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Cek v. Rdoht8/4/2000
on the trial court's thinking.
During this proceeding, the trial court noted that if it awarded prejudgment interest to appellee in addition to the postjudgment interest which had already been paid, then R.C. 1343.03(C) mandated that such interest had to be computed from the date the cause of action accrued to the date of the judgment ordering the payment of money. In this regard, the trial court observed:
"The statute which I reviewed this morning, looks to be a do it or don't type of statute. You will go all the way back to the tortious conduct, to the date of judgment or give no interest. Looks like one way or another."
The trial court was correct in this observation. Having recognized this point of law, however, the trial court then proceeded to deviate from it. Instead of awarding prejudgment interest from the date the cause of action accrued on November 14, 1995 (i.e., the date of the accident) to the date of the July 14, 1998 decree entering judgment against appellant for $30,000, the trial court selected September 22, 1997 as the commencement date for calculating such interest. The trial court chose this date because it was one week after the September 15, 1997 pretrial hearing at which appellee's counsel made the oral settlement offer of $40,000.
The trial court's selection of this date is at the crux of appellee's cross appeal. In his assignment of error on cross appeal, appellee asserts that the trial court erred as a matter of law by deviating from the mandate in the prior version of R.C. 1343.03(C) that prejudgment interest "shall be computed from the date the cause of action accrued[.]" From appellee's perspective, the trial court was statutorily compelled to award him prejudgment interest dating back to the day of the accident on November 14, 1995.
Appellee is correct. In Musisca v. Massillon Community Hosp. (1994), 69 Ohio St.3d 673, the Supreme Court of Ohio considered the specific question of whether the language of R.C. 1343.03(C) allowed any room for the trial court to adjust the point in time at which an award of prejudgment interest should begin to run depending on the equities of the situation. The court held:
"The provision of R.C. 1343.03(C) that a prejudgment interest award begins to run on the date the cause of action accrued is mandatory; a trial court may not adjust the date the award begins to run for equitable reasons." Musisca, 69 Ohio St.3d 673, at syllabus.
In arriving at this conclusion, the Musisca court ruled that the use of the word "shall" in the statute was determinative. Accordingly, the court opined that the decision as to when an award of prejudgment interest should begin to run is not discretionary and such interest, if awarded, had to be calculated from the date the cause of action accrued. Id. at 676.
In light of Musisca, it is obvious that the trial court erred by selecting September 22, 1997 as the commencement date for the awarding of prejudgment interest. Appellee's assignment of error on cross appeal is well-taken.
This leads us back to the question presented by appellant's first assignment, to wit: did the trial court abuse its discretion by awarding prejudgment interest to appellee? After having reviewed the transcript of the motion hearing, it is obvious that the trial court did not engage in the analysis required by R.C. 1343.03(C). Specifically, the trial court did not determine whether appellant, as the party required to pay the money, failed to make a good faith effort to settle the case and whether appellee, as the party to whom the money was to be paid, did not fail to make a good faith effort to settle the case.
Instead, t
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