Ford Motor Co. v. Forrest Walker

517 P.3d 653

FORD MOTOR COMPANY, Petitioner,

v.FORREST WALKER, Respondent.

Supreme Court Case No. 20SC947

Supreme Court of Colorado.

June 21, 2022

Rehearing Denied July 25, 2022

Attorneys for Petitioner: Wheeler Trigg O'Donnell LLP, Theresa Wardon Benz, Kristen L. Ferries, Edward C. Stewart, Denver, Colorado

Attorneys for Respondent: Purvis Gray Thomson, LLP, John A. Purvis, Michael J. Thomson, Boulder, Colorado, Chalat Hatten & Banker, PC, Evan P. Banker, Denver, Colorado

Attorneys for Amicus Curiae American Tort Reform Association: Evans Fears & Schuttert LLP, Lee Mickus, Denver, Colorado

Attorneys for Amici Curiae Colorado Defense Lawyers Association and Colorado Civil Justice League: Messner Reeves LLP, Kendra N. Beckwith, Darren D. Alberti, Denver, Colorado

Attorneys for Amicus Curiae Colorado Trial Lawyers Association: McDermott Law, LLC, Timothy M. Garvey, Denver, Colorado, Ogborn Mihm, LLP. Kylie M. Schmidt,Denver, Colorado

En Banc

JUSTICE SAMOUR delivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE HOOD, and JUSTICE GABRIEL joined.

JUSTICE SAMOUR delivered the Opinion of the Court.

¶1 Watch TV long enough and you'll eventually encounter a well-known figure of our justice system—the personal injury plaintiff. It's now common knowledge that a person who sustains personal injuries as a result of a tort may sue the responsible party for damages. But few people are aware that when such a plaintiff prevails, interest is available on the sum of the judgment. That interest generally runs at the statutorily fixed rate of nine percent from the date of the claim's accrual through satisfaction of the judgment. In some circumstances, however, the interest rate changes to a market-based postjudgment rate, which is currently lower than nine percent. In this appeal, we explore when that switch takes place and how the market-based postjudgment interest is calculated.

¶2 The plaintiff in this product liability case obtained a money judgment to compensate him for personal injuries he sustained in a car accident. The judgment debtor, the manufacturer of the plaintiff's car, appealed, and a division of the court of appeals reversed the judgment. We affirmed the division's judgment on different grounds and remanded the matter for a new trial. On remand, the plaintiff prevailed again, obtaining a new money judgment. The parties agree that the nine percent interest rate applies from the date of the accident until the date of the appealed judgment (the first judgment). But the parties cross swords on the applicable interest rate between entry of that judgment and satisfaction of the final judgment (the second judgment).

¶3 So, when a personal injury judgment debtor successfully appeals the judgment and obtains a new trial but ultimately incurs another money judgment at that new trial, which interest rate applies between the date of the appealed judgment and the date the final judgment is satisfied? Is it the nine percent fixed rate or the market-based postjudgment interest rate? The difference matters—in this case, for nearly two million reasons. A division of the court of appeals said that the nine percent fixed rate governs. We disagree and therefore reverse.

¶4 Guided by the General Assembly's intent in section 13-21-101, C.R.S. (2021) ("Interest on damages"), which we discern from the statute's legislative history, we hold that whenever the judgment debtor appeals the judgment, the interest rate switches from nine percent to the market-based rate. The outcome of the appeal is of no consequence; the filing of any appeal of the judgment by the judgment debtor triggers the shift in interest rate. We further hold that the market-based postjudgment interest on the sum to be paid must be calculated from the date of the appealed judgment. Thus, the market-based postjudgment interest rate applies from the date of the appealed judgment (the first judgment) through the date the final judgment (the second judgment) is satisfied. Accordingly, we remand for recalculation of interest on the sum to be paid ($2,929,881.20) from the date of the appealed judgment (April 1, 2013) until the date the final judgment was satisfied (March 10, 2020) using the market-based postjudgment interest rate.

I. Facts and Procedural History

¶5 In 2009, Forrest Walker was stopped at a red light in his 1998 Ford Explorer when he was rear-ended by a car traveling thirty-five miles per hour. The driver's seat in the Explorer yielded rearward, causing Walker to sustain permanent injuries.

¶6 Walker sued the other driver for negligence. He also brought a product liability action against Ford, alleging that the driver's seat in his Explorer was defective because its yield during the crash caused or contributed to his injuries. Ford denied liability, arguing that the seat's yield was an intentional safety feature aimed at absorbing crash forces. In April 2013, after settling his claim with the other driver, Walker proceeded to trial against Ford.

¶7 At the jury instructions conference, Walker asked for the pattern instruction addressing design defects, which permitted the jury to find a design defect under either a "consumer expectation" test or a "risk-benefit" test. Ford objected, contending that longstanding precedent required the court to use the risk-benefit test. The court overruled Ford's objection and gave the jury the pattern instruction. After deliberations, the jury awarded Walker $2,915,971.20 in compensatory damages. The court then entered judgment.

¶8 Ford appealed the 2013 judgment, and a unanimous division of the court of appeals reversed and remanded for a new trial. Walker v. Ford Motor Co. ("Walker I "), 2015 COA 124, ¶ 3, 410 P.3d 609, 611. While the division disagreed with Ford that the jury could not be "instructed at all on the consumer expectation test," it agreed with Ford that the jury shouldn't have been "instructed separately " on that test. Id. at ¶ 14, 410 P.3d at 613.

¶9 Walker petitioned our court for certiorari, and we agreed to review the case. We affirmed the division's judgment, albeit on different grounds. Walker v. Ford Motor Co. ("Walker II "), 2017 CO 102, ¶ 2, 406 P.3d 845, 847. We held that "the proper test under which to assess the design's dangerousness was the risk-benefit test, not the consumer expectation test." Id. (footnote omitted). In so doing, we explained that we had concluded, more than thirty years earlier, that the risk-benefit test is the applicable test in determining whether a product is unreasonably dangerous due to a design defect where, as here, the dangerousness of the design is defined primarily by technical, scientific information. Id. Because the trial court had instructed on both tests, we concluded that it had improperly allowed the jury to base the verdict on the consumer expectation test alone. Id.

¶10 The case was retried to a jury in 2019, six years after entry of the appealed judgment and nearly a decade after the crash. The second jury awarded Walker $2,929,881.20 in compensatory damages, $13,910 more than the first jury.

¶11 Walker thereafter requested that the district court award him interest on the final judgment amount at the statutory rate of nine percent for the entire timespan between accrual of his claim in 2009 and satisfaction of the 2019 final judgment in 2020. Ford conceded that it owed interest at the nine percent statutory rate for the period between accrual of Walker's claim in 2009 and entry of the appealed judgment in 2013. But Ford maintained that the lower, market-based postjudgment interest rate applied from entry of the appealed judgment in 2013. In other words, according to Ford, the nine percent interest rate applied from accrual of Walker's claim up until the date of the first judgment, and the market-based postjudgment interest rate applied thereafter for the remainder of the proceedings through satisfaction of the second judgment.

¶12 The district court sided with Walker and ordered Ford to pay $3,629,792.85 in interest, nearly one hundred and twenty-five percent more than the actual damages award, bringing Walker's recovery to just under $7,000,000.00. It reasoned that, since the appealed judgment had neither been affirmed nor modified or reversed with instructions to enter a money judgment on remand, the provisions of section 13-21-101(2)(a) and (b) addressing market-based postjudgment interest did not apply. Apparently realizing that subsections (2)(a) and (b) don't expressly address reversal of an appealed judgment with instructions to hold a retrial, the district court filled the gap by applying the fixed nine percent "prejudgment" interest rate from accrual of the claim through satisfaction of the final judgment (i.e., from 2009 through 2020).

¶13 Ford did not appeal the second judgment, but it did appeal the amount of interest ordered. A different division of the court of appeals unanimously affirmed. Walker v. Ford Motor Co. ("Walker III "), 2020 COA 164, ¶ 1, 490 P.3d 996, 997. The division observed that the switch from "prejudgment to postjudgment interest" doesn't depend on the judgment debtor's appeal of the judgment. Id. at ¶ 8, 490 P.3d at 998. Rather, explained the division, the shift from the nine percent interest rate to the market-based postjudgment interest rate is outcome-dependent: The latter interest rate kicks in only if the appealed judgment is (1) affirmed or (2) modified or reversed with instructions to enter a money judgment on remand. Id. at ¶ 9, 490 P.3d at 998. Because the appealed judgment here was reversed and the case was remanded for a new trial, and because subsections (2)(a) and (b) don't expressly address that situation, the division filled the gap the same way the district court did: It ruled that the nine percent "prejudgment interest" continued to apply after the date of the appealed judgment. Id. at ¶ 1, 490 P.3d at 997.

¶14 Elaborating, the division stated that, following the mandate in Walker II, the parties returned...