Prejudgment Interest Available on Unliquidated Contract-Based Claims

By:  Elizabeth Ryan Cano

Questions about whether and when Nebraska plaintiffs can recover prejudgment interest for unliquidated breach-of-contract claims have long puzzled both litigants and courts. Nebraska has two statutes addressing prejudgment interest—one general statute and one specific to certain breach-of-contract claims. See Neb. Rev. Stat. § 45-103.02; Neb. Rev. Stat. § 45-104. While each statute appears clear on its face, reconciling the two statutes has proven difficult. The confusion has been over whether these two statutes provide independent ways to recover prejudgment interest or whether Neb. Rev. Stat. § 45-103.02 creates a set of requirements that applies to all claims for prejudgment interest, including those contract-based claims under Neb. Rev. Stat. § 45-104.

In Weyh v. Gottsch, 303 Neb. 280 (2019), the Nebraska Supreme Court definitively resolved these issues. Recognizing the “competing and contradictory lines of authority” in its jurisprudence, the Nebraska Supreme Court made clear that Neb. Rev. Stat. § 45-104 provides an independent mechanism for recovering prejudgment interest in breach-of-contract cases. In short, a plaintiff can recover prejudgment interest on some categories of contract-based claims, even if those claims are unliquidated.

The general rule under Nebraska law is that prejudgment interest can be recovered only for liquidated claims. See Neb. Rev. Stat. § 45-103.02. Claims are liquidated only when both liability and the amount of recoverable damages are beyond reasonable dispute. The only exception to § 45-103.02’s rule that prejudgment interest is unavailable for unliquidated claims applies only when a plaintiff makes a settlement demand and then ends up recovering a verdict that exceeds the demand.

But § 45-103.02 is not the only statute that addresses the recovery of prejudgment interest. Nebraska also has a statute, which long predates the current version of § 45-103.02, authorizing recovery of prejudgment interest on four categories of contract-based claims. Neb. Rev. Stat. § 45‑104. When § 45-104 applies, interest is recoverable at 12% per annum or an amount agreed on by the parties. By its own terms, § 45-104 has no requirement that claims be liquidated to recover prejudgment interest.

The issue troubling courts and litigants alike has been how these two statutes interact. Can a plaintiff recover prejudgment interest on a breach-of-contract claim under § 45-104, even if the claim is unliquidated? Or does § 45-103.02 apply to all claims for prejudgment interest? Previous decisions from Nebraska’s appellate courts gave inconsistent answers to these questions. The Nebraska Supreme Court at times suggested that § 45-103.02 provided the only way to recover prejudgment interest, without addressing whether § 45-104 provided an independent way to recover prejudgment interest. See, e.g., Roskop Dairy, L.L.C. v. GEA Farm Techs., Inc., 292 Neb. 148 (2015).

Recognizing that its previous jurisprudence had been inconsistent, the Weyh court squarely confronted how these statutes interact. It concluded that § 45-104 provides a “separate and independent means of recovering prejudgment interest.” 303 Neb. at 283. When a claim falls within the scope of § 45-104, there is no need to show that a claim is liquidated to recover prejudgment interest.

Nebraska law is now clear: prejudgment interest is available at the rate of 12% per annum (or an amount agreed to by the parties) on any claim for (1) money due on any instrument in writing; (2) settlement of the account from the day the balance shall be agreed upon; (3) money received to the use of another and retained without the owner’s consent, express or implied, from the receipt thereof; and (4) money loaned or due and withheld by unreasonable delay of payment. Neb. Rev. Stat. § 45-104. This is true even if either liability or the amount of damages is subject to genuine dispute. While many claims within the scope of § 45-104 are liquidated, not all are. The unliquidated claims are those for which the award of prejudgment interest will be most significant because of the time spent in litigation. For example, in Weyh, the prejudgment interest awarded at 12% amounted to $ 460,210.66 on a claim of just over $1.2 million. This may change the calculus for litigants considering prolonged litigation to dispute contract-based claims.