Opinion
No. FST CV 05 4004778 S
September 30, 2010
MEMORANDUM OF DECISION ON DEFENDANT'S MOTION FOR SUPPLEMENTAL JUDGMENT and PLAINTIFF'S OBJECTION THERETO
Following this court's decision on the plaintiff's motion to reargue and/or alter the terms of the judgment the defendant filed a motion for supplemental judgment seeking interest on the amount awarded and expert fees by way of taxable costs.
I. Interest
As a threshold matter the court must address the plaintiff's argument that the defendant has waived or abandoned its right to recover interest by not requesting it in its post-trial brief. The plaintiff has offered no authority or analysis to support this position. On the contrary, the familiar rule of abandonment by omission ( Chatham and Assoc, Inc. v. William Raveis Real Estate, Inc., 218 Conn. 297, 300 (1991)) has no application here where the defendant requested interest as a prayer for relief and interest is mandated by statute (G.S. Sec. 37-3c). Moreover, interest is considered to be a constitutionally mandated component of the just compensation clause of the Fifth Amendment of the United States Constitution. Leverly Hurley Co. v. Commission of Transportation, 192 Conn. 377, 380 (1984).
The court notes that the plaintiff makes no claim that the court has lost jurisdiction over the judgment entered. The proper characterization of an award of interest in a condemnation proceeding after judgment has entered is that it is an ancillary but necessary final step in the process of assuring the property owner of just compensation.
The plaintiff further argues that because the court did not include interest on the award in its memorandum of decision, the court relinquished its right to determine a reasonable and just rate of interest as required by Sec. 37-3c and is therefore relegated to the default rate provided for in that statute. The court disagrees. In Sears Roebuck and Co. v. Board of Tax Review, 24l Conn. 749, 753 (1997), our Supreme Court approved, by implication, of the use of a motion for supplemental judgment as "a remedial measure" to recover prejudgment interest on overpaid municipal taxes. The court likened the process to that of opening a judgment.
Section 37-3c should not be construed as creating a "gottcha" situation which results from the silence of the original judgment on the issue. See also, Doe v. Heintz, 204 Conn. 17 (1987); LaPre v. Nibo Films Limited Ltd., 10 Conn.App. 669 (1987).
The court notes that neither party has requested an evidentiary hearing concerning the proper interest rate to be applied by the court. The defendant urges the court to award interest at the statutory rate (G.S. Sec. 37-3a) or at least the legal rate (G.S. Sec. 37-1). The plaintiff has invited the court's attention to a collection of trial court decisions in which the court awarded condemnation interest ranging from 3 to 3 1/2 percent. The court does not believe that 10 percent, 8 percent or 3 1/4 percent are fair, just and reasonable rates.
Section 37-3a must be placed in its proper perspective. The Sears Roebuck Co. case supra, makes it clear that the statute was not intended to reflect what is a fair, just and reasonable interest rate at all times under all circumstances, but rather establishes "a maximum above which a trial court should not venture." At the same time, the legal rate statute (G.S. Sec. 37-1), though expressing the legislature's view of a fair and just rate in the context of borrowed money, is not appropriate in a real estate investment setting. The subject property is commercial real estate. Therefore, the court believes that the most appropriate standard that can be applied is a variation of that which the court applied in Laurel Inc. v. Caldwell, 187 Conn. 171 (1982), namely, "a fair and reasonable (and just) overall average interest rate which a reasonably prudent investor could have obtained in Fairfield County" from the date of taking to the present.
The court finds that a rate which most closely approximates that rate is the prime rate which is defined as the rate which a commercial lender would charge its most credit worthy customers. This rate is deemed to be reasonable and just under the circumstances of this case because it is a readily ascertainable figure which provides a reasonable though rough estimate of the interest rate necessary to justly compensate defendant not only for the loss of the use of its money but also for the risk inherent in the litigation. Gorenstein Enterprises v. Quality Care-USA, Inc., 874 F.2d 431, 7th Cir. (1989). The overall average prime rate for the period June 13, 2005 to date is six percent.
The plaintiff uses June 13, 2005 and the defendant uses June 17, 2005 as the taking date. The court believes that June 13, 2005 is correct.
The interest is therefore calculated as follows:
360 day year utilized as per Sec. 37-1; prime rate derived from HTML WSJ Prime Rate. US/Wall Street Journal Prime Rate History.
II. Appraisal/Engineering Fees
Defendant's request that the court award costs is procedurally governed by P. B. § 18-5 which requires initial determination by the clerk of the court. The court only becomes involved in the event that either party files a motion for review pursuant to subdivision (b).
So Ordered.