COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 576
(By Senators Jenkins, Harrison, Foster, Oliverio, Kessler and
McKenzie)
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[Originating in the Committee on the Judiciary;
reported February 23, 2006.]
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A BILL 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
prejudgment and post-judgment interest.
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) If an obligation to pay interest arises under this
chapter, the rate of interest
is that specified in section §56-6-31
of this code shall be ten dollars upon one hundred dollars per
annum, and proportionately for a greater or lesser sum, or for a
longer or shorter time, notwithstanding any other provisions of law. Interest accrues only upon the outstanding principal of such
obligation. On and after the ninth day of June, one thousand nine
hundred ninety-five, this section will be construed to permit the
accumulation of simple interest and may not be construed to permit
the compounding of interest. Interest which accrued on unpaid
installments accruing before the ninth day of June, one thousand
nine hundred ninety-five, may not be modified by any court,
irrespective of whether such installment accrued simple or compound
interest:
Provided, That unpaid installments upon which interest
was compounded before the effective date of this section shall
accrue only simple interest thereon on and after the ninth day of
June, one thousand nine hundred ninety-five.
(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.
In computing prejudgment interest, the court shall apply
the rate of interest prescribed in subsection (a) of this section,
without regard to the provisions of section thirty-one, article
six, chapter fifty-six of this code.
(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.
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
such
special or liquidated damages shall bear interest
from the date the
right to bring the same shall have accrued, as determined by the
court 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. The rate of interest shall be ten dollars upon
one hundred dollars per annum, and proportionately for a greater or
lesser sum, or for a longer or shorter time, notwithstanding any
other provisions of law.
(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. 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: 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.
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(NOTE: The purpose of this bill is to change the way
prejudgment and post-judgment interest is determined.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)
FINANCE COMMITTEE AMENDMENT
On page three, section three hundred two, after line seven, by
adding the following: "(d) Amendments to this section enacted in
the year two thousand six shall apply the first day of January, two
thousand seven.";
And,
On page four, section thirty-one, after line twenty-seven, by
adding the following: "(c) Amendments to this section enacted in
the year two thousand six shall apply the first day of January, two
thousand seven."
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