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Sunwest Bank of Albuquerque3/10/1994
MONTGOMERY, Chief Justice.
The principal issue in this case, discussed later in this opinion, relates to a subject arising frequently in New Mexico caselaw--prejudgment interest. We seek to clarify the circumstances under which each of the two New Mexico statutes governing an award of prejudgment interest, NMSA 1978, Sections 56-8-3 (Repl. Pamp. 1986) and 56-8-4(B) (Cum. Supp. 1993), is applied.
The case consists of an appeal and a cross-appeal from a judgment awarding a bank restitution for a mistaken payment. On appeal, the recipient of the payment argues that the trial court misapplied the doctrine of unjust enrichment. On cross-appeal, the bank argues that the trial court erred by failing to award prejudgment interest and by awarding postjudgment interest at a variable rate. We affirm in part, reverse in part, and remand for further proceedings.
I. FACTS
In October 1964, Mona Florence and Sue Rutter were joint tenants in checking account No. 24-1987-4 ("the Account") at Sunwest Bank of Albuquerque ("the Bank"). Mona Florence married Michael Colucci ("Colucci") in 1978, and at some point she and Ms. Rutter directed Sunwest Bank to add Colucci as a P.O.D. (payable on death) beneficiary to the Account. Mona Florence Colucci died in May 1990.
After his wife's death, Colucci called the Bank about the Account and was told that the money in the Account did not belong to him. On June 5, 1990, Colucci went to the Bank and spoke to Arnold Cordova, who was relieving the branch manager during the manager's vacation, about withdrawing the funds in the Account. Cordova mistakenly reviewed the signature card to another account, No. 24-79-001, a joint account between Colucci and Mrs. Colucci, rather than the correct card for the joint account (the Account) between Mrs. Colucci and Ms. Rutter. He then issued a cashier's check for the balance in the Account, $12,256.51, and gave it to Colucci.
On September 14, 1990, the Bank filed a complaint against Colucci for money paid by mistake and unjust enrichment, requesting interest on the money due from the date of the mistaken payment. The Bank claimed that it had mistakenly paid Colucci funds from the Account and that the money in that
account belonged to Ms. Rutter, not Colucci, upon Mrs. Colucci's death. The court conducted a bench trial in April 1992 and in May entered judgment in favor of the Bank. The court concluded that the balance in the Account had been paid to Colucci by mistake and that he had been unjustly enriched. Colucci was ordered to pay the Bank $12,256.31, with postjudgment interest to be calculated "at a variable rate equal to the rate paid by [the Bank] to the Federal Reserve for funds borrowed." No prejudgment interest was awarded. Colucci, by the personal representative of his estate, appeals from the judgment; and the Bank cross-appeals.
On appeal, Colucci argues that (1) the trial court misapplied the doctrine of unjust enrichment because it failed to consider whether Colucci was in fact unjustly enriched and whether the enrichment was at the Bank's expense, and (2) that the Bank should not be entitled to restitution because the harm was caused by its repeated negligence and failure to exercise due diligence. We affirm the trial court's judgment in favor of the Bank.
The Bank contends on cross-appeal that the trial court erred in refusing to permit it to recover prejudgment interest and in setting postjudgment interest at a variable rate. We reverse the trial court on the Bank's cross-appeal and remand for further proceeding
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