Andreason v. Aetna Cas. & Sur. Co.

• Decision Date: 18 February 1993
• Docket Number: No. 910615-CA,910615-CA
• Citation: 848 P.2d 171
• Court: Utah Court of Appeals
• Parties: Derek ANDREASON and Dana Andreason, Plaintiffs, Appellees, and Cross-Appellants, v. AETNA CASUALTY & SURETY COMPANY, Defendant, Appellant, and Cross-Appellee.

Page 171

848 P.2d 171

Derek ANDREASON and Dana Andreason, Plaintiffs, Appellees and Cross-Appellants, v. AETNA CASUALTY & SURETY COMPANY, Defendant, Appellant, and Cross-Appellee.

No. 910615-CA.

Court of Appeals of Utah.

Feb. 18, 1993.

Michael P. Zaccheo, Salt Lake City, for appellant.

Wayne B. Watson and Thomas J. Scribner, Provo, for appellees.

Before BILLINGS, GREENWOOD and ORME, JJ.

GREENWOOD, Judge:

Defendant Aetna Casualty & Surety Company appeals a jury verdict awarding plaintiffs, Dana and Derek Andreason, damages based upon a promissory estoppel theory. On appeal, defendant claims that the trial court abused its discretion in refusing to either subject the jury award to remittitur or order a new trial. Plaintiffs cross-appeal, claiming that the trial court erred as a matter of law in refusing to grant them prejudgment interest on the jury award. We affirm the trial court's decision upholding the jury award without prejudgment interest.

BACKGROUND

Because the parties tried this case before a jury, we recite the facts in a light favorable to the jury verdict. State v. Perdue, 813 P.2d 1201, 1202 (Utah App.1991). On April 4, 1986, a fire extensively damaged plaintiffs' kitchen and garage, and caused smoke, electrical, and water damage throughout their home. Immediately after the fire and for the three weeks following, defendant's agents mistakenly represented to plaintiffs that their fire losses would be covered by their insurance policy with defendant. A week after the fire, defendant's adjuster visited plaintiffs' burned home, instructed them on repairs, and authorized them to proceed. Plaintiffs immediately began extensive clean up and repair work consistent with the adjuster's instructions.

After three weeks, defendant discovered that it no longer insured plaintiffs because their fire insurance policy had been canceled six weeks prior to the fire. When defendant belatedly denied insurance coverage for their fire losses, plaintiffs sued.

In May 1991, plaintiffs' suit against defendant went to trial. The trial court had previously granted defendant a partial summary judgment, concluding that the insurance contract was canceled prior to the fire. The trial, therefore, continued solely on plaintiffs' promissory estoppel theory. During the trial, plaintiff Derek Andreason testified in detail about the extent, nature, and timing of the home repairs. He stated that he undertook $41,957.69 worth of work, and that he did "all of the work" in detrimental reliance on defendant's promise of coverage. Mr. Andreason testified that defendant's agent provided detailed instructions on repairs and replacements that should be undertaken. For example, according to Mr. Andreason, the agent told him not to consider repairing some items, but to simply discard them and purchase new ones. These items included the living room carpet, the kitchen range, kitchen cabinets, a cedar wall, and the tile floor. Mr. Andreason claimed that without the promise of insurance coverage, he would have boarded up his home, gradually done the work himself, and repaired rather than replaced many items. By the time defendant repudiated its promise of coverage, however, repair work had proceeded beyond the point where plaintiffs' self-help plan was an option. The jury awarded plaintiffs damages of $37,500.00.

Defendant filed a motion for a new trial or remittitur and objected to plaintiffs' request for prejudgment interest from the date they originally demanded payment for their repair costs. The trial court denied defendant's motion and issued a judgment

for plaintiffs without awarding prejudgment interest. This appeal followed.

ANALYSIS

Both defendant's appeal, seeking to vacate the jury award, and plaintiffs' cross-appeal, seeking to increase the award to include prejudgment interest, present issues related to the nature of damages in promissory estoppel. Defendant asks this court to determine whether the trial court abused its discretion in refusing to grant its motion for remittitur or a new trial, claiming that the damages awarded were excessive or unwarranted. On cross-appeal, plaintiffs question whether the trial court erred as a matter of law in failing to award them prejudgment interest, arguing that without prejudgment interest, their damage recovery was incomplete.

Promissory Estoppel

Promissory estoppel is an equitable claim for relief which is normally tried to the bench. See Tolboe Constr. v. Staker Paving & Constr., 682 P.2d 843, 849 (Utah 1984). The parties in this case apparently agreed to present their case to the jury. Utah Rules of Civil Procedure authorize the jury to act as a factfinder in an equity action. "In all actions not triable of right by a jury the court upon motion or of its own initiative may try any issue with an advisory jury or, with the consent of both parties, may order a trial with a jury whose verdict has the same effect as if trial by jury had been a matter of right." Utah R.Civ.P. 39(c); see Willard M. Milne Inv. Co. v. Cox, 580 P.2d 607, 609 (Utah 1978). Because the jury properly heard this promissory estoppel case, we need only determine if the trial court abused its discretion in refusing to grant a remittitur or a new trial. See Crookston v. Fire Ins. Exch., 817 P.2d 789, 805 (Utah 1991).

Because damage assessment is peculiarly a jury function, trial courts should exercise caution in setting aside a verdict and ordering a new trial on the basis of excessive damages. Batty v. Mitchell, 575 P.2d 1040, 1043 (Utah 1978). A trial court enjoys broad discretion in this decision, as long as its grounds for granting a remittitur or a new trial fit one of the seven specified in Rule 59. See Crookston, 817 P.2d at 804. The pertinent three among these grounds include:

(5) Excessive or inadequate damages, appearing to have been given under the influence of passion or prejudice.

(6) Insufficiency of the evidence to justify the verdict or other decision, or that it is against law.

(7) Error in law.

Utah R.Civ.P. 59(a)(5)--(7). The trial court should review the propriety of the damages award and grant a new trial only where it is obvious that the jury lacked a reasonable basis for its decision, acted with prejudice or passion, or disregarded competent evidence. Crookston, 817 P.2d at 803-05.

On reviewing the decision of the trial court to grant or deny a new trial, we do not directly review the verdict, "ignoring any intermediate actions by the trial court." Id. at 802. Instead we consider that " '[w]hen the determination of the jury has been submitted to the scrutiny and judgment of the trial judge, his [or her] action thereon should be regarded as giving further solidarity to the judgment.' " Id. at 806 (quoting Elkington v. Foust, 618 P.2d 37, 41 (Utah 1980)). We, therefore, will reverse "the judge's ultimate decision to grant or deny a new trial, ... only if there is no reasonable basis for that decision," id. at 805, resolving any doubt in favor of the trial court, id. at 806.

Because the insurance contract between plaintiffs and defendant was cancelled when defendant offered to reimburse plaintiffs for the repairs necessitated by fire damage to their home, plaintiffs based their claim against defendant on promissory estoppel. Promissory estoppel may be invoked in circumstances where " 'equity recognizes the unfairness of permitting withdrawal of the promise and will enforce it.' " Tolboe, 682 P.2d at 846 (quoting Union Tank Car Co. v. Wheat Bros., 15 Utah 2d 101, 387 P.2d 1000, 1003 (1964)). The necessary elements of promissory estoppel include: "(1) a promise reasonably expected The factual prerequisites for promissory estoppel are:

to induce reliance; (2) reasonable reliance inducing action or forbearance on the part of the promisee or a third person; and (3) detriment to the promisee or third person." Weese v. Davis County Comm'n, 834 P.2d 1, 4 n. 17 (Utah 1992) (emphasis added). Utah has also adopted the Restatement (Second) of Contracts section 90 describing promissory estoppel as follows: " 'A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.' " Tolboe, 682 P.2d at 845 (quoting Restatement (Second) Contracts § 90(1) (1981)).

"that the defendants were aware of all the material facts; that in such awareness they made the promise when they knew that the plaintiff was acting in reliance on it; that the latter, observing reasonable care and prudence, acted in reliance on the promise and got into a position where it suffered a loss."

Id. at 845-46 (emphasis deleted) (quoting Union Tank Car, 387 P.2d at 1003).

Defendant argues that when the facts of plaintiffs' case are compared to the essential promissory estoppel elements, they are insufficient to justify plaintiffs' recovery. Although defendant concedes the presence of a clear promise and does not challenge the reasonableness of plaintiffs' reliance on that promise, it claims that plaintiffs deserve no recovery because either (1) plaintiffs did not do anything as a result of the promise that they would not have done without the promise, or (2) plaintiffs' expenses merit no compensation because they provided a benefit and, accordingly, caused no detriment to plaintiffs. Thus, according to defendant, plaintiffs' damages were the result of the fire, not defendant's promise, and plaintiffs benefitted from the repairs and replacements. For these reasons, defendant asserts that plaintiffs failed to prove entitlement to damages. Defendant also asserts that even if plaintiffs proved an entitlement to damages, they provided insufficient evidence from which to calculate damages.

Utah's appellate courts have not focused on the claims asserted by appellant. However, Utah's...