Warrington v. Great Falls Clinic, LLP

• Decision Date: 07 July 2020
• Docket Number: DA 19-0679
• Citation: 467 P.3d 567,2020 MT 174,400 Mont. 360
• Parties: Lisa WARRINGTON, Plaintiff and Appellant, v. GREAT FALLS CLINIC, LLP, Defendant and Appellee.
• Court: Montana Supreme Court

400 Mont. 360

467 P.3d 567

2020 MT 174

Lisa WARRINGTON, Plaintiff and Appellant,

v.GREAT FALLS CLINIC, LLP, Defendant and Appellee.

DA 19-0679

Supreme Court of Montana.

Submitted on Briefs: June 3, 2020

Decided: July 7, 2020

For Appellant: Timothy McKittrick, McKittrick Law Office, P.C., Great Falls, Montana

For Appellee: Gerry P. Fagan, Adam Warren, Moulton Bellingham PC, Billings, Montana

Justice Dirk Sandefur delivered the Opinion of the Court.

¶1 Plaintiff Lisa Warrington (Warrington) appeals the December 2, 2019, judgment of the Montana Eighth Judicial District Court, Cascade County, adjudicating that defendant Great Falls Clinic (Clinic) satisfied the judgment debt on her successful breach of contract claim. The restated issue is:

Whether a stay of execution of judgment obtained by the judgment debtor on cross-appeal also tolls the continued accrual of post-judgment interest under §§ 25-9-204, and -205, MCA ?

¶2 We reverse and remand for assessment of additional post-judgment interest.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 This case is now before us for the third time. It began on Warrington's assertion of contract and related tort claims for damages caused by the Clinic's detrimental cancellation of an executory contract to prospectively employ her in a health care clinic management position. We were initially involved on supervisory control where we affirmed a grant of summary judgment that the Clinic breached the contract and that the Montana Wrongful Discharge from Employment Act did not apply.

Great Falls Clinic LLP v. Mont. Eighth Judicial Dist. Court (Warrington I) , 2016 MT 245, ¶¶ 14-15, 385 Mont. 95, 381 P.3d 550. On remand, the case went to trial on the balance of the contract claim after the District Court denied Warrington leave to add additional tort claims and granted summary judgment eliminating her related claim for tortious breach of the implied covenant of good faith and fair dealing. Warrington v. Great Falls Clinic, LLP (Warrington II) , 2019 MT 111, ¶¶ 4-5, 395 Mont. 432, 443 P.3d 369. On February 2, 2018, the jury returned a verdict awarding Warrington $220,000 in contract damages. Warrington II , ¶¶ 5-6.

¶4 On February 26, 2018, with ruling still pending on her amended post-verdict motion for costs, Warrington appealed the adverse rulings on her contract bad faith and other proposed tort claims. She did not appeal any aspect of the verdict on her successful contract claim. The Clinic subsequently cross-appealed various adverse trial rulings and then moved pursuant to M. R. App. P. 22 for a stay of execution of judgment, but without the usually-required supersedeas bond. On April 23, 2018, upon ruling on Warrington's post-verdict claim for costs, the District Court separately granted the Clinic a stay of execution pending appeal. The court granted the stay without requirement for bond based on the Clinic's assertion that M. R. App. P. 22(1)(b) applies only to appeals and thus does not require a supersedeas bond upon a cross-appeal.¹

¶5 On May 14, 2019, we affirmed Warrington's $220,000 contract judgment in toto, holding, inter alia , that the District Court properly granted summary judgment on her tortious bad faith claim, denied her leave to add additional tort claims, and made no trial error. Warrington II , ¶¶ 12-38. Remittitur issued on May 30, 2019, with filing below the next day.

¶6 On remand, the Clinic moved pursuant to M. R. Civ. P. 60(b)(5) for declaration that it fully satisfied Warrington's adverse judgment as of June 28, 2019, upon prior payment of $223,485.12 in principal, costs, and accrued interest. The motion noted that the parties’ disputed Warrington's claim for an additional $24,428.13 in post-judgment interest that would have accrued under § 25-9-205(1)(a), MCA, during the pendency of the appeal.

¶7 Pursuant to In re Marriage of Pospisil , 2000 MT 132, ¶ 51, 299 Mont. 527, 1 P.3d 364, the Clinic asserted that the Rule 22 stay not only stayed execution of judgment pending appeal, but also tolled further accrual of post-judgment interest during the stay. Citing McCulley v. U.S. Bank of Mont. , 2015 MT 100, ¶¶ 57-63, 378 Mont. 462, 347 P.3d 247, and Hulstine v. Lennox Indus., Inc. , 2010 MT 180, ¶¶ 27-28, 357 Mont. 228, 237 P.3d 1277, Warrington contrarily asserted that the Rule 22 stay had no effect on the continued accrual of post-judgment interest under §§ 25-9-204 and -205, MCA. Finding McCulley and Hulstine of only limited effect,² the District Court granted the Clinic's motion pursuant to Pospisil and New Hope Lutheran Ministry v. Faith Lutheran Church of Great Falls, Inc. , 2014 MT 69, ¶ 72 n.11, 374 Mont. 229, 328 P.3d 586 (citing Pospisil ¶ 51 ), and thus declared Warrington's judgment fully satisfied upon the Clinic's prior payment of $223,485.12. Warrington timely appeals.

STANDARD OF REVIEW

¶8 The proper construction or application of a statute is a question of law. Ritchie v. Town of Ennis , 2004 MT 43, ¶ 33, 320 Mont. 94, 86 P.3d 11. Accordingly, whether a district court correctly construed or applied §§ 25-9-204, -205, or 27-1-211, MCA, in the assessment of post-judgment interest is a question of law subject to de novo review. In re Marriage of DeBuff , 2002 MT 159, ¶ 15, 310 Mont. 382, 50 P.3d 1070.

DISCUSSION

¶9 Whether a stay of execution of judgment obtained by the judgment debtor on cross-appeal also tolls the continued accrual of post-judgment interest under §§ 25-9-204, and -205, MCA ?

¶10 Sections 27-1-210 and -211, MCA, generally govern the right to prejudgment interest and §§ 25-9-204 and -205, MCA, distinctly govern the right to post-judgment interest. See Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc. , 2008 MT 2, ¶ 101, 341 Mont. 33, 174 P.3d 948 ; DeBuff , ¶¶ 38-44 ; Tipp v. Skjelset , 1998 MT 263, ¶¶ 15-17, 291 Mont. 288, 967 P.2d 787 ; Ellingson Agency, Inc. v. Baltrusch , 228 Mont. 360, 368, 742 P.2d 1009, 1014 (1987) ; Carriger v. Ballenger , 192 Mont. 479, 485-86, 628 P.2d 1106, 1109-10 (1981).³ Rather than matters of discretionary award, prejudgment and post-judgment interest are matters of right under their respective governing statutes. Healy v. Healy , 2016 MT 154, ¶ 34, 384 Mont. 31, 376 P.3d 99 ; Winter v. State Farm Mut. Auto. Ins. Co. , 2014 MT 168, ¶ 32, 375 Mont. 351, 328 P.3d 665 ; New Hope , ¶ 72 n.11 (citing Pospisil , ¶¶ 49-51 ); Price Bldg. Serv., Inc. v. Holms , 214 Mont. 456, 468-69, 693 P.2d 553, 559-60 (1985).

¶11 Judgment creditors have the right to recover prejudgment interest on money judgments as of the date the right to the sum was both "vested" and "certain or capable of being made certain by calculation." Section 27-1-211, MCA (enacted Mont. Civ. Code § 4280 (1895), as amended). Thus, the accrual start date for prejudgment interest necessarily varies depending on the particular facts and circumstances of each case. See, e.g., Carriger , 192 Mont. at 485-86, 628 P.2d at 1109-10 (date of judgment); Agrilease, Inc. v. Gray , 173 Mont. 151, 159-60, 566 P.2d 1114, 1118-19 (1977) (date of debt maturation under contract term); Sun River Cattle Co. v. Miners’ Bank of Mont. , 164 Mont. 479, 481-82, 525 P.2d 19, 20-21 (1974) (date of trigger of statutory duty to pay); Lapke v. Hunt , 151 Mont. 450, 460, 443 P.2d 493, 498 (1968) (date of filing of complaint); Silver Bow Cty Sch. Dist. No. 1 v. Globe & Republic Ins. Co. of Am. , 146 Mont. 208, 216, 404 P.2d 889, 894 (1965) (date of judgment regardless of subsequent appeal); W. J. Lake & Co. v. Mont. Horse Prod. Co. , 109 Mont. 434, 442-43, 97 P.2d 590, 594 (1939) (date of maturation of contract duty to pay); Mitchell v. Banking Corp. of Mont. , 94 Mont. 165, 175-77, 22 P.2d 175, 180 (1933) (date of initial assertion of claim); Clifton, Applegate & Toole v. Big Lake Drain Dist. No. 1 , 82 Mont. 312, 334-35, 267 P. 207, 214 (1928) (date of prelitigation demand on account). As an express statutory exception, the accrual of prejudgment interest tolls "during [any period of] time that the debtor is prevented by law or by the act of the creditor from paying the [judgment] debt." Section 27-1-211, MCA. Notably, § 27-1-211, MCA, does not specify the applicable rate of prejudgment interest.

¶12 As to post-judgment interest, money judgments entered upon "verdict or decision" must include interest from the time of "render[ing] or ma[king]" of the judgment. Section 25-9-204, MCA (Mont. Code Civ. Proc. § 1870 (1895), as amended). In contrast to the pre-judgment interest statute ( § 27-1-211, MCA ), and except as otherwise provided by contract, the post-judgment interest statute currently specifies the rate of post-judgment interest—the federal reserve system prime rate plus 3%. Section 25-9-205(1)(a), MCA (Mont. Code Civ. Proc. § 2588 (1895), as amended). In further contrast to the prejudgment interest statute, the post-judgment interest statute includes no exception for tolling of interest accrual during periods in which "the debtor is prevented by law or by the act of the creditor from paying the [judgment] debt." See §§ 25-9-204 and -205, MCA. Compare § 27-1-211, MCA.

¶13 In Pospisil , after incessant disputes regarding money and a family ranch continued between the parties long after the dissolution of their marriage and division of the marital estate, they came back to court for enforcement and clarification of various rights and obligations arising under the dissolution decree and since. Pospisil , ¶¶ 4-14. When the dust settled, the wife obtained a money judgment including various sums due to her under the original decree and a subsequent judgment of the court. Pospisil , ¶¶ 16, 47, and 49. She then appealed and the District Court granted a stay of execution of judgment pending appeal. Pospisil , ¶¶ 17, 52.⁴ As a threshold matter, as pertinent here, we held that the wife was entitled to prejudgment interest on various judgment sums under § 27-1-211, MCA. Pospisil , ¶¶ 51-52. However, without explanation as to the precise interplay between the language of § 27-1-211, MCA,...