N.M. Stat. Ann. § 56-8-3

Section 56-8-3 permits prejudgment interest on money due by contract only after the contractual duty to pay has been breached; payment upon settlement before breach creates no entitlement.

State Farm Mut. Auto. Ins. Co., an Illinois Corp. v. Blystra · filed 1997-10-02A

The general rule in New Mexico is that prejudgment interest as a matter of right is appropriate "only when a party has breached a duty to pay a definite sum of money or the amount due under the contract can be ascertained with reasonable certainty by a mathematical standard fixed in the contract or by established market prices." ... In focusing on these two issues, however, the parties lose sight of the threshold requirement of the Restatement that the defendant commit a breach of contract. ... There could be no breach of the contract to pay uninsured motorists' benefits until the factual issue of liability that prompted the remand from this court was settled. ... Because Farmers promptly paid the settlement amount there was never any legal entitlement to prejudgment interest.

Section 56-8-3(B) does not authorize prejudgment interest on tort damages when the defendant did not receive and retain the plaintiff's money.

City of Hobbs v. Nutmeg Insurance · filed 2000-11-30(B)

The City’s argument, with which the district court agreed, appears to be that, because Nutmeg owed the City compensatory damages because of its bad faith conduct, Nutmeg effectively retained money which in reality was the City’s and should therefore pay prejudgment interest on it. Respectfully, we are unpersuaded. That is tantamount to saying that any award of damages should always be accompanied by an award of prejudgment interest. We do not believe the New Mexico courts would expand § 56-8-3(B) to this extent. There is no unjust enrichment or quantum meruit action here. Rather, there is simply liability for damages caused by tortious conduct. We therefore reverse the award of prejudgment interest.

Section 56-8-3 caps interest on money due by contract at fifteen percent annually when no written contract sets a different rate.

Production Credit Association of Southern New Mexico v. Alamo Ranch Company · filed 1993-03-24(A)

Obviously, the district court did not find this evidence credible and assigned interest charges at the rate of fifteen percent in accordance with New Mexico law. “The rate of interest, in the absence of a written contract fixing a different rate, shall be not more than fifteen percent annually ... (A) on money due by contract.” N.M.Stat.Ann. § 56-8-3 (Michie 1978). It was within the district court’s discretion to disbelieve evidence of an alleged oral waiver, and to award interest in compliance with the statute.

Subsection (A) permits up to 15% annual interest on money due by contract when the contract does not set a different rate, including interest charged by private lenders.

Martinez v. Albuquerque Collection Services, Inc. · filed 1994-10-14(A)

Section 56-8-3 expressly permits interest on money due by contract. Where a contract or a statute authorizes interest on money debts, the interest is due and payable from the date of refusal of payment. ... The Court therefore interprets section 56-8-3 to empower private lenders to charge interest on money debts at the legal rate where the contract is silent on the issue. ... Although Colucci requires a court to exercise discretion when it awards interest as damages, the Court is not persuaded that Colucci reduces section 56-8-3 to a mere judicial tool. Rather, section 56-8-3 prescribes the legal rate of interest in all cases where it is charged, whether by courts or by private lenders.

Subsection (B) authorizes prejudgment interest as compensation for a claimant’s lost opportunity to use money owed to the claimant and retained by the obligor, including when liability is based on unjust enrichment or quantum meruit.

United States v. Garcia · filed 2000-07-18(B)

Prejudgment interest under § 56-8-3(B) “constitutes an obligation to pay damages to compensate a claimant for the lost opportunity to use money owed the claimant and retained by the obligor between the time the claimant’s claim accrues and the time of judgment (the loss of earning power of the claimant’s funds).”

Section 56-8-3(A) permits up to 15% annual prejudgment interest on money due by contract when no written contract sets a different rate, and such interest generally is a matter of right absent peculiar circumstances.

J&J Rentals, LLC v. Bighorn Construction & Reclamation, LLC · filed 2023-09-06(A)

“The purpose of an award of prejudgment interest under § 56-8-3 is to compensate a plaintiff for the lost opportunity to use the money owed between the time the plaintiff’s claim accrued and the time of judgment.” ... prejudgment interest under NMSA § 56-8-3 “generally should be awarded absent peculiar circumstances as a matter of right.”

When no written contract fixes a different rate, subsection (A) limits interest on money due by contract to 15% annually; when the amount is fixed or easily calculated, prejudgment interest generally should be awarded absent peculiar circumstances.

Kabana, Inc. v. DFC Services Corp. · filed 2024-09-23(A)

Section 56-8-3 provides in pertinent part that “[t]he rate of interest, in the absence of a written contract fixing a different rate, shall not be more than fifteen percent annually . . . on money due by contract.” N.M. Stat. Ann. § 56-8-3(A) (West) (emphasis added). When the amount is fixed or easily calculated, “prejudgment interest [under Section 56-8-3] generally should be awarded absent peculiar circumstances.” Sunwest Bank of Albuquerque, N.A. v. Colucci, 872 P.2d 346, 351 (N.M. 1994) (quotation omitted). Here, Plaintiff’s invoices to Defendant fix a rate of 18% per annum. ECF No. 14-1 at ¶ 5; see also ECF No. 1-1 at Tab 1 ¶¶ 6-7 (providing for pricing terms to be set by invoices). Plaintiff has sufficiently established that it is entitled to this interest rate, and the undersigned finds no circumstances from which to depart from New Mexico’s general rule allowing for such prejudgment interest.

Section 56-8-3 permits a prejudgment-interest award when the contract does not preclude interest, and the applicable statutory rate is the rate in effect when the suit is filed.

City of Farmington v. Amoco Gas Company · filed 1985-11-12

While Amoco correctly concludes that the statutory rate provided in N.M.Stat.Ann. § 56-8-3 (Cum.Supp.1980) cannot be applied where a contract forbids the accrual of interest on contractual obligations, II E falls short of stating such a prohibition with sufficient exactness to preclude application of the statute. ... Where a contract does not preclude interest, an award of prejudgment interest under N.M.Stat.Ann. § 56-8-3 is within the sound discretion of the trial court. ... The New Mexico courts have held that the statutory rate of interest in effect at the time a suit is filed is applicable to determine prejudgment and postjudgment interest.

Section 56-8-3 supports prejudgment interest at the legal rate when the amount owed is ascertainable from the contract or established market prices, including certain quantum-meruit awards measured by contract terms.

United States ex rel. C.J.C., Inc. v. Western States Mechanical Contractors, Inc. · filed 1987-11-30

In New Mexico, “where the amount of indebtedness under the contract is ascertainable by the breaching party, the injured party is entitled to interest as a matter of right on those monies at the legal rate.” Grynberg v. Roberts, 102 N.M. 560, 698 P.2d 430, 432 (1985) (emphasis in original); see N.M.StatAnn. § 56-8-3 (Supp. 1987). ... Thus, in certain circumstances, where the trial court must rely on the theory of quantum meruit to permit recovery for work performed outside the written contract but also relies on the express terms of that contract to determine the value of that work, the injured party is entitled to prejudgment interest. We believe that CJC's claim falls within this narrow exception.

Section 56-8-3's statutory interest rate for money due by contract or on a judgment does not apply to an equitable interest award in a specific-performance action.

El Paso Natural Gas Company v. Western Building Associates · filed 1982-04-21

We think the New Mexico statute clearly inapplicable since the trial court, sitting in equity, was not awarding money due on a contract; and of course there was no money due "on a judgment" until the court entered its judgment.