793 N.W.2d 437
Minn. Ct. App.2010Background
- Respondent settled malpractice claim against CDI for $150,000 on December 9, 2003; the agreement did not mention interest.
- Soderbeck repudiated the agreement the next day and refused to sign a release; CDI moved to enforce.
- After procedural delays, district court enforced the settlement but reserved interest issues; CDI tendered $150,000 on October 13, 2008.
- District court awarded Soderbeck $43,550 interest from 12/9/2003 to 10/13/2008 at 6% under Minn. Stat. § 334.01.
- This Court remanded for reasoning on why interest should accrue and whether CDI was liable for interest.
- The court ultimately held CDI is not liable for interest because the settlement amount was not due/ascertainable during Soderbeck’s repudiation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CDI is liable for interest on the settlement funds. | Soderbeck argues CDI defaulted by not paying the settled amount. | CDI contends the repudiation delayed performance, so no default or ascertainable debt arose. | No liability for interest; repudiation paused performance and amount not ascertainable. |
| When does the amount owed become ascertainable for prejudgment interest? | Interest accrues from settlement date as liability was certain. | Uncertainty remained due to repudiation and potential later determination of liability. | Ascertaining not met during repudiation; interest not startable until ascertainable. |
| Whether equity or election-of-remedies principles justify awarding interest. | Equitable considerations favor Soderbeck due to CDI’s use of funds. | Equity cannot override a valid contract; repudiation bars such relief; no election of remedies issue. | Equity not available; no basis to grant interest given the contract and repudiation. |
Key Cases Cited
- Glodek v. Romnski, 390 N.W.2d 477 (Minn.App. 1986) (ascertainability of liability delayed by asset-specific valuation and party conduct)
- Eide v. State Farm Mut. Auto. Ins. Co., 492 N.W.2d 549 (Minn.App. 1992) (insurer liability not ascertainable until district court decision; repudiation delays payment)
- Solid Gold Realty, Inc. v. Mondry, 399 N.W.2d 681 (Minn.App. 1987) (ascertainability of liability by objective standard; not necessary to prove exact damages)
- Wasser v. W. Land Secs. Co., 107 N.W. 160 (Minn. 1906) (breach excusing performance; no default where obligation not due)
- Lappinen v. Union Ore Co., 224 Minn. 395 (Minn. 1947) (interest only for money due; no default when amount not due or ascertainable)
- Potter v. Hartzell Propeller, Inc., 189 N.W.2d 499 (Minn. 1971) (review of interest as damages; construct settlement interest de novo)
- Trapp v. Hancuh, 587 N.W.2d 61 (Minn.App. 1998) (de novo review of statutory interest; ascertainability standard)
- Renczykowski, 409 N.W.2d 890 (Minn.App. 1987) (equitable powers to award interest narrow; contract governs rights)