- Posted by Brett M. Hill
- On January 2, 2008
In State of Washington Department of Corrections v. Fluor Daniel, Inc., 130 Wn. App. 629, 126 P.3d 52 (Dec. 12, 2005), the Division One Court of Appeals held that prejudgment interest prior to entry of judgment on an arbitration award is not recoverable when the damages at issue in the arbitration were unliquidated.
Fluor Daniel, Inc. and the Department of Corrections (“DOC”) entered into a contract for the development of the Stafford Creek Corrections Center. A lawsuit arose between Fluor and the DOC. The parties agreed to stay the litigation and submit their remaining disputes to binding arbitration. On January 18, 2005, the arbitrator issued his decision that Fluor was entitled to payment of approximately $6 million. Three days later, Fluor moved for an order confirming the arbitration award and for entry of judgment. Fluor characterized the arbitrator’s award as a liquidated sum, and asked for prejudgment interest from the date of the arbitrator’s award. The Superior Court granted Fluor’s motion on February 8, 2005, and awarded prejudgment interest dating back to January 18. The DOC appealed. The Court of Appeals reversed.
An arbitration award is not the same thing as a final judgment of a court. The Court reached this conclusion primarily because Washington’s statutory scheme for arbitration, RCW 7.04, provides an elaborate process for the confirmation, vacation, correction, or modification of an arbitration award in court and for the entry of a judgment which conforms with the Court’s final determination. The Court determined that the Legislature did not consider an arbitration award to be the equivalent of a final judgment of a court from which interest may run. RCW 4.56.110(4). The Court determined that an arbitrator’s award is more analogous to a jury verdict. Significant to the Court’s decision was that Fluor and the DOC agreed the damages awarded by the arbitrator were unliquidated, and Fluor did not seek prejudgment interest for the period prior to the arbitration award.