Torres v. Goodyear Tire & Rubber Co. ( 2014 )

130 Nev., Advance Opinion 5
IN THE SUPREME COURT OF THE STATE OF NEVADA
ERNESTO TORRES AND LEONOR No. 60904
TORRES, INDIVIDUALLY, AND
ERNESTO TORRES, AS SPECIAL
ADMINISTRATOR FOR ANDRES
TORRES, DECEASED; ERNESTO
FILED
TORRES FOR ARMANDO TORRES JAN 30 2014
AND CRYSTAL TORRES, MINORS, TRAQ/E K. L/NDEMAN
REPRESENTED AS THEIR GUARDIAN CLE - • SU - RE pp
AD LITEM; VICTORIA CAMPE, AS BY 'at 0 .17
DEP
SPECIAL ADMINISTRATOR OF
FRANK ENRIQUEZ, DECEASED;
PATRICIA JAYNE MENDEZ, FOR
JOSEPH ENRIQUEZ, JEREMY
ENRIQUEZ, AND JAMIE ENRIQUEZ,
MINORS, REPRESENTED AS THEIR
GUARDIAN AD LITEM; AND MARIA
ARRIAGA FOR KOJI ARRIAGA,
REPRESENTED AS HIS GUARDIAN
AD LITEM,
Appellants,
vs.
GOODYEAR TIRE & RUBBER
COMPANY,
Respondent.
Appeal from a post-judgment order refusing to award
compound post-judgment interest. Eighth Judicial District Court, Clark
County; Stefany Miley, Judge.
Affirmed.
Cap & Kudler and Allen A. Cap, Las Vegas; Albert D. Massi, Ltd., and
Albert D. Massi, Las Vegas,
for Appellants.
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Lewis Roca Rothgerber, LLP, and Daniel F. PoIsenberg and Joel D.
Henriod, Las Vegas,
for Respondent.
BEFORE THE COURT EN BANC.
OPINION
By the Court, SAITTA, J.:
After obtaining a jury verdict awarding damages for personal
injuries and multiple deaths caused by a single vehicle accident, members
of the Torres and Enriquez families and Koji Arriaga (the appellants)
sought compound post-judgment interest on the judgment. At issue here
is whether the appellants are entitled to compound interest on the
judgment awarded to them. We hold that they are not. "As a general rule,
compound interest is not favored by the law and is generally allowed only
in the presence of a statute or an agreement between the parties allowing
for compound interest." Campbell v. Lake Terrace, Inc., 111 Nev. 1329,
1333, 905 P.2d 163, 165 (1995), overruled on other grounds by Aviation
Ventures, Inc. v. Joan Morris, Inc., 121 Nev. 113, 115, 110 P.3d 59, 60-61
(2005). NRS 17.130(2), the statute that provides a default interest rate for
judgments, directs that the interest rate will be adjusted biannually,
although the statute does not authorize compound interest. Because it
does not authorize compound interest, NRS 17.130(2) only allows for the
award of simple interest on judgments.
FACTS AND PROCEDURAL HISTORY
The underlying facts of this case were before this court in
Bahena t). Goodyear Tire & Rubber Co., 126 Nev. , 235 P.3d 592 (2010),
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and Bahena v. Goodyear Tire & Rubber Co., 126 Nev. , 245 P.3d 1182
(2010). The appellants, along with members of the Bahena family, were
traveling in a rental vehicle whose tire separated while on a highway in
Utah. As a result, the vehicle rolled over. Several people were killed and
several others were severely injured.
The district court struck Goodyear's answer for failure to
properly conduct discovery and entered a default liability judgment
against Goodyear. After a jury verdict and post-trial motions on the issue
of damages, the district court entered a judgment awarding damages to
the appellants and the other plaintiffs. The parties then reached a
settlement in which the appellants preserved their right to seek compound
interest. Goodyear paid the settlement amount and simple interest to the
appellants.
The appellants then filed a motion to recover compound
interest on the judgment. The district court denied their motion because it
concluded that NRS 17.130 only allowed simple interest. This appeal
followed.
DISCUSSION
The sole issue in this appeal is whether NRS 17.130, which
provides a statutory right for interest on judgments, authorizes an award
of compound interest. We review the award of interest upon a judgment
for error. Schiff v. Winchell, 126 Nev. „ 237 P.3d 99, 100 (2010).
Moreover, because the parties dispute the meaning of NRS 17.130, we use
a de novo standard of review as we interpret the statute. Kerala Props.,
Inc. v. Familian, 122 Nev. 601, 604, 137 P.3d 1146, 1149 (2006).
"When interpreting a statute, we give words their plain
meaning unless attributing the plain meaning would violate the spirit of
the statute." Banks ex rel. Banks v. Sunrise Hosp., 120 Nev. 822, 846, 102
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P.3d 52, 68 (2004). If the statute is unambiguous, we are "not permitted
to look beyond the statute itself when determining its meaning" Westpark
Owners' Ass'n v. Eighth Judicial Dist. Court, 123 Nev. 349, 357, 167 P.3d
421, 427 (2007). A statute "is ambiguous when it is capable of more than
one reasonable interpretation." Orion Portfolio Servs. 2, L.L.C. v. Cnty. of
Clark ex rel. Univ. Med. Ctr. of S. Nev., 126 Nev. , 245 P.3d 527,
531 (2010).
Simple interest is "Nnterest paid on the principal only and not
on accumulated interest." Black's Law Dictionary 887 (9th ed. 2009).
Compound interest is thiterest paid on both the principal and the
previously accumulated interest." Id. When not provided for by an
agreement, compound interest on a judgment is only permissible if
authorized by statute. Campbell, 111 Nev. at 1333, 905 P.2d at 165.
Because there is no agreement that provides for compound interest on the
appellants' judgment, NRS 17.130 must authorize compound interest for it
to be applied to their judgment instead of simple interest.
NRS 17.130(2) dictates the method of determining the interest
rate. It provides that the default interest rate on judgments shall be
based on the prime rate at Nevada's largest bank and be adjusted
biannually:
When no rate of interest is provided by contract or
otherwise by law, or specified in the judgment, the
judgment draws interest from the time of service
of the summons and complaint until satisfied,
except for any amount representing future
damages, which draws interest only from the time
of the entry of the judgment until satisfied, at a
rate equal to the prime rate at the largest bank in
Nevada as ascertained by the Commissioner of
Financial Institutions on January 1 or July 1, as
the case may be, immediately preceding the date
SUPREME COURT of judgment, plus 2 percent. The rate must be
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adjusted accordingly on each January 1 and July
I thereafter until the judgment is satisfied.
NRS 17.130(2) (emphasis added).
The parties disagree about the meaning of the last sentence in
the statute: "The rate must be adjusted accordingly on each January 1 and
July 1 thereafter until the judgment is satisfied." NRS 17.130(2). They
also dispute whether the term "per annum" is necessary to denote the use
of simple interest.
The appellants argue that the term "adjusted accordingly" in
the last sentence of NRS 17.130(2) means that every time the interest is
adjusted, the judgment's principal must be adjusted to include the interest
accrued during the prior six-month period. However, this interpretation
takes the phrase "adjusted accordingly" out of context. Statutes must be
interpreted as a whole, and the appellants fail to read the two sentences of
the statute together. See Arguello v. Sunset Station, Inc., 127 Nev.
252 P.3d 206, 209 (2011) (explaining that provisions of a statute must
be read as a whole). As used in this statute, "adjusted accordingly"
instructs the reader that the interest rate must be adjusted every six
months to a rate that is two percent higher than the prime rate at
Nevada's largest bank. The statute does not state that the amount of
principal is to be adjusted, or that interest is to accrue on interest that has
already been accumulated. Therefore, the phrase "adjusted accordingly"
does not authorize compound interest.'
'Additionally, the use of a variable interest rate in a statute does not
necessarily imply the use of compound interest. See D.E. Shaw Laminar
Portfolios, L.L.C. v. Archon Corp., 755 F. Supp. 2d 1122, 1128-29 (D. Nev.
2010) (applying a statutory interest rate that adjusts every six months to
calculate an award of simple interest), affd mem., 483 F. App'x 358 (9th
continued on next page . . .
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The appellants also argue that the phrase "per annum"
designates that the interest is to be simple. The failure to use this term in
MRS 17.130(2), they argue, authorizes an award of compound interest.
Cases from other jurisdictions demonstrate that "per annum" can
designate the application of simple interest. See, e.g., Am. Say. Bank v.
Michael, 474 N.Y.S.2d 300, 303 (App. Div. 1984) ("[W]hen an interest rate
is . . . expressed as a percent per annum, it should be understood as
indicating a simple annual rate rather than one that is compounded."),
modified, 477 N.E.2d 430 (N.Y. 1985). Although the use of the term "per
annum" in a statute about interest rates may be sufficient to dictate the
use of simple interest, it is not a necessary term for requiring the use of
simple interest. See Burlington N. R.R. Co. v. Whitt, 611 So. 2d 219, 223
(Ala. 1992) (stating that using an annual interest rate has no bearing on
whether the interest is simple or compound). Therefore, the failure to use
this term in the statute does not prohibit the application of the statute's
plain meaning which, in the absence of language authorizing compound
interest, unambiguously authorizes the award of simple interest only. 2
. . continued
Cir. 2012); see also Fendi Adele S.R.L. v. Burlington Coat Factory
Warehouse Corp., 689 F. Supp. 2d 585, 626 (S.D.N.Y. 2010) (applying the
federal underpayment rate found in the Internal Revenue Code but
requiring the calculation of simple interest).
2We have also considered the parties' policy arguments. In light of
the plain meaning of this unambiguous statute, we need not address these
arguments. See Westpark Owners' Ass'n, 123 Nev. at 357, 167 P.3d at 427.
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CONCLUSION
Interest is simple unless otherwise stated in a contract or
statute. Because NRS 17.130(2) does not provide for compound interest,
interest awarded under this statute is simple. Thus, the district court did
not err in denying the appellants' motion for compound interest.
Therefore, we affirm the judgment of the district court.
J.
Saitta
We concur:
CA.
Gibboics
Piek24. , J.
Pickering
4
Hardesty
rA.A. Lcsi-am , J.
arraguirre
Aca , J.
Douglas
Cherry
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