Plaintiff-Appellee
v.
HO PYO HONG d/b/a KOREANSA SHIPPING
AGENCY, Defendant-Appellant
High Court of
Appellate Division
AP No. 04-97
[1]
A trial court’s factual determinations are reviewed for clear error.
[2]
Questions of law or mixed questions of law and fact are reviewed de novo.
[3]
Samoan law provides that interest shall be presumed on all overdue debts.
[4]
The presumption of interest on overdue debts is a rebuttable one.
[5]
Where creditor sought prejudgment interest on uncertain debt but creditor was
largely responsible for uncertainty of debt and delay in resolution of case,
Court’s refusal to award such interest was proper.
Before RICHMOND, Associate
Justice, GOODWIN,* Acting Associate
Justice, MUNSON,** Acting Associate Justice, SAGAPOLUTELE,
Associate Judge, TAUANU`U, Temporary Associate Judge. [3ASR3d25]
Counsel: For Appellant,
Charles V. Ala`ilima
For Appellee,
Cherie
OPINION
Per Curiam:
The only issue on appeal is whether the trial court erred in refusing
to award prejudgment interest to the prevailing party after prolonged and
complex litigation over disputed accounts. We affirm the trial court’s
judgment.
In 1992, Defendant-Appellant Ho Pyo Hong (d/b/a Koreansa Shipping
Agency) (“Hong”) was engaged in several businesses (see Hong v.
Samoa Sharkfin Trading Co. v. Hong,
3 A.S.R.3d 37 (App. Div. 1999) including the business of provisioning fishing
vessels. Korean Deep Sea Fishing Association (“KDSFA”), an association of
fisherman with independently-owned fishing vessels, was one of Hong’s major
customers. This action arose out of
KDSFA’s allegation that it had extended cash advances to Hong, and that the
advances had never been repaid; Hong alleged, in response, that he had supplied
a substantial amount of inventory to KDSFA on credit, and was owed in excess of
$1 million.
After a lengthy trial and evaluation of virtually incomprehensible
business records, the trial division ruled in Hong’s favor and eventually
entered judgment in the amount of $1,339,344.06. Although Hong requested
interest on the debt (6% for the period May 1992, the time of the transactions,
to January 1997, the time of the judgment), the court denied his request for
prejudgment interest. Hong appealed and KDSFA failed to file a brief.
[1-2] A trial court’s factual determinations are reviewed for clear error.
The reviewing court affords particular weight to the trial judge’s assessment
of conflicting and ambiguous facts, especially where the findings are based in
part on the trial court’s evaluation of conflicting evidence and live
testimony. Questions of law or mixed
questions of law and fact are reviewed de novo.
Roman Catholic Diocese of
[3] Samoan law provides that interest, at a rate of six percent, “shall be
presumed on all overdue debts.”[1] The statute raises two questions in this[3ASR3d26] case: (1) whether the
presumption is conclusive or rebuttable; and (2) when the debt in this case
became “overdue.” The trial division, after finding as a fact that much of the
delay and difficulty in liquidating, the amount of the debt was of Hong’s own
confection, denied prejudgment interest on the debt. In so doing, the court noted that the
accounting records and other evidence presented by Hong at trial constituted a
“time consuming haystack” for the court, and implied that judgment would have
been rendered sooner if Hong had presented the court with a more
straightforward accounting of his business dealings. Specifically, the court
said that “much about what he brought on himself was through his own doing . .
.” and that Hong “did not exactly have clean hands in the whole thing . . . .” [Trans. at 9] Essentially, the court relied upon equitable
principles to overcome the statutory presumption in favor of prejudgment
interest.
Hong has not directed our attention to any case law on point, Samoan or
otherwise, and KDSFA declined to submit a brief in this matter. The trial court
was guided by the fact that several years had been consumed in litigation, much
of which would not have been necessary if Hong had kept regular books and
records.
[4] The court, pursuant to the statute, could have awarded interest on the
debt owed to Hong, but on the facts of this case clearly was not compelled to
do so. The amount of the debt was uncertain, and the exact time at which it
could be said to have been “overdue” was uncertain prior to the judgment of the
court. The statutory presumption was rebuttable, and the court found ample
facts to rebut it.
Many U.S. jurisdictions have drawn a distinction
between liquidated and unliquidated damages, and adopted a rule prohibiting the
award of prejudgment interest where the amount of the debt is unknown, and not
readily determinable, prior to the entry of judgment. See
Traditional Rule Against Allowance of Interest, 22 Am. Jur. 2d Damages § 654 (1988); see,
e.g., Cox v. McLaughlin, 18 P. 100, 103 (
[4] This case is an appropriate one in which to treat the presumption
favoring interest as overcome by the facts. The amount of the debt was
uncertain prior to the entry of judgment, and the creditor seeking interest was
largely responsible for the uncertainty and the delay in the resolution of the
case.
AFFIRMED.
**********
*
Honorable Alfred T. Goodwin, Senior Circuit Judge,
**
Honorable Alex R. Munson, Chief Judge, District Court for the Commonwealth of
the
[1] The Samoan anti-usury statute provides, in pertinent
part:
Except as provided in this title, no person may charge more than 15
percent a year as interest on a debt or obligation, and no agreement to pay a
rate of interest higher than 6 percent a year shall be enforceable unless the
same is in writing and is signed by the party to be charged. The rate of
interest when there is no written agreement with respect thereto shall be 6
percent a year, and interest shall be presumed on overdue debts.
A.S.C.A. § 28.1501(a) (1992).