Arden-Mayfair, Inc. v. Patterson, ARDEN-MAYFAI

• Court: Court of Appeals of Oregon
• Writing for the Court: WARDEN; JOSEPH
• Citation: 613 P.2d 1062,46 Or.App. 849
• Parties: , Appellant-Cross-Respondent, v. Randall O. PATTERSON and Arlene J. Patterson, dba Astoria Frozen Foods, Respondents-Cross-Appellants. 77-553; CA 13953.
• Docket Number: INC,No. CC,ARDEN-MAYFAI,CC
• Decision Date: 30 June 1980

Page 1062

613 P.2d 1062 46 Or.App. 849 ARDEN-MAYFAIR, INC., Appellant-Cross-Respondent,
v.
Randall O. PATTERSON and Arlene J. Patterson, dba Astoria
Frozen Foods, Respondents-Cross-Appellants. No. CC 77-553; CA 13953. Court of Appeals of Oregon. Argued and Submitted March 24, 1980.
Decided June 30, 1980.

[46 Or.App. 850]

Page 1063

S. Ward Greene, Portland, argued the cause for appellant-cross-respondent. With him on the briefs was Otting & Enz, P. C., Portland.

D. Richard Fischer, Astoria, argued the cause for respondents-cross-appellants. With him on the brief was Larson & Fischer, Astoria.

Before JOSEPH, P. J., and WARDEN and WARREN, JJ.

[46 Or.App. 851] WARDEN, Judge.

The defendants will be designated singularly in this opinion, referring to Arlene J. Patterson only. She was awarded the interest of defendant Randall O. Patterson in the business, Astoria Frozen Foods, in a marriage dissolution proceeding prior to trial of this case.

This appeal arises out of plaintiff's action on a promissory note and defendant's counterclaim for overpayment of the note. The jury found for defendant on her counterclaim in the sum of $10,500. The trial court ordered judgment in that sum with interest at the rate of 6% per annum from the first day of August, 1976, and awarded defendant $6087.50 accounting fees as a part of defendant's costs and disbursements. Both parties appeal. We affirm the judgment for defendant in the sum found by the jury and the trial court's award of accounting fees, but we reverse the allowance of prejudgment interest.

Page 1064

Plaintiff and defendant began doing business in 1965. Plaintiff supplied ice cream and other dairy products to defendant, who was both a jobber for plaintiff, delivering products to direct customers of plaintiff, and also a purchaser, reselling products for defendant's own profit. Defendant was billed for every item she picked up from plaintiff's warehouse in Portland, including a charge for milk containers, regardless of whether she was purchasing products for resale or for delivery to plaintiff's direct customers. Plaintiff later issued credits to defendant for transactions she handled merely as jobber. The credit equaled the purchase price of the products plus a profit to defendant for servicing the account. Plaintiff also issued credits for damaged products, billing errors and returned milk containers.

Prior to 1973, defendant's account balance was never greater than a few thousand dollars. Difficulties arose in 1973, when plaintiff's billings to defendant [46 Or.App. 852] began to show that defendant owed between $10,000 and $13,000, though there was little change in defendant's purchases or her deliveries to plaintiff's customers.

In March, 1973, defendant met with plaintiff's accounts receivable manager and one of its bookkeepers in Portland to try to reconcile the account. At that time, defendant's statement showed a balance of $13,000. The parties determined that the defendant actually owed plaintiff approximately $3500. Defendant wrote plaintiff a draft for $3500. Plaintiff was to correct errors on future statements.

Despite the apparent resolution of the matter, defendant's statements continued to show large balances due. Plaintiff continued to demand payments of these amounts. Defendant refused to pay. In June, 1973, defendant was put on a cash basis. Thereafter, defendant paid for each item as it was picked up from plaintiff's warehouse.

Disagreement as to the amount owed continued until August, 1973, when defendant executed a promissory note for $16,585.23. In exchange for the note, plaintiff agreed to issue to defendant all credits due her. Defendant paid on the note until September, 1976. At that time, she stopped doing business with plaintiff.

Plaintiff commenced this action in September, 1977, for the balance claimed due on the note. Defendant counterclaimed in August, 1978, for $10,500.51, alleging that she had overpaid plaintiff by this amount because credits due her had not been applied against the note.

In late November, 1978, the parties signed a stipulation wherein they agreed to retain the accounting firm of Yergen and Meyer to attempt to arrive at a balance of the parties' account. The parties further agreed that the losing party in this litigation would pay the accounting fees.

[46 Or.App. 853] The Yergen and Meyer accountant worked from a balance of $3577.71, the sum agreed by the parties to be the true balance as of November 4, 1972. From that time forward the accountant had to reconstruct the account from the records of the parties. The accountant reviewed the charges and credits from November, 1972, until June, 1973, when defendant was placed on a cash basis. After June, 1973, the accountant had to look for credits due defendant, and to determine whether defendant actually received them. The accountant did not examine the parties' records of their dealings past September, 1973, when defendant signed the promissory note.

The accountant admitted in her testimony that she could not determine exactly the state of the account between the parties, but she explained what she did find. She relied primarily on plaintiff's accounts receivable records. Using only the figures from those records which she could verify from actual invoices, the accountant found $8708.82 due defendant from plaintiff. Defendant's testimony allowed an inference of overpayment of nearly $11,000. The jury found for defendant in the sum of $10,500. The trial judge ruled that defendant was entitled to prejudgment interest on that sum from August 1, 1976. Finally, the judge assessed accounting fees of $6087.50 against plaintiff as a part of defendant's costs and disbursements.

Page 1065

The accounting firm has actually submitted a bill for $7750. The trial court subtracted from that sum $162.50, the accounting firm's billing for appearances in court, and $1500 of the bill for work done in November, 1978.

Plaintiff first contends that the trial court erred in failing to instruct...