{ "id": 2482169, "name": "JOSEPH M. PHELPS v. DUKE POWER COMPANY", "name_abbreviation": "Phelps v. Duke Power Co.", "decision_date": "1989-02-09", "docket_number": "No. 464PA87", "first_page": "72", "last_page": "79", "citations": [ { "type": "official", "cite": "324 N.C. 72" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "358 S.E. 2d 89", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": -1 }, { "cite": "86 N.C. App. 455", "category": "reporters:state", "reporter": "N.C. 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App. 222", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526952 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/76/0222-01" ] }, { "cite": "358 S.E. 2d 89", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "91" } ], "opinion_index": 0 }, { "cite": "86 N.C. App. 455", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12133815 ], "year": 1987, "pin_cites": [ { "page": "458" } ], "opinion_index": 0, "case_paths": [ "/nc-app/86/0455-01" ] } ], "analysis": { "cardinality": 696, "char_count": 17296, "ocr_confidence": 0.829, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.08128311727826602 }, "sha256": "8ba90db39d72c8e9772152965e1489facbbeb2e6ffe37782cbac4e5ecda32fa5", "simhash": "1:ac7bc032374f8dfe", "word_count": 2854 }, "last_updated": "2023-07-14T20:39:53.264050+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JOSEPH M. PHELPS v. DUKE POWER COMPANY" ], "opinions": [ { "text": "EXUM, Chief Justice.\nThe questions raised here relate to the awarding of prejudgment interest under former N.C.G.S. \u00a7 24-5 (1983 Cum. Supp.) before it was rewritten by Chapter 214 of the 1985 Session Laws. Former N.C.G.S. \u00a7 24-5 provided:\nThe portion of all money judgments designated by the fact-finder as compensatory damages in actions other than contract shall bear interest from the time the action is instituted until the judgment is paid and satisfied, and the judgment and decree of the court shall be rendered accordingly. The preceding sentence shall apply only to claims covered by liability insurance. The portion of all money judgments designated by the factfinder as compensatory damages in actions other than contract which are not covered by liability insurance shall bear interest from the time of the verdict until the judgment is paid and satisfied, and the judgment and decree of the court shall be rendered accordingly.\nPlaintiff filed complaint on 19 November 1982, alleging that he was injured on 23 November 1979 when a combine being operated by him contacted defendant\u2019s power line, causing plaintiff to suffer severe electrical shock and serious electrical burns which, in turn, caused him substantial injury and damages. Defendant answered, denying negligence.\nThe case first came on for trial in May 1984 when at the close of plaintiffs evidence the trial court allowed defendant\u2019s motion for a directed verdict. The Court of Appeals reversed. Phelps v. Duke Power Co., 76 N.C. App. 222, 332 S.E. 2d 715 (1985), disc, rev. denied, 314 N.C. 668, 336 S.E. 2d 401 (1985).\nAt retrial before Judge Battle, from which this appeal is taken, the jury returned its verdict on 9 June 1986, answering the liability issues favorably to plaintiff and assessing plaintiffs damages at $600,000. Judge Battle denied defendant\u2019s motion for judgment notwithstanding the verdict and entered judgment on the verdict on 10 June 1986. The judgment ordered that the amount awarded, $600,000, would accrue interest from 9 June 1986, the date of the verdict. Defendant appealed.\nIn the Court of Appeals defendant presented in its brief the single question whether the trial court erred in admitting the testimony of an economist proffered by plaintiff on the issue of plaintiffs damages. The Court of Appeals found no error in the admission of this testimony.\nPlaintiff cross-assigned as error the trial court\u2019s \u201climiting the award of interest on the judgment from the date of the judgment.\u201d Plaintiff argued in the Court of Appeals that, pursuant to former N.C.G.S. \u00a7 24-5, the trial court should have awarded interest on the judgment from the date the action was instituted to the extent defendant had liability insurance covering plaintiffs claims. For that portion of the judgment not covered by liability insurance, plaintiff argued, the trial court should have awarded interest from 31 May 1984, the date the directed verdict was entered against plaintiff at the first trial. The Court of Appeals first concluded that because plaintiffs cross-assignment of error constituted an attack on the judgment itself \u201cand not an alternative basis in law for supporting the judgment,\u201d it was not, under Appellate Procedure Rule 10(d), a proper vehicle for bringing forward plaintiffs challenge to the interest awarded. 86 N.C. App. at 458, 358 S.E. 2d at 91. The Court of Appeals elected, pursuant to Appellate Procedure Rule 2, to treat plaintiffs cross-assignment of error as a petition for writ of certiorari under Appellate Procedure Rule 21 and to issue its writ in order to address the prejudgment interest question.\nThe Court of Appeals decided: (1) Since plaintiff had not raised at trial the question of his entitlement to interest on the basis of defendant\u2019s having liability insurance, he was precluded from raising it for the first time on appeal. (2) The trial court should have awarded interest from 31 May 1984, the date of the directed verdict in defendant\u2019s favor (ultimately reversed) at the first trial.\nThe Court of Appeals vacated that portion of the trial court\u2019s judgment awarding interest from 9 June 1986, the date of the jury verdict in the second trial, and remanded the matter for entry of judgment awarding interest from 31 May 1984, the date of the ultimately reversed directed verdict in defendant\u2019s favor.\nWe allowed defendant\u2019s petition for further review of the Court of Appeals\u2019 decision that plaintiff was entitled to interest from the date of the directed verdict. We now reverse that decision and remand for further proceedings consistent with this opinion.\nWe are confident, contrary to the holding of the Court of Appeals, that the legislature intended the words \u201cfrom the time of the verdict\u201d to mean the verdict upon which judgment in favor of plaintiff was rendered.\nIn determining the legislature\u2019s intent the court should consider the act as a whole, \u201cthe language of the statute, the spirit of the act and what the act seeks to accomplish.\u201d Town of Emerald Isle v. State of N. C., 320 N.C. 640, 654, 360 S.E. 2d 756, 764 (1987); accord, In re Arthur, 291 N.C. 640, 231 S.E. 2d 614 (1977); Stevenson v. City of Durham, 281 N.C. 300, 188 S.E. 2d 281 (1972). A court may consider the \u201ccircumstances surrounding [the statute\u2019s] adoption which throw light upon the evil sought to be remedied.\u201d Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 399, 269 S.E. 2d 542, 561 (1980); accord, Milk Commission v. Food Stores, 270 N.C. 323, 154 S.E. 2d 548 (1967).\nIt is clear that the purpose of former N.C.G.S. \u00a7 24-5 was to change the common law rule with reference to the accrual of interest on tort claims reduced to judgment. At common law prejudgment interest was not awarded on damages recovered for personal injuries. Penny v. R.R., 161 N.C. 523, 77 S.E. 774 (1913). The statutes which preceded former N.C.G.S. \u00a7 24-5 did not address the question of prejudgment interest on claims other than contract. They provided simply that these claims when reduced to judgment would bear interest from the time of the judgment. See N.C.G.S. \u00a7 24-5 (Replacement 1965) and its predecessors. Former N.C.G.S. \u00a7 24-5 was obviously meant to change the common law rule so that tort damages reduced to judgment would bear interest from the time the action was commenced provided the damages ordered to be paid were covered by liability insurance. The legislature, it seems clear to us, did not intend to change the rule regarding the accrual of interest on tort claims not covered by liability insurance.\nFor its holding that plaintiff was entitled to interest from the time of the directed verdict, ultimately reversed, in favor of defendant, the Court of Appeals relied on Jackson v. Gastonia, 247 N.C. 88, 100 S.E. 2d 241 (1957).\nJackson involved an action for tortious conversion of a water and sewer system in a suburban real estate development. Most of the material facts, including the amount of damages, were stipulated; the parties waived jury trial; and the matter was submitted to the trial court for determination of the facts and law. The trial court entered judgment of nonsuit against plaintiffs. On appeal this judgment was reversed and judgment ordered to be entered for plaintiffs. Jackson v. Gastonia, 246 N.C. 404, 98 S.E. 2d 444 (1957). When, on remand, the trial court entered judgment for plaintiffs, it ordered interest on the stipulated damages from the filing of the complaint. Defendant appealed the award of interest. On this second appeal, the Court held that interest under the facts before it would ordinarily be figured from the first day of the term at which judgment in plaintiffs\u2019 favor was rendered. The Court held further that since judgment should have been rendered in plaintiffs\u2019 favor at the first trial, \u201cin so far as plaintiffs\u2019 right to recover interest is concerned, the judgment as entered below after remand will be treated as having been entered at the 10 December, 1956 Term of Court [the term at which the first trial was conducted], and the plaintiffs\u2019 recovery will bear interest from the first day of that term.\u201d Jackson, 247 N.C. at 90, 100 S.E. 2d at 242.\nJackson does not control here. Jackson did not construe former N.C.G.S. \u00a7 24-5. Jackson applied common law rules governing interest assessable in actions for conversion in addition to a predecessor of former N.C.G.S. \u00a7 24-5 \u2014 a statute which did not use the term \u201cverdict\u201d but provided simply that judgments entered in actions other than contract bore interest from the time of the judgment. See N.C.G.S. \u00a7 24-5 (Replacement 1965). As the Jackson Court expressly recognized, juries at common law in conversion cases were permitted to assess interest from the time of the conversion. Jackson v. Gastonia, 247 N.C. at 90, 100 S.E. 2d at 242. See also Lance v. Butler, 135 N.C. 419, 47 S.E. 488 (1904); Stephens v. Koonce, 103 N.C. 266, 9 S.E. 315 (1889). Finally, Jackson involved essentially resolutions of questions of law on stipulated facts and liquidated, stipulated damages.\nThe case before us involves essentially factual questions regarding both defendant\u2019s negligence and the amount of damages, all of which a jury was required ultimately to determine. Until a jury made these determinations there was no basis for the award of interest. Even if the trial court at the first trial had not entered a directed verdict for defendant and had permitted the case to go to the jury, we cannot be certain that that jury would have returned a verdict for plaintiff. As this Court noted in Penny:\n. . . [Prejudgment] interest is not recoverable on the damages awarded in actions for torts to the person, because the damages in such cases are in large measure discretionary with the jury and are not ascertainable with reference to a pecuniary standard. [Citation omitted.]\nThe universal principle deduced from all the precedents is that a personal injury does not create a debt and does not become one until it is judicially ascertained . . . . We do not find a single dissenting case to that proposition.\nPenny, 161 N.C. at 526, 77 S.E. at 776-77.\nPlaintiff continues to contend before us, as he did in the Court of Appeals, that he is entitled to interest under former N.C.G.S. \u00a7 24-5 from the time the action was begun. Plaintiff argues that in the absence of any showing in the trial court regarding defendant\u2019s liability insurance, there should be a presumption that defendant has such insurance which will cover the damages awarded, and prejudgment interest should, under the statute, be awarded accordingly. At least, plaintiff contends, the matter should be remanded to the trial court for a determination of the existence of defendant\u2019s liability insurance, if any, and, depending on the outcome of this determination, interest awarded accordingly. We disagree with the first, but agree with the second, of plaintiffs arguments.\nPlaintiff relies on Harris v. Scotland Neck Rescue Squad, Inc., 75 N.C. App. 444, 331 S.E. 2d 695, disc. rev. and stay denied, 314 N.C. 329, 333 S.E. 2d 486-87 (1985), to support his argument that in the absence of any showing in the trial court regarding a defendant\u2019s liability insurance, interest should be awarded under former N.C.G.S. \u00a7 24-5 as if defendant had insurance covering the damages awarded, ie. from the time the suit was begun. Harris was an action for damages arising out of an automobile collision. In this context the Court of Appeals held that under the prejudgment interest statute when the record is silent on the question of the existence of liability insurance, interest should be figured from the date of the filing of the complaint, this being the time when the action was \u201cinstituted.\u201d The Court of Appeals said:\nIn light of the statutory requirement of financial responsibility, G.S. 20-309 et seq., which is generally met through liability insurance, we hold that defendant had the burden of showing the absence of such insurance.\nHarris, 75 N.C. App. at 452, 331 S.E. 2d at 701.\nWhatever the merits of the Harris rule in the context of statutorily mandated automobile liability insurance, we conclude it should not be applied in cases, such as the one before us, where liability coverage is not statutorily required. We hold in these kinds of cases when plaintiff recovers judgment, it is the trial court\u2019s duty, on its own motion, to inquire of the defendant regarding the existence of any liability insurance which could cover the damages awarded. It is the defendant\u2019s duty to respond fully and accurately to the trial court\u2019s inquiry. In almost all cases there should be no controversy about the existence and extent of defendant\u2019s liability insurance, and this procedure should satisfactorily resolve the matter. If there is controversy about defendant\u2019s liability insurance, plaintiff, of course, should be given an opportunity to be heard. Evidence, if needed, may be taken and the matter resolved by the trial court, if necessary, by the usual findings of fact and conclusions of law with plaintiff having the burden to establish the existence and the extent of the insurance. We remand this case for determination by this procedure of the existence, if any, of defendant\u2019s liability insurance.\nTo the extent that defendant here has liability insurance which covers the damages awarded plaintiff, as determined by the trial court, plaintiff, pursuant to the prejudgment interest statute, shall be awarded interest from the date the complaint was filed. To the extent that defendant has no liability insurance which covers the damages awarded, plaintiff shall be awarded interest from the day the verdict was entered against defendant. See Wagner v. Barbee and Seiler v. Barbee, 82 N.C. App. 640, 347 S.E. 2d 844 (1986), disc. rev. denied, 318 N.C. 702, 351 S.E. 2d 761 (1987).\nFor the foregoing reasons, the decisions of the Court of Appeals that (1) plaintiff is not entitled to interest on the basis that defendant had liability insurance because the matter was not raised at trial and (2) plaintiff is entitled to interest from the date of the directed verdict in favor of defendant are reversed. The case is remanded to the Court of Appeals for remand to the Superior Court, Orange County, for further proceedings consistent with this opinion.\nReversed and remanded.\n. Former N.C.G.S. \u00a7 24-5, under which this appeal is decided, appears infra in the text. This statute was substantially rewritten, as the text states, in 1985 and is codified as N.C.G.S. \u00a7 24-5(b) (1986) as follows:\n(b) Other Actions. \u2014In an action other than contract, the portion of money judgment designated by the fact finder as compensatory damages bears interest from the date the action is instituted until the judgment is satisfied. Interest on an award in an action other than contract shall be at the legal rate.\nChapter 214, section 2 of the 1985 Session Laws provides that the new statutes shall become effective 1 October 1985 and shall not affect pending litigation.\nThe version of N.C.G.S. \u00a7 24-5 (1983 Cum. Supp.) with which we here deal will be referred to hereinafter in the opinion as simply \u201cformer N.C.G.S. \u00a7 24-5.\u201d There were versions of this statute which predate the version now before us. These earlier versions are generally referred to as such later in the opinion.", "type": "majority", "author": "EXUM, Chief Justice." } ], "attorneys": [ "Coleman, Bemholz, Dickerson, Bemholz, Gledhill & Hargrave by G. Nicholas Herman and Douglas Hargrave for plaintiff appellee.", "Newsom, Graham, Hedrick, Bryson & Kennon by E. Bryson, Jr. and Joel M. Craig; Cheshire & Parker by Lucius M. Cheshire for defendant appellant." ], "corrections": "", "head_matter": "JOSEPH M. PHELPS v. DUKE POWER COMPANY\nNo. 464PA87\n(Filed 9 February 1989)\nInterest \u00a7 2; Judgments 8 55\u2014 negligence action \u2014 prejudgment interest\nIn a negligence action arising from plaintiffs combine coming into contact with defendant\u2019s power lines in which the trial court first allowed defendant\u2019s motion for a directed verdict, the Court of Appeals reversed, the jury answered the liability issues favorably for plaintiff, and the trial court awarded interest from the date of the verdict, the Court of Appeals erred by holding that the trial court should have awarded interest from the date of the directed verdict in defendant\u2019s favor. Former N.C.6.S. \u00a7 24-5, under which this case was decided, was obviously meant to change the common law rule so that tort damages reduced to judgment would bear interest from the time the action was commenced, provided the damages ordered to be paid were covered by liability insurance. In cases such as this, where liability insurance is not statutorily required, it is the court\u2019s duty on its own motion to inquire of the defendant regarding the existence of any liability insurance which could cover the damages awarded and the duty of defendant to respond fully and adequately to the trial court\u2019s inquiry. This case was remanded for determination by this procedure of the existence, if any, of defendant\u2019s liability insurance.\nOn defendant\u2019s petition for discretionary review of a decision of the Court of Appeals, 86 N.C. App. 455, 358 S.E. 2d 89 (1987), vacating in part a judgment entered by Battle, J., presiding at the 27 May 1986 Civil Session of Superior Court, ORANGE County, and remanding for the entry of judgment as directed by the Court of Appeals\u2019 opinion. Heard in the Supreme Court 14 March 1988.\nColeman, Bemholz, Dickerson, Bemholz, Gledhill & Hargrave by G. Nicholas Herman and Douglas Hargrave for plaintiff appellee.\nNewsom, Graham, Hedrick, Bryson & Kennon by E. Bryson, Jr. and Joel M. Craig; Cheshire & Parker by Lucius M. Cheshire for defendant appellant." }, "file_name": "0072-01", "first_page_order": 110, "last_page_order": 117 }