Colorado Court of Appeals Issues New Precedent Regarding State’s Interest on Damages Statute for Personal Injury Cases: Prejudgment Interest Applies From the Date of Claim Accrual to the Date of Final Judgment, and Most Appeals Do Not Reset the Clock | Faegre Drinker Biddle & Reath LLP

On November 19, 2020, a three-judge appeals court in the Colorado Court of Appeals, Division I, unanimously upheld a $ 3.6 million interest surcharge in addition to a $ 2.9 million judgment against Ford Motor Co. in a case involving an allegedly defective driver’s seat. Despite a lengthy appeal process and Ford’s successful appeal on retrial, the court has awarded 9% interest for 10 years.

The case arose from a motor vehicle accident in 2009 when plaintiff Forrest Walker’s 1998 Ford Explorer was overtaken by another driver, causing Walker to suffer traumatic brain and neck injuries. Walker has settled his negligence suit against the driver who left him and brought Ford on trial for product liability claims.

In April 2013, a jury awarded Walker approximately $ 2.9 million in damages. Ford appealed and sought a new lawsuit. In 2015, the Colorado Court of Appeals granted Ford’s retrial, and in 2017 the Colorado Supreme Court upheld it. However, the resumption of proceedings in 2019 led to an almost identical result. The jury awarded Walker another 2.9 million US dollars. Thereafter, the court granted Walker prejudice interest of 9% for 10 years (from the date of the accident to the date of the 2019 jury verdict) under Colorado’s Personal Injury Compensation Act, Co. Rev. Stat. § 13-21-101 (1).

On appeal, Ford admitted it owed interest on the judgment, but argued that post-judgment interest should apply from the date of the first appeal, which would have resulted in a significantly lower interest surcharge. Ford supported his argument by “drawing on the last sentence of Section 13-21-101 (1), which literally states:“ If the judgment debtor appeals a monetary judgment in a personal injury lawsuit for damages, post judgment interest must be calculated on the total. . . from the date of the judgment to the date of satisfaction of the judgment and must include the annual compounding. “

The appellate court found that the district court’s decision did not take into account this last sentence, but based its decision on an earlier part of the law. However, upon reading the entire statute, including paragraphs 2 (a) and 2 (b), the appeals court rejected Ford’s argument, finding that the correct interpretation of the prejudice interest statute applies from the date of accrual to the date of the final judgment.

The appeals court rejected Ford’s argument that “every appeal resulted in a switch from prejudice to post-judgment interest” and ruled that a switch to the lower post-judgment rate would only trigger two cases: if a monetary judgment “[i] changed in the appeal process or [ii] conversely, with the instruction that a court judgment be submitted to court. “Since Ford’s original appeal did not fall into either category – and instead was a complete reversal of the verdict – there was nothing left for post-judgment interest during the pending retrial. Rather, “that reversal resulted in the parties being placed in the same position as they were before the original 2013 judgment was delivered.” According to the Colorado Appellate Court, “for the purposes of [the statute] The [posture] was ‘prejudice’. “

The appellate court suggested that the litigants must weigh the risks involved in the lawsuit, and further stated that “because interest can only accrue if there is a judgment, the interest accrued up to the point in time that the Supreme Court issued its opinion reversing the outcome of the trial. The first trial disappeared along with the verdict. “At that point,” were Ford and Walker. . . They are free to proceed in any manner they deem appropriate, including by resolving the case. “

In particular, the appellate court left the question open whether the inclusion of an appeal on the amount of money triggers the use of post-judgment interest for the judgment debtor. In any case, Colorado’s recent ruling on the Interest Act may herald change for Colorado defendants as they ponder what to do after a negative judgment. Debtors must weigh the potentially significant financial risks that result from the build-up of prejudice interest, especially during lengthy appeals proceedings.