269 A.3d 974
Del.2021Background
- Noranda operated an aluminum smelter; two serious accidents led to insurer disputes over coverage and business-interruption losses.
- After a jury trial the Superior Court entered judgment for Noranda for about $28 million on October 17, 2019; this Court affirmed.
- Parties disputed the proper post-judgment interest rate under 6 Del. C. § 2301(a): Noranda sought 7.5% (Fed. Reserve discount rate 2.5% on judgment date + 5%); Insurers sought 6% (discount rate 1% when liability arose + 5%).
- The Superior Court awarded 6% relying on its precedent (TranSched and earlier Superior Court decisions) that pre- and post-judgment interest use the same rate.
- The Supreme Court considered the 2012 amendment to § 2301(a), which added language requiring that judgments “shall, from the date of the judgment, bear post-judgment interest of 5% over the Federal Reserve discount rate . . . or the contract rate, whichever is less.”
- The Supreme Court reversed, holding post-judgment interest must be calculated using the legal rate in effect on the date judgment was entered (7.5% in this case) and remanded for award of that rate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-judgment interest is calculated using the legal rate in effect on the judgment date or at the time liability (interest) first arose | Noranda: post-judgment interest accrues only after judgment exists, so use the discount rate in effect on the judgment date (7.5%) | Insurers: same legal rate used for pre- and post-judgment interest (use rate when liability arose, 6%) | Court: Use legal rate in effect on judgment date; post-judgment interest accrues from judgment date (7.5% here). |
| Whether § 2301(a) applies only to loans or also supplies statutory post-judgment interest in contract/insurance cases | Noranda: § 2301(a) governs post-judgment interest generally where no contract rate exists | Insurers: amendment and synopsis suggest the change targeted personal loans; statute should be read as limited | Court: § 2301(a) applies to judgments outside loan context; prior Delaware decisions applied it to contracts and insurance. |
| Effect of Superior Court precedent (Rollins/TranSched) and stare decisis on interest-rate calculation | Noranda: 2012 legislative amendment changed the controlling statutory text, undermining earlier Superior Court practice | Insurers: longstanding Superior Court practice for ~40 years should carry weight and not be disturbed | Court: Legislative amendment supersedes prior Superior Court practice; apply the unambiguous statutory text. |
Key Cases Cited
- Watkins v. Beatrice Cos., 560 A.2d 1016 (Del. 1989) (applied § 2301(a) to calculate interest in a contract case)
- Acierno v. Worth Bros. Pipeline Corp., 656 A.2d 1085 (Del. 1995) (described § 2301(a) as establishing the statutory amount of post-judgment interest in breach-of-contract disputes)
- Wilmington Country Club v. Cowee, 747 A.2d 1087 (Del. 2000) (held that interest on a judgment begins to accrue when the judgment is entered)
- Rollins Environ. Servs., Inc. v. WSMW Indus., Inc., 426 A.2d 1363 (Del. 1980) (Superior Court decision often cited for treating pre- and post-judgment interest as the same rate; discussed here as dictum and not controlling after statutory amendment)
- Del. Tech. & Comm. Coll. v. Emory Hill & Co., 116 A.3d 1243 (Del. 2015) (addressed § 2301 issues but involved a contract falling under § 2301(c); not dispositive on the reach of the 2012 amendment)