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PUBLIC LAWS OF MAINE
First Regular Session of the 121st

CHAPTER 460
H.P. 835 - L.D. 1132

An Act To Simplify Calculation of Legal Interest

     Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and

     Whereas, the unification of the District Court and the Superior Court became effective on January 1, 2001; and

     Whereas, since that date, there has been ambiguity and confusion regarding the proper methodology for calculating prejudgment and post-judgment interest; and

     Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 10 MRSA §1113, sub-§4, as enacted by PL 1993, c. 461, §1, is amended to read:

     4. Delayed payments. Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection 3, the owner shall pay the contractor interest on any unpaid balance due beginning on the 21st day, at an interest rate equal to that specified in Title 14, section 1602-A, subsection 2 1602-C.

     Sec. 2. 10 MRSA §1114, sub-§4, as enacted by PL 1993, c. 461, §1, is amended to read:

     4. Delayed payments. Notwithstanding any contrary agreement, if any progress or final payment to a subcontractor or material supplier is delayed beyond the due date established in subsection 2 or 3, the contractor or subcontractor shall pay its subcontractor or material supplier interest on any unpaid balance due beginning on the next day, at an interest rate equal to that specified in Title 14, section 1602-A, subsection 2 1602-C.

     Sec. 3. 14 MRSA §1502-D, as amended by PL 1989, c. 360, is further amended to read:

§1502-D. Taxing of costs; hearing

     The clerk shall set costs under section 1502-B and interest under section 1602 1602-B to the extent they appear from the record. The prevailing party or the prevailing party's attorney may submit a bill of costs for all other costs or interest to the court not later than 10 days after entry of judgment and serve copies on all parties who have appeared and may be required to pay these costs. Any party required to pay all or any part of these costs, except a party who is defaulted and has not appeared, may, within 10 days after the date of service, challenge any items of cost or interest and request review by the court. The prevailing party shall, within 10 days after a challenge, submit to the court any vouchers or other records verifying any challenged items of cost or interest. Either side may request oral argument and submit affidavits and briefs. An evidentiary hearing on the reasonableness of costs or interest will be held only when the judge determines that there exists a substantial need for the hearing and the amount of challenged costs or interest are substantial. If the presiding judge determines that the imposition of costs will cause a significant financial hardship to any party, the judge may waive all or part of the costs with respect to that party.

     Sec. 4. 14 MRSA §1602, as amended by PL 2001, c. 471, Pt. D, §13, is repealed.

     Sec. 5. 14 MRSA §1602-A, as amended by PL 2001, c. 471, Pt. D, §14, is repealed.

     Sec. 6. 14 MRSA §§1602-B and 1602-C are enacted to read:

§1602-B. Interest before judgment

     1. In small claims. In small claims actions, prejudgment interest is not recoverable unless the rate of interest is based on a contract or note.

     2. On contracts and notes. In all civil and small claims actions involving a contract or note that contains a provision relating to interest, prejudgment interest is allowed at the rate set forth in the contract or note.

     3. Other civil actions; rate. In civil actions other than those set forth in subsections 1 and 2, prejudgment interest is allowed at the one-year United States Treasury bill rate plus 3%.

     4. Stated rate. When prejudgment interest is awarded pursuant to subsection 2 or 3, the applicable rate must be stated in the judgment.

     5. Accrual; suspension; waiver. Prejudgment interest accrues from the time of notice of claim setting forth under oath the cause of action, served personally or by registered or certified mail upon the defendant until the date on which an order of judgment is entered. If a notice of claim has not been given to the defendant, prejudgment interest accrues from the date on which the complaint is filed. In actions involving a contract or note that contains a provision relating to interest, the rate of interest is fixed as of the time the notice of claim is given or, if a notice of claim has not been given, as of the date on which the complaint is filed. If the prevailing party at any time requests and obtains a continuance for a period in excess of 30 days, interest is suspended for the duration of the continuance. On petition of the nonprevailing party and on a showing of good cause, the trial court may order that interest awarded by this section be fully or partially waived.

     6. Effect on post-judgment interest. This section does not affect post-judgment interest imposed by section 1602-C. Prejudgment interest may not be added to the judgment amount in determining the sum upon which post-judgment interest accrues.

     7. Rate on accrual of interest prior to July 1, 2003. Notwithstanding subsection 3, for actions in which the interest begins to accrue, as determined pursuant to subsection 5, prior to July 1, 2003, the rate of prejudgment interest on civil actions other than those set forth in subsection 2 is as follows:

§1602-C. Interest after judgment

     1. Rate. In all civil and small claims actions, post-judgment interest is allowed at a rate equal to:

The applicable post-judgment interest rate must be stated in the judgment, except for judgments in small claims actions.

     2. Accrual; suspension; waiver. Post-judgment interest accrues from and after the date of entry of judgment and includes the period of any appeal. In actions involving a contract or note that contains a provision relating to interest, the rate of interest is fixed as of the date of judgment. If the prevailing party at any time requests and obtains a continuance for a period in excess of 30 days, interest is suspended for the duration of the continuance. On petition of the nonprevailing party and on a showing of good cause, the trial court may order that interest awarded by this section be fully or partially waived.

     Sec. 7. 14 MRSA §7487, as enacted by PL 1999, c. 109, §1, is amended to read:

§7487. Interest

     A person who is awarded a money judgment in a small claims action is entitled to post-judgment interest in accordance with section 1602-A 1602-C.

     Sec. 8. 14 MRSA §8115, sub-§2, as enacted by PL 1977, c. 2, §2, is amended to read:

     2. Subdivision's plan for payment. In the event that a political subdivision has not procured insurance, the trial judge may accept a reasonable plan for the payment of the amount of the judgment. A payment plan shall may not exceed 5 years, and may include interest at the rate provided in section 1602 1602-C.

     Sec. 9. 18-A MRSA §3-806, sub-§(d), as amended by PL 1997, c. 202, §1, is further amended to read:

     (d) Unless otherwise provided in any judgment in another court entered against the personal representative, allowed claims bear prejudgment interest at the rate specified in Title 14, section 1602, subsection 1, paragraph A 1602-B for the period commencing 60 days after the time for original presentation of the claim has expired unless based on a contract making a provision for interest, in which case they bear interest in accordance with that provision.

     Sec. 10. 22 MRSA §2172, sub-§3, ¶B, as enacted by PL 1991, c. 837, Pt. A, §49, is amended to read:

     Sec. 11. 22 MRSA §2498, sub-§3, ¶B, as enacted by PL 1991, c. 591, Pt. J, §5, is amended to read:

     Sec. 12. 22 MRSA §7946, sub-§2, as amended by PL 1989, c. 747, §2, is further amended to read:

     2. Collection of penalties; interest. Long-term care facilities that are fined pursuant to this chapter are required to pay the department the amount of the penalties. Penalties may be collected by the department by the offset of any reimbursement due the facility, or by any other method authorized by law. An appeal of the department's decision to penalize a long-term care facility stays the collection of any penalties. All penalties are to be assessed for each day that the facility is or was out of compliance and are to be collected with interest accruing at the rate set by Title 14, section 1602-A 1602-C. An appeal of the department's decision to penalize a long-term care facility does not stay the assessment of any penalties or interest as long as the long-term care facility continues to be in violation of any requirement of section 7943.

     Sec. 13. Application. This Act applies to judgments entered on or after July 1, 2003.

     Emergency clause. In view of the emergency cited in the preamble, this Act takes effect July 1, 2003.

Effective July 1, 2003.

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