaning so plain and unambiguous that there is no room for judicial construction, we will adopt the meaning plainly expressed. Bowen v. Review Board of Indiana Employment Security Division (1977), Ind.App., 362 N.E.2d 1178.

"Clearly, there is no need for judicial construction here, where the statute provides that the 180-day period begins to run at the date of settlement or judgment 'unless there is an appeal, in which case not later than one hundred eighty (180) days after a final decision is rendered.'

"The Court of Appeals rendered its judgment on February 13, 1978, and since no petition for rehearing was filed thereon, the Court of Appeals judgment was the 'final decision' from which the 180-day period would run. The State paid the judgment principal plus costs to the Bartholomew County Clerk on April 5, 1978, well within the time period allowed, and therefore was not liable for any interest under the statute."

In Holt, the court faced squarely the question of ambiguity, and Judge Garrard unequivocally rejected the same charge as Thompson's:

"If the General Assembly had intended to equate 'final decision' with 'judgment,' it would not have used both those terms in the same section. Furthermore, if those terms were synonymous, the exception in the first sentence of IC 34-4-16.5-17 (footnote omitted) would be totally redundant....

....

"The General Assembly has expressed itself unambiguously and with sufficient clarity."

391 N.E.2d at 832-33.

Furthermore, from the language of Acts 1980, P.L. 198, § 2(a), p. 1630, it is clear that the amendment permitting interest to accrue from the date of judgment was not intended to apply retroactively. We must reject Thompson's argument that the 1974 version of the statute contained a drafting error which the legislature corrected in 1980. Thus, Thompson, as a tort judgment creditor of the state, would be entitled to collect interest on his judgment entered on July 20, 1976, only if the state had failed to pay the judgment within one hundred and eighty days after transfer was denied by our supreme court on October 9, 1979. Because the state paid the entire amount of the judgment into court on November 5, 1979, the trial court properly decided under the statute that Thompson was not entitled to interest.

Issue Two Due Process, Unjust Compensation

Thompson contends that denial of interest on his $1.24 million judgment against the state pursuant to Ind.Code 34-4-16.5-17 for almost forty months involved in the state's appeal of this case constituted a taking of his property without just compensation which is forbidden by both the Fourteenth Amendment of the United States Constitution ¹ and Article I, Section 21 of the Indiana Constitution. ² The reasoning on which he builds his argument is based on analogy with law in eminent domain cases and can be outlined in the following manner:

1. A judgment obtained in a tort action against the state is a vested property right. State v. Daley, Admx., (1975) 165 Ind.App. 513, 332 N.E.2d 845.

2. Both the Federal and Indiana Constitutions preclude the taking of private property or even the interference with a property right for public benefit without just compensation. Schnull v. Indianapolis Union R. Co., (1921) 190 Ind. 572, 131 N.E. 51.

3. One of the elements of just compensation is interest. State v. Stabb, (1948) 226 Ind. 319, 79 N.E.2d 392.

4. The legislature may prescribe and alter the rate of interest to be paid in condemnation awards so long as the interest they set is not so unreasonably low as to amount to a deprivation of just compensation. Gradison v. State, (1973) 260 Ind. 688, 300 N.E.2d 67. Thompson asserts that awards of interest in tort judgments obtained against the state are constitutionally mandated by the same language which mandates interest in condemnation awards.

Thompson's facially appealing argument is fatally flawed in several respects. First, he fails to distinguish between prejudgment interest (interest qua damages) and post-judgment interest (interest eo nomine). See Note, Interest on Verdicts and Judgments in State and Federal Courts, 38 Notre Dame Law. (1962). Second, he ignores the distinct historical developments with respect to both types of interest in eminent domain, contract, and tort cases. See Annot., "Retrospective application and effect of statutory provisions for interest on changed rate of interest," 4 A.L.R.2d 932 (1949). Finally, he blithely dismisses the historical context of the legislation in question in two sentences and confines his discussion of the...