September 27 2011
DA 11-0061
IN THE SUPREME COURT OF THE STATE OF MONTANA
2011 MT 240
SCOTT DOUGLAS WEISS,
Petitioner and Appellee,
v.
RAYNA MARICE WEISS,
Respondent and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DR 08-1307
Honorable Ingrid Gustafson, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kenneth D. Tolliver, Matthew B. Gallinger, Tolliver Law Firm, P.C.,
Billings, Montana
For Appellee:
W. Corbin Howard, Attorney at Law, Billings, Montana
Submitted on Briefs: August 24, 2011
Decided: September 27, 2011
Filed:
__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1 Rayna Marice Weiss (Rayna) appeals from the order and judgment of the District
Court for the Thirteenth Judicial District, Yellowstone County, Montana, requiring Scott
Douglas Weiss (Scott) to pay Rayna $49,954.79 in interest on a $280,000 loan with
postjudgment interest accruing at the rate of 10% per annum until paid. Rayna appeals
the District Court’s determination that the principal of the loan was paid back in full and
the District Court’s subsequent calculation of interest. We affirm.
ISSUE
¶2 The dispositive issue on appeal is whether the District Court was correct in
deciding Scott’s nine loan repayments to Rayna, totaling $280,000, were appropriately
applied solely to the principal balance of the loan instead of first to the accrued interest.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Rayna and Scott met in 1990 and were married in 1993. Before marrying, they
signed a premarital agreement, which provided that in the event of a divorce, any
property separately held in one of their individual names would go to that person
individually. In 2000, Scott purchased an ownership interest in a brokerage service
(ownership interest) with $20,000 from Rayna and a $20,000 gift from Rayna’s parents.
He later purchased more ownership interest with the earnings from the initial ownership
interest and from his personal income. In 2004, Scott purchased additional ownership
interest with $50,000 borrowed from his 401(k) and $280,000 borrowed from Rayna.
These funds went into Scott’s separate checking account, from which he issued a check
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to purchase the ownership interest. All of the 40% of purchased ownership interest was
held solely in Scott’s name.
¶4 By December 3, 2007, Scott had repaid Rayna the entire $280,000 in nine
payments (with the exception of $0.10 which he later paid). The only written
documentation of the loan was a repayment schedule including the forecasted and actual
payments. With every payment, Scott provided Rayna with an updated printout of the
repayment schedule, which showed the deduction of his payments from the principal loan
amount. Rayna accepted Scott’s payments and the updated repayment schedules without
protest.
¶5 Scott petitioned for dissolution of the marriage in 2008. In 2009, the District
Court entered Findings of Fact, Conclusions of Law and Final Decree of Dissolution of
Marriage. Each party was awarded the assets in their separate names, the entire 40%
ownership interest was awarded to Scott, and the $280,000 loan from Rayna was deemed
an interest-free loan. Rayna appealed.
¶6 In 2010, this Court determined the $20,000 Rayna transferred to Scott in 2000 was
a gift, the 40% ownership interest was solely Scott’s, and the $280,000 Rayna transferred
to Scott in 2004 was a loan that required the payment of interest at the rate of 10% a year,
as per § 31-1-106(1), MCA. We remanded to the District Court for calculation of interest
at the rate of 10% a year on the $280,000 loan, from the time when Rayna transferred the
funds to Scott until the amount was paid in full. In re Marriage of Weiss, 2010 MT 188,
¶ 34, 357 Mont. 320, 239 P.3d 123 [hereinafter Weiss I]. Upon remand, the District
Court concluded Scott owed Rayna interest at a rate of 10% a year for the unpaid
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principal amounts for the life of the loan. Under this calculation, interest was calculated
on the unpaid principal until the principal was entirely paid off in accordance with the
repayment schedule. The District Court concluded that the accrued interest on the unpaid
principal amounted to $49,954.79.
¶7 Rayna appeals the District Court’s calculation of interest. Rayna argues the nine
repayments should have been applied first to the interest accrued as of those dates, with
any excess applied to the remaining principal. By this calculation, Rayna asserts there
remains $62,473.27 of unpaid principal and $18,502.36 of accrued interest since the last
payment on December 3, 2007, totaling $80,975.63 owed by Scott.
STANDARD OF REVIEW
¶8 Determining the method to be used to calculate interest in this appeal is an issue of
law. “This Court reviews issues of law to determine whether the district court’s
application or interpretation of the law is correct.” MacPheat v. Schauf, 2002 MT 23,
¶ 7, 308 Mont. 215, 41 P.3d 895 (citing Williams v. Zortman Mining, Inc., 275 Mont.
510, 512, 914 P.2d 971, 972-73 (1996)).
DISCUSSION
¶9 This is the second appeal by these parties to this Court. As decided by this Court
in the first appeal, Scott owed Rayna interest on the $280,000 loan at a rate of 10% a
year. According to § 31-1-103, MCA, “[w]henever a loan of money is made, it is
presumed to be made upon interest unless it is otherwise expressly stipulated at the time
in writing.” There was no express statement in writing regarding interest at the time of
the loan, and therefore, under Montana law, the loan was made upon interest.
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¶10 This Court further decided in the first appeal that because there was no express
contract in writing fixing the interest rate, the default interest rate under Montana law
fixes the interest rate at 10% a year after it becomes due. Section 31-1-106(1), MCA,
provides:
Except as otherwise provided by the Uniform Commercial Code, 31-1-111
and 31-1-112, or 31-1-817, unless there is an express contract in writing
fixing a different rate or a law or ordinance or resolution of a public body
fixing a different rate on its obligations, interest is payable on all money at
the rate of 10% a year after it becomes due on:
(a) any instrument of writing, except a judgment;
(b) an account stated;
(c) money lent or due on any settlement of accounts from the date on
which the balance is ascertained; and
(d) money received for the use of another person and detained from
that person.
¶11 These conclusions are incorporated into the instant case by the doctrine of the law
of the case, which applies to issues previously before this Court on subsequent
proceedings and appeals. In re Marriage of Becker, 255 Mont. 357, 360, 842 P.2d 332,
334 (1992). In Becker, we noted:
When this Court on appeal affirms in part the judgment of the District
Court, and remands for reconsideration other parts of the appeal, those parts
of the judgment which are affirmed become the law of the case and are
binding upon the trial court and the parties in subsequent proceedings on
remand. Once a decision has been rendered by this Court on a particular
issue between the same parties in a case, that decision is binding upon the
courts and the parties and cannot be relitigated in a subsequent appeal.
Becker, 255 Mont. at 360-61, 842 P.2d at 334 (citations omitted). Simply, on remand,
“[t]he trial court should examine the mandate and the opinion of the reviewing court and
proceed in conformity with the views expressed” by the appellate court, “as to any
question not presented or settled by such decision.” Zavarelli v. Might, 239 Mont. 120,
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125-26, 779 P.2d 489, 493 (1989). As Rayna correctly attests, the District Court was
required to adhere to this Court’s direction on remand to calculate interest owed at the
rate of 10% a year. We conclude it did.
¶12 The District Court originally determined Scott repaid Rayna the entire $280,000
principal of the loan prior to the dissolution. This Court subsequently affirmed that part
of the judgment in Weiss I. We then remanded “to the District Court for calculation of
interest at the rate of 10% a year from the date Rayna first transferred the funds to Scott
until the amount was paid in full.” Weiss I, ¶ 34 (emphasis added). Thus, the
determination by this Court that the entire loan was repaid is law of the case and is
dispositive of Rayna’s present argument that there remains due a portion of the loan
principal.
¶13 We now turn to the issue of interest calculation. Notably, the repayment schedule
did not contemplate interest, but rather specified that each payment be applied directly to
the principal of the loan. Scott provided Rayna with an updated printout of the
repayment schedule with each payment. Each time, Rayna accepted the payment and the
updated repayment schedule without protest. It wasn’t until December 2010 that Rayna
expressed a different viewpoint as to how the repayments should have been applied to the
loan. At that time, Rayna moved the court for entry of judgment against Scott for “the
principal amount of $62,473.27, together with interest accrued on such sum from
December 3, 2007, until paid.” These facts demonstrate that during the period of
repayment, Scott and Rayna implicitly agreed that each payment was to be applied to the
principal, not to interest accrued at the time of the payments.
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¶14 The District Court calculated the interest Scott owed Rayna at the rate of 10% a
year by applying the simple interest equation to the unpaid principal amounts during the
existence of the loan. The timeframe for the calculations was between November 16,
2004, when Rayna electronically transferred the $280,000 to Scott, and December 3,
2007, when Scott made the final payment to Rayna. The simple interest formula to
calculate interest, as used by Scott and confirmed by the District Court, appears to be:
Total amount of Remaining Number of days of
0.10 interest rate
interest owed = x principal x accumulated interest
365 days
between payments amount due since last payment
By adding together all of the total amounts of interest owed between payments, based on
the dates Scott made payments to Rayna on the principal, we determine the sum total
owed is $49,954.79.
¶15 Finally, Rayna argues that she is entitled to prejudgment interest on the $280,000
loan. However, in her brief on appeal, she states that if we agree with the District Court’s
decision, “the discussion is concluded,” and we need not further address her remaining
calculation arguments. We agree with this concession, and in light of the foregoing,
decline to consider or award prejudgment interest.
CONCLUSION
¶16 For the foregoing reasons, we conclude the District Court’s conclusions of law
were correct. The District Court correctly determined that the $280,000 loan was paid off
in full by Scott as of December 3, 2007, and its subsequent calculation of simple interest
on the loan was correct.
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¶17 The District Court judgment is affirmed.
/S/ PATRICIA COTTER
We concur:
/S/ JAMES C. NELSON
/S/ BETH BAKER
/S/ BRIAN MORRIS
/S/ JIM RICE
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