45-103.02. Prejudgment interest; accrual; when; conditions.

(1) Except as provided in section 45-103.04, interest as provided in section 45-103 shall accrue on the unpaid balance of unliquidated claims from the date of the plaintiff's first offer of settlement which is exceeded by the judgment until the entry of judgment if all of the following conditions are met:

(a) The offer is made in writing upon the defendant by certified mail, return receipt requested, to allow judgment to be taken in accordance with the terms and conditions stated in the offer;

(b) The offer is made not less than ten days prior to the commencement of the trial;

(c) A copy of the offer and proof of delivery to the defendant in the form of a receipt signed by the party or his or her attorney is filed with the clerk of the court in which the action is pending; and

(d) The offer is not accepted prior to trial or within thirty days of the date of the offer, whichever occurs first.

(2) Except as provided in section 45-103.04, interest as provided in section 45-104 shall accrue on the unpaid balance of liquidated claims from the date the cause of action arose until the entry of judgment.

Source

Annotations

1. Liquidated claims

2. Unliquidated claims

3. Miscellaneous

1. Liquidated claims

Prejudgment interest is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to the plaintiff's right to recover and the amount of such recovery. This determination requires a two-pronged inquiry. There must be no dispute as to the amount due and to the plaintiff's right to recover. Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d 433 (2010).

Prejudgment interest may be awarded only as provided in subsection (2) of this section. Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d 433 (2010).

Prejudgment interest under this section is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to either the plaintiff's right to recover or the amount of such recovery. A two-pronged inquiry is required. There must be no dispute either as to the amount due or as to the plaintiff's right to recover, or both. Ferer v. Aaron Ferer & Sons, 272 Neb. 770, 725 N.W.2d 168 (2006).

Under this section, the proper date for prejudgment interest to begin accruing on a liquidated claim is the date in which the cause of action arose; it is important that a court awarding prejudgment interest disclose the precise date on which it determined the cause of action giving rise to an award of prejudgment interest arose. Blue Valley Co-op v. National Farmers Org., 257 Neb. 751, 600 N.W.2d 786 (1999).

A claim is liquidated when there is no reasonable controversy either as to the plaintiff's right to recover or as to the amount of such recovery. Cheloha v. Cheloha, 255 Neb. 32, 582 N.W.2d 291 (1998).

2. Unliquidated claims

Under subsection (1) of this section, where the claim is unliquidated and the plaintiff's offer of settlement is exceeded by the judgment, prejudgment interest accrues on the full amount of the judgment starting on the date of the plaintiff's first offer of settlement, which offer is exceeded by the judgment. Martensen v. Rejda Bros., 283 Neb. 279, 808 N.W.2d 855 (2012).

The interest rate referenced in this section does not apply when the parties have contractually agreed to the rate of interest that will apply to an unliquidated claim. This section prescribes the conditions for allowance of prejudgment interest on all causes of action, and the parties cannot contract out of the statutory conditions. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).

An offer to settle a claim pursuant to this section may be made either before or after the commencement of an action asserting the claim. This section does not differentiate between a judgment reached by agreement and one rendered following trial. Wortman By and Through Wortman v. Unger, 254 Neb. 544, 578 N.W.2d 413 (1998).

3. Miscellaneous

This section provides the sole means for recovery of interest costs. Interest is not otherwise recoverable as a separate element of damages. R & D Properties v. Altech Constr. Co., 279 Neb. 74, 776 N.W.2d 493 (2009).

Prejudgment interest may be awarded only as provided in this section. IBP, Inc. v. Sands, 252 Neb. 573, 563 N.W.2d 353 (1997).

In order to be eligible to receive prejudgment interest in a cause of action accruing after January 1, 1987, a litigant must comply with the requirements of this section. Label Concepts v. Westendorf Plastics, 247 Neb. 560, 528 N.W.2d 335 (1995).

It was plain error for district court to award prejudgment interest where the requirements of this section were not complied with. Peterson v. Kellner, 245 Neb. 515, 513 N.W.2d 517 (1994).

In order to receive prejudgment interest, a litigant must comply with this section. Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993).

Prejudgment interest may be recovered only as provided under this section. Elson v. Pool, 235 Neb. 469, 455 N.W.2d 783 (1990).

Prejudgment interest is not allowed on rent which accrued on or after January 1, 1987, unless the provisions of this section are complied with. Knox v. Cook, 233 Neb. 387, 446 N.W.2d 1 (1989).