Fuller v. Bohne

• Decision Date: 09 February 2017
• Docket Number: No. 20150146-CA,20150146-CA
• Citation: 392 P.3d 898
• Parties: David FULLER, Ruth M. Fuller, and Fuller's Appliance Parts and Service LLC, Appellants, v. Denise BOHNE and Western States Insurance Agency, Appellees.
• Court: Utah Court of Appeals

392 P.3d 898

David FULLER, Ruth M. Fuller, and Fuller's Appliance Parts and Service LLC, Appellants,

v.Denise BOHNE and Western States Insurance Agency, Appellees.

No. 20150146-CA

Court of Appeals of Utah.

Filed February 9, 2017

Stephen K. Christiansen, Attorney for Appellants

Joseph P. Barrett, Attorney for Appellees

Judge Gregory K. Orme authored this Opinion, in which Judges J. Frederic Voros Jr. and David N. Mortensen concurred.

Opinion

ORME, Judge:

¶1 Appellants David Fuller, Ruth M. Fuller, and Fuller's Appliance Parts and Service LLC (collectively, the Fullers) appeal the trial court's judgment awarding them damages and prejudgment interest in their suit against Denise Bohne and Western States Insurance Agency (collectively, Western). Their appeal is limited to the question of whether the trial court calculated prejudgment interest on the jury award at the proper rate. We affirm.

BACKGROUND

¶2 The Fullers owned a home and a small business, both located on the same property in Springville, Utah. The Fullers purchased insurance from Western on the home, the business, and their vehicles. Many years later, in June 2007, a fire destroyed their home and business, and they filed a claim with Western, only to learn that they were considerably underinsured. They received $3,000, which, to their surprise, was the maximum benefit payable under the policy.¹

¶3 The Fullers sued Western and sought damages for, inter alia, breach of various duties, breach of contract, and negligent misrepresentation. Before the trial began, the Fullers and Western stipulated, and the trial court agreed, that the jury would receive the following instruction (Instruction 29) for calculating interest if it awarded damages to the Fullers:

The Fullers seek recovery of prejudgment interest as part of their loss. In Utah, prejudgment interest may be awarded in situations where the damage is complete, the loss can be measured by facts and figures, and the amount of loss is fixed as of a particular time. If you find for the Fullers on their claim of prejudgment interest, you should award them 10% annually on the value of their proven loss from the date of the fire to the date of your verdict.

¶4 Just before the court instructed the jury, however, Western asked the trial court to withdraw Instruction 29 and to decide the issue of prejudgment interest itself. The Fullers challenged this request, and Western then conceded that prejudgment interest would be recoverable if the jury's verdict included an amount for property damages. Western indicated that it was simply asking the court to do the math in calculating the amount of prejudgment interest. The Fullers agreed with this approach, and the trial court stated that it was "fine" with the rate of ten percent and that it could readily make the appropriate calculation: "it's a 10 percent calculation and you can do it in your head." Thus, Instruction 29 was withdrawn.

¶5 The jury returned a verdict against Western on the claims of negligent misrepresentation and breach of agency duties, awarding the Fullers $101,595 for their lost property.

¶6 When the Fullers moved for the entry of judgment on the verdict, Western opposed the inclusion of prejudgment interest and the calculation of prejudgment interest at ten percent. After a hearing, the court issued a memorandum decision that, in relevant part, sought supplemental briefing as to the appropriate interest rate. The court stated:

From the record before me, it appears that [Western] did not stipulate to an absolute award of any prejudgment interest that [the Fullers] requested. Rather, in withdrawing the jury instruction on that issue, the parties agreed that the Court should make the final determination regarding prejudgment interest after the conclusion of the trial and add that amount to the final judgment.

¶7 In a telephonic hearing held after supplemental briefing was complete, the trial court, "having gone back and listened to the tape [of the prior hearing] very carefully," concluded that the parties had stipulated to the court's awarding prejudgment interest. But on the issue of the rate, the court did not agree with the Fullers that the stipulation included the rate of ten percent, even though the instruction that it supplanted had included that rate. To begin the discussion, the judge commented that perhaps the postjudgment rate, not the ten percent rate, was proper. The court's questions to counsel focused their attention on Utah precedent suggesting that the ten percent statutory rate only applies to certain contract-based claims.

¶8 Ultimately, the court determined that while Western had stipulated to the award of prejudgment interest, its stipulation to the rate of ten percent had fallen by the wayside when the jury instruction was withdrawn. The court concluded that the proper rate was the statutory postjudgment rate of 2.27% per annum. It also determined that interest would accrue from the date of the fire until the judgment is paid in full. The Fullers appeal.

ISSUES AND STANDARDS OF REVIEW

¶9 The Fullers raise two main issues on appeal. First, they assert that "[t]he district court abused its discretion by declining to enforce the parties' stipulation to apply a 10% prejudgment interest rate" and, relatedly, that section 15–1–1 of the Utah Code requires a ten percent prejudgment interest rate. See Utah Code Ann. § 15–1–1 (LexisNexis 2013). The applicability and interpretation of a statute are questions of law that we review for correctness. Encon Utah, LLC v. Fluor Ames Kraemer, LLC , 2009 UT 7, ¶ 11, 210 P.3d 263. The scope of a stipulation presents a question of fact, see Prinsburg State Bank v. Abundo , 2011 UT App 239, ¶ 8, 262 P.3d 454, aff'd on other grounds , 2012 UT 94, ¶ 10, 296 P.3d 709, which we review for clear error. Brasher v. Christensen , 2016 UT App 100, ¶ 13, 374 P.3d 40.

¶10 Second, the Fullers claim that if the trial court was free to choose the applicable rate, "[t]he district court [erred] by applying a low 2015 post-judgment interest rate when prejudgment interest began running in 2007," at which time the rate was higher. The appropriate rate of prejudgment interest ordinarily "is a question of law that we review for correctness." USA Power, LLC v. PacifiCorp , 2016 UT 20, ¶ 32, 372 P.3d 629.

ANALYSIS

I. The Trial Court Did Not Abuse Its Discretion in Declining To Calculate Prejudgment Interest at Ten Percent.

¶11 The Fullers assert that the trial court was required, by stipulation and by statute, to calculate prejudgment interest at ten percent per annum. We conclude that neither the stipulation regarding interest nor Utah Code section 15–1–1 bound the trial court and that it did not abuse its discretion in rejecting the ten percent rate that the Fullers advocated.

A. Stipulation

¶12 The Fullers' argument, in effect, is that the stipulation had two distinct parts, each of which should have been enforced: (1) stipulation to the award of prejudgment interest if the jury awarded property damages and (2) stipulation to prejudgment interest at a rate of ten percent per annum, as a carry-over from Instruction 29, which the stipulation supplanted.²

1. Stipulation to Prejudgment Interest

¶13 Stipulations generally "are binding on the parties and the court." Prinsburg State Bank v. Abundo , 2012 UT 94, ¶ 13, 296 P.3d 709. Where parties stipulate to a fact and the court accepts that stipulation, the matter is settled and, generally, is not subject to appellate review. Id. Here, the trial court determined that, during the discussion of whether to allow the jury to be instructed about prejudgment interest, the parties stipulated that prejudgment interest would apply to any property damages award made by the jury. The record showed that Western did not dispute the Fullers' entitlement to prejudgment interest. Thus, the court concluded that Western had "stipulated away" its right to challenge the availability of prejudgment interest when it conceded that an award for property damage would bring with it prejudgment interest. And the parties agree on appeal that this conclusion was correct.

2. No Stipulation to Interest Rate

¶14 The trial court did not clearly err by concluding that Western did not stipulate to a particular prejudgment interest rate. The scope and terms of a stipulation, like any other contract, are construed "to give effect to the intentions of the parties." DeBry v. Occidental/Nebraska Fed. Sav. Bank , 754 P.2d 60, 62 (Utah 1988) (citation and internal quotation marks omitted). See also Prinsburg State Bank v. Abundo , 2011 UT App 239, ¶ 8, 262 P.3d 454 (affirming that the parties' intent, including the parties' intended scope of the stipulation, is a "question[ ] of fact that [is] appropriately directed, in the first instance, to the district court"), aff'd on other grounds , 2012 UT 94, ¶ 10, 296 P.3d 709.

¶15 After reviewing the trial transcript and briefing from the parties, the trial court concluded that the parties' stipulation, unlike the earlier Instruction 29, did not include an agreement as to the particular interest rate to be charged. The Fullers argue this was clearly erroneous because Instruction 29, which the stipulation negated, would have had the jury assess an annual interest rate of ten percent on "the value of their proven loss." And the Fullers note that the trial judge recited that rate during the stipulation discussion when he said, "[I]t's a 10 percent calculation and you can do it in your head."

¶16 But the Fullers focus on facts that do not reveal the parties' intent in forming the stipulation. The parties' discussion about withdrawing Instruction 29, which ultimately led to the stipulation in question, did not address the rate at which interest was to be assessed even though the proposed instruction did contain a reference to ten percent. Rather, they discussed whether the calculation of interest should appear on the special verdict form, which led to a discussion of whether prejudgment interest was...