S-109                 _______________________________________________

                                                   SENATE BILL NO. 5732

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Senators Nelson and Johnson

Read first time 2/3/89 and referred to Committee on  Law & Justice.

AN ACT Relating to prejudgment interest; amending RCW 4.56.110; adding a new section to chapter 4.56 RCW; creating a new section; and repealing RCW 4.56.115.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 4, chapter 136, Laws of 1895 as last amended by section 1, chapter 147, Laws of 1983 and RCW 4.56.110 are each amended to read as follows:

          Interest on judgments shall accrue as follows:

          (1) Judgments founded on written contracts, providing for the payment of interest until paid at a specified rate, shall bear interest at the rate specified in the contracts:  PROVIDED, That ((said)) the interest rate ((is)) in the contract shall be set forth in the judgment.

          (2) Except as provided under subsection (1) of this section and RCW 82.32.060, judgments shall bear interest from the date of entry at the  maximum rate permitted under RCW 19.52.020 on the date of entry thereof:  PROVIDED, That in any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

(3) In addition to the interest allowed under subsection (2) of this section, that portion of any civil judgment constituting economic damages shall accrue prejudgment interest from the date of notice to the date the judgment is entered.  Prejudgment interest shall be calculated at the prejudgment interest rate on the date of notice.

(4) If any moneys are advanced to a judgment creditor as compensation for economic damages prior to the entry of the judgment, then prejudgment interest under subsection (3) of this section shall only accrue on such moneys from the date of notice to the date of payment.

(5) If the cause of action is continued solely at the judgment creditor's request, then prejudgment interest allowable under subsection (3) of this section shall not accrue during the period of the continuance, unless the court rules that the reason for the continuance was beyond the ability of the requesting party to control.

(6) In any case where the judgment debtor has made a written settlement offer that is not accepted by the judgment creditor within thirty days, or sixty days prior to trial, whichever occurs first, and the settlement offer is not less than seventy-five percent of the judgment amount, then prejudgment interest after the date of service of the settlement offer shall only be calculated on that portion of the judgment which exceeds the settlement offer.

(7) For the purposes of this section:  (a) "Prejudgment interest rate" means a rate of interest which is two percentage points above the equivalent coupon issue yield (as published by the Federal Reserve Bank of San Francisco) of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the calendar month immediately preceding the date of notice; (b) "economic damages" shall be as defined in RCW 4.56.250; and (c) "date of notice" means:  (i) The date a claimant gives written notice of a claim to a potential defendant, which notice may be given by personal service or by registered mail to the potential defendant at the potential defendant's last known address.  Written notice of the claim shall include the identification, amount, nature, and elements known at the time of claim.  If the judgment amount differs from the amount claimed in the notice, the prejudgment interest shall accrue on the judgment amount; or (ii) the date a lawsuit is initiated, either by filing or personal service, if prior written notice of a claim has not otherwise been given to the defendant.

NEW SECTION. Sec. 2.     Section 1 of this act applies to any cause of action filed after the effective date of this section.

NEW SECTION. Sec. 3.  A new section is added to chapter 4.56 RCW to read as follows:

          An attorney shall not receive as compensation any portion of a judgment representing prejudgment interest awarded pursuant to RCW 4.56.110.

NEW SECTION. Sec. 4.  Section 1, chapter 26, Laws of 1975, section 2, chapter 147, Laws of 1983 and RCW 4.56.115 are each repealed.