Woods v. Farmers Ins. of Columbus, Inc.

• Citation: 666 N.E.2d 283,106 Ohio App.3d 389
• Decision Date: 19 September 1995
• Docket Number: No. 95APE02-203,95APE02-203
• Parties: WOODS, Admr., et al., Appellants, v. FARMERS INSURANCE OF COLUMBUS, INC., Appellee, et al.
• Court: United States Court of Appeals (Ohio)

Page 389

106 Ohio App.3d 389

666 N.E.2d 283

WOODS, Admr., et al., Appellants, v. FARMERS INSURANCE OF COLUMBUS, INC., Appellee, et al.

No. 95APE02-203.

Court of Appeals of Ohio Tenth District, Franklin County.

Decided Sept. 19, 1995.

Clark, Perdue, Roberts & Scott, Edward L. Clark and Glen R. Pritchard, Columbus, for appellants.

Mazanec, Raskin & Ryder Co., L.P.A., and Edward M. Ryder, Columbus, for appellee.

LAZARUS, Judge.

This case presents the issue of whether prejudgment interest pursuant to R.C. 1343.03(C) is available upon a judgment entered on an arbitration award pursuant to R.C. 2711.09. We hold that it is.

On November 8, 1992, Deborah C. Woods, the decedent herein, was killed as a result of the negligence of an uninsured motorist. On July 22, 1993, Kevin D. Woods, the administrator of Ms. Woods's estate, her children, Matthew S. and Christopher P. Smith, and her parents, Richard N. and Marion J. Governor, filed suit in the Franklin County Court of Common Pleas against the Governors' insurer, Hamilton Mutual Insurance Co. (hereinafter "appellee"). Other claims and parties were joined, none of which are relevant to this appeal. On April 19, 1994, the trial court granted summary judgment in favor of the Governors, declaring that the uninsured motorist provision of the Governors' policy covered their wrongful death claims. The parties agreed to submit the issues of liability and damages to arbitration. On October 26, 1994, the arbitration panel awarded the Governors $175,000 each, and on November 8, 1994, the Governors collected the $350,000 and signed documents titled "Full and Final Release of All Claims and Demands and Trust Agreement," in which the Governors expressly reserved whatever rights they had to prejudgment interest on the arbitration award.

On November 22, 1994, the Governors applied to the court of common pleas for an order confirming the arbitration award and for a judgment entry thereon pursuant to R.C. 2711.09, and filed a motion for prejudgment interest on the arbitration award pursuant to R.C. 1343.03(C). The court denied both requests. Plaintiffs-appellants Richard and Marion Governor now appeal and raise the following two assignments of error:

1. "The trial court erred in denying plaintiffs Richard and Marion Governors' application to reduce their arbitration award to judgment by finding that plaintiffs may not avail themselves of R.C. 2711.09."

2. "The trial court erred in denying plaintiffs' motion for prejudgment interest and requests for an oral hearing."

R.C. 2711.09 provides:

"At any time within one year after an award in an arbitration proceeding is made, any party to the arbitration may apply to the court of common pleas for an order confirming the award. Thereupon the court shall grant such an order and enter judgment thereon, unless the award is vacated, modified, or corrected as prescribed in sections 2711.10 and 2711.11 of the Revised Code." (Emphasis added.)

R.C. 2711.12, redundant of R.C. 2711.09 as to confirmed arbitration awards, provides:

"Upon the granting of an order confirming, modifying, correcting, or vacating an award made in an arbitration proceeding, the court must enter judgment in conformity therewith." (Emphasis added.)

We hold that a court does not have discretion under R.C. 2711.09 to deny a party's application for an order confirming an arbitration award, except when the award is vacated, modified, or corrected. Nor does a court have discretion under R.C. 2711.09 or 2711.12 to refuse to enter judgment in conformity with the order.

The language of R.C. 2711.09 is mandatory, providing that a court "shall" grant a requested order confirming an arbitration award. As stated in State ex rel. Botkins v. Laws (1994), 69 Ohio St.3d 383, 385, 632 N.E.2d 897, 900:

"It is axiomatic that when used in a statute, the word 'shall' denotes that compliance with the commands of that statute is mandatory unless there appears a clear and unequivocal legislative intent that it receive a construction other than its ordinary usage." See, e.g., Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638, 658, 635 N.E.2d 331, 347-348 (noting effect of "shall" in R.C. 1343.03[C] ).

We are aware of no legislative intent, much less unequivocal legislative intent, that a court have some discretion in confirming or entering judgment on an arbitration award. While not expressly construing the mandatory language of R.C. 2711.09, the Supreme Court of Ohio in Warren Edn. Assn. v. Warren City Bd. of Edn. (1985), 18 Ohio St.3d 170, 172-173, 18 OBR 225, 226-228, 480 N.E.2d 456, 458-459, used R.C. 2711.09 as an example of mandatory language, contrasting the requirement that a court confirm an arbitration award when so requested with the limited circumstances in which an award can be vacated, modified, or corrected.

Our holding is consistent with that of the Seventh District Court of Appeals in J. Philip Davidson, DPM, Inc. v. Higgins (Mar. 31, 1992), Mahoning App. No. 90CA-207, unreported, 1992 WL 73590, and the dicta in Davidson v. Bucklew (1992), 90 Ohio App.3d 328, 333-334, 629 N.E.2d 456, 459. In Davidson, the trial court refused to enter judgment on an arbitration award won by a patient in a medical malpractice dispute. The court of appeals reversed, holding that the court of common pleas was without discretion to deny the requested judgment entry, even though the patient had collected the arbitration award.

We disagree with the reasoning of the Eighth District Court of Appeals in Luby v. Saveco Ins. Co. (Oct. 29, 1987), Cuyahoga App. No. 52874, unreported, 1987 WL 19250, in which the court held that a party that has collected fully on an arbitration award is not entitled to a judgment entry pursuant to R.C. 2711.09. The court in Luby reasoned that, because the purpose of the statute is to guarantee collection of the arbitration award, the awardee was not entitled to a judgment entry. We disagree because the statutory language is mandatory and because we are unwilling to presume that the statute serves no other purpose. See Davidson, supra. A judgment entry may serve an evidentiary function in other actions and, as we hold herein, may serve as the basis for an award of prejudgment interest. In the absence of unequivocal legislative intent to the contrary, we refuse to restrict the mandate of R.C. 2711.09. For the same reasons, we reject appellee's argument that appellants impliedly waived their right to prejudgment interest by accepting the arbitration award. Appellants are entitled to an entry of judgment upon their arbitration award pursuant to R.C. 2711.09. The first assignment of error is sustained.

R.C. 1343.03(C), the prejudgment interest statute, provides:

"Interest on a judgment, decree, or order for the payment of money rendered in a civil action based on tortious conduct and not settled by agreement of the parties, shall be computed from the date the cause of action accrued to the date on which the money is paid, if, upon motion of any party to the action, the court determines at a hearing held subsequent to the verdict or decision in the action that the party required to pay the money failed to make a good faith effort to settle the case and that the party to whom the money is to be paid did not fail to make a good faith effort to settle the case." (Emphasis added.)

Before R.C. 1343.03(C) was enacted in 1982, prejudgment interest had a long but inconsistent history as a common-law right in Ohio. See Note, H. 189: A Legislative Expansion of Prejudgment Interest (1984), 10 U.Day.L.Rev. 229, 231-232. Cases in Ohio and elsewhere cite three rationales for prejudgment interest: (1) it is an element of compensatory damages, Lawrence RR. Co. v. Cobb (1878), 35 Ohio St. 94, 98-99; (2) it is restitution for the use of the principal award withheld from the time the injury accrued, Hogg v. Zanesville Canal & Mfg. Co. (1832), 5 Ohio 410, 424; and (3) it is an inducement to settlement, Kalain v. Smith (1986), 25 Ohio St.3d 157, 159, 25 OBR 201, 202-203, 495 N.E.2d 572, 573-574. See, generally, Annotation, Validity and Construction of State Statute or Rule Allowing or Changing Rate of Prejudgment Interest in Tort Actions (1985), 40 A.L.R.4th 147.

This case and the opinions in eight other Ohio cases that have addressed the availability of prejudgment interest on arbitration awards reveal four distinct preconditions, or requirements, for a hearing under R.C. 1343.03(C): " [a] judgment, decree, or order for the payment of money rendered in a civil action based on tortious conduct and not settled by agreement of the parties." Because all four requirements are satisfied in this case, the court of common pleas erred in denying appellants a hearing on the issue.

Prejudgment interest pursuant to R.C. 1343.03(C) is available only "on a judgment, decree, or order for the payment of money." By the plain meaning of R.C. 2711.09, a judgment entry on an arbitration award is a judgment for the payment of money.

The Supreme Court has emphasized many times the primary need to apply statutes by their plain meaning: "Courts do not have the authority to ignore the plain and unambiguous language in a statute in the guise of statutory interpretation." State v. Krutz (1986), 28 Ohio St.3d 36, 38, 28 OBR 96, 97, 502 N.E.2d 210, 211. "Absent ambiguity, a statute is to be construed without resort to a process of statutory construction." Ohio Dental Hygienists Assn. v. Ohio State Dental Bd. (1986), 21 Ohio St.3d 21, 23, 21 OBR 282, 284, 487 N.E.2d 301, 303. "[W]hen a statute is free from ambiguity this court will not, under the guise of judicial interpretation, ' * * * delete words used or * * * insert words not used [within a statute].' " State ex rel. Molden v. Callander Cleaners Co. (1983), 6 Ohio St.3d 292, 294, 6 OBR 355, 356, 452 N.E.2d 1335, 1336. "It is axiomatic that an unambiguous statute means what it says." Hakim v. Kosydar (1977), 49 Ohio St.2d 161, 164, 3 O.O.3d...