Friday, December 28, 2007

Prejudgment interest in South Carolina

In Dixie Bell, Inc. v. Redd, a breach of contract action arose when the parties failed to reach an agreement on the purchase price of Dixie Belle’s interest in another company. The case was tried to a jury and the jury returned a $100,000 verdict for Dixie Belle. The trial court awarded prejudgment interest on this sum. The Court of Appeals reversed. The Court held that prejudgment interest was improper because it has not been pled and that Dixie Belle’s damages,were unliquidated. In South Carolina prejudgment interest is only allowed on a liquidated sum. The claim was unliquidated because:

(1) there was no agreement between the parties as to a sum certain, (2) it could not be reduced to a sum certain by computation or formula, (3) the purchase price was not contractually stipulated, (4) it is not reduced to a sum certain by operation of law or a controlling statute, and (5) it could only be reduced to certainty by a jury determination. Furthermore, the conditions existing at the time the claim arose did not fix the measure of recovery.

On the whole, the opinion is a good discussion of the law of prejudgment interest in South Carolina.

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