Thompson v. King Feed & Nutrition Service, Inc.

• Citation: 105 P.3d 378,153 Wash.2d 447
• Decision Date: 20 January 2005
• Docket Number: No. 74280-4.,74280-4.
• Court: United States State Supreme Court of Washington
• Parties: Glenn THOMPSON and Janice Thompson, husband and wife, Respondents, v. KING FEED & NUTRITION SERVICE, INC., a Washington Corporation, Appellant.

105 P.3d 378

153 Wash.2d 447

Glenn THOMPSON and Janice Thompson, husband and wife, Respondents, v. KING FEED & NUTRITION SERVICE, INC., a Washington Corporation, Appellant.

No. 74280-4.

Supreme Court of Washington, En Banc.

Argued June 30, 2004.

Decided January 20, 2005.

James Morton Beecher, Seattle, for Appellant.

Nigel Stephen Malden, Tacoma, for Respondents.

IRELAND, J.¹

In this case we consider whether the trial court erred in its jury instruction as to the proper measure of damages for the negligent destruction of a barn and whether the trial court abused its discretion in granting sanctions under CR 37(c). We hold that the trial court's instruction was not prejudicial or erroneous. We therefore affirm the Court of Appeals. As to the issue of sanctions, the opinion of the court is reflected in the dissent, which holds that the trial court abused its discretion and vacates the order imposing sanctions.

FACTS

Glenn and Janice Thompson (Owners) own a 15 acre parcel of land in Enumclaw, Washington. In June 1998, Owners agreed to rent the barn on the property to King Feed & Nutrition Service, Inc. (King Feed) for storing hay cut from Owners' and other properties in the local area. On August 27, 1998 the barn was completely destroyed by fire. The cause of the fire was determined to be spontaneous combustion due to the negligent storage of wet hay. Liability as to the cause of the fire is not in dispute on appeal.

In October 1999, Owners brought suit to recover the cost of replacing the barn. During discovery, Owners sent King Feed a request for admission to admit negligence and proximate cause and to admit that Owners were not contributorily negligent or comparatively at fault. King Feed denied all requests for admission and raised the affirmative defense that Owners may have been comparatively at fault. At trial, Owners called several experts to testify as to the value of the barn. A real estate agent estimated the rental value of the barn to be at least $2,500 per month and the value of the barn itself to be $400,000. A general contractor estimated the cost of rebuilding the barn to be more than $500,000. A real estate appraiser estimated that the "barn contributed a value of $300,000 more or less" to Owners' property. Verbatim Report of Proceedings (VRP) at 285. The appraiser also estimated that the cost of replacing the barn would be between $485,000 and $500,000. In response, King Feed called one witness, a real estate sales associate, who testified that the barn added $100,000 to $110,000 to the value of Owners' property.

The jury awarded Owners $300,000. In a posttrial motion, Owners requested the trial court to "order defendant to partially reimburse" Owners' reasonable attorneys fees and costs as sanctions for discovery violations under CR 37(c) and/or CR 26(g) and RCW 4.84.185. Clerk's Papers (CP) at 134. The trial court granted Owners' motion under CR 37(c) and ordered King Feed to pay an additional $19,434. The court specifically noted that not every item related to negligence and causation is reimbursable. Rather, reimbursement is limited to the costs associated with the time period after which a reasonable person in King Feed's position should have conceded the issues.

The Court of Appeals affirmed the trial court in a partially published opinion, holding that (1) the trial court did not err by refusing to give King Feed's proposed instruction on damages, (Thompson v. King Feed & Nutrition Serv., Inc., 117 Wash.App. 260, 70 P.3d 972 (2003)), and (2) the trial court did not abuse its discretion in granting CR 37(c) sanctions against King Feed for its failure to admit certain matters in the requests for admission propounded by Owners during discovery. Id. at 261, 70 P.3d 972.

In addition, Owners requested an award of additional attorney fees and costs incurred on appeal under CR 37(c) and RAP 14.1-14.4. The Court of Appeals denied this request because none of the cited provisions support such an award. Thompson, No. 48419-2-I, slip op. (unpublished portion) at 21, 2003 WL 21377695 at *10.

ISSUES

The following issues have been raised on appeal:

1. Did the trial court err in rejecting WPI 30.11 (6 Washington Pattern Jury Instructions: Civil (4th ed.2002)) as the proper measure of damages instruction for the negligent destruction of a building?

2. Did the trial court abuse its discretion in granting sanctions against King Feed under CR 37(c)?

3. Should Owners be awarded additional attorney fees and costs incurred on appeal pursuant to CR 37(c) and RAP 14.1-14.4?

ANALYSIS

1. Did the trial court err in rejecting WPI 30.11 as the proper measure of damages instruction for the negligent destruction of a building?

Jury instructions are reviewed de novo, and an instruction that contains an erroneous statement of the applicable law is reversible error where it prejudices a party. Cox v. Spangler, 141 Wash.2d 431, 442, 5 P.3d 1265, 22 P.3d 791 (2000). Jury instructions are sufficient when they allow counsel to argue their theories of the case, do not mislead the jury, and when taken as a whole, properly inform the jury of the law to be applied. Id. A clear misstatement of the law, however, is presumed to be prejudicial. Keller v. City of Spokane, 146 Wash.2d 237, 249-50, 44 P.3d 845 (2002).

King Feed contends that the Court of Appeals' affirmation of instruction 8 is "an erroneous statement of the applicable law on damages." Pet. for Review at 15. Jury instruction 8 provides, in relevant part:

If your verdict is for the plaintiff, then you must determine the amount of money which will reasonably and fairly compensate the plaintiff for such damages as you find were proximately caused by the negligence of the defendant.

If you find for the plaintiff, you should consider the following factors:

1. The value the barn added to the plaintiff's property immediately before the fire;

2. The fair market value of the barn;

3. The fair rental value of the barn;

4. The reasonable cost to replace the barn if you find:

a. that there is reason personal to the owner for replacing the barn or

b. where there is reason to believe that the plaintiff will replace the barn to its original condition,

and you find that the cost of replacing the barn, although it may be greater than the value added to the property by the barn, is not unreasonably disproportionate to the diminution in market value of the property because of the loss of the barn.

CP at 99.

King Feed maintains the court should have given proposed jury instruction D6.² According to King Feed, proposed instruction D6 was based upon WPI 30.11 and contained an accurate statement of the applicable measure of damages based on Hogland v. Klein, 49 Wash.2d 216, 298 P.2d 1099 (1956). WPI 30.11 states that the measure of damages to personal property should be the lesser of:

1. The reasonable value of necessary repairs to any property that was damaged; or

2. The difference between the fair cash market value of the property immediately before the occurrence and the fair cash marked value of the unrepaired property immediately after the occurrence.

In addition to Hogland, King Feed relies upon the cases Pepper v. J.J. Welcome Construction Co., 73 Wash.App. 523, 871 P.2d 601 (1994), DeYoung v. Swenson, 6 Wash.App. 452, 493 P.2d 1247 (1972), and Falcone v. Perry, 68 Wash.2d 909, 416 P.2d 690 (1966) to support the contention that the "lesser than" rule is correctly applied when a barn is negligently destroyed by fire.

In response, Owners argue that instruction number 8 was proper and that the "lesser than" rule is inapplicable to this case. In support, Owners point to the "Note on Use" that accompanies WPI 30.11, which states: "This instruction may not be appropriate for damages to real estate or improvements thereon." WPI 30.11. They also argue that under the general rule stated in Burr v. Clark, 30 Wash.2d 149, 190 P.2d 769 (1948), they were entitled to ask the jury to award the cost of restoring the barn. Lastly, Owners distinguish both DeYoung and Pepper.

We find that WPI 30.11, the "lesser than" rule, is inapplicable in circumstances involving negligent destruction of a building. In addition to the Note on Use cited by Owners, a careful reading of the cases cited by King Feed illustrates that WPI 30.11 applies to situations in which property is damaged, not destroyed.

In Hogland, the owner of a house contracted with a company to have the house moved to a new location. The move required separating the house into two sections. The first section was moved without incident, but the second section was damaged when one of the supporting timbers fractured. The trial court, quoting 15 American Jurisprudence § 113, at 524, applied the "lesser than" rule:

"The owner is entitled to recover the entire cost of restoring a damaged building to its former condition unless such cost exceeds its diminution in value as the result of the injury, in which event the recovery must be limited to the amount of such diminution. Under this rule the court should receive evidence both as to the cost of restoring the building and as to the amount of its diminished value, and then adopt as the measure of damages the lesser of the two amounts."

Hogland, 49 Wash.2d at 220, 298 P.2d 1099. We affirmed the "lesser than" rule as the proper measure of damages for the damaged portion of the house. Id.

In Falcone, the executors of an estate sued to recover damages from a truck driver whose runaway truck struck and damaged a home. We approved a jury instruction based upon the "lesser than" rule:

"The measure of damages with reference to the plaintiffs' property in this case is the entire cost of restoring the damage to return the property to its former condition unless the cost exceeds the diminution in value as a result of the accident, in which event the measure of damages would be the difference between the fair cash market value of the plaintiffs' property immediately before and

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