Simpson v. State

• Decision Date: 06 February 1991
• Citation: 105 Or.App. 523,805 P.2d 734
• Parties: Derril O. SIMPSON, Respondent, v. STATE of Oregon, Third-Party Plaintiff-Appellant, and Ralph Cobb, Third-Party Defendant. 16-86-03611; CA A62054.
• Court: Oregon Court of Appeals

Page 734

805 P.2d 734

105 Or.App. 523

Derril O. SIMPSON, Respondent, v. STATE of Oregon, Third-Party Plaintiff-Appellant and Ralph Cobb, Third-Party Defendant.

16-86-03611; CA A62054.

Court of Appeals of Oregon.

Argued and Submitted Sept. 17, 1990.

Decided Feb. 6, 1991.

Meg Reeves, Asst. Atty. Gen., Salem, argued the cause for appellant. With her on the brief were Dave Frohnmayer, Atty. Gen., and Virginia L. Linder, Sol. Gen., Salem.

Michael A. Greene, Portland, argued the cause for respondent. With him on the brief were B. Carlton Grew and Rosenthal & Greene, P.C., Portland.

Before DEITS, P.J., and NEWMAN and DE MUNIZ, JJ.

DE MUNIZ, Judge.

The issue is whether plaintiff is entitled to recover from defendant State of Oregon interest that accrued on a judgment against him when the resolution of his appeal from that judgment was delayed by the trial court clerk's failure to mail a notice required by ORCP 63E. The trial court awarded plaintiff damages in an amount equal to the interest that accrued during that delay. We affirm.

The parties stipulated to the facts. ¹ In a separate action, Marjorie Simpson had obtained a judgment against plaintiff. Plaintiff filed a motion for judgment notwithstanding the verdict or, alternatively, a new trial. The trial court denied that motion; however, the trial court clerk did not mail a notice of the date of entry of that order to plaintiff's attorney, as required by ORCP 63E. When plaintiff appealed from the judgment, Marjorie Simpson moved to dismiss the appeal, because the notice of appeal was not timely filed. We dismissed the appeal for that reason, Simpson v. Simpson, 73 Or.App. 1, 697 P.2d 570 (1985); however, the Supreme Court reinstated the appeal. Simpson v. Simpson, 299 Or. 578, 704 P.2d 509 (1985). We subsequently affirmed the judgment against plaintiff. Simpson v. Simpson, 83 Or.App 86, 730 P.2d 592 (1986), rev. den. 303 Or. 454, 737 P.2d 1248 (1987).

Defendant argues that plaintiff is not entitled to recover the accrued interest for several reasons. First, defendant argues that "[p]laintiff has not been damaged to the extent of accrued interest because he has not lost the use of the amount of the judgment." In this regard, defendant contends that this case is controlled by Hoage v. Westlund, 43 Or.App. 435, 441, 602 P.2d 1147 (1979), where a contract of sale for a building provided that the taxes on the building for the year in which the sale occurred would be prorated as of the date of the agreement. A title company was employed by the parties to close the sale, and they instructed it to prorate the taxes. The plaintiff, the seller, sought damages from the purchaser, Westlund, for failure to prorate and pay taxes correctly on the building in accordance with the contract of sale. Westlund filed a cross-complaint against the title company for the amount of damages that he was required to pay the plaintiff. 43 Or.App. at 437, 602 P.2d 1147.

One of the issues on appeal was whether Westlund was entitled to recover damages equal to the amount of prejudgment interest that the plaintiff recovered against him. In that context, we noted that "[i]nterest is money paid for the use of money." We held that Westlund "had the use" of the amount of money represented by the underlying judgment before the judgment was entered; therefore, he was not entitled to recover damages equal to the interest on that amount from the title company. 43 Or.App. at 441, 602 P.2d 1147.

Plaintiff does not argue that he is entitled to the accrued interest as compensation for the use of his money. Rather, he argues that he is entitled to the accrued interest, because it is damage resulting directly from defendant's negligence. Accordingly, this case is not controlled by the rule that we cited in Hoage v. Westlund, supra, 43 Or.App. at 441, 602 P.2d 1147. See Spreader Specialists v. Monroc, Inc., 114 Idaho 15, 21-22, 752 P.2d 617, 623-624 (Idaho App.1987); Rodrigues v. State, 52 Hawaii 156, 167-169, 472 P.2d 509 (1970).

The parties do not cite, and we have not found, any Oregon case that has addressed the recoverability of interest incurred as a direct result of a defendant's negligence. However, several other jurisdictions have addressed the issue under similar circumstances. In Spreader Specialists v. Monroc, Inc., supra, the plaintiff sought to recover interest on a loan that it took out to finance the repair of a vehicle that the defendant had damaged. The court held that "interest charges incurred on a loan obtained in good faith, as part of a reasonable course of action to mitigate losses, may be recovered as an item of consequential damages." 114 Idaho at 22. (Footnote and citations omitted.)

Similarly, in Rodrigues v. State, supra, the plaintiffs obtained a loan to repair flood damage to their house caused by the defendant's negligent maintenance of a drainage culvert. The court concluded that

"the expense of interest charges on the loan incurred by the [plaintiffs] was attributable to the damage caused by the overflow of waters from the blocked culvert. We hold, therefore, that interest charges, as an incidental expense of a loan which is incurred by the claimant in good faith to mitigate damages, may be recovered as an item of compensatory damages in civil suits." 52 Hawaii at 167, 472 P.2d 509. (Citations omitted.)

The plaintiffs in Sanders v. Park Towne, Ltd., 2 Kan.App.2d 313, 578 P.2d 1131 (1978), were vendors of a mobile home park who brought an action for fraud and breach of fiduciary duty against, among others, the escrow agent and two title companies involved in the sale and refinancing of the park. The plaintiffs lost their right to a second mortgage lien during the transaction. The trial court allowed "prejudgment interest on the unpaid balances of plaintiffs' notes as an element of damages." The escrow agent and title companies argued that the interest damages violated "the general rule against prejudgment interest on unliquidated tort claims." However, the court concluded that

"the interest on the notes was part of the actual damages suffered by the plaintiffs.

Although the court did not make findings regarding the value of the property and the amount outstanding on the first mortgage, it apparently concluded that a valid second mortgage would have fully secured the amount due on the notes plus interest. Where interest is part of the actual loss it is recoverable." 2 Kan.App.2d at 320, 578 P.2d 1131. (Citations omitted; emphasis supplied.)

As those opinions demonstrate, interest that is incurred as a result of a defendant's tortious conduct may be allowed as consequential damages. "[A] negligent de...