Opinion
No. X05 CV 05 4005513 S
January 16, 2009
MEMORANDUM AND ORDER RE MOTION FOR OFFER OF JUDGMENT INTEREST AND ATTORNEYS FEES
Following a jury verdict and this court's denial of defendants' motion for judgment notwithstanding the verdict or a new trial, the plaintiffs, Elizabeth and Simon Oram on behalf of their young child, Spencer, have moved for the addition of interest to the verdict amount pursuant to General Statutes § 52-192a, the offer of judgment statute in effect prior to October 1, 2005. See General Statutes § 52-192b.
General Statutes § 52-192a is now known as the offer of compromise statute.
This action was commenced on June 22, 2005. A review of the file shows that on behalf of Spencer Oram, an offer of judgment was made to the defendants Corinne E. deCholnoky, M.D. and OB/GYN Professional Associates, P.C., in the amount of $2 million on December 11, 2006. Dkt. Entry 189.00. On February 8, 2008 a jury rendered a verdict in favor of Spencer Oram and against Dr. deCholnoky and OB/GYN in the amount of $37.5 million which was subsequently reduced by $553,758.66, pursuant to General Statutes § 52-225a(a) as a collateral source reduction, making Spencer's total award $36,946,241.34. Following the denial of the post-trial motions noted above, judgment on that amount was entered on November 3, 2008.
The plaintiffs contend that pursuant to statute Spencer is entitled to offer of judgment interest at a twelve percent per annum rate on $36,946,241.34 from the date of filing the complaint, June 22, 2005, to the judgment date of November 3, 2008 amounting to $14,985,395.49. The defendants disagree and make two contentions: (1) that no offer of judgment interest is due because Elizabeth and Simon Oram, Spencer's parents, did not have probate court approval to settle the case on behalf of Spencer for the sum of $2 million; and (2) at the very least, offer of judgment interest at 12 percent per annum should run only to the date of the verdict and therefore only $11,672,987.81 in interest should be awarded.
The parties do not challenge the various calculations of interest for the differing periods of time.
The defendants' first contention is based on the language of General Statutes § 45a-631(b) which provides: "A release given by both parents or the parent who has legal custody of a minor or by the guardian or spouse shall, if the amount does not exceed ten thousand dollars in value, be valid and binding on the minor." Defendants argue that the offer of judgment filed in this case was, in effect, an offer to give a release in exchange for $2 million and would only have been valid if approved by the probate court. Since no such approval was obtained, the offer of judgment was not valid.
The court rejects this argument because, as plaintiffs observe, the defendants failed to raise the claimed deficiency, or alleged contingent nature of the offer of judgment, when it was filed in 2006. This after-the-fact argument made now, if accepted, would fly in the face of the purposes of the offer of judgment statute which the Connecticut Supreme Court has noted is "mandatory" and has a "punitive aspect" to it that "effectuates the underlying purpose of the statute and provides the impetus to settle cases." Blakeslee Arpaia Chapman, Inc. v. El Constructors, Inc., 239 Conn. 708, 752 (1997). As said in Accettullo v. Worcester Insurance Co., 256 Conn. 667 (2001) "[t]his statutory provision clearly reflects the consequences at play when a party rejects a valid offer of judgment, proceeds to trial, consumes precious judicial resources and ultimately is subject to a verdict that exceeds that offer." Id., 673. Having made no objection to the offer of judgment, having taken no other steps such as a request to the court for additional time to respond to the offer after it was approved by the probate court, indeed, having simply ignored the offer of judgment, the defendants have lost any right to contest its validity at this late date.
Furthermore, Section 45a-631(b) refers to the giving of releases and whether they can bind a minor child. No release is involved in the offer of judgment statute as it was effective prior to October 1, 2005. The offer of judgment statute required an offer to stipulate to a judgment in a certain amount. While a release in return for consideration and a stipulated judgment may have similar effects, they are different animals. The former is part of a private contract; the latter is a court order. Therefore the court finds that Section 45a-631(b) does not constrain or condition the operation of Section 52-192a.
Finally, in the interpretation of statutes a court must presume that laws are enacted in view of existing relevant statutes and that statutes are to be interpreted with regard to other relevant statutes because the legislature is presumed to have created a consistent body of law. Commissioner of Environmental Protection v. Mellon, 286 Conn. 687, 691 (2008). In this case there is no evidence that the legislature intended Section 46a-631(b) to condition or bar the use of the offer of judgment statute on behalf of minors, particularly given the articulated strong policy reasons for the enactment of Section 52-192a. Therefore, this court disagrees with the contention that its use in this case was of no effect.
As to the defendants' argument that the offer of judgment interest of twelve percent should only run to the time of verdict and not to the time judgment was entered, the court notes, and the defendants concede, that the Connecticut Supreme Court has said, "Section 52-192a(b) requires a trial court to award interest to the prevailing plaintiff from the date of the filing of the complaint to the date of judgment whenever [the statutory requirements are met]." Willow Springs Condominium Association, Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 55 (1998) [quoting Loomis Institute v. Windsor, 234 Conn. 169, 180 (1995)]. The defendants do not contend the statutory requirements were not met. Rather, they argue that a 1997 amendment to the postjudgment interest statute changed the rules which were applied to the Willow Springs and Loomis Institute cases. General Statutes § 37-3b(a), as amended by P.A. 97-58 § 2, now provides that in negligence cases postjudgment interest at ten percent per annum shall be recovered and is to be "computed from the date that is twenty days after the judgment or the date that is ninety days after the date of verdict, whichever is earlier, upon the amount of judgment." The defendants contend that Section 37-3b(a) interest of ten percent becomes effective May 8, 2008 and therefore plaintiffs, on behalf of Spencer, are seeking, in total, twenty-two percent interest from May 8, 2008 to November 3, 2008, an absurd result, they argue.
Plaintiffs contend there is appellate authority for their position. In Paulus v. LaSala, 56 Conn.App. 139 (1999) cert. denied, 252 Conn. 928 (2000) the Appellate Court, noting the paucity of cases specifically determining the ending date of prejudgment interest, held that Sections 37-3a and 52-192a should be read together and held that Section 52-192a provides for interest until the date of judgment. Id.; 56 Conn.App. 151. This holding, based on Gionfriddo v. Avis Rent a Car System, Inc., 192 Conn. 301 (1984) was in a case involving Section 37-3a which contains the express provision "[e]xcept as provided in sections 37-3b, 37-3c and 52-192a," a provision not included in Section 37-3b. In Aubin v. Miller, 64 Conn.App. 781, 800 (2001) the Appellate Court, also in a case involving Section 37-3a, stated "[t]he rules of § 52-192a determine prejudgment interest, the interest from the date the offer was filed until the date of judgment." (quoting O'Leary v. Industrial Park Corp., 211 Conn. 648, 653 (1989).
This court has not found, and the parties have not offered, any appellate cases which directly interpret the interplay of the offer of judgment statute, Section 52-192a and the interest statute for negligence cases, Section 37-3b. As noted the latter statute clearly states that ten percent interest shall run from the earlier of ninety days after the verdict is rendered or twenty days after judgment. Unlike Section 37-3a the interest statute for negligence cases does not make an exception for an offer of judgment interest scenario. Section 52-192a does not, by its terms, establish a date by which its interest rate terminates. This date was established in Gionfriddo to be the date judgment was entered in a case involving Section 37-3a. However, since Gionfriddo and Willowbrook, the legislature has specifically decreed that the interest on verdicts in negligence cases shall commence to run ninety days after verdict if that date comes before entry of judgment, as it does in this case.
In interpreting Section 52-192a, Gionfriddo advises us that when two statutes are arguably involved we must read the statutes "in conjunction with each other." Gionfriddo, supra, 192 Conn. 308 [citing Blue Cross Blue Shield of Connecticut, Inc. v. Mike, 184 Conn. 352, 362 (1981) and Heffernan v. Slapin, 182 Conn. 40, 46 (1980)]. Blue Cross Blue Shield, supra, held that where two statutes relate to the same subject matter "every effort should be made to find a reasonable field for the operation of both statutes." Heffernan v. Slapin, supra, held that statutes must be interpreted with regard to other relevant statutes because the legislature is presumed to have created a consistent body of law — the same point recently reaffirmed by the Supreme Court in Mellon.
It is clear from the statutory language itself and reemphasized by Gionfriddo that Section 52-192a says nothing about when offer of judgment (now known as offer of compromise) interest terminates. Id., 192 Conn. 308. However, reading 52-192a "in conjunction" with Section 37-3b this court determines that the latter statute provides a sound basis for concluding that offer of judgment interest in this case ends ninety days after the verdict was rendered at which time the ten percent interest rate would apply to the entire verdict, not just the verdict in favor of Spencer.
This conclusion is at odds with the arguments of both plaintiffs and defendants. The plaintiffs contend that Spencer is entitled to the twelve per cent rate of offer of judgment interest through to the date of judgment and Section 37-3b interest of ten percent from May 8, 2008 thus obtaining a combined twenty-two percent rate for the nearly six-month period to November 3, 2008. The court rejects that contention. First, such a high rate of interest just does not smell right. The court has acknowledged case law support for the "punitive" aspects of the offer of judgment statute, but twenty-two percent interest seems simply too much. Second, the court finds no authority or basis for concluding that the legislature intended the two interest rates to be aggregated. Indeed, the position of the plaintiffs flies in the face of the language of Section 37-3b which states that interest of ten percent "and no more" shall be allowed. Third, there is no rational basis to have a prevailing plaintiff in a wrongful detention of money case receive a single interest rate while the prevailing plaintiff in a negligence case gets the total of two interest rates.
The defendants, on the other hand, argue that offer of judgment interest should run, if at all, only to the date of the verdict. They contend that Section 37-3b now covers and governs all post-verdict interest assessments in negligence case. The court is not convinced, since there is nothing in the statutory language or its legislative history to support arbitrarily cutting off offer of judgment interest prior to allowing the imposition of post-verdict interest.
Therefore, the court rules that the plaintiffs are entitled to offer of judgment interest at twelve per cent per annum from June 22, 2005 to May 8, 2008 in the amount of $12,754,045.12.