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Norquest/RCA-W Bitter Lake Partnership v. City of Seattle

December 19, 1996

NORQUEST/RCA-W BITTER LAKE PARTNERSHIP, A WASHINGTON GENERAL PARTNERSHIP; NORQUEST HEALTH-CARE CORPORATION, A WASHINGTON CORPORATION, INDIVIDUALLY AND AS GENERAL PARTNER OF NORQUEST/RCA-W BITTER LAKE PARTNERSHIP; AND RECOVERY CENTERS OF AMERICA-WESTERN, INC., A CALIFORNIA CORPORATION, INDIVIDUALLY AND AS GENERAL PARTNER OF NORQUEST/RCA-W BITTER LAKE PARTNERSHIP, APPELLANTS,
v.
CITY OF SEATTLE, A MUNICIPAL CORPORATION, RESPONDENT.



Appeal from Superior Court of King County. Docket No: 892163527. Date filed: 09/20/95. Judge signing: Hon. Carol Schapira.

Authored by Mary K. Becker. Concurring: Walter E. Webster, Ronald E. Cox

The opinion of the court was delivered by: Becker

BECKER, J. -- On Norquest's first appeal in this case, this court reversed the damage award in part, and remanded to the trial court for recalculation. This time, Norquest appeals the trial court's refusal to allow the modified damages to bear interest from the date of the first judgment. Because our first decision partly affirmed the original damage award, backdated interest is appropriate on the affirmed portions. We again reverse and remand.

In the mid-1980s Norquest Healthcare Corporation and Recovery Centers of America-Western planned to develop a drug treatment facility. The City of Seattle initially denied them a necessary building permit. Norquest sued the City and in 1992 obtained a judgment for damages resulting from the delay in issuing the permit. The trial court found as a fact that the City's wrongful conduct caused Norquest nine months of delay in opening the treatment facility.

The City appealed the judgment, amounting to over $350,000, to this court. In a partially published The City contends that there is no substantial evidence to support [the trial court's] finding that the treatment facility would have opened on January 1, 1990. We agree. Assuming the permit had been issued at least by August 1, 1989, the Partnership's construction project manager, Ronald Peterson, testified that construction would have taken approximately 6 months. As the City notes, this put the facility opening date at February 1, 1990, and assumes that the facility would open the day construction ended. [The trial court's]

finding of fact 113 is therefore not supported by substantial evidence. All damages based on the 9-month delay (i.e., the day the facility should have opened, January 1, 1990, to the day it actually opened, October 1, 1990) are reversed and remanded to determine damages based on a 7-month delay (i.e., this assumes that construction would have ended February 1, 1990, and that an additional month was necessary to move in and organize the facility). *fn1 The appellate opinion further noted, "In light of our holding that damages are to be calculated based on a 7-month rather than a 9-month delay, on remand the interest award will have to be adjusted accordingly." *fn2 On remand, the superior court recalculated the damages and entered a revised judgment. The amount awarded for the three disputed items was $99,283.33--exactly seven-ninths of the principal amount awarded in the first judgment for those three items. The court ordered that interest on this sum would accrue only from September 1995, the date of the revised judgment. Norquest now contends the interest should accrue from January, 1992, the date of the original judgment. The difference amounts to over $42,000.

The relevant statute, RCW 4.56.115, generally allows only post-judgment interest on judgments against the State and its municipal subdivisions. But it also specifically authorizes interest dating back to any portion of an original judgment that "is wholly or partly affirmed on review". The statute provides in its entirety:

Judgments founded on the tortious conduct of the state of Washington or of the political subdivisions, municipal corporations, and quasi municipal corporations of the state, whether acting in their governmental or proprietary capacities, shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof: PROVIDED, That in any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

The City, relying on the phrase "reversed and remanded" in the appellate decision that reviewed the first judgment, claims this was not a case where the judgment as to the contested items of damage was "affirmed on review". We disagree. In reversing and remanding the original judgment, we effectively reversed two months worth of damages and affirmed seven months worth of damages. We remanded only for the trial court to reduce the award by two months worth of damages. The recalculated damages should accrue interest from the time of the original judgment.

RCW 4.56.110(3), the analogous statute that regulates interest on judgments generally, has given rise to decisions that support our Conclusion. Under this section, we held in Fulle v. Boulevard Excavating *fn3 that when a remand instructs the trial court merely to amend the original judgment, not re-determine liability, interest is properly due on the entire revised judgment from the date of the original judgment. The Supreme Court reached the opposite result in Fisher Properties v. Arden-Mayfair, *fn4 where the trial court had been instructed to consider two alternative measures of damages on remand, and "more was required than recomputation."

The record here demonstrates that the trial court, in the revised judgment, awarded for each remanded damage item exactly seven-ninths of the amount originally awarded. The City presented no alternative measure of damages to the trial court on remand. In this appeal, the City has presented no basis for its belief that the first appellate decision required the trial court to do more than simple recomputation.

The City defends the trial court's failure to award interest by arguing that any interest relating to dates prior to the 1995 revised judgment would be prejudgment interest. As this court recently held in Teevin v. Wyatt, *fn5 RCW 4.56.115 does not waive the City's sovereign immunity from liability for true prejudgment interest. But what Norquest seeks in this appeal is interest that has been accruing since 1992 on the seven-ninths portion of its damages award that was affirmed on appeal. This is postjudgment interest, not prejudgment interest. There was no need in Teevin for the court to distinguish between a judgment partially affirmed and a judgment reversed. That situation exists here and the statute plainly addresses it by providing that interest shall run from the original judgment where the judgment "is wholly or partly affirmed on review." *fn6 Reversed and remanded with instruction to award interest on the three damage items previously remanded, from the date of the original judgment entered on January 22, 1992. We award Norquest reasonable attorney fees on this appeal.

WE CONCUR:

Walter E. ...


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