HF 1461

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to civil actions; regulating interest on verdicts, awards, and judgments;
modifying the method used to calculate interest; amending Minnesota Statutes
2006, section 549.09, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 549.09, subdivision 1, is amended to read:

Subdivision 1.

When owed; rate.

(a) When a judgment or award is for the recovery
of money, including a judgment for the recovery of taxes, interest from the time of
the verdict, award, or report until judgment is finally entered shall be computed by the
court administrator or arbitrator as provided in paragraph (c) and added to the judgment
or award.

(b) Except as otherwise provided by contract or allowed by law, preverdict,
preaward, or prereport interest on pecuniary damages shall be computed as provided
in paragraph (c) from the time of the commencement of the action or a demand for
arbitration, or the time of a written notice of claim, whichever occurs first, except as
provided herein. The action must be commenced within two years of a written notice of
claim for interest to begin to accrue from the time of the notice of claim. If either party
serves a written offer of settlement, the other party may serve a written acceptance or a
written counteroffer within 30 days. After that time, interest on the judgment or award
shall be calculated by the judge or arbitrator in the following manner. The prevailing
party shall receive interest on any judgment or award from the time of commencement
of the action or a demand for arbitration, or the time of a written notice of claim, or as
to special damages from the time when special damages were incurred, if later, until the
time of verdict, award, or report only if the amount of its offer is closer to the judgment or
award than the amount of the opposing party's offer. If the amount of the losing party's
offer was closer to the judgment or award than the prevailing party's offer, the prevailing
party shall receive interest only on the amount of the settlement offer or the judgment or
award, whichever is less, and only from the time of commencement of the action or a
demand for arbitration, or the time of a written notice of claim, or as to special damages
from when the special damages were incurred, if later, until the time the settlement offer
was made. Subsequent offers and counteroffers supersede the legal effect of earlier offers
and counteroffers. For the purposes of clause (2), the amount of settlement offer must
be allocated between past and future damages in the same proportion as determined by
the trier of fact. Except as otherwise provided by contract or allowed by law, preverdict,
preaward, or prereport interest shall not be awarded on the following:

(1) judgments, awards, or benefits in workers' compensation cases, but not including
third-party actions;

(2) judgments or awards for future damages;

(3) punitive damages, fines, or other damages that are noncompensatory in nature;

(4) judgments or awards not in excess of the amount specified in section 491A.01;
and

(5) that portion of any verdict, award, or report which is founded upon interest, or
costs, disbursements, attorney fees, or other similar items added by the court or arbitrator.

(c) deleted text begin The interest shall be computed as simple interest per annum. The rate of interest
shall be based on the secondary market yield of one year United States Treasury bills,
calculated on a bank discount basis as provided in this section.
deleted text end

deleted text begin On or before the 20th day of December of each year the state court administrator
shall determine the rate from the one-year constant maturity treasury yield for the most
recent calendar month, reported on a monthly basis in the latest statistical release of the
board of governors of the Federal Reserve System. This yield, rounded to the nearest one
percent, or four percent, whichever is greater, shall be the annual interest rate during the
succeeding calendar year. The state court administrator shall communicate the interest
rates to the court administrators and sheriffs for use in computing the interest on verdicts
and shall make the interest rates available to arbitrators. deleted text end new text begin Interest shall be calculated as of
the date of judgment at a rate equal to the one-year treasury constant maturity published
by the Federal Reserve in the H15 report settled immediately prior to the date of the
judgment plus two percent. The state court administrator shall distribute notice monthly of
that rate and any changes to that rate to all district courts.
new text end

When a judgment creditor, or the judgment creditor's attorney or agent, has received
a payment after entry of judgment, whether the payment is made voluntarily by or on
behalf of the judgment debtor, or is collected by legal process other than execution levy
where a proper return has been filed with the court administrator, the judgment creditor,
or the judgment creditor's attorney, before applying to the court administrator for an
execution shall file with the court administrator an affidavit of partial satisfaction. The
affidavit must state the dates and amounts of payments made upon the judgment after the
most recent affidavit of partial satisfaction filed, if any; the part of each payment that
is applied to taxable disbursements and to accrued interest and to the unpaid principal
balance of the judgment; and the accrued, but the unpaid interest owing, if any, after
application of each payment.

(d) This section does not apply to arbitrations between employers and employees
under chapter 179 or 179A. An arbitrator is neither required to nor prohibited from
awarding interest under chapter 179 or under section 179A.16 for essential employees.

Sec. 2. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin Section 1 is effective August 1, 2007, and applies to judgments and awards finally
entered on or after that date.
new text end