Opinion
No. 59819-8-I.
May 5, 2008.
Appeal from a judgment of the Superior Court for King County, No. 06-2-27169-6, Paris K. Kallas, J., entered April 6, 2007.
Remanded by unpublished opinion per Leach, J., concurred in by Cox and Ellington, JJ.
Default judgment was entered against Martin for damages relating to an automobile accident. Martin appeals the default judgment, claiming the incorrect interest rate was used to calculate the amount of the judgment. We agree and remand for reentry of the judgment with interest before and after entry at the statutory rate for tort judgments set forth in RCW 4.56.110(3).
BACKGROUND
This is an insurance subrogation action arising out of an automobile collision. As Clinton Martin was driving a truck on State Route 99, the truck in front of him stopped abruptly. Martin was unable to stop his vehicle and collided with the vehicle in front of him. Nationwide Mutual Insurance Company sued Martin for property damage.
Martin was served with the summons and complaint but failed to file a timely answer or notice of appearance. The complaint requested judgment "in the principal amount of $4,145.36, together with costs, interest, and reasonable attorney's fees." Default judgment was entered against Martin in the principal amount requested together with pre-and postjudgment interest at 12% per annum. The default judgment was supported by the affidavit of Rita Gray, Nationwide's subrogation claims representative, which attested to liquidated damages of $4,135.36 and stated "prejudgment interest at the contractual rate should apply."
Martin filed a motion to vacate the default judgment, a motion for an order to show cause, and the declaration of Serin Ngai. In his motion to vacate, Martin argued that the court should vacate the default judgment under CR 60(b)(1) because of mistake, inadvertence, or excusable neglect in obtaining the judgment. However, Martin's motion to vacate the default judgment was deficient because it did not demonstrate a prima facie defense to the claims against him. Martin then attempted to argue several possible defenses, including the incorrect interest rate, in his written rebuttal and during oral argument on the motion. The trial judge refused to consider those defenses because they were not presented in the motion, and Nationwide therefore had no opportunity to respond to them.
See Johnson v. Asotin County, 3 Wn. App. 659, 664, 477 P.2d 207 (1970).
DISCUSSION
The only issue raised by Martin on appeal is whether the judgment entered against him provides for pre-and postjudgment interest at an incorrect rate. A default judgment is a final judgment from which a party may appeal. The interest rate applicable to tort judgments is governed by RCW 4.56.110(3).
Since Martin concedes that Nationwide is entitled to prejudgment interest, for purposes of this case we will assume it is so entitled.
Rule of Appellate Procedure (RAP) 2.2(a)(1).
Nationwide argues that Martin waived his objection to the postjudgment interest rate because he failed to raise it properly below. Rule of Appellate Procedure (RAP) 2.5(a) provides that "[t]he appellate court may refuse to review any claim of error which was not raised in the trial court." This rule "is permissive in nature and does not automatically preclude the introduction of an issue at the appellate level." Because Nationwide obtained the entry of a judgment providing for postjudgment interest at a rate contrary to the express provisions of the applicable statute without prior notice to Martin, we address the issue.
RAP 2.5(a).
Pulcino v. Federal Express, 141 Wn.2d 629, 649, 9 P.3d 787 (2000).
It is undisputed that the judgment in this case is a tort judgment. The interest rate for tort judgments is prescribed by RCW 4.56.110(3), which provides:
Interest on judgments shall accrue as follows:
. . .
(3)Judgments founded on the tortious conduct of individuals or other entities, whether acting in their personal or representative capacities, shall bear interest from the date of entry at two percentage points above the equivalent coupon issue yield, as published by the board of governors of the federal reserve system, of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the calendar month immediately preceding the date of entry. 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.
Nationwide argues that this statute governs postjudgment but not prejudgment interest for tort judgments. It also argues that under RCW 4.56.110(4) and RCW 19.52.020(1), the legislature intended all prejudgment interest to be calculated at the rate of 12 percent per annum. RCW 4.56.110(4) provides, in pertinent part:
(4) Except as provided under subsections (1), (2), and (3) of this section, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof.
RCW 4.56.110(4) (emphasis added).
Nationwide emphasizes the phrase "from the date of entry" in subsections (3) and (4), arguing that RCW 4.56.110 does not address any prejudgment interest rate and that courts must look to the general interest statute, RCW 19.52.020, when calculating prejudgment interest. We disagree.
Our Supreme Court has noted that, where the amount of damages is liquidated, "[p]rejudgment interest is allowed in civil litigation at the statutory judgment interest rate, RCW 4.56.110, RCW 19.52.020." In addition, we previously held in Mercier v. GEICO Indemnity Co. that the interest rate for both pre-and postjudgment interest on a tort judgment accrues at the rate enumerated in RCW 4.56.110(3). In the context of confirmation of an MAR arbitration award for underinsured motorist benefits, Mercier argued that he should have been awarded pre-and postjudgment interest at the rate of 12 percent rather than the tort rate, because GEICO's obligation to pay his coverage benefits was contractual. We determined that the tort rate applied to pre-and postjudgment interest because "[a]n underinsured motorist carrier stands in the shoes of the tortfeasor and its liability to the insured is identical to the tortfeasor's." We find no reason to depart from this rule.
Mahler v. Szucs, 135 Wn.2d 398, 429, 957 P.2d 632, (1998).
139 Wn. App. 891, 165 P.3d 375 (2007).
Mercier, 139 Wn. App. at 903-04.
Mercier, 139 Wn. App. at 903 (citing Dayton v. Farmers Ins. Group, 124 Wn.2d 277, 281, 876 P.2d 896 (1994)).
Mercier, 139 Wn. App. at 903.
We remand for recalculation of the judgment using the interest rate for tort judgments in RCW 4.56.110(3).
Attorney Fees
Martin requests attorney fees on appeal under RCW 4.84.290, which provides, "the prevailing party on appeal shall be considered the prevailing party for the purpose of applying the provisions of RCW 4.84.250." Because Martin is the prevailing party on appeal, we grant his request for attorney fees, provided he complies with RAP 18.1(d).
The judgment is REMANDED to the trial court for recalculation of the interest rate in accordance with this opinion.