AE, Inc. v. Goodyear Tire & Rubber Co.

Summary

The Supreme Court of Colorado answered a certified question from the United States District Court for the District of Colorado concerning the choice of law governing prejudgment interest in a tort action. The court held that Colorado applies the Restatement (Second) of Conflict of Laws' most-significant-relationship test to both the underlying tort claim and prejudgment interest, so the law governing the tort also governs prejudgment interest. The court overruled Hays v. Arbuckle to the extent it was inconsistent with this holding.

Holdings

1. Colorado applies the most-significant-relationship-to-the-occurrence-and-parties test to determine the law governing both the underlying tort action and an award of prejudgment interest.
2. Prejudgment interest is an element of damages and is therefore governed by the law selected for the underlying tort claim, rather than automatically by the procedural law of the forum.
3. Hays v. Arbuckle is overruled to the extent it is inconsistent with the rule that the law governing the underlying tort action also governs prejudgment interest.

Questions Presented

1. Whether Colorado applies the most-significant-relationship-to-the-occurrence-and-parties test under Restatement (Second) of Conflict of Laws sections 145 and 171 to determine the law governing prejudgment interest in a multistate tort action.
2. Whether the law governing the underlying tort claim also governs the availability and rate of prejudgment interest on the damages award.
3. Whether Hays v. Arbuckle remains controlling to the extent it applies the law of the forum to prejudgment interest.

Disposition

remanded