dissenting. The majority has reversed itself and now remands the matter to the “trier of fact” to reconsider the compound-interest question. By its second remand, the majority sends the unmistakable message that henceforth prejudgment interest in condemnation cases should be compounded to afford “just compensation.” I cannot agree with that decision.
On October 11, 1988, the jury awarded appellant Wilson $29,000 for a triangular piece of land taken by the City of Fayetteville. The trial court denied prejudgment interest. Wilson appealed to the court of appeals on the prejudgment-interest point, and that court reversed the decision and remanded to the trial court for a determination of a proper rate of interest.
The trial court conducted a hearing, received evidence, heard arguments, and made its decision to award prejudgment interest of $30,718.32 as of October 11, 1988, which was more than the value of the land awarded by the jury. In doing so, the court denied compound interest and awarded only simple interest. It then averaged local CD rates to arrive at the appropriate rate and the resulting $30,718.32. The total award to Wilson as of October 11, 1988, became $59,618.32.
The majority apparently still agrees with the original decision of this court affirming the trial court in its decision that average CD rates in .the area comprise the proper rate of interest. It remands solely for the purpose of deciding whether that rate should be compounded to afford just compensation. Who should decide the compound interest question? The opinion states that the trier of fact should, presumably a jury unless waived by the parties. The trial court, of course, has already considered the prejudgment-interest issue twice. Wilson would have nothing to lose by requesting a jury determination.
At the hearing, the trial court rules as follows on the compound interest question:
Now, we had one issue [which] was whether or not he is entitled to simple or compound interest. I ruled in a letter opinion February 7th that based upon the Vick case, cited at 284 Ark. 372, the Supreme Court used the words “simple interest” in that case, although they were not specifically addressing that issue. But based upon that language, in my opinion, simple interest is the way to figure the interest and not compounding it. Your objections to that will be noted, Mr. Stanley, on Mr. Wilson’s behalf.
The court looked to dictum in Arkansas State Highway Comm’n v. Vick, 284 Ark. 372, 682 S.W.2d 731 (1985) for guidance and made a decision not to compound interest.
We have held that the award of prejudgment interest is a matter of law, and there is no right to trial by jury on the issue. USAA Life Ins. Co. v. Boyce, 294 Ark. 575, 745 S.W.2d 136 (1988); Hopper v. Denham, 281 Ark. 84, 661 S.W.2d 379 (1983); Wooten v. McClendon, 272 Ark. 61, 612 S.W.2d 105 (1981). The trial judge in this case followed the law. Nowhere in our statutes or constitution is compound interest authorized. Indeed, the converse is true since both the statutes and constitution speak in terms of a six-percent-per-annum rate. Ark. Const. art. 19, § 13; Ark. Code Ann. § 27-67-316 (1987). In Arkansas State Highway Comm’n v. Vick, supra, we said that since a constitutional right was involved, the interest rate could exceed that specified by statute, and we allowed ten percent simple interest. We have never approved compound interest in condemnation cases. Before compound interest can be considered in determining a proper rate of interest for just compensation, there should be legislative authority for doing so. It represents a significant change.
The majority opinion decides that the award of compound interest is an issue of fact for the factfinder to decide and sends a clear signal that compound interest is appropriate. In doing so, it gives Wilson a third bite at the apple and reverses the trial court’s decision which was one of law and which followed our decision in Vick v. Arkansas Highway Comm’n, supra.
This decision sets us on a new and expensive course. I would deny the petition.
Hays and Glaze, JJ., join.