Johnson v. Pearson Agri-Systems, Inc.

• Decision Date: 29 June 1984
• Docket Number: No. 82-684,INC,AGRI-SYSTEM,82-684
• Citation: 350 N.W.2d 127,119 Wis.2d 766
• Parties: Keith M. JOHNSON, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. PEARSON, a Delaware corporation, Defendant-Appellant and Cross-Respondent, Railoc Company, Inc., an Illinois corporation, Defendant-Co-Appellant and Cross-Respondent.
• Court: Wisconsin Supreme Court

Page 127

350 N.W.2d 127

119 Wis.2d 766

Keith M. JOHNSON, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. PEARSON AGRI-SYSTEMS, INC., a Delaware corporation Defendant-Appellant and Cross-Respondent Railoc Company, Inc., an Illinois corporation Defendant-Co-Appellant and Cross-Respondent.

No. 82-684.

Supreme Court of Wisconsin.

Argued May 29, 1984.

Decided June 29, 1984.

Robert A. Slattery, Milwaukee (argued), for plaintiff-respondent and cross-appellant-petitioner; Robert A. Slattery, David A. McClurg and Frisch, Dudek & Slattery, Ltd., Milwaukee, on brief.

Carl F. Schetter, Milwaukee (argued), for defendant-appellant and cross-respondent; Carl F. Schetter and Schetter, Keck & Fuhrman, Milwaukee, on brief.

David J. Condon, Green Bay (argued), for defendant-co-appellant and cross-respondent; David J. Condon, Sara E. Ramaker and Condon, Hanaway, Wickert & Fenwick, Ltd., Green Bay, on brief. DAY, Justice.

This is a review of an unpublished decision of the court of appeals, 114 Wis.2d 593, 338 N.W.2d 527, affirming an order of the circuit court for Manitowoc county, Honorable Fred H. Hazlewood, Circuit Judge, denying a request for pre-verdict interest in a personal injury action. Two issues are presented on this review: (1) Is a plaintiff in a personal injury action entitled to interest on the damages award from the time of the injury through the date the verdict is rendered? (2) Does the court of appeals have subject matter jurisdiction over a cross-appeal from an oral order? We conclude: (1) A plaintiff in a personal injury action is not entitled to pre-verdict interest; ¹ and (2) the court of appeals had subject matter jurisdiction over the cross-appeal from the circuit court's oral order denying pre-verdict interest.

The plaintiff-respondent/cross-appellant-petitioner Keith M. Johnson (Plaintiff) was injured when he fell approximately ninety-five feet down an access chute on a silo. According to the Plaintiff's testimony at trial, the accident occurred when a removable door giving access from the chute to the inside of the silo gave way when the Plaintiff put his weight on a ladder rung attached to the door. Defendant-appellant/cross-respondent Pearson Agri-Systems, Incorporated (Pearson) manufactured and installed the upper portion of the silo. Defendant-appellant/cross-respondent Railoc Company, Incorporated (Railoc) manufactured and installed the swing latches and rungs on the access chute doors.

The accident occurred on May 9, 1978. On August 25, 1980, the Plaintiff filed suit against Pearson and Railoc alleging both negligence and strict liability in tort. The Plaintiff prayed for compensatory damages of $1,000,000.

The matter was tried to a jury which returned a special verdict on December 23, 1981, finding Pearson fifty-three percent causally negligent, Railoc forty-seven percent causally negligent and the Plaintiff zero percent negligent. The jury awarded the Plaintiff damages of $264,664.90 including: $2,964.90 for medical expenses to the time of trial; $11,700 for loss of earning capacity to the time of trial; $130,000 for lost future earning capacity; $20,000 for past pain, suffering and disability; and $100,000 for future pain, suffering and disability.

On February 3, 1982, the Plaintiff filed an "amended motion for award of pre-judgment interest" requesting that he be awarded interest on the amount of the judgment accruing from the date of the accident through and including the date of entry of the judgment. At a hearing on motions after verdict held on February 16, 1982, Judge Hazlewood issued an oral decision denying the Plaintiff's request for pre-verdict interest.

Pearson and Railoc filed notices of appeal from the circuit court judgment with the court of appeals on April 9 and 16, respectively. On April 16, the Plaintiff filed a notice of cross-appeal from the circuit court's decision denying pre-verdict interest. On December 31, 1982, Railoc filed a motion with the court of appeals to dismiss the Plaintiff's cross-appeal on the grounds that the court lacked subject matter jurisdiction over the cross-appeal because the order was not reduced to writing or entered as required by Sections 808.03(1), 807.11 or 809.10(1), Stats. On January 13, 1983, the court of appeals denied the motion to dismiss citing State v. Alles 106 Wis.2d 368, 316 N.W.2d 378 (1982) for the proposition that an oral order is properly reviewable by cross-appeal. The court of appeals issued its unpublished decision on the merits of the appeal and cross-appeal on July 8, 1983. That decision affirmed the judgment over a number of evidentiary challenges raised by Pearson and Railoc and also affirmed the order denying the Plaintiff's request for pre-verdict interest. This court granted the Plaintiff's petition to review that part of the court of appeals decision affirming the denial of pre-verdict interest.

The common law rule defining the circumstances in which a party is entitled to pre-verdict interest in Wisconsin has its origins in the case of Laycock v. Parker, 103 Wis. 161, 79 N.W. 327 (1899). That case involved a suit by a builder for the unpaid balance on a building contract and for extras. The defendant claimed a set off against the amount owing for certain omissions and substitutions and for delay. The trial court gave judgment to the plaintiff for the amount claimed minus set offs plus interest on the judgment from the date of the commencement of the action. On appeal, the defendant argued that the court erred when it permitted the plaintiff to recover interest accruing prior to the verdict. After reviewing the cases from Wisconsin and other jurisdictions, this court affirmed the judgment of the trial court. The court stated that whereas earlier cases had sometimes permitted an award of pre-verdict interest "by way of punishment to a wrongdoer," more recent cases had recognized "[t]he idea of compensation to him who had been deprived of the use of his money." 103 Wis. at 179, 79 N.W. 327. The earlier cases had confined the award of pre-verdict interest to "strictly liquidated demands" so as not to impose the "punishment" of interest "if there were any uncertainty as to defendant's duty to excuse nonperformance of it." 103 Wis. at 179, 79 N.W. 327. More recent cases, the court said, had recognized "an intermediate class of demands between strictly liquidated ones ... and those wholly unliquidated...." 103 Wis. at 180, 79 N.W. 327. The court concluded that an award of pre-verdict interest should not be limited to instances of liquidated damages, but should extend as well to those cases where the amount of damages is determinable or "liquidable," i.e., where "there [is] a reasonably certain standard of measurement by the correct application of which one can ascertain the amount he owes...." 103 Wis. at 186, 79 N.W. 327.

The rule announced in Laycock, that pre-verdict interest is recoverable only on damages that are either liquidated or liquidable has, with minor modifications, been consistently adhered to ever since. See e.g., Necedah Mfg. Corp. v. Juneau County, 206 Wis. 316, 237 N.W. 277, 240 N.W. 405 (1932); Maslow Cooperage Corp. v. Weeks Pickle Co., 270 Wis. 179, 70 N.W. 577 (1955); Giffen v. Tigerton Lumber Co., 26 Wis.2d 327, 132 N.W.2d 572 (1965); State ex rel. Schilling & Klingler v. Baird, 65 Wis.2d 394, 222 N.W.2d 666 (1974); Olguin v. Allstate Ins. Co., 71 Wis.2d 160, 237 N.W.2d 694 (1976).

The most frequently stated rationale for the rule is that if the amount of damages is either liquidated or determinable by reference to some objective standard, the defendant can avoid the accrual of interest by simply tendering to the plaintiff a sum equal to the amount of damages. In State ex rel. Schilling & Klingler v. Baird, 65 Wis.2d at 401-402, 222 N.W.2d 666, this Court stated: "[I]n order to recover interest there must be a fixed and determinate amount which could have been tendered and interest thereby stopped." (quoting De Toro v. DI-LA-CH, Inc., 31 Wis.2d 29, 34, 142 N.W.2d 192 (1966). Similarly this Court said in Wyandotte Chemicals Corp. v. Royal Electric Mfg., 66 Wis.2d 577, 587, 225 N.W.2d 648 (1975): "[T]his court has denied interest recovery where the withholding party had no means available to determine that amount which he had to tender in order to prevent interest from accruing."

This court discussed the rules governing the award of pre-verdict interest in the recent case of Nelson v. Travelers Ins. Co., 102 Wis.2d 159, 306 N.W.2d 71 (1981). The specific issue in that case did not involve pre-verdict interest. The question rather had to do with whether a prevailing plaintiff in a personal injury action was entitled to post-verdict interest under Section 814.04, Stats. 1977, from the date of the trial fixing the amount of damages when the liability portion of the verdict was set aside on appeal and retried. The court held that interest accrued from the date of the first trial. In the course of the opinion the court discussed the rules governing pre-verdict interest. The court stated that if pre-verdict interest is "[v]iewed from the perspective of punishment instead of compensation, the traditional liquidated-unliquidated distinction is meaningful, since it would be unreasonable to punish one for failing to pay a debt, the amount of which is not only undermined [sic] but incapable of determination." 102 Wis.2d at 167. However, the court further stated that punishment is not the proper rationale for awarding pre-verdict interest. "The interest obligation imposed upon the wrongdoer is not an additional penalty for the wrong but is simply the value of the use of the money--a value which should be accruing for the benefit of the plaintiff-creditor but, because of the nature of the debt, was accruing to the defendant-debtor instead." 102 Wis.2d at 169. The court suggested that when pre-verdict interest is viewed as compensation, the liquidated-unliquidated distinction...