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NELSE MORTENSEN & CO. v. UNITED STATES

October 28, 1969

NELSE MORTENSEN & CO., Inc., Plaintiff,
v.
UNITED STATES of America and Washington Water Power Company, Defendants. UNITED STATES of America, Third Party Plaintiff, v. John R. CULLER et al., Third Party Defendants



The opinion of the court was delivered by: EAST

 EAST, Senior District Judge.

 For a detailed recital of the progress of these proceedings, and the premise of the judgment in favor of the defendant Washington Water Power (Power) against Plaintiff, see the Court's Opinion standing as the Court's Findings of Facts and Conclusions of Law entered herein on July 1, 1969. 301 F. Supp. 635 (Opinion).

 Briefly, while Plaintiff as general contractor was doing excavation work in the course of the construction of a building for the Defendant, United States of America (Government), Power's underground high tension electrical conduit was inadvertently, as distinguished from intentionally, fractured (accident) with a resulting cost and expense to Power for repairs exceeding $10,000. Power counter-claimed in Plaintiff's Tucker Act action herein against the Government seeking from Plaintiff the cost and expense aforesaid. The Court tried Power's counter-claim on the theory of its third party beneficiary rights under the construction contract, *fn1" and during the trial orally granted summary judgment in favor of Power against the Plaintiff for $10,268.81.

 Power has tendered a written judgment for that amount "plus interest at the rate of 6% per annum from November 19, 1965", the date of the accident, with notice to the Plaintiff.

 Suffice, we are to be guided by the State of Washington contract-law judicial construction of R.C.W. 4.56.110, providing "that all judgments, other than those founded on written contracts, will bear interest at the rate of six percent (6%) per annum."

 Chapter 46, Regular Session of the State of Washington Legislature, amended Sec. 4.56.110 by raising the rate of interest to eight percent (8%), effective June 12, 1969. I do not take it that Chapter 46 has retroactive effect.

 Going first to the modern trend of general law as to pre-judgment date interest, 22 Am.Jur.2d Damages, Sec. 186 advises us:

 
"The rule that interest is not allowed on unliquidated damages in cases based upon contracts, express or implied, has been modified, and the more liberal view now prevails that interest will be allowed as damages where the demand, although unliquidated, is of such a nature that the amount is capable of ascertainment by mere computation, or can be established with reasonable certainty, or determined by reference to well-established market values."

 As to State of Washington law we are taught by Prier v. Refrigeration Engineering Company, 74 Wash. 2d 25, 442 P.2d 621 (1968), leaning on the prophecy and "sense of justice" of an 1899 Wisconsin decision:

 
"'It may be safely said that the tendency has been in favor of allowing interest rather than against it, and that the degree of certainty or ease with which the approximate amount can be ascertained has grown less and less stringent. * * *
 
"'The true principle, which is based on the sense of justice in the business community and on our statute, is that he who retains money which he ought to pay to another should be charged interest upon it. The difficulty is that it cannot well be said one ought to pay money, unless he can ascertain how much he ought to pay with reasonable exactness. Mere difference of opinion as to amount is, however, no more a reason to excuse him from interest than difference of opinion whether he legally ought to pay at all, which has never been held an excuse.'" (74 Wash.Dec.2d at 33-34, 442 P.2d at 627)

 And further, by Caterpillar Tractor v. Collins Machinery Co., 286 F.2d 446 (9 Cir. 1960) that:

 
"Under Washington law interest is allowed on all claims that are liquidated or readily ascertainable by mathematical computations or by reference to standards prescribed in the contract - in other words where it ...

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