Skinner and Skinner

534

Argued and submitted September 22; decision of Court of Appeals reversed;

judgment of circuit court affirmed in part and reversed in part, and case

remanded to circuit court for further proceedings December 15, 2022

In the Matter of the Marriage of

Cynthia R. SKINNER,

nka Cynthia R. Davenport,

Petitioner on Review,

and

Andrew J. SKINNER,

Respondent on Review.

(CC 13DR02511) (CA A167584) (SC S068972)

522 P3d 528

On remand following an appeal, the trial court issued a modified judgment

that increased wife’s spousal support award, retroactively applying the increased

amount to past installment dates established by the original judgment. The

trial court imposed interest on that increased amount and husband objected to

the accrual of that interest from the date of the original judgment rather than

from the date of the modified judgment. The Court of Appeals reversed, holding

that the trial court could not impose prejudgment interest on a spousal support

installment award. Held: (1) Wife is entitled to post-judgment interest on the

increased spousal support award; and (2) that interest accrues from the date of

the original judgment.

The decision of the Court of Appeals is reversed. The judgment of the circuit

court is affirmed in part and reversed in part, and the case is remanded to the

circuit court for further proceedings.

En Banc

On review from the Court of Appeals.*

Andrew W. Newsom, Holtey Law LLC, Portland, argued

the cause and filed the briefs for petitioner on review.

Daniel S. Margolin, Margolin Family Law, Portland,

argued the cause and filed the brief for respondent on review.

NELSON, J.

The decision of the Court of Appeals is reversed. The judg-

ment of the circuit court is affirmed in part and reversed in

part, and the case is remanded to the circuit court for fur-

ther proceedings.

______________

* Appeal from Linn County Circuit Court, Thomas A. McHill, Judge. 314 Or

App 394, 498 P3d 311 (2021).

Cite as 370 Or 534 (2022) 535

NELSON, J.

This case arises from the dissolution of a marriage.

At issue is whether interest accrues on spousal support pay-

ments that are increased retroactively following an appeal.

In this case, the trial court increased wife’s spousal support

award on remand from the Court of Appeals in Skinner and

Skinner, 285 Or App 788, 398 P3d 419 (2017) (Skinner I),

added the additional amounts retroactively to past install-

ment dates, and ordered husband to pay interest on those

amounts. Husband appealed and the Court of Appeals

reversed, holding that the award of interest was improper.

Skinner and Skinner, 314 Or App 394, 498 P3d 311 (2021)

(Skinner II).

We allowed review and now conclude that wife is

entitled to statutory interest at nine percent per annum

on the additional amount that the trial court added to the

monthly support award in the original judgment, calculated

from the dates that those payments would have been due.

Accordingly, we reverse the decision of the Court of Appeals,

affirm in part and reverse in part the decision of the circuit

court, and remand this case to the circuit court for further

proceedings.

I. FACTS AND PROCEDURAL HISTORY

We draw the following facts from the record. In

2014, wife filed for dissolution of her marriage to husband.

At the trial to divide the parties’ assets and establish sup-

port awards for both wife and a child, wife requested, in rel-

evant part, $750 per month in transitional spousal support

for 60 months and $750 per month in maintenance spousal

support for an indeterminate period. The trial court entered

a general judgment (the “original 2014 judgment”) award-

ing wife, in relevant part, $750 per month in transitional

spousal support for 60 months, to begin on the date of the

2014 judgment (May 1, 2014), and $500 per month in main-

tenance spousal support for an indefinite period to begin

immediately after the transitional support ended (June 1,

2019). Wife appealed, challenging both the monthly amount

and the delayed commencement of the maintenance support

536 Skinner and Skinner

award.1 The Court of Appeals reversed and remanded,

holding that the trial court had misapplied the factors in

ORS 107.105(1)(d)(C), and thus erroneously calculated wife’s

maintenance support amount and postponed the mainte-

nance support payments until after the transition support

ended. Skinner I, 285 Or App at 797-98.

On remand in 2018, the trial court increased wife’s

maintenance support to $1,000 per month for 60 months,

with the first payment due on May 1, 2014, the same date

that the transitional support award became effective under

the original 2014 judgment. After 60 months, the mainte-

nance support would decrease to $750 per month indefi-

nitely. The $750 per month transitional support award was

unchanged—$750 per month for 60 months, also effective

on May 1, 2014. Wife provided a proposed corrected general

judgment that included the following details:

“6. Judgment Amount: Spousal Support Judgment: $750

transitional support and $1,000 maintenance support

beginning May 1, 2014[,] with a like payment on the first

day of each month thereafter for a period of 60 months. * * *

“7. Prejudgment Interest: Nine percent (9%) per annum

simple interest on support arrearages from the date the

arrearage accrues, until paid.

“8. Postjudgment Interest: Rate: Nine percent (9%) per

annum simple interest on support arrearages from the

date the arrearage accrues, until paid.”

Husband objected to the “prejudgment interest”

provision in the proposed judgment, arguing that he should

not be required to pay interest on installment amounts that

were imposed retroactively because of the 2018 modification

to the judgment. Wife argued that, under this court’s deci-

sion in Lakin v. Senco Products, Inc., 329 Or 369, 987 P2d 476

(1999), overruled on other grounds by Horton v. OHSU, 359

Or 168, 376 P3d 998 (2016), retroactive interest was appro-

priate because the original 2014 judgment had not been

“wiped out.” See id. at 373 (interest accrues from original

1

In Skinner I, wife also appealed the child support award. That issue was not

renewed in Skinner II and is not before this court.

Cite as 370 Or 534 (2022) 537

judgment date when money award is modified after appeal,

but interest accrues from new judgment date when appeal

has effect of “wiping out” original judgment). The trial court

agreed with wife and entered wife’s proposed general judg-

ment, including the above stated award for both prejudg-

ment and post-judgment interest, as a corrected general

judgment (the “2018 corrected judgment”).

Husband appealed, arguing that the interest imposed

on the retroactive support installments was improper pre-

judgment interest, and that the only permissible interest

was post-judgment interest, which could not begin accruing

until after the entry date of the 2018 corrected judgment.

The Court of Appeals accepted husband’s characterization

of “prejudgment interest” and did not independently ana-

lyze whether the interest imposed on installments retroac-

tive to 2018, but subsequent to the original 2014 judgment,

was properly considered prejudgment, as opposed to post-

judgment, interest.2 Ultimately, the court held that the trial

court erred in awarding wife prejudgment interest but did

so on grounds other than those asserted by husband. The

court determined that Chase and Chase, 354 Or 776, 323

P3d 266 (2014), controlled the issue because this court’s dis-

cussion in that case of prejudgment interest with respect

to child support awards was equally applicable to spousal

support awards.

The Court of Appeals understood Chase to mean

that an installment payment on a support obligation may

accrue only post-judgment interest. Skinner II, 314 Or App

at 400. Applying that rule here, the court held that the

trial court’s award of “prejudgment interest” was error. Id.

Having determined that the trial court erred in awarding

prejudgment interest at all, the court did not reach the issue

of when such interest could otherwise have begun accruing.

The court reversed and remanded the case to the trial court,

and wife petitioned this court for review.

2

In a footnote, the Court of Appeals noted that wife had asserted that the

interest was retroactive post-judgment interest, rather than prejudgment inter-

est. However, the court declined to address that distinction because “[w]ife * * *

[did] not make any meaningful arguments to support that distinction.” Skinner II,

314 Or App at 398 n 3.

538 Skinner and Skinner

II. ANALYSIS

At issue in this case is whether the so-called Lakin

rule applies to an installment money award that is increased

on remand following an appeal when the additional amounts

are retroactively added to past installment obligations. We

begin with a review of the case law leading to the Lakin rule

before considering that rule in the context of this case.

In Lakin, a jury awarded the plaintiffs $2.876

million in noneconomic damages. The trial court initially

reduced that amount to comply with a statutory cap, but it

reinstated the full award following a remand by this court.

On review a second time, the parties disputed whether inter-

est on the full damages amount began to accrue on the date

that the trial court had entered the original judgment or on

the date that the court had entered the modified judgment

reinstating the full award. We determined that,

“where a money award has been modified on appeal and

the only action necessary in the trial court is compliance

with the mandate of the appellate court, then the interest

on the award, as modified, should run from the date of the

original judgment or from the date that judgment should

have been entered on a jury verdict in the lower court, as if

no appeal had been taken.”

Lakin, 329 Or at 373 (quoting Pearson v. Schmitt, 260 Or 607,

609, 492 P2d 269 (1971)). Further, we noted that the only

exception is “if the action of the appellate court in reversing

the opinion of the lower court has the effect of wiping out

the original judgment” in which case the “interest should

run only from the time when the amount of the new award

is fixed[.]” Id. Using that rule, we held that interest on “the

increased award of noneconomic damages beg[an] to accrue

from the date when the trial court entered [the original]

judgment.” Id. at 371-72.

Ten years later, we clarified the Lakin rule. In

Young v. State of Oregon, 346 Or 507, 511-12, 212 P3d 1258

(2009), the plaintiffs sought interest accruing from the date

of the trial court’s original judgment, which had awarded

unpaid overtime compensation, on supplemental judgments

increasing that award, which the court had entered on

remand. Numerous appeals occurred throughout the case; in

Cite as 370 Or 534 (2022) 539

relevant part, however, the plaintiffs appealed from a series

of limited judgments that established their money awards,

arguing, among other things, that the trial court had used

the wrong method to calculate those awards. After entering

the limited judgments, but while the plaintiffs’ appeal was

still pending, the trial court entered a final judgment sub-

ject only to the possibility of modification from the plaintiffs’

appeal. Id. at 511.

On remand from this court, the trial court used a

different calculation method and entered a series of supple-

mental judgments that awarded the plaintiffs the difference

between the amounts granted in the initial limited judg-

ments and the higher amounts owed to the plaintiffs under

the new calculation method. The plaintiffs sought interest

on those increased amounts, arguing that, under the Lakin

rule, interest should accrue from the date that the trial court

entered the final judgment while the appeal was pending.

The trial court denied the request for post-judgment inter-

est, the Court of Appeals affirmed, and we granted review.3

The state argued that the Lakin exception applied

because requiring the trial court to use a different calcu-

lation method effectively “wiped out” the final judgment.

However, we stated that “the phrase ‘wiping out’ describes

the effect of a ‘full reversal’ of the trial court’s judgment,”

and the supplemental judgments had merely reflected an

anticipated modification. Id. at 518-19. Therefore, we held

that the Lakin rule still applied and that post-judgment

interest accrued from the date of the original judgment.

Id. at 519.

Wife argues that, under Lakin and Young, interest

in this case should run from the original installment dates

set forth by the original 2014 judgment because that judg-

ment is the original judgment. In response, husband argues

that the Lakin rule should apply only to “lump sum” awards

that are increased or decreased following appeal, not to sup-

port awards made in installments. In other words, because

the maintenance awards that were imposed retroactively as

a result of the 2018 corrected judgment did not exist in the

3

We also considered whether the state was immune from the imposition of

interest. We held that the state was liable for interest on the judgment.

540 Skinner and Skinner

original 2014 judgment, husband argues that they should

not be subject to interest under Lakin.

We agree with wife. We see no reason to limit appli-

cation of the Lakin rule to lump sum judgments. Lakin

applies to money awards that are modified on appeal. A

support award is a money award because it is a portion of

a judgment that requires the payment of money. See ORS

18.005(14), (19) (defining “money award” and “support

award”). Like the modification in Young, the change to

wife’s spousal support award on remand did not “wipe out”

the original 2014 judgment. Rather, the trial court merely

applied different factors in its calculation of wife’s support

award on remand. The 2018 corrected judgment thus mod-

ified the original 2014 judgment by increasing the mainte-

nance support amount and changing the date as of which

those payments were owed.4 Such a modification is not the

same as creating a new spousal support award altogether.

Even if Lakin applies, husband argues, Young would

not permit the accrual of interest from the installment due

dates. Noting that, in Young, the interest began to accrue

from the final judgment, which had been entered after the

limited judgments that were later increased on remand,

husband argues that the interest in this case should simi-

larly accrue from the 2018 corrected judgment, not the orig-

inal installment dates.5

In Young, post-judgment interest began to accrue

from the date of the final judgment because the final

4

We acknowledge that, generally, judgments that modify installment obliga-

tions do not apply retroactively. See ORS 107.135(7) (“The court may not modify

any portion of the judgment that provides for any payment of money * * * that

has accrued before the motion is served.”). However, ORS 107.135 applies when

one party files a motion with the trial court to modify the support award due

to a change of circumstances that impacts their needs or ability to pay. ORS

107.135(3). The change in wife’s spousal support award in this case did not occur

pursuant to ORS 107.135; therefore, the limitations in ORS 107.135(7) are inap-

plicable in this case.

5

Husband also argues that Lakin contains a foreseeability element; the

debtor in that case knew how much the award could be increased on appeal. In

this case, however, husband argues that that foreseeability element is unmet

because he could not have known the exact amount of additional support that

the 2018 corrected judgment would impose. We are not persuaded. The use of a

different calculation method after wife’s appeal is the sort of foreseeable change

that we have described as an “anticipated modification.” Young, 346 Or at 519.

Cite as 370 Or 534 (2022) 541

judgment was the “original judgment” for purposes of the

Lakin rule. Whether interest should have accrued from

the date of entry of the limited judgments was not a ques-

tion before this court, nor does that question bear on when

interest should begin to accrue here. Under both Lakin and

Young, the original judgment (unless “wiped out” on appeal)

is the operative judgment for determining when interest

begins to accrue. In this case, the 2014 judgment is the orig-

inal judgment, as modified by the 2018 corrected judgment,

and interest therefore begins to accrue from the installment

dates established by the original 2014 judgment.

We understand the Court of Appeals’ analysis to

have been driven by the assumption that the trial court

awarded impermissible “prejudgment interest” for which,

under Chase, installment payments on support awards do

not qualify. That assumption was understandable in light

of the parties’ and the trial court’s choice of terminology.

However, for the reasons that we have explained, interest on

support installments established by the original 2014 judg-

ment is, in fact, post-judgment interest under Lakin even

though it was imposed retroactively from the 2018 corrected

judgment.

Husband argues, finally, that the award of interest

is unfair because it does not consider both wife’s needs and

his ability to pay. See ORS 107.105(1)(d)(C)(viii) (requiring

trial court to consider “[t]he financial needs and resources of

each party” when awarding spousal maintenance support).

Husband asserts that awarding interest on installments

that the 2018 corrected judgment retroactively increased

would give wife a windfall by providing more support than

she needs while requiring husband to pay more than he may

be able to afford. Additionally, husband argues that that

windfall results solely from the trial court’s failure to award

the proper amount of support. Thus, in husband’s view, wife

would receive an undue benefit from the trial court’s error

while husband would suffer undue harm from that error.

Husband asserts that such a situation contradicts the bal-

ancing of interests underlying ORS 107.105.

We are unpersuaded by husband’s arguments.

Awarding interest compensates wife for the lost time value

542 Skinner and Skinner

of money—the benefit of which husband has enjoyed—that,

according to the trial court, she should have received in

prior years and does not constitute a windfall.6

For those reasons, we hold that, when a spousal

support award on appeal is reversed and remanded for a

different calculation and the modified judgment entered on

remand applies that award retroactively and imposes inter-

est, the Lakin rule applies and that post-judgment interest

begins to accrue from each installment date. That interest

accrues separately on each monthly unpaid balance as it

arises. See Shannon v. Shannon, 193 Or 575, 581, 238 P2d

744 (1951), reh’g den, 193 Or 582, 239 P2d 993 (1952) (holding

that alimony installment payments begin accruing interest

from each installment date).

III. CONCLUSION

Accordingly, we hold that the Court of Appeals

erred by denying wife interest on the past due amounts,

the circuit court erred by imposing prejudgment interest,

but the circuit court correctly granted wife interest on the

past due spousal support amounts. Wife is entitled to post-

judgment interest at the statutory rate of nine percent per

annum for each additional $1,000 per month that is due and

unpaid by husband, beginning May 1, 2014. That is, upon

the entry of the 2018 corrected judgment, husband owed

an additional $1,000 on May 1, 2014. Statutory interest at

nine percent per annum began accruing on that $1,000 on

May 1, 2014, and continues to accrue until paid. That

analysis applies to each installment date where a debt

remains due and unpaid.

The decision of the Court of Appeals is reversed.

The judgment of the circuit court is affirmed in part and

reversed in part, and the case is remanded to the circuit

court for further proceedings.

6

The “time value” of money recognizes that a dollar today is worth less than

that dollar would have been worth in the past. That is because a dollar in the past

could have been invested and gained value over time. Mihail Busu, Essentials of

Investment and Risk Analysis: Theory and Applications 11-13 (2022). Thus, impos-

ing interest when a debtor fails to make a payment recognizes that the principal

amount that the creditor eventually receives has less value when the creditor

receives it later than the date that they were owed.