may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Charles Ehlen, M.D.,
Steven Rice, M.D., et al.,
Filed July 27, 1999
Stearns County District Court
File No. C5-95-3792
Edward J. Laubach, Hall & Byers, P.A., 1010 West St. Germain, St. Cloud, MN 56301 (for respondents)
Considered and decided by Willis, Presiding Judge, Schumacher, Judge, and Harten, Judge.
Charles Ehlen, M.D. appeals from an order requiring respondents Steven Rice, M.D., Peter Larsen, M.D., David Lindgren, M.D., Deborah McCarl, M.D., Eric Thompson, M.D., Elizabeth Schmidt, M.D., David Van Nostrand, M.D., and Frank Brown, M.D., individually and d/b/a Northway Professional Group (Northway) to pay him statutory interest from and after November 23, 1998, on an arbitration award. Ehlen argues he is entitled to interest from January 23, 1997, the date of the arbitration award, to April 21, 1998, the date this court affirmed the award. Because the arbitration award was not an award "for the recovery of money" under Minn. Stat. § 549.09, subd. 1(a) (1998) and because Northway did not owe Ehlen any money until November 23, 1998, the date Ehlen transferred his partnership interest to Northway as ordered by the arbitration award, we affirm.
Following a hearing, the arbitrator issued his findings and order on January 23, 1997. Among other things, the arbitrator found Ehlen had breached the agreement and ordered him to sell his interest to Northway.
Northway determined the purchase price of Ehlen's interest to be $130,138 and offered him payment of that amount in exchange for transfer of his interest. Ehlen refused the payment, claiming he intended to appeal.
Ehlen moved to vacate or modify the award on April 14, 1997. The district court denied the application; this court affirmed the district court's decision on April 21, 1998. Ehlen v. Rice, No. C0-97-1741 (Minn. App. Apr. 21, 1998). Northway again offered to pay Ehlen $130,138 in exchange for transfer of his interest; Ehlen again refused.
Northway brought a motion in district court seeking to compel Ehlen to transfer his partnership interest. Northway further argued that Ehlen was entitled to no interest on the amount due until he transferred his partnership interest. Ehlen opposed the motion and argued he was entitled to interest from the date of the arbitration award until April 23, 1998, when this court affirmed the arbitrator's award.
On November 23, 1998, Ehlen executed a bill of sale transferring his partnership interest to Northway. On February 1, 1999, the district court ordered Northway to pay Ehlen $130,138 plus interest at the statutory rate from and after November 23, 1998. Ehlen appeals.
A trial court's award of interest on an award or judgment is a question of law and is reviewed de novo. S.B. Foot Tanning Co. v. Piotrowski, 554 N.W.2d 413, 420 (Minn. App. 1996), review denied (Minn. Dec. 17, 1996). Interest on a judgment is an element of damages awarded to provide full compensation by converting time-of-demand damages into time-of-verdict damages; it is designed to compensate a plaintiff for loss of use of money owed. Simeone v. First Bank Nat'l Ass'n, 73 F.3d 184, 190-91 (8th Cir. 1996). Thus, interest is inappropriate when there is no underlying judgment or award entered that could serve as a basis for a prejudgment interest award. Warrick v. Graffiti, Inc., 550 N.W.2d 303, 309-10 (Minn. App. 1996), review denied (Minn. Sept. 20, 1996). Interest is also inappropriate when a party is not entitled to receive money until one of several contingencies occurs. See Thomas v. Thomas, 383 N.W.2d 727, 729 (Minn. App. 1986) (when appellant not entitled to receipt of money on homestead lien until one of several contingencies occurred, interest on lien inappropriate).
Ehlen claims that he is owed interest from the date of the arbitrator's award on January 23, 1997 until April 21, 1998, the date this court affirmed the district court's order. He argues that his claim for interest is based on Minn. Stat. § 549.09, subd. 1(a) (1996), which requires interest to be paid on any money judgment from "the time of the verdict or report until judgment is finally entered." Ehlen reasons that "verdict or report" includes arbitration awards and that a judgment is not "final" until all appeals have been exhausted. See Pacific Indem. Co. v. Thompson-Yaeger, Inc., 258 N.W.2d 762, 764-65 (Minn. 1977). He insists that, until the appellate process finally decided all the issues presented to the arbitrator, interest could not be ascertained.
Minn. Stat. § 549.09, subd. 1(a) provides:
When a judgment or award is for the recovery of money, * * * interest from the time of the verdict, award, or report until judgment is finally entered shall be computed by the court administrator or arbitrator as provided in clause (c) and added to the judgment or award.
The arbitration award in this case was not "for the recovery of money." Rather, the award ordered Ehlen to transfer his partnership interest to Northway and ordered Northway to pay Ehlen for that partnership interest. This is not a case where Ehlen prevailed at arbitration and was awarded money damages; rather, the arbitrator determined Ehlen had breached his agreement and ordered him to transfer his partnership interest. Ehlen's claim to the $130,138 payment was contingent upon his transferring his partnership interest. Thus, Ehlen's reliance on this statute as a basis for his claim for interest is misplaced.
As the district court reasoned, interest generally is an incident of debt or legal liability for money owed. Bourdeaux v. Gilbert Motor Co., 220 Minn. 538, 544, 20 N.W.2d 393, 396 (1945). A claim for interest is dependent upon the underlying debt. Thompson v. Gasparro, 257 N.W.2d 355, 356 (Minn. 1977). In this case, Northway did not owe Ehlen any money until he transferred his partnership interest on November 23, 1998; at that point, Northway was obligated to pay Ehlen $130,138 and interest on that amount. We therefore affirm the district court's order.