On Tuesday, the state Supreme Court ruled that Richard and Nancy Madsen, who made advance payments to a mortgage company to cover taxes and insurance, are not entitled to interest on that money.

The unanimous decision reverses a judgment of $134 in interest for the Madsens, who filed a class-action suit in 1975 against their mortgage company, Prudential Federal Savings and Loan Association.

The ruling also throws out a judgment of about $1 million awarded to 9,547 class members, who claimed they were owed an average of $105 in interest on their advance payments.

Both Geri Ann Baptista, a spokeswoman for Washington Mutual Bank, which indirectly acquired Prudential in the 1990s, and attorney Joseph Palmer, who has been on the case for 33 years, said they are pleased with the ruling.

Lawyers for the plaintiffs could not be reached for comment.

The Madsens financed the 1964 purchase of their Holladay home by borrowing money from Prudential. Their contract required them to make monthly payments for taxes and insurance into an account held by Prudential, which paid no interest on the balance.

The Madsens filed the class-action suit in Utah's 3rd District Court claiming unjust enrichment by Prudential and seeking interest on their account. Prudential responded that its contract with the Madsens contained no provision to pay them interest and that federal law preempted a state law claim for payment.

For more than 30 years, the case wound its way through the legal system, going from state court to federal court and back again. Except for several long-standing water-rights disputes dating back to the 1950s, it is the oldest active civil case in the state. Richard Madsen died in 2006. Nancy Madsen became the lead plaintiff.

The Utah Supreme Court's ruling says that Prudential had no obligation to pay interest under federal regulations in effect when the Madsens took out their loan. And when state law conflicts with federal law, the federal law prevails, the high court said.

pmanson@sltrib.com