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State v. Taylor - 2/2/2010

Arizona Court of Appeals Division One Holds That An Administrative Penalty Does Not Accrue Prejudgment Interest in the Absence of an Explicit Statutory Mandate.


In 1994, the Arizona Structural Pest Control Commission (now the Office of Pest Management) imposed a civil penalty against the Taylors for performing pest control without a license.  The Taylors never paid the penalty.  In 2004, the Commission filed civil suit to convert the penalty order to a judgment and asked the Superior Court also to impose prejudgment interest.  The Court entered the order, but refused to order interest, and the Commission appealed.

The Court of Appeals affirmed.  A.R.S. § 44-1201(A), which the Commission cited as authority for awarding interest, applies only to “any loan, indebtedness, judgment or other obligation,” which language the Court concluded did not encompass an administrative penalty.  Nor had the legislature provided for prejudgment interest in the specific statute that authorized the penalty against the Taylors, as it had in a number of other administrative penalty statutes.

PRACTICE NOTE:  The Taylors claimed that the Court of Appeals did not have jurisdiction over this case because the Commission failed to file a notice of appeal within 30 days of judgment as required by ARCAP 9.  The Court rejected this argument.  The judgment was entered against the Taylors on April 21, 2008.  The Commission also had a claim against a third party, which was resolved by default judgment on August 21, 2008.  The April judgment against the Taylors was not a final, appealable judgment because it did not dispose of all claims against all defendants.  Because the Commission filed its notice of appeal within 30 days of the August judgment, the Court had jurisdiction.

 Judge Johnsen authored the opinion; Judges Orozco and Thompson concurred.

Posted By: Kathleen Brody O'Meara

Posted On: 2/10/2010