The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.
Before the court is the motion of Petroleum Insurance Limited ("P.I.L.") to modify this court's July 24, 1990 judgment. The motion is granted in part, as set forth below.
On March 16, 1978, the supertanker Amoco Cadis went down in heavy Atlantic seas with a full load of crude, dumping its 220,000 tons of oil on the north coast of France. The aftermath spawned litigation that was consolidated before this court. A bifurcated trial was held that took more than eight years to complete, resulting in the court's final judgment on July 24, 1990.
As part of that final judgment, the court held that the parties should calculate interest on the basis of a 360 day "bank year."
An appeal was had. In a per curiam opinion, the Seventh Circuit said in part, "the computation of damages is affirmed with the following exceptions: . . . . 5. P.I.L. is entitled to simple prejudgment interest at the rate of 12.31% per annum from March 16, 1978." In re Oil Spill By the Amoco Cadiz Off the Coast of France On March 16, 1978, 954 F.2d 1279, 1337 (7th Cir. 1992) (hereinafter "Cadiz"). No modification of the court's holding that the 360 day year apply, was made.
On March 4, 1992, P.I.L. moved to modify the court's July 24, 1990 judgment to include a prejudgment interest as required by the Seventh Circuit. The parties agreed that the 360 day year applied and that the amount of principal at issue is $ 21,748,577.
P.I.L. calculated interest as follows: "the sum of $ 21,748,577.44 . . . with interest thereon at the rate of 12.31% . . . per annum simple interest from March 16, 1990 as provided by law in the amount of U.S. $ 33,569,738.13 . . . ."
Cadiz, 954 F.2d at 1337.
P.I.L. replied that Amoco failed to take into account the holding of this court that the 360 day year applied. P.I.L. calculated whole years in a manner similar to that of Amoco except that instead of assuming that a 360 day year equaled a calendar 365 or 366 day year, they calculated the interest based on the ratio of the actual number of days in a year over 360. This ratio (for each of the first twelve years) P.I.L. multiplied by 12.31% and multiplied that number by the twenty-one million dollar principal amount to arrive at its figure for the first twelve years. Then, P.I.L. explained, the ratio of 130/360 was multiplied by 12.31% and the principal to reach a figure for 1990. The sum total was $ 33,569,738.
Any review of this case reveals that nothing here is done with ease. Calculation of prejudgment interest, even after the rate has been judicially established, is no exception. Both sets of parties vigorously argue their points because every day taken from or added to their calculation means a loss or gain of more than $ 7,000. For the court to determine how the prejudgment interest is to be calculated, the court relies heavily on the holdings of the Seventh Circuit in Cadis and affirmed conclusions of this court for these must be followed as the law of the case. See Cadiz, 954 F.2d at 1291.
In common nomenclature, everyone understands what a year is. A girl celebrating her second birthday is commonly understood by her parents to have lived 730 (365 x 2) days. Even though this calculation may be off by as much as a day, for nearly all purposes, this calculation suffices. Two unique problems arise in this case. First, every day makes a difference here. Second, the English language uses more than one definition of a year, and more than one of those has been applied to this case.
What the Court of Appeals said is worth repeating, "P.I.L. is entitled to simple prejudgment interest at the rate of 12.31% per annum from March 16, 1978." Cadiz, 954 F.2d at 1337 (emphasis added). What is "per annum"? Henry Black defines the phrase as "By the year; annually; yearly." Black's Law Dictionary 1022 (5th ed. 1979). Webster uses a similar definition, "in or for each year." Webster's Ninth New Collegiate Dictionary 872 (1986). But this definition leaves the question of what is a year?
There are a wide variety of definitions of year. One definition is most precise, "a division in time equal to about 365 days, 5 hours, 48 minutes, and 46 seconds, representing the interval between one vernal equinox and the next." Webster's Encyclopedia Unabridged Dictionary of the English Language 1654 (1989). This is commonly known as a calendar year but more accurately termed a solar year. Id. This common definition appears to be what the Seventh Circuit ...