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%.