Maryland State Highway Administration v. Kim

BELL, Chief Judge. The question that we are asked to resolve in this case is whether sovereign immunity bars an award of post-judgment interest, when the money judgment entered against a State agency, in accordance with the provisions of the Maryland Tort Claims Act, Maryland Code (1984, 1989 Cum.Supp.) ³¹⁵ § 12-104 1 of the State Government Article, is for the maximum amount prescribed by the act. We hold that sovereign immunity does not preclude such an award. I. This case had its genesis in an automobile accident, in July 1989, in which David Kim, a 15 year old summer school student, was seriously injured.

His parents, Joseph and Hoon ³¹⁶ Kim, (the “appellees”), as next friends, filed a negligence action in the Circuit Court for Prince George’s County against, among others, the State Highway Administration of the Department of Transportation (“SHA”), the appellant, and the Board of Education of Prince George’s County (“BOE”). The case was tried to a jury, which, at the conclusion of the trial, returned a verdict awarding the appellees. $650,000 in damages. Pursuant to Maryland Code (1985, 1988 Repl.Vol., 1989 Cum.Supp.), § 9-105 2 of the State Finance & Proc. Article and COMAR 25.02.01.01(B)(1) (1984, Supp. 3 1989), 3 with respect to the SHA, and pursuant to Maryland Code (1978, 1989 Repl.Vol.) § 4-105 4 of the Education Article, with respect to the BOE, the trial court reduced the award to $50,000 ³¹⁷ and $100,000, respectively, and judgment was entered accordingly.

Both the SHA and the BOE noted an appeal to the Court of Special Appeals. In an unreported opinion, that court affirmed the judgments. After the intermediate appellate court issued its mandate, the SHA tendered to the appellees, in payment of the judgment, its check for $50,000. It rejected, however, the appellees’ demand for post-judgment interest on that judgment, from the date of its entry.

Consequently, the appellees filed, in the circuit court, a motion for appropriate relief, in which they asked the court to award post-judgment interest on the SHA judgment. The court granted the appellees’ motion, prompting the SHA’s appeal. This Court, on its own motion, granted certiorari, before the Court of Special Appeals considered the matter. (a) The appellant’s argument proceeds from the premises that “[t]he sovereign immunity of the State may only be waived if the General Assembly has authorized suits for damages and has provided for the payment of the resulting judgments or settlements[,] Kee v. State Highway Administration, 313 Md. 445, 455 , 545 A.2d 1312, 1317 (1988); see Katz v. Washington Suburban Sanitary Commission, 284 Md. 503, 508 , 397 A.2d 1027, 1030 (1979)” and that the Maryland Tort Claims Act does not authorize payments for injury, loss, or damage, in excess of $50,000 in situations arising under the Act.

From ³¹⁸ those premises, the appellant argues that, by awarding the appellees post-judgment interest on a judgment, for the maximum amount for which the State’s sovereign immunity has been waived and for which provision has been made for payment, the circuit court, in effect, expanded the waiver of sovereign immunity beyond the contemplation of the General Assembly, to claims in excess of $50,000. The Legislature has neither authorized nor provided funds to pay post-judgment interest in that circumstance, it asserts. (b) The appellees argue, on the other hand, that the court quite properly awarded post-judgment interest on the judgment. The authority for doing so may be found, they maintain, by reading the Maryland Tort Claims Act in conjunction with Maryland Code (1974, 1989 Repl.Vol., 1989 Cum.Supp.) § 11-107(a) 5 of the Courts & Judicial Proceedings Article and Maryland Rule 2-604(b). 6 Because the State’s sovereign immunity may be waived either directly or by implication and the right to post-judgment interest arises, not as a consequence of any damage their son suffered in the accident on July 25, 1989, but, instead, arises from the State’s failure timely to pay the judgment rendered against it in February 1996, the appellees ask this Court to affirm the trial court’s judgment.

II

As indicated, the issue we are asked to resolve is whether the State’s sovereign immunity applies to post-judg ³¹⁹ ment interest, where the judgment is for the maximum amount of damages permitted by the Maryland Tort Claims Act. We answer that question in the negative, concluding that the statute plainly and unambiguously does not so provide. We also recognize both that sovereign immunity bars the recovery of damages and that the award of post-judgment interest is not an award of damages. By 1981 Md. Laws, Chap. 298, effective July 1, 1982, the General Assembly enacted the Maryland Tort Claims Act.

Codified at Maryland Code (1974, 1980 Repl.Vol., 1983 Cum. Supp.), §§ 5-401 through 5-408 of the Courts and Judicial Proceedings Article, this legislation waived the tort immunity of the State under specified conditions and, thus, “afforded a remedy for individuals injured by tortious conduct attributable to the State.” Condon v. State, 332 Md. 481, 492 , 632 A.2d 753, 758 (1993). Section 5-403(a) set forth the scope of the waiver: in six specified tort actions to recover damages, 7 “ to the extent and in the amount that the State is covered by a program of insurance.” 8 ³²⁰ Because it was but “a cautious beginning in the effort to abolish the sovereign immunity doctrine,” 9 there were several enumerated instances in which the State’s immunity was not waived. One such instance was when pre-judgment interest was sought. § 5-403(b). 10 In 1984, the Maryland Tort Claims Act was moved from Title 5, Subtitle 4, of the Courts and Judicial Proceedings Article, to its present location in the State Government Article.

See 1984 Md. Laws, Chap. 284. The waiver of immunity provision, other than adding a tort action, see § 12-104(a), as well as the provision prescribing exceptions to the waiver, see § 12-104(b), remained substantially identical until they were amended in 1985. See 1985 Md. Laws, Chap. 538, § 2. Those amendments deleted the specified categories for which immunity was waived, see Clea v. Mayor and City Council of Baltimore, 312 Md. 662 , 671 n. 6, 541 A.2d 1303 , 1307 n. 6 (1988), and, with regard to those for which immunity was not waived, the reference to the dollar amount of the claim.

Section 12-104(b) was also amended to exclude from the waiver, acts and omissions committed with ³²¹ malice or gross negligence, or outside the scope of the State employee’s public duties. Thus, from its inception, the Maryland Tort Claims Act has exempted pre-judgment interest from the waiver of the State’s sovereign immunity. At the same time, noticeable by its absence from that legislation, and, in particular, its “Exclusions and limitations” provision, is any mention of post-judgment interest. This difference in the treatment of pre-judgment and post-judgment interest is quite significant. a.

The allowance of interest on a judgment, at law, is of ancient lineage; the Maryland Legislature, very early in the history of the State, enacted legislation providing for the payment of interest on judgments. That legislation did not differentiate between debtors or in any way exempt the State from its reach, thereby, arguably demonstrating the legislature’s desire that everyone, even the State, pay interest on judgments. As early as 1802, 11 among the Laws of Maryland was a statute mandating that an administrator or an executor of an estate pay not only verdicts meted out by juries, but also “interest thereon from the time of rendering the said judgment.” See Ch. 101, § 1 of the Acts of 1802,1. Dorsey’s Laws of Maryland (1840), at 471^72.

A short time later, in Ch. 153, § 4 of the Acts of 1809, a statute of more general operation was enacted. It provided: ³²² “And be it enacted, That in all cases where a verdict shall be given in any court of this state, the court before whom such verdict shall be given, shall and they are hereby authorized to enter such judgment upon the verdict as will carry an interest on the same until the payment of the damages assessed by the jury giving such verdict, in the same manner as is now used and practiced in the cases of a confession of judgment in said court.” I. Dorsey’s Laws of Maryland (1840), at 590. Subsequently, a provision requiring the payment of post-judgment interest in respect of judgments by default was added to the laws of Maryland. See Ch. 161, § 5 of the Acts of 1811, I. Dorsey’s Laws of Maryland (1840), at 605.

That provision provided: “Sec. 5. And be it enacted, That all judgments by default hereafter to be entered, shall carry .interest in the same manner that judgments entered upon a finding of a jury now do; Provided always, that nothing contained in this act, except so far as the same relates to judgments by default and appeals, shall extend or be construed to extend to any case now brought or pending in any of the courts of this state.” The provision pertaining to post-judgment interest appearing in Maryland Code: Public General Laws (1888), Art. 26, § 16, addressed judgments generally. 12 It read simply: “[a]ll judgments by confession, on verdict, or by default, shall be so entered as to carry interest from the time they are rendered.” Although the provision in the 1914 Code was phrased somewhat differently, 13 the payment of post-judgment interest re ³²³ mained a statutory requirement until Maryland Code (1951), Art. 26, § 17, 14 was repealed in 1957 Md. Laws, Chap. 399, § 1, effective June 1, 1957, in favor of a rule on the subject, promulgated by this Court, pursuant to Art. IV, § 18A of the Maryland Constitution, 15 and upon the recommendation of the Standing Committee on Rules of Practice and Procedure. That rule, Maryland Rule 642, (present Maryland Rule 2-604), was adopted July 18,1956, effective January 1,1957, as a part of the “codification of the rules and procedural statutes of Maryland with respect to normal law and equity actions, including appeals to the Court of Appeals.” See Twelfth Report of the Standing Committee on Rules of Practice and Procedure (1956). Largely mirroring the language of the statute it was to replace, Maryland Code (1951), Art. 26, § 17, it provided: “Rule 642.

Interest on Judgment .... Law A judgment by confession or by default shall be so entered as to carry interest from the time the judgment was rendered. A judgment on verdict shall be so entered as to carry interest from the date on which the verdict was ³²⁴ rendered. A judgment nisi entered by the court following a special verdict pursuant to Rule 560 (Special Verdict) or trial by the court without a jury pursuant to Rule 564 (Trial by the Court) shall be so entered as to carry interest from the date of the entry of judgment nisi.” The rule was “legislative in nature,” see Ginnavan v. Silverstone, 246 Md. 500, 504-05 , 229 A.2d 124, 126 (1967), and, like the antecedent statute, was applicable only to judgments at law.

As this history demonstrates, the allowance of interest on a judgment is deep rooted in Maryland law. Both the statute codifying the practice and its successor Maryland Rule 16 predated the Maryland Tort Claims Act. Neither made an exception for the State. Moreover, when the Legislature enacted the Tort Claims Act, it did not include post-judgment interest in the list of exclusions from the waiver of sovereign immunity, even though pre-judgment interest was such an exclusion.

The failure specifically to reserve the state’s immunity with respect to post-judgment interest by including post-judgment interest in § 12-104(b) of the Act is evidence that it did so intentionally. We have stated on prior occasions that, when the Legislature acts, it “is presumed to be aware of its own enactments,” State v. Hernandez, 344 Md. 721, 727 , 690 A.2d 526, 529 (1997) (citing GEICO v. Insurance Comm’r, 332 Md. 124, 132 , 630 A.2d 713, 717 (1993)), that it does so “with respect to, full knowledge and information as to prior and existing law and legislation on the subject of the statute and the policy of the prior law.” Bd. of Educ. of Garrett County v. Lendo, 295 Md. 55, 63 , 453 A.2d 1185, 1189 (1982); Harden v. Mass Transit Adm., 277 Md. 399, 406-07 , 354 A.2d 817, 821 (1976). As one ³²⁵ appellate court, addressing the issue sub judice, has put it, we know the Legislature “was well aware of [the] previously enacted definitions of interest,” Austin v. State, 831 S.W.2d 789, 791 (Tenn.App.1991), and of the ordinary meanings of pre-judgment and post-judgment interest; thus, if the Legislature had intended to place a limit on the award of post-judgment interest it would have stated as much. Moreover, it is well settled that, in determining legislative intent, we consider the language of a statute in its natural and ordinary signification, see Whack v. State, 338 Md. 665, 672 , 659 A.2d 1347, 1350 (1995); Jones v. State, 336 Md. 255, 261 , 647 A.2d 1204, 1206-7 (1994); Parrison v. State, 335 Md. 554, 559 , 644 A.2d 537, 539 (1994), and where the language is neither ambiguous nor obscure, the language itself is dispositive.

See Gardner v. State, 344 Md. 642, 648 , 689 A.2d 610, 613 (1997); Comptroller of the Treasury v. Jameson, 332 Md. 723, 732-33 , 633 A.2d 93, 94 (1993). Section 12-104(b) is clear, it excludes from the State’s waiver of immunity only those items specifically enumerated. Post-judgment interest is not one of the enumerated items. b. Pre-judgment interest, as we have seen, is specifically included among the types of recoveries that are still subject to sovereign immunity, as provided in § 12-104(b).

When the nature and purpose of pre-judgment interest is considered, in relation to the other items included in subsection (b), and contrasted to the nature and purpose of post-judgment interest, it becomes clear that the Legislature’s exclusion of the latter was intentional. The common thread connecting the items listed in subsection (b) is that they are either elements of damages or claims or acts for which damages are recoverable. Post-judgment interest does not share that attribute, which explains why it was not included in the exclusions from the waiver of sovereign immunity. Although pre-judgment interest ordinarily is not allowed in Maryland for bodily harm, emotional distress, or ³²⁶ other types of damages not capable of being precisely measured, see Pine Street Trading v. Farrell Lines, 278 Md. 363, 377 , 364 A.2d 1103, 1112 (1976), we stated in I.W. Berman Prop. v. Porter Bros., 276 Md. 1, 16-17 , 344 A.2d 65, 75 (1975): “Generally, interest is not an inseparable and invariable incident of claims for money or unliquidated accounts, City Pass.

Rwy. Co. v. Sewell, 37 Md. 443, 452 (1873), it is recoverable as a matter of right under contracts in writing to pay money on a day certain, such as bills of exchange or promissory notes, Isle of Thye Land Co. v. Whisman, 262 Md. 682, 708-09 , 279 A.2d 484, 498 (1971); Robt. C. Herd & Co., Inc. v. Krawill Mach. Corp., [ 256 F.2d 946 (4th Cir. 1958) ], supra; Affiliated Distillers Brands Corp. v. R.W.L. Wine & Liquor Co., Inc., 213 Md. 509, 516 , 132 A.2d 582, 586 (1957); in actions on bonds, Mullan Contracting Co. v. International Business Machs.

Corp., 220 Md. 248, 262 , 151 A.2d 906, 914 (1959); Kasten Constr. Co. v. Anne Arundel County, 262 Md. 482, 489-90 , 278 A.2d 282, 286-87 (1971); Affiliated Distillers Brands Corp. v. R.W.L. Wine & Liquor Co., Inc., supra; in actions under contracts providing for the payment of interest, Isle of Thye Land Co. v. Whisman, supra, see Robt. C. Herd & Co., Inc. v. Krawill Mach. Corp., supra; in cases where the money claimed has been actually used by the other party, Charles County Broadcasting Co., Inc. v. Meares, 270 Md. 321, 332 , 311 A.2d 27, 34 (1973); Affiliated Distillers Brands Corp. v. R.W.L. Wine & Liquor Co., Inc., supra; and in cases upon sums payable as rent, Eidelman v. Walker & Dunlop, Inc., 265 Md. 538, 545 , 290 A.2d 780, 784 (1972).

See also Brown v. Bradshaw, 245 Md. 524, 539 , 226 A.2d 565, 573 (1967).” In those instances in which pre-judgment interest is allowed as a matter of course, it is because “the obligation to pay and the amount due had become certain, definite, and liquidated by a specific date prior to judgment so that the effect of the debtor’s withholding payment was to deprive the creditor of the use of a fixed amount as of a known date.” First Virginia Bank v. Settles, 322 Md. 555, 564 , 588 A.2d 803, 807 (1991); see also David Sloane, Inc. v. Stanley G. House & ³²⁷ Associates, Inc., 311 Md. 36, 53-4 , 532 A.2d 694, 702-3 (1987). See Atlantic States Constr. Co. v. Drummond & Co., 251 Md. 77, 85 , 246 A.2d 251, 255 (1968); Affiliated Distillers Brands Corp. v. R.W.L.Wine & Liquor Co., 213 Md. 509, 519 , 132 A.2d 582, 586 (1957). And when allowed in those instances, the interest serves a compensatory function, to compensate an injured party for the harm that he or she suffered or prospectively will suffer, see Owens-Illinois, Inc. v. Armstrong, 326 Md. 107, 127 , 604 A.2d 47, 56 (1992), and to make the plaintiff whole.

See Huppman v. Tighe, 100 Md.App. 655, 670 , 642 A.2d 309, 317 (1994); Exxon Corp. v. Yarema, 69 Md.App. 124, 137 , 516 A.2d 990, 997 (1986). Consequently, pre-judgment interest is in the nature of an element of damages. See Austin v. State, 831 S.W.2d 789, 792 (Tenn.App.1991) (It is a part of “the pecuniary consequences which the law imposes for the breach of some duty or violation of some right”). Post-judgment interest, on the other hand, serves to “compensate the judgment creditor for the loss of the monies due and owing to him by the judgment debtor from the time the judgment is entered until it is paid.” Mayor and City Council of Baltimore v. Kelso Corp., 294 Md. 267, 271 , 449 A.2d 406, 408 (1982).

Otherwise stated, it “compensate^ the successful suitor for the .. .loss of the use of the monies represented by the judgment in its favor, and the loss of income thereon, between the time of the entry of the judgment ... -when there is a judicial determination of the monies owed it—and the satisfaction of the judgment by payment.” I.W. Berman Properties v. Porter Bros., Inc., 276 Md. 1, 24 , 344 A.2d 65, 79 (1975). Thus, there is a “distinct difference between pre-judgment interest which is a part of damages and interest on a judgment which does not constitute part of the damages.” Austin, supra, 831 S.W.2d at 791 . As we have already observed, in Maryland, there has never been any attempt to treat the State differently from other litigants insofar as the payment of post-judgment interest is concerned. The Supreme Court of Minnesota has articulated a rationale for not doing so: “[requiring the State to reim ³²⁸ burse the expenses of litigation and to pay interest on the amount for which it has been adjudged liable imposes on the State the same financial pressure which encourages private persons to avoid litigation and to pay judgments promptly.” Lienhard v. State, 431 N.W.2d 861, 866 (Minn.1988). 17 See also University of Texas Medical Branch v. York, 808 S.W.2d 106, 112 (Tex.App.1991), rev’d on other grounds, 871 S.W.2d 175 ( 1994), in which the court, addressing a situation similar to the one under discussion, explained: “[P]ost judgment interest is compensation allowed by law for the use of detention of money computed from the date of the rendition of a judgment until the date of its satisfaction.

Interest as interest in such a situation is an incident of debt, and to be payable it requires an obligation binding on one person to pay money to another. Once the debt is established, unless there is an agreement as to when it is to be satisfied, the obligation to pay is immediate. Failure of the obligor to promptly pay deprives the obligee of the right to invest and earn interest on his money. The obligor benefits from the use of the money while the obligee does not.

Thus, the award of interest on money owed is the only compensation available to the obligee who cannot enjoy the benefits of his own money. The Texas Tort Claims Act limits the amount of damages one can recover from a governmental unit for a personal injury claim. Once the claim is proven and damages established, so long as the damages do not exceed the maximum authorized by statute, the obligation to pay is the same as that of any other debtor. The Act does not permit the ³²⁹ sovereign to withhold payment once the debt is established____ To deny this request [for post judgment interest] is to allow [the State] to keep control of the money for however long it desires, depriving the [plaintiffs], who have no recourse, the benefit and use of what is now their money.

In other words, there is no incentive for [the state] to pay the [plaintiffs] the money that belongs to them. Because post-judgment interest is not considered to be damages, it does not affect the statutory amount controlled by the Tort Claims Act. Thus, we can find no reason why post judgment interest should not be awarded.” ( citations omitted). We agree with these authorities.

Had the State paid the judgment on the date the verdict was rendered, its responsibility for the payment of interest would not have arisen. See King v. State Roads Com’n of State Highway Admin., 298 Md. 80, 85 , 467 A.2d 1032, 1034 (1983); Cook v. Toney, 245 Md. 42 , 224 A.2d 857 (1966) ( A litigant is entitled to “post-judgment interest on the award at the legal rate from the date of entry of the judgment ... to the date the award is actually paid”). See also I.W. Berman Properties v. Porter Bros. Inc., 276 Md. at 21 , 344 A.2d at 77 .

Having failed to do so, it must be held accountable for the payment of post-judgment interest. Otherwise, the State would be