No. 20705-6-III.The Court of Appeals of Washington, Division Three. Panel Three.
Filed: August 15, 2002. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION.
Appeal from Superior Court of Chelan County, No. 99-2-00617-2, Hon. John E. Bridges, November 6, 2001, Judgment or order under review.
Counsel for Appellant(s), Stewart R. Smith, Lacy Kane, 222 Eastmont Ave, P.O. Box 7132, East Wenatche, WA 98802-0132.
Counsel for Respondent(s), David M. Bohr, Attorney At Law, P.O. Box 2686, Wenatchee, WA 98801.
STEPHEN M. BROWN, C.J.
Jeffery and Kristine Boullioun and The Boullioun Company (the Boulliouns), doing business as Superior Turf Equipment, appeal the trial court’s denial of prejudgment interest on their successful claim against the Scammahorn Revocable Trust for unpaid invoices. While conceding the claim liquidity, the Trust argues prejudgment interest is unavailable because the invoices did not specify a default interest rate.
We disagree. Accordingly, we reverse and remand for determination of prejudgment interest.
FACTS
The trial court’s findings of fact are unchallenged. The Boulliouns, through Superior Turf, sell and repair golf course equipment. In 1996, Mr. Boullioun read about Home Place Golf, a new golf course being developed, and made contact with Paul and Edna Hansen, the developers. Ms. Hansen was the trustee of the Scammahorn trust, which owned the golf course development property. Her husband, Mr. Hansen, was the manager/superintendent of the golf course.
In 1997, Superior Turf sold equipment to Home Place Golf, and performed maintenance on existing equipment resulting in 11 invoices totaling $32,627.97. When Mr. Boullioun provided these sales and services, he did not know how he would be paid, but he expected payment. He understood the Hansens were attempting to obtain financing to pay off the invoices. Four of the invoices referenced payment “net 30 days,” but Mr. Hansen made no attempt to collect on them. Clerk’s papers (CP) at 33-34. None of the invoices provided for interest on unpaid balances.
In November 1998, Mr. Boullioun scheduled a meeting with the Hansens to discuss payment. Shortly before the meeting was to occur, Ms. Hansen died. Following her funeral, Mr. Boullioun discussed payment of the invoices with Mr. Hansen. Mr. Hansen believed the golf course was in default, and he had no authority to act on behalf of the course, but nevertheless, he executed a promissory note to the Boulliouns for $32,627.97 to cover the invoices. The note was backdated to November 26, 1997, and signed by Mr. Hansen.
The Boulliouns sued after the bank foreclosed on the golf course. At trial the Boulliouns successfully argued the note was invalid and Home Place Golf owed the invoice amounts. The trial court entered judgment for the Boulliouns in the amount of the invoices, but refused to grant prejudgment interest because it concluded the invoices did not specify that interest would be charged on unpaid accounts. The Boulliouns appeal.
ANALYSIS
The issue is whether the trial court erred in denying prejudgment interest on the liquidated, invoiced amounts because the invoices did not specifically provide for interest. Washington public policy favors prejudgment interest as an element of damages for the loss of use of money. Colonial Imports v. Carlton Northwest, Inc., 83 Wn. App. 229, 242, 921 P.2d 575 (1996) (C.J. Baker, dissenting). Even so, some uncertainty in Washington still exists on the review standard.
In Colonial, the court held that prejudgment interest on a liquidated claim is generally a matter of right, with limited discretion to deny interest based upon unwarranted delay in prosecuting the claim. Id. at 244-45. Several subsequent cases have, however, cited Colonial for the proposition that an award or denial of prejudgment interest is reviewed for abuse of discretion. Litho Color, Inc. v. Pac. Employers Ins. Co., 98 Wn. App. 286, 300, 991 P.2d 638 (1999); Seattle-First Nat. Bank v. Wash. Ins. Guar. Ass’n., 94 Wn. App. 744, 757, 972 P.2d 1282
(1999). “[A] trial court abuses its discretion when its decision is arbitrary, manifestly unreasonable, or based upon untenable grounds.” Mehlenbacher v. DeMont, 103 Wn. App. 240, 250-51, 11 P.3d 871 (2000) (quoting Atwood v. Shanks, 91 Wn. App. 404, 409, 958 P.2d 332
(1998)).
In any event, prejudgment interest is allowed on liquidated claims. Litho Color, Inc., 98 Wn. App. at 300. `A claim is liquidated if `the evidence furnishes data, which, if believed, makes it possible to compute the amount [owed] with exactness, without reliance on opinion or discretion.” Id. at 301 (quoting Prier v. Refrigeration Eng’g Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968)). The Trust concedes the Boulliouns’ claims are liquidated. However, the trial court denied prejudgment interest after concluding that the invoices sued upon did not provide for interest.
However, a difference exists between prejudgment interest required by contract, and prejudgment interest awarded as damages. See Farm Credit Bank v. Tucker, 62 Wn. App. 196, 200, 813 P.2d 619 (1991). When a contract specifically calls for a default interest rate, the court has no discretion to deny such interest in the event of breach. Id. On the other hand, prejudgment interest awarded as damages recognizes the loss of use of money when `no agreement to pay interest exists.’ Id. `The claim need not arise out of contract or any specific cause of action.’ Seattle-First, 94 Wn. App. at 759. In the latter case, the trial court has discretion to deny prejudgment interest where the claimant delayed prosecution of the claim. Colonial, 83 Wn. App. at 244-45.
No indication exists that the Boulliouns delayed prosecution of these claims. The complaint was filed on July 16, 1999, and judgment was entered on November 6, 2001, following a bench trial continued at the Trust’s request.
The interest rate applicable to prejudgment interest is generally set at 12 percent by statute. Mehlenbacher, 103 Wn. App. at 251. Under RCW 19.52.010, `(1) Every loan for forbearance of money, goods, or thing in action shall bear interest at the rate of twelve percent per annum where no different rate is agreed to in writing between the parties.’ In Mehlenbacher, the plaintiffs sued on a promissory note that did not contain a default interest rate. The court affirmed an award of prejudgment interest at 12 percent by applying the interest rate provided by RCW 19.52.010. Id.
Prejudgment interest runs from the date the claim arises until the judgment is entered. Seattle-First, 94 Wn. App. at 760. The Trust argues the trial court properly denied prejudgment interest because the actual date when the money became due was never established. The record on appeal does not support this argument. No indication exists in this record that the trial court considered the due dates when denying prejudgment interest.
The trial court did find that the Boulliouns expected the invoices to be paid, even though it was uncertain how they would be paid. That a due date may be difficult to ascertain does not excuse the fact-finder from making such a finding when necessary to determine prejudgment interest. See Dautel v. Heritage Home Ctr., Inc., 89 Wn. App. 148, 155, 948 P.2d 397 (1997) (remanded for fact-finding to determine due date and modify judgment to add prejudgment interest).
The Boulliouns point out that, pursuant to the Uniform Commercial Code, the invoices for goods became due upon receipt of the equipment unless otherwise agreed by the parties. See RCW 62A.2-310(a). While this may be true, the due dates, whether by default under the UCC, or by separate agreement of the parties, are questions of fact that depend upon the circumstances of each case and are not properly decided by appeal courts.
Accordingly, we hold the trial court abused its discretion in denying the Boulliouns’ request for prejudgment interest because its decision was based upon the untenable ground that prejudgment interest could not be awarded when a contract does not specify an interest rate for past-due liquidated amounts. Reversed and remanded for further proceedings consistent with this opinion.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
WE CONCUR: Sweeney, J., Schultheis, J.