In all cases where an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery.
(Orig. Code 1863, § 2886; Code 1868, § 2894; Code 1873, § 2945; Code 1882, § 2945; Civil Code 1895, § 3800; Civil Code 1910, § 4396; Code 1933, § 20-1408.)
Cross references.- Effect of deposit in court on determination of interest, § 9-11-67.
Law reviews.- For annual survey on trial practice and procedure, see 64 Mercer L. Rev. 305 (2012). For article, "2015 Georgia Corporation and Business Organization Case Law Developments," see 21 Ga. St. Bar. J. 30 (Apr. 2016).
JUDICIAL DECISIONS
Material conflicts in pleadings needed to be resolved.
- Trial court's grant of a default judgment to the appellee on the issue of the appellant's liability on a promissory note was upheld but the trial court's award of damages, interest, and attorney fees to the appellee was vacated because material conflicts in the pleadings existed that had to be resolved before the trial court could calculate the value of the stock on the day the appellee submitted the June Conversion Notice and could award that amount as damages. Pure Hospitality Solutions, Inc. v. Canouse, 347 Ga. App. 592, 820 S.E.2d 434 (2018).
Recovery for breach of contract may be awarded interest for two periods: (1) fact finder may within the finder's discretion in a proper case award interest from date of breach on unliquidated claim; and (2) claimant is entitled to interest from date claim becomes liquidated as a matter of law. Norair Eng'r Corp. v. Saint Joseph's Hosp., 147 Ga. App. 595, 249 S.E.2d 642 (1978) but see Black v. Automatic Sprinkler Co., 35 Ga. App. 8, 131 S.E. 543 (1926).
Whether interest from time of breach shall be added to damages is within discretion of jury. Black v. Automatic Sprinkler Co., 35 Ga. App. 8, 131 S.E. 543 (1926); but see Norair Eng'r Corp. v. Saint Joseph's Hosp., 147 Ga. App. 595, 249 S.E.2d 642 (1978).
Prejudgment interest on damages exceeded recovery amount authorized by evidence.
- Pursuant to instructions from trial court, while jury was authorized under O.C.G.A. § 13-6-13 to increase the $24,698.39 in breach of contract damages by adding prejudgment legal interest to damages at the rate of seven percent per annum simple interest from the date of the breach, jury's general verdict on the breach of contract claim in amount of $42,690.05 was in excess of any recovery authorized by the evidence; as a result, judgment entered on the verdict had to be reversed and the case remanded for new trial. Chacon v. Holcombe, 290 Ga. App. 767, 660 S.E.2d 851 (2008).
Prejudgment interest is generally allowed only on liquidated claims. United States ex rel. Ga. Elec. Supply Co. v. United States Fid. & Guar. Co., 656 F.2d 993 (5th Cir. 1981).
In a suit against an insurer under a policy covering oriental rugs, when several of the insured's rugs sustained water damage and others were stolen, because damages for the water damage claim were not liquidated, the trial court did not err in denying an award of prejudgment interest on that claim; however, inasmuch as the theft claim was for liquidated damages, the court erred in not awarding prejudgment interest on that claim. Holloway v. State Farm Fire & Cas. Co., 245 Ga. App. 319, 537 S.E.2d 121 (2000).
Prejudgment interest for unliquidated damages in breach of contract action is governed by this statute. United States ex rel. Delta Metals, Inc. v. R.M. Wells Co., 497 F. Supp. 541 (S.D. Ga. 1980) (see O.C.G.A. § 13-6-13).
There is no error in allowing prejudgment interest in breach of contract cases to be found by the jury as a separate item of the award, even where the damages are not liquidated. Braner v. Southern Trust Ins. Co., 255 Ga. 117, 335 S.E.2d 547 (1985); Bishop Contracting Co. v. North Ga. Equip. Co., 203 Ga. App. 655, 417 S.E.2d 400, cert. denied, 203 Ga. App. 905, 417 S.E.2d 400 (1992).
Prejudgment interest may be obtained in action for unliquidated damages.
- O.C.G.A. § 13-6-13 allows for prejudgment interest to be awarded by a jury even on unliquidated claims. However, a prerequisite to the award of prejudgment interest is that the jury's finding of damages be the same as the amount of damages at the time of the breach. For interest to be permitted on an unliquidated claim, there must be a monetary loss which "immediately and necessarily" flows to the injured party. Malta Constr. Co. v. Henningson, Durham & Richardson, Inc., 716 F. Supp. 1466 (N.D. Ga. 1989), aff'd, 927 F.2d 614 (11th Cir. 1991).
Prejudgment interest not authorized when only remedy was specific performance.
- In a case arising out of breach of a stock purchase agreement, in which the trial court ordered specific performance of the agreement for a purchase price of $1.2 million, the trial court erred in awarding prejudgment interest under O.C.G.A. § 13-6-13 because § 13-6-13 only allowed interest on "damages" and did not apply to specific performance. Whether the sellers were entitled to prejudgment interest on O.C.G.A. § 7-4-15 (liquidated demands) was a question for the trial court on remand. Estate of Callaway v. Garner, 297 Ga. 52, 772 S.E.2d 668 (2015).
Prejudgment interest award was proper.
- Trial court did not err in denying defendant's motion for a directed verdict on the issue of prejudgment interest where the court's charge on prejudgment interest as given was an accurate and complete statement of the law and where entry of judgment based on the findings of the jury as to the amount of interest calculated from the exhibits in evidence was proper. Bishop Contracting Co. v. North Ga. Equip. Co., 203 Ga. App. 655, 417 S.E.2d 400, cert. denied, 203 Ga. App. 905, 417 S.E.2d 400 (1992).
Award of prejudgment interest was proper in a hospital's breach of contract action, wherein it was awarded judgment in its favor on a claim for recovery of monies due that had been loaned to a doctor who did not repay the full sum; pursuant to O.C.G.A. §§ 7-4-15 and13-6-13, where the balance was a liquidated amount, as here, the court was authorized to award prejudgment interest. Walker v. Gwinnett Hosp. Sys., 263 Ga. App. 554, 588 S.E.2d 441 (2003).
Summary judgment for a city for $2,885,827 damages, plus pre-judgment interest under O.C.G.A. § 13-6-13, was proper on the city's claim against a county and its tax commissioner for breach of an agreement under which the county was required to collect the city's taxes and remit them to the city, but instead withheld $2,885,827 for a tax refund obligation owed by the county. Ferdinand v. City of E. Point, 301 Ga. App. 333, 687 S.E.2d 617 (2009).
In breach-of-contract actions in all cases where an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery. Goody Prods. v. Dev. Auth. of Manchester, 320 Ga. App. 530, 740 S.E.2d 261 (2013).
Prejudgment interest award not required.
- Although O.C.G.A. § 13-6-13 authorizes a separate award of prejudgment interest, the law does not require such an award. T & R Custom, Inc. v. Liberty Mut. Ins. Co., 227 Ga. App. 144, 488 S.E.2d 705 (1997).
Award of prejudgment interest is for jury's discretion.
- Award of prejudgment interest under O.C.G.A. § 13-6-13 is a matter for the jury's discretion. American Family Life Assurance Co. v. United States Fire Co., 885 F.2d 826 (11th Cir. 1989).
In cases involving unliquidated damages, allowance of interest is within jury's discretion.
- It is error for trial judge in a case involving unliquidated damages to instruct jury that plaintiff is entitled to interest, since in such a case allowance of interest is a matter within jury's discretion. Smith v. Maples, 114 Ga. App. 529, 151 S.E.2d 815 (1966) but see Eastern Fed. Corp. v. Avco-Embassy Pictures Corp., 331 F. Supp. 1253 (N.D. Ga. 1971).
Although it is reversible error for judge to instruct jury that the jury must award interest in actions for unliquidated damages arising from breach of contract, a jury may, in the jury's discretion, increase immediate amount of damages found by an allowance of interest. Norair Eng'r Corp. v. Saint Joseph's Hosp., 147 Ga. App. 595, 249 S.E.2d 642 (1978).
When damages are unliquidated, the Georgia Court of Appeals has apparently relegated award of prejudgment interest to discretion of jury. United States ex rel. Delta Metals, Inc. v. R.M. Wells Co., 497 F. Supp. 541 (S.D. Ga. 1980).
Increasing damages by allowing interest.
- In action for breach of contract, where damages are not liquidated, interest is not recoverable as such; but jury in the jury's discretion may increase immediate amount of damages found by an allowance of interest. Bennett v. Tucker & Pennington, 32 Ga. App. 288, 123 S.E. 165 (1924); United States ex rel. Delta Metals, Inc. v. R.M. Wells Co., 497 F. Supp. 541 (S.D. Ga. 1980).
Compound interest not permitted in breach of contract.- In this breach of contract action, it was error to compound the interest because the parties' agreement stated that late amounts under the contract would "be subject to interest at the lesser of 1.5% per month or the maximum allowed by applicable law." Caradigm USA LLC v. PruittHealth, Inc., 964 F.3d 1259 (11th Cir. 2020).
Jury instructions.
- Court does not err in instructing the jury that the jury may award interest from the time of the theft of a bailed good until trial when the jury finds that the sum awarded is a liquidated sum. Wheels & Brakes, Inc. v. Capital Ford Truck Sales, Inc., 167 Ga. App. 532, 307 S.E.2d 13 (1983).
Trial court did not err in charging the jury regarding interest since the jury in the court's discretion could increase the immediate amount of damages found by an allowance of interest. Pulte Home Corp. v. Woodland Nursery & Landscapes, Inc., 230 Ga. App. 455, 496 S.E.2d 546 (1998).
Prejudgment interest may not be obtained in breach of contract action for unliquidated damages. Eastern Fed. Corp. v. Avco-Embassy Pictures Corp., 331 F. Supp. 1253 (N.D. Ga. 1971).
Section applicable to breach of warranty actions. Snowden v. Waterman & Co., 110 Ga. 99, 35 S.E. 309 (1900).
Section applied to action for unpaid wages. Ansley v. Jordan, 61 Ga. 482 (1878).
In an action for breach of contract to recover unpaid wages, when the amount of wages due was contested by the employer, recovery of pre-judgment interest by the employee was governed by O.C.G.A. § 13-6-13. Surgijet, Inc. v. Hicks, 236 Ga. App. 80, 511 S.E.2d 194 (1999).
It was not necessary for an employee to have made a demand for the payment of the salary claimed and to have been denied payment for the employee to be entitled to recover pre-judgment interest. Surgijet, Inc. v. Hicks, 236 Ga. App. 80, 511 S.E.2d 194 (1999).
An action for unpaid sales commissions under an employment contract was not based on a commercial account and the trial court erred in charging the jury that the jury could award prejudgment interest at the rate of 1.5 percent a month. Southern Water Techs., Inc. v. Kile, 224 Ga. App. 717, 481 S.E.2d 826 (1997).
Section applicable where bailee refuses to deliver property bailed. Garrard v. Dawson, 49 Ga. 434 (1873).
Application of section to tort actions.
- See Western & A.R.R. v. Brown, 102 Ga. 13, 29 S.E. 130 (1897).
Prejudgment interest not authorized in tort action.
- Suit to recover the down payment made under a purchase agreement that was rescinded for fraud was a tort action; thus, the trial court erred in awarding interest under O.C.G.A. § 13-6-13. H & H Subs, Inc. v. Lim, 223 Ga. App. 656, 478 S.E.2d 632 (1996).
Trial court properly concluded that the plaintiff did not have a valid claim for prejudgment interest under O.C.G.A. § 13-6-13 because the plaintiff did not base claims upon any fiduciary duty imposed in limited liability company agreements but instead based claims upon fiduciary duties imposed by default under Delaware law; thus, the default fiduciary duties at issue did not arise from any contractual right, and prejudgment interest would not have been available under § 13-6-13. Miller v. Lynch, 351 Ga. App. 361, 830 S.E.2d 749 (2019), cert. denied, No. S19C1614, 2020 Ga. LEXIS 152 (Ga. 2020), cert. denied, No. S19C1615, 2020 Ga. LEXIS 148 (Ga. 2020).
In a legal malpractice action, the trial court erred when the court authorized the recovery of prejudgment interest because the holding company did not include a breach of contract claim in the company's suit and neither side pointed to any specific contract in the record which might ground a claim for prejudgment interest. Alston & Bird LLP v. Hatcher Management Holdings, LLC, 355 Ga. App. 525, 843 S.E.2d 613 (2020).
The fair rule to be applied in awarding interest in building contracts is to ascertain the stated debt due at a certain time and deduct therefrom a reasonable amount for remedying defects. The former should bear interest from date it is ascertained or demanded; the latter should bear interest only from time dispute is resolved, even if it is at trial. J.A. Jones Constr. Co. v. Greenbriar Shopping Ctr., 332 F. Supp. 1336 (N.D. Ga. 1971), aff'd, 461 F.2d 1269 (5th Cir. 1972).
Damages for time value of money.
- In a breach of trust action, the jury properly included "damages for the time value of money" as part of the measure of damages. Sims v. Heath, 258 Ga. App. 681, 577 S.E.2d 789 (2002), overruled on other grounds by Rockdale Hospital, LLC v. Evans, 306 Ga. 847, 834 S.E.2d 77 (2019)(Unpublished).
Cited in Blalock v. Phillips, 38 Ga. 216 (1868); Newton Mfg. Co. v. White, 53 Ga. 395 (1874); Tifton T. & G. Ry. v. Butler, 4 Ga. App. 191, 60 S.E. 1087 (1908); Whitlock v. Mozley & Co., 142 Ga. 305, 82 S.E. 886 (1914); Happ Bros. Co. v. Hunter Mfg. & Comm'n Co., 145 Ga. 836, 90 S.E. 61 (1916); Farm Prods. Co. v. Eubanks, 29 Ga. App. 604, 116 S.E. 327 (1923); Callaway v. Barmore, 32 Ga. App. 665, 124 S.E. 382 (1924); Benton v. Roberts, 41 Ga. App. 189, 152 S.E. 141 (1930); Southern Cotton Oil Co. v. Raines, 171 Ga. 154, 155 S.E. 484 (1930); Atlanta C.L.R.R. v. Tifton Produce Co., 179 Ga. 624, 176 S.E. 624 (1934); Merchants Ins. Co. v. Lilgeomont, Inc., 84 F.2d 685 (5th Cir. 1936); Powell v. Bussell, 64 Ga. App. 42, 12 S.E.2d 152 (1940); State Hwy. Dep't v. Knox-Rivers Constr. Co., 117 Ga. App. 453, 160 S.E.2d 641 (1968); Norair Eng'r Corp. v. Erickson's, Inc., 152 Ga. App. 489, 263 S.E.2d 165 (1979); Horne v. Drachman, 247 Ga. 802, 280 S.E.2d 338 (1981); Williamson v. Bank Bldg. & Equip. Corp. of Am., 162 Ga. App. 295, 291 S.E.2d 124 (1982); Gregory v. Townsend Roofing Co., 163 Ga. App. 836, 296 S.E.2d 154 (1982); Reahard v. Ivester, 188 Ga. App. 17, 371 S.E.2d 905 (1988); Typo-Repro Servs., Inc. v. Bishop, 188 Ga. App. 576, 373 S.E.2d 758 (1988); Vulcan Life Ins. Co. v. Davenport, 191 Ga. App. 79, 380 S.E.2d 751 (1989); Stratton Indus., Inc. v. Northwest Ga. Bank, 191 Ga. App. 683, 382 S.E.2d 721 (1989); Jim Ellis Atl., Inc. v. McAlister, 198 Ga. App. 94, 400 S.E.2d 389 (1990); Lofty v. Fuller, 223 Ga. App. 95, 477 S.E.2d 30 (1996); Westchester Specialty Ins. Servs., Inc. v. United States Fire Ins., (11th Cir. 1997); Colonial Bank v. Boulder Bankcard Processing, Inc., 254 Ga. App. 686, 563 S.E.2d 492 (2002).
RESEARCH REFERENCES
Am. Jur. 2d.
- 22 Am. Jur. 2d, Damages, § 154 et seq. 45 Am. Jur. 2d, Interest and Usury, §§ 1, 34, 40, 339 et seq., 344, 345.
C.J.S.- 25 C.J.S., Damages, §§ 1, 2, 10 et seq., 80 et seq., 154 et seq., 235 et seq., 350.
ALR.
- Reduction of claim under contract as affecting right to interest, 3 A.L.R. 809; 89 A.L.R. 678.
Rate of exchange to be taken into account in assessing damages for breach of contract, 50 A.L.R. 1273; 105 A.L.R. 640.
Rights as between vendor and vendee under land contract in respect of interest, 75 A.L.R. 316; 25 A.L.R.2d 951.
Rate of interest after maturity on contract naming rate but not employing term "until paid," or similar phrase, 75 A.L.R. 399.
Interest on recovery for period before judgment in action for money loss caused by fraud or duress, 171 A.L.R. 816.
Interest as element of damages recoverable in action for breach of contract for the sale of a commodity, 4 A.L.R.2d 1388.
Rights as between vendor and vendee under land contract in respect of interest, 25 A.L.R.2d 951.
Measure and elements of sublessee's damages recoverable from sublessor for latter's failure to exercise option to renew his lease, 94 A.L.R.2d 1345.
Measure of damages for breach of contract to will property, 65 A.L.R.3d 632.