392 P.3d 898
Utah Ct. App.2017Background
- The Fullers owned a home and a business insured by Western; both were destroyed by fire in June 2007 and the Fullers learned they were underinsured. The jury awarded $101,595 for property loss.
- Before trial the parties agreed to withdraw a jury instruction (Instruction 29) that would have directed the jury to award prejudgment interest at 10% annually; the court approved withdrawing the instruction and the parties agreed the court would determine prejudgment interest after trial.
- At post-trial briefing the trial court found the parties had stipulated to awarding prejudgment interest but not to a specific 10% rate; the court concluded the 10% language from the withdrawn instruction was not part of the stipulation.
- The trial court applied Utah Code section 15-1-4 (federal postjudgment rate plus 2%) because section 15-1-1’s 10% rate was limited to certain contract loan/forbearance contexts per recent Utah Supreme Court authority, and set the rate at 2.27% (the statutorily-prescribed rate as of Jan 1, 2015).
- The Fullers appealed only the prejudgment interest-rate determination; the Court of Appeals affirmed the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the parties’ stipulation required prejudgment interest at 10% | The stipulation (by withdrawing Instruction 29) incorporated the instruction’s 10% rate and thus bound the court to apply 10% | The stipulation only agreed that prejudgment interest would be awarded if property damages were found; it did not fix the rate | Court: Stipulation covered entitlement to prejudgment interest but did not clearly include the 10% rate; trial court did not clearly err in so finding |
| Whether Utah Code § 15-1-1 (10% rate) applies to tort judgments | § 15-1-1 entitles the Fullers to 10% because a tort claim is a chose in action and forbearance occurred | § 15-1-1 is limited to contracts for loan/forbearance; it does not apply to tort-based judgments per Utah Supreme Court precedent | Court: § 15-1-1 does not apply to these tort claims; USA Power limits § 15-1-1 to contract loan/forbearance contexts |
| If § 15-1-1 inapplicable, which statutory rate controls | Fullers: if postjudgment rate applies, it should be the rate effective when prejudgment interest began (2007 rate) or a rate reflecting market conditions when loss occurred | Western: trial court should apply statutory postjudgment scheme (section 15-1-4) which fixes the rate as of the judgment date (and the rate in effect Jan 1 each year governs) | Court: Section 15-1-4 governs when § 15-1-1 doesn’t apply; the trial court properly used the statutorily-prescribed postjudgment rate (2.27% as of Jan 1, 2015) |
Key Cases Cited
- Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 210 P.3d 263 (Utah 2009) (standard for reviewing statutory interpretation)
- Prinsburg State Bank v. Abundo, 296 P.3d 709 (Utah 2012) (stipulation scope and binding effect)
- Brasher v. Christensen, 374 P.3d 40 (Utah Ct. App. 2016) (standard for reviewing factual findings about stipulations)
- USA Power, LLC v. PacifiCorp, 372 P.3d 629 (Utah 2016) (limits § 15-1-1 to contracts for loan or forbearance)
- Wilcox v. Anchor Wate Co., 164 P.3d 353 (Utah 2007) (discusses applicability of § 15-1-1 and alternative rate approaches)
- DeBry v. Occidental/Nebraska Fed. Sav. Bank, 754 P.2d 60 (Utah 1988) (contract-construction principles applied to stipulation scope)
- Consolidation Coal Co. v. Utah Div. of State Lands & Forestry, 886 P.2d 514 (Utah 1994) (skepticism about broad application of § 15-1-1)
- Francis v. National DME, 350 P.3d 615 (Utah Ct. App. 2015) (discussion of § 15-1-1 application and interpretive complexity)
- Fell v. Union Pacific Ry., 88 P. 1003 (Utah 1907) (historical case relied on by Fullers for broader reading of § 15-1-1)