SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-1030-98T5
WILLIAM BROWN and COLLEEN
BROWN,
Plaintiffs-Appellants,
v.
DAVKEE INC.,
Defendant-Respondent,
and
CHANNEL LUMBER, INC., CHANNEL OF
MIDDLETOWN, a New Jersey Corporation,
CHANNEL HOME CENTERS, INC., and CHANNEL
COMPANIES INC.
Defendants.
Submitted: July 27, 1999 - Decided: August 2,
1999
Before Judges P.G. Levy and Steinberg.
On appeal from the Superior Court of New
Jersey, Law Division, Monmouth County.
Parsons & Nardelli, attorneys for appellants
(James M. Nardelli, on the brief).
Stephen E. Gertler, attorney for respondent
(Mark S. Hochman, on the brief).
The opinion of the court was delivered by
STEINBERG, J.A.D.
Plaintiffs William Brown and Colleen Brown appeal from an
order calculating the post-judgment interest due them at 5.5
percent rather than at the rate of 7.5 percent and from the denial
of their application for counsel fees in bringing the motion
seeking to establish 7.5 percent as the proper rate of post-judgment interest. We reverse and remand.
Plaintiff William Brown was injured when he fell in a parking
lot owned and maintained by defendant Davkee Inc. He and his wife
filed suit and, on July 17, 1999, recovered judgment against
defendant totaling $227,002.98, together with costs. The judgment
included pre-judgment interest. Defendant appealed and we affirmed
in an unpublished opinion. Brown v. Davkee, No. A-167-97 (App.
Div. May 26, 1998).
On July 13, 1998, plaintiffs' attorney received a settlement
check totaling $238,461.96, representing the judgment amount and
post-judgment interest calculated at the rate of 5.5 percent
through June 17, 1998, which apparently was the date the check was
written. Plaintiffs objected to the payment, contending that post-judgment interest should have been paid through July 13, 1998, the
date upon which the payment was received and, in addition, should
have been calculated at the rate of 7.5 percent pursuant to R.
4:42-11(a)(iii). Defendant disagreed. Accordingly, plaintiffs
filed a motion seeking a determination that they were entitled to
post-judgment interest through July 13, 1998, calculated at the
rate of 7.5 percent. Moreover, plaintiffs sought an order
declaring defendant to be in violation of litigants' rights
entitling them to an award of attorney's fees for bringing the
motion.
R. 4:42-11(a) governs post-judgment interest. It provides as
follows:
(a) Post Judgment Interest. Except as
otherwise ordered by the court or provided by
law, judgments, awards and orders for payment
of money, taxed costs and counsel fees shall
bear simple interest as follows:
(i) For periods prior to January 2,
1986, the annual rate of return shall be as
heretofore provided by this rule, namely, 6" for the period prior to April 1, 1975; 8" for
the period between April 1, 1975 and September
13, 1981; and 12" for the period between
September 14, 1981 and January 1, 1986.
(ii) For judgments not exceeding the
monetary limit of the Special Civil Part at
the time of entry, regardless of the court in
which the action was filed: commencing
January 2, 1986 and for each calendar year
thereafter, the annual rate of interest shall
equal the average rate of return, to the
nearest whole or one-half percent, for the
corresponding preceding fiscal year
terminating on June 30, of the State of New
Jersey Cash Management Fund (State accounts)
as reported by the Division of Investment in
the Department of the Treasury. [For current
rates see Publisher's Note below.]
(iii) For judgments exceeding the
monetary limit of the Special Civil Part at
the time of entry: in the manner provided for
in subparagraph (a)(ii) of this Rule until
September 1, 1996; thereafter, at the rate
provided in subparagraph (a)(ii) plus 2" per
annum.
Post-judgment interest may be included in
the calculation of an attorney's contingency
fee.
The motion judge concluded that R. 4:42-11(a) did not apply to
tort actions in light of the fact that R. 4:42-11(b) expressly
applies to tort actions. We disagree. R. 4:42-11(b) deals with
pre-judgment interest only and is limited, by its very terms, to
tort actions. That does not mean that a plaintiff in a tort action
seeking post-judgment interest is not entitled to the benefits of
R. 4:42-11(a)(iii). According to the publisher's note to R. 4:42-11, the proper rate of interest for 1997 and 1998 was 5.5 percent.
We agree with plaintiffs' interpretation of R. 4:42-11(a), which
expressly provides that "judgments, awards and orders for the
payment of money, taxed cost and counsel fees shall bear simple
interest" and then sets forth the manner of calculation of post-judgment interest. The rule does not exclude recoveries in tort
actions. We recognize, as the motion judge observed, that R. 4:42-11(b) is entitled "Tort Actions". However, we disagree with the
motion judge's conclusion that that means tort actions are excluded
from the operation of R. 4:42-11(a). It merely means that pre-judgment interest is only authorized in tort actions. Since
plaintiffs' recovery exceeded the monetary limit of the Special
Civil Part, we conclude that they were entitled to post-judgment
interest at the rate of 7.5 percent per year, calculated as the sum
of 5.5 percent authorized under R. 4:42-11(a)(ii) plus the
additional 2 percent authorized by R. 4:42-11(a)(iii).
We are satisfied that R. 4:42-11(a) applies. R. 4:42-11(b)
refers only to pre-judgment interest. Defendant contends that the
Law Division has previously held that in tort actions, R. 4:42-11(b) should be utilized to calculate post-judgment interest. See
American Metal Co. v. Fluid Chemical Co.,
121 N.J. Super. 179 (Law
Div. 1972). We disagree with plaintiff's interpretation of that
case. American Metal Co., supra, dealt with an award of pre-judgment interest under R. 4:42-11(b), not post-judgment interest,
and merely held that the rule applied to judgments rendered after
its effective date even though the complaint was filed prior to
that date. If we were to accept defendant's argument that R. 4:42-11(b) applies to post-judgment interest as well as pre-judgment
interest in tort actions, the rule expressly provides that interest
shall be calculated in the "manner provided for by paragraph (a) of
[the] rule". Under that interpretation, plaintiff would still be
entitled to the 2 percent per year premium set forth in R. 4:42-11(a)(iii).
The motion judge's denial of plaintiff's request for counsel
fees was based upon his conclusion that the position taken by
defendant was debatable and, in fact, debatable to the point where
he agreed with defendant. Since we have reversed, we also remand
to the trial judge for reconsideration of plaintiffs' application
for an award of counsel fees. We express no opinion as to
plaintiffs' entitlement to an award of counsel fees.
Reversed and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.See footnote 1
Footnote: 1The motion judge also determined that interest must be paid to "approximately the date the check is received by plaintiff". Defendant has not cross-appealed and accordingly is bound by that decision. Although not necessary to our decision, we note our agreement.