Civil Procedure--Offer of Judgment--Interest Calculated as Interest on "Judgment" not "Obligation"

Metzler v.BCI Coca-Cola Bottling Co.,Inc.,690 Ariz.Adv.Rep. 7(July 11,  2014)  (J. Pelander)

INTEREST ON  OFFER OF JUDGMENT RUNS FROM THE  LAST ENFORCEABLE JUDGMENT ENTERED AFTER APPEALS AND IS CALCULATED AS INTEREST ON JUDGMENT  AT PRIME PLUS 1% AND NOT 10% REQUIRED ON AN "OBLIGATION"

Plaintiff slipped and  fell on water leaking fron a refrigerator owned and maintained by  defendant. Plaintiff made a $150,000 Offer of Judgment which  was rejected. Ultimately plaintiff obtained a verdict  of $1.5 million.  The trial court granted A new trial on  liability  only  which  was overturned on appeal where the  appeals court  expressly found the  initial  judgment  to  be  of no  force and  effect. Thereafter plaintiff was awarded 10% interest on the  judgment  from the date of  the  offer of judgment based upon the  finding the interest was an "obligation" under ARS sec. 44-1201 (A) and  not  interest on a "judgment" under ARS sec. 44--1201 (B).  The Arizona Court of Appeals agreed but the   Arizona Supreme Court reversed and  remanded. At the time plaintiff  obtained his first judgment ARS sec. 44-1201 provided for 10% interest on "judgments" and "obligations."  However, in  2011 the statute was  amended to  separate "obligations" at 10% from "judgments" which are now prime plus 1%.  The Supreme Court held  that interest on an offer of judgment is  interest on  a  judgment and  not an obligation and because plaintiff's prior judgment was found to be "of no force and effect" by the  court of appeals, and the new judgment was entered subsequent to the amendment in 2011,  the amendment  applies and  instead of 10% interest  plaintiff gets prime  plus 1% or  4.25%.