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Cek v. Rdoht8/4/2000
Ctr. (1994), 69 Ohio St.3d 638, the Supreme Court of Ohio held that R.C. 1343.03 establishes certain requirements. First, a party seeking prejudgment interest must petition the court for such interest within fourteen days after entry of judgment. The decision is one for the trial court, not the jury. Second, the trial court must hold a hearing on the motion. Third, before awarding prejudgment interest, the trial court must find that the party required to pay the judgment failed to make a good faith effort to settle. Fourth, the trial court must find that the party to whom the judgment is to be paid did not fail to make a good faith effort to settle the case. Moskovitz, 69 Ohio St.3d at 658.
R.C. 1343.03 uses the mandatory word "shall," as opposed to the discretionary term "may." Therefore, if the four requirements of the statute are satisfied, the decision to order the payment of prejudgment interest is not within the trial court's discretion. Id.
The real crux of the statute, however, is whether the party required to pay the money failed to make a "good faith effort" to settle the case and whether the party to whom the money is to be paid did not fail to make a similar "good faith effort" to settle the case. Since determinations going to the existence of a good faith effort or the lack thereof are within the trial court's discretion, "the ultimate decision whether to award prejudgment interest is reposed in the trial judge[.]" Id. Therefore, the standard of review on appeal is whether the trial court abused its discretion. Id.
As noted in Moskovitz, the obvious question to be asked is what constitutes a good faith effort or, conversely, when has a party failed to make a good faith effort to settle the litigation? The Supreme Court of Ohio has attempted to develop a judicial standard of good faith governing motions for prejudgment interest under R.C. 1343.03(C). In Kalain, supra, the court held:
"A party has not `failed to make a good faith effort to settle' under R.C. 1343.03(C) if he has (1) fully cooperated in discovery proceedings, (2) rationally evaluated his risks and potential liability, (3) not attempted to unnecessarily delay any of the proceedings, and (4) made a good faith monetary settlement offer or responded in good faith to an offer from the other party. If a party has a good faith, objectively reasonable belief that he has no liability, he need not make a monetary settlement offer." Kalain, 25 Ohio St.3d 157, at syllabus.
The effect of Kalain is to place the burden of proof on the party seeking prejudgment interest. Moskovitz, 69 Ohio St.3d at 659. The factors enumerated in Kalain, and others where appropriate, should be considered by a trial court in making a prejudgment interest determination.
Accordingly, it is incumbent on the moving party to present evidence that he or she made a written or equally persuasive settlement offer to the defendant(s) which was reasonable in light of such factors as the nature of the case, the injuries involved, and the applicable law. Moreover, it will generally be insufficient for the moving party merely to make subjective claims of lack of good faith on the part of the party required to pay the money. The statutory phrase "failed to make a good faith effort to settle," however, does not mean that the party required to pay the money acted in "bad faith." Moskovitz, 69 Ohio St.3d at 659. Indeed, the nonmoving party may have failed to make a good faith effort to settle the case, even though he or she did not necessarily act in bad faith.
We turn now to the assigned errors. In order to simplify our analysis, we will consider the assignment of error raised by appellee on cross ap
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