Minajares v. State of Arizona – 10/29/2009

November 3, 2009

Arizona Court of Appeals Division One Affirms Superior Court’s Correction of a Judgment that Had Already Been Affirmed on Appeal and Holds That the Normal Statutory Interest Rate on a Final Judgment Does Not Apply During the Course of an Appeal Where the Judgment Would be Paid Out of the State Risk Management Revolving Fund.

The Appellant brought a tort action against the State of Arizona and others. A jury found in the Appellant’s favor. After the State had unsuccessfully appealed the judgment, it requested the superior court to correct the judgment by reducing the judgment interest rate during the appeal. The superior court granted the request and modified the judgment. The Appellant appealed the corrected judgment, arguing that the judgment could not be altered once the appellate court had rendered its decision. The Appellant also argued that the statute mandating a lower interest rate for payments made out of the state risk management fund did not apply.

The Arizona Appeals Court affirmed the superior court’s order. The Court held that the State’s request to correct the judgment was not barred by res judicata because the Court’s first decision and mandate did not address the question of the proper interest rate, and the parties had never litigated those issues. Because the superior court had not committed clear error, the Court also affirmed the superior court’s finding that the State had not waived its argument regarding the correct interest rate. The Appeals Court held that the superior court’s post-judgment relief was proper under Rule 60(c)(6) Ariz. R. Civ. P., which allows relief from a final judgment for “any other reason justifying relief from the operation of the judgment.” The Court rejected the Appellant’s argument that A.R.S. § 44-1201(A), which sets a default interest rate of ten percent on any indebtedness, was the controlling statute in this case. The Court held that the controlling statute was A.R.S. § 41-622(F), which states that interest on a judgment to be paid out of the State risk management revolving fund “shall accrue at the average yield offered by United States treasury bills during the course of the appeal. . . .”

Judge Norris dissented in part. She felt that the State had waived any argument that it was entitled to the lower interest rate because it had not raised the issue before the superior court entered final judgment in the first appeal.

Judge Weisberg authored the opinion; Judge Downie concurred; Judge Norris dissented in part and concurred in part.