SB 576 Text

ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 576
(Senators Jenkins, Harrison, Foster, Oliverio, Kessler and McKenzie, original sponsors)
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[Passed March 9, 2006; in effect ninety days from passage.]
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AN ACT to amend and reenact §48-1-302 of the Code of West Virginia, 1931, as amended; and to amend and reenact §56-6-31 of said code, all relating to the rate of interest allowed for certain prejudgment and post-judgment awards; providing interest rate for domestic relation judgment obligations; establishing methodology for establishing rates for judgments or decrees generally; allowing exceptions to established interest rate based on prior written agreements; requiring the state Supreme Court of Appeals to annually determine and publish annual interest rate; providing that the interest rate applies for the entire term of the judgment or decree; and providing internal effective dates.

Be it enacted by the Legislature of West Virginia:

That §48-1-302 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that §56-6-31 of said code be amended and reenacted, all to read as follows:
CHAPTER 48. DOMESTIC RELATIONS.
ARTICLE 1. GENERAL PROVISIONS; DEFINITIONS.
PART 3. MISCELLANEOUS PROVISIONS RELATING
TO DOMESTIC RELATIONS.
§48-1-302. Calculation of interest.

(a) Notwithstanding any other provisions of the code, if an obligation to pay interest arises under this chapter, the rate of interest is ten percent per annum and proportionate thereto for a greater or lesser sum, or for a longer or shorter time. Interest awarded shall only be simple interest and nothing in this section may be construed to permit awarding of compound interest. Interest accrues only upon the outstanding principal of such obligation.

(b) Notwithstanding any other provision of law, no court may award or approve prejudgment interest in a domestic relations action against a party unless the court finds, in writing, that the party engaged in conduct that would violate subsection (b), Rule 11 of the West Virginia Rules of Civil Procedure. If prejudgment interest is awarded, the court shall calculate prejudgment interest from the date the offending representation was presented to the court pursuant to subsection (a) of this section.

(c) Upon written agreement by both parties, an obligor may petition the court to enter an order conditionally suspending the collection of all or part of the interest that has accrued on past-due child support prior to the date of the agreement: Provided, That said agreement shall also establish a reasonable payment plan which is calculated to fully discharge all arrearages within twenty-four months. Upon successful completion of the payment plan, the court shall enter an order which permanently relieves the obligor of the obligation to pay the accrued interest. If the obligor fails to comply with the terms of the written agreement, then the court shall enter an order which reinstates the accrued interest.

(d) Amendments to this section enacted by the Legislature during the two thousand six regular session shall become effective the first day of January, two thousand seven.
CHAPTER 56. PLEADING AND PRACTICE.
ARTICLE 6. TRIAL.
§56-6-31. Interest on judgment or decree.

(a) Except where it is otherwise provided by law, every judgment or decree for the payment of money, whether in an action sounding in tort, contract or otherwise, entered by any court of this state shall bear interest from the date thereof, whether it be so stated in the judgment or decree or not: Provided, That if the judgment or decree, or any part thereof, is for special damages, as defined below, or for liquidated damages, the amount of special or liquidated damages shall bear interest at the rate in effect for the calendar year in which the right to bring the same shall have accrued, as determined by the court and that established rate shall remain constant from that date until the date of the judgment or decree, notwithstanding changes in the federal reserve district discount rate in effect in subsequent years prior to the date of the judgment or decree. Special damages includes lost wages and income, medical expenses, damages to tangible personal property and similar out-of-pocket expenditures, as determined by the court. If an obligation is based upon a written agreement, the obligation shall bear a prejudgment interest at the rate set forth in the written agreement until the date the judgment or decree is entered and, thereafter, the judgment interest rate shall be the same rate as provided for in this section.

(b) Notwithstanding the provisions of section five, article six, chapter forty-seven of this code, the rate of interest on judgments and decrees for the payment of money, including prejudgment interest, is three percentage points above the Fifth Federal Reserve District secondary discount rate in effect on the second day of January of the year in which the judgment or decree is entered: Provided, That the rate of prejudgment and post- judgment interest shall not exceed eleven percent per annum or be less than seven percent per annum. The administrative office of the Supreme Court of Appeals shall annually determine the interest rate to be paid upon judgments or decrees for the payment of money and shall take appropriate measures to promptly notify the courts and members of the West Virginia State Bar of the rate of interest in effect for the calendar year in question. Once the rate of interest is established by a judgment or decree as provided in this section, that established rate shall thereafter remain constant for that particular judgment or decree, notwithstanding changes in the Federal Reserve District discount rate in effect in subsequent years.

(c) Amendments to this section enacted by the Legislature during the year two thousand six regular session shall become effective the first day of January, two thousand seven.

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