When someone files a personal injury lawsuit in Colorado and wins at trial, the plaintiff may receive not only monetary damages, but interest on that amount starting from the date of the injury.

But what happens when the defendant appeals the judgment, goes all the way to the Supreme Court, and wins a new trial six years later?

By a 4-2 vote, the state’s justices last week found Colorado law was ambiguous about how much interest the Ford Motor Company owed to Forrest Walker, who suffered injuries from a 2009 vehicle accident. The majority concluded Ford owed 9% interest from the time of Walker’s injury through the first trial in 2013, and then a lower, market rate of interest during the more than half-decade until the case’s second jury trial.

In addition to eliminating roughly $1.8 million of the interest Ford owed after losing its second trial, the Supreme Court case garnered the attention of lawyer groups representing plaintiffs and defendants, each accusing the other of securing a “windfall” depending on the court’s interpretation of the interest rate.

“Personal injury suits are not brought exclusively against so-called deep-pocket defendants,” wrote the Colorado Defense Lawyers Association and the Colorado Civil Justice League in advocating for Ford.

The decision ultimately interpreted what the state legislature intended in describing how interest rates should apply to monetary judgments on appeal. All parties agreed Ford should pay a set rate of 9% interest from the date of Walker’s accident injuries through the first trial in Boulder County, where a jury awarded Walker $2.9 million.

But Ford appealed the judgment, arguing the trial judge provided faulty instructions to the jury. In November 2017, the Supreme Court agreed with the company and ordered a new trial. The retrial took place in 2019 and the jury again sided against Ford, awarding $2.9 million to Walker.

Walker argued to District Court Judge Nancy W. Salomone that he should receive only the 9% prejudgment interest rate, stretching from his 2009 injury date all the way through the second trial. Ford countered that once it had appealed the 2013 judgment, the law provided for a market rate of interest, which at the time ranged from three to five percent.

Salomone agreed with Walker’s interpretation and awarded him $3.6 million in interest, an amount higher than the entire jury verdict.

As written, state law requires that the market rate of interest apply from the date of the judgment “through the date of satisfying the judgment” when a personal injury verdict is appealed. The same principle applies if an appeals court upholds the judgment or sends it back to the trial court with directions to modify it.

The law does not, however, outline what should happen when an appellate court reverses the outcome and orders a new trial. In Ford’s case, the answer to the question was worth $1.8 million in disputed interest payments.

A three-judge panel for the Court of Appeals believed Walker and Salomone were correct, and the question of which interest rate to apply depended upon the outcome of an appeal. Because the Supreme Court reversed the original judgment when it ordered a new trial, there was only one judgment in the case: the one from the 2019 trial. Therefore, the panel reasoned, the 9% interest rate was in effect from Walker’s injury date through the time of the one and only judgment.

Ford turned to the Supreme Court, arguing it should not have to pay a higher price merely for pursuing its ultimately-correct claim that the original jury instructions were legally problematic.

“Yes, Ford wanted a new trial it could win, but it mainly wanted a fair trial,” attorney Theresa Wardon Benz told the Supreme Court.

She outlined the legislature’s rationale for applying a market rate of interest after a judgment. A defendant who loses at trial and appeals a judgment could conceivably earn money when the market interest is higher than the 9% written into state law. Therefore, there would be an incentive to drag out an appeal and delay paying the judgment while interest accrues in the market. Likewise, if the market rate of interest is below the fixed rate, a losing defendant may opt against appealing, even if its claim has merit.

Therefore, Ford argued, applying the market rate on appeal and through a second trial is the only way to eliminate both financial incentives and disincentives to filing an appeal.

Walker took a different position. Ford, he said, wanted a new trial and got one. But that should not insulate the company from the risks of losing a second time.

“For ten years, Mr. Walker suffered the long-term effects of a traumatic brain injury — cognitive dysfunctions, processing speeds in the first percentile, and hypersensitivity to light and sound, while Ford held his $2.9 million,” attorney Evan P. Banker wrote to the Supreme Court. “For those ten years while Ford held the money to which Mr. Walker was rightly entitled, the legislatively prescribed remedy is interest at 9% per annum.”

The court’s majority believed both parties’ interpretation of the ambiguously-written law was reasonable, but that Ford’s was more persuasive.

“Walker offers no compelling explanation as to why the judgment debtor who fully succeeds on appeal (by obtaining a reversal of the judgment and a new trial) should pay the nine percent interest rate during the pendency of the appeal while the judgment debtor who is only partially successful on appeal (by obtaining a reversal of the judgment with instructions to enter a new money judgment on remand) should pay the lower market-based interest rate during the same timeframe,” wrote Justice Carlos A. Samour Jr. in the June 21 opinion.

In a single sentence, Samour cast aside the Court of Appeals’ reliance on the 2019 judgment as the one and only judgment in Walker’s lawsuit.

“That American jurisprudence generally treats reversed judgments as null and void is of no consequence,” Samour added.

Justice Monica M. Márquez, writing in dissent for herself and Justice Melissa Hart, criticized the majority for casually dismissing the notion of a single judgment.

“It is well established that when a judgment is reversed or vacated, it ceases to exist for all purposes,” Márquez wrote.

She believed the majority’s interpretation necessarily required the addition of words that appeared nowhere in the statute, distinguishing between “the appealed judgment” and “the final judgment,” where the law simply referred to “the judgment.”

“The only existing judgment here is the 2019 judgment, which Ford has not appealed. There is no postjudgment interest to calculate,” she concluded.

Justice Maria E. Berkenkotter did not participate in the case. She was the original trial judge whose erroneous jury instructions prompted the second trial.