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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1988 

                        CHAPTER 503-H.F.No. 1493 
           An act relating to civil law; deleting the minimum 
          percentage amount for interest on judgments; altering 
          the application of joint and several liability; 
          providing for payment of future damages; amending 
          Minnesota Statutes 1986, section 604.02, subdivision 1;
          Minnesota Statutes 1987 Supplement, section 549.09, 
          subdivision 1; proposing coding for new law in 
          Minnesota Statutes, chapter 549; repealing Minnesota 
          Statutes 1986, section 604.07. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1987 Supplement, section 
549.09, subdivision 1, is amended to read:  
    Subdivision 1.  [WHEN OWED; RATE.] (a) When the judgment is 
for the recovery of money, including a judgment for the recovery 
of taxes, interest from the time of the verdict or report until 
judgment is finally entered shall be computed by the court 
administrator as provided in clause (c) and added to the 
judgment.  
    (b) Except as otherwise provided by contract or allowed by 
law, preverdict or prereport interest on pecuniary damages shall 
be computed as provided in clause (c) from the time of the 
commencement of the action, or the time of a written settlement 
demand, whichever occurs first, except as provided herein.  The 
action must be commenced within 60 days of a written settlement 
demand for interest to begin to accrue from the time of the 
demand.  If either party serves a written offer of settlement, 
the other party may serve a written acceptance or a written 
counteroffer within 60 days.  After that time interest on the 
judgment shall be calculated by the judge in the following 
manner.  The prevailing party shall receive interest on any 
judgment from the time the action was commenced or a written 
settlement demand was made, or as to special damages from the 
time when special damages were incurred, if later, until the 
time of verdict or report only if the amount of its offer is 
closer to the judgment than the amount of the opposing party's 
offer.  If the amount of the losing party's offer was closer to 
the judgment than the prevailing party's offer, the prevailing 
party shall receive interest only on the amount of the 
settlement offer or the judgment, whichever is less, and only 
from the time the action was commenced or a written settlement 
demand was made, 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 (3), 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 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, decrees, or orders in dissolution, 
annulment, or legal separation actions; 
    (3) judgments for future damages; 
    (4) punitive damages, fines, or other damages that are 
noncompensatory in nature;  
    (5) judgments not in excess of the amount specified in 
section 487.30; and 
    (6) that portion of any verdict or report which is founded 
upon interest, or costs, disbursements, attorney fees, or other 
similar items added by the court. 
    (c) 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. 
    On or before the 20th day of December of each year the 
state court administrator shall determine the rate from the 
secondary market yield on one year United States treasury bills 
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, shall be the annual interest rate during the 
succeeding calendar year; provided, however, that in no event 
shall the rate of interest be less than eight percent per 
annum.  The state court administrator shall also determine the 
average rate of interest on judgments to be used during the 
succeeding calendar year for computation of the discount rate 
under section 604.07, subdivision 4.  The state court 
administrator shall communicate the interest rates to the court 
administrators and sheriffs for use in computing the interest on 
verdicts and the discount rate under section 604.07. 
    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.  
    Sec. 2.  [549.25] [FUTURE DAMAGES; PAYMENT.] 
    Where a claimant is awarded an amount representing future 
damages greater than $100,000, the court shall hold a hearing 
prior to ordering entry of judgment to allow the claimant to 
consider whether payment of the future damages over time as the 
damages are incurred is in the best interests of the claimant.  
The following factors may be considered at the hearing, as well 
as any others as justice requires: 
    (1) the claimant's financial ability to meet obligations 
likely to be incurred as a result of the injury at issue in the 
trial; 
    (2) the advantages, if any, to the claimant from 
voluntarily entering into a structured settlement; and 
    (3) the interests of the claimant in self-determination 
over the claimant's financial affairs. 
    If the claimant decides, after the hearing, that structured 
payments of future damages would be in the claimant's best 
interests, the court shall make available information to assist 
the claimant in seeking an appropriate financial instrument to 
provide such payments.  Judgment may not be entered until the 
claimant has notified the court that the claimant does not wish 
to enter into a structured settlement. 
    Sec. 3.  Minnesota Statutes 1986, section 604.02, 
subdivision 1, is amended to read:  
    Subdivision 1.  When two or more persons are jointly 
liable, contributions to awards shall be in proportion to the 
percentage of fault attributable to each, except that each is 
jointly and severally liable for the whole award.  Except in 
cases where liability arises under chapters 18B - pesticide 
control, 115 - water pollution control, 115A - waste management, 
115B - environmental response and liability, 115C - leaking 
underground storage tanks, and 299E - pipeline safety, public 
nuisance law for damage to the environment or the public health, 
any other environmental or public health law, or any 
environmental or public health ordinance or program of a 
municipality as defined in section 466.01, a person whose fault 
is 15 percent or less is liable for a percentage of the whole 
award no greater than four times the percentage of fault, 
including any amount reallocated to that person under 
subdivision 2. 
     If the state or a municipality as defined in section 466.01 
is jointly liable, and its fault is less than 35 percent, it is 
jointly and severally liable for an amount a percentage of the 
whole award no greater than twice the amount of fault, including 
any amount reallocated to the state or municipality under 
subdivision 2. 
    Sec. 4.  [INJURY COMPENSATION STUDY.] 
    The speaker of the house of representatives and the 
majority leader of the senate shall each appoint three persons 
to a commission to study the civil justice system and current 
and alternative methods of compensating injured persons.  Not 
later than January 1, 1990, the study commission shall report 
its findings to the legislature along with any recommendations 
for legislative action. 
    Sec. 5.  [REPEALER.] 
    Minnesota Statutes 1986, section 604.07, is repealed. 
    Sec. 6.  [APPLICATION; EFFECTIVE DATE.] 
    Sections 2 and 3 apply to causes of action arising on or 
after their effective dates.  Sections 1 and 5 are effective the 
day following final enactment and apply to all cases pending or 
brought on or after that date. 
    Approved April 12, 1988