MacHela Transport Co. v. Philadelphia Indemnity Insurance
2013 U.S. App. LEXIS 23396
| 8th Cir. | 2013Background
- Macheca operated a refrigerated warehouse that suffered an ammonia leak in Nov. 2001; litigation concerns insurance coverage for property damage, lost business income, and related expenses.
- Macheca had two relevant policies: Philadelphia Indemnity (defendant) and Travelers (a separate insurer) — Travelers paid Macheca $348,481.70 for some losses before suit.
- This litigation produced multiple trials and appeals: the Eighth Circuit previously reversed summary judgment (Macheca I), remanded, reversed another summary judgment (Macheca II), and after a second retrial a jury awarded Macheca $174,964.
- At both trials the district court instructed juries not to award any amount already paid by Travelers; Macheca did not challenge that instruction on its first appeal.
- Post-judgment, Macheca sought prejudgment interest under Mo. Rev. Stat. § 408.020 and challenged the Travelers offset as a collateral-source issue or otherwise improper; the district court denied prejudgment interest (generally) and refused to eliminate the Travelers offset.
- On this appeal the Eighth Circuit: (1) held Macheca is barred by the law-of-the-case doctrine from relitigating the Travelers-offset issue it failed to raise on the first appeal; (2) affirmed denial of prejudgment interest for lost business income and necessary expenses; and (3) reversed denial of prejudgment interest as to the property-damage award and remanded for further proceedings on that limited point.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Travelers payment is a collateral source and therefore should not reduce Macheca's recovery | Travelers payment is collateral source; it should not offset Philadelphia's liability | Travelers payment should reduce recovery; jury properly instructed to exclude amounts Travelers paid | Denied — law-of-the-case bars relitigation because jury instruction and offset issue were decided at first trial and not appealed |
| Whether prejudgment interest is available on awarded damages under Mo. Rev. Stat. § 408.020 | Macheca sought prejudgment interest on all awarded categories (property, lost business income, necessary expenses) | Philadelphia opposed; argued damages not liquidated/ascertainable and equitable factors weigh against interest | Mixed — prejudgment interest denied for lost business income and necessary expenses; allowed for property damage |
| Whether property-damage award was "liquidated"/ascertainable so prejudgment interest may run | Property damage was calculable soon after loss and measured by replacement cost, so liquidated | Philadelphia argued disputes over amounts and valuation precluded interest | Held — property damage was reasonably ascertainable; prejudgment interest under § 408.020 is available |
| Whether lost business income and necessary expenses were "liquidated"/ascertainable | Lost business income and necessary expenses were not readily determinable because Macheca changed theories and repair timing; thus interest unwarranted | Philadelphia argued same: amounts uncertain and dispute over duration/method | Held — these categories were unliquidated/uncertain; prejudgment interest denied |
Key Cases Cited
- Macheca Transp. v. Phila. Indem. Co., 463 F.3d 827 (8th Cir. 2006) (prior appellate decision reversing summary judgment)
- Macheca Transp. v. Phila. Indem. Co., 649 F.3d 661 (8th Cir. 2011) (prior appellate decision reversing second summary judgment and remanding)
- Arizona v. California, 460 U.S. 605 (U.S. 1983) (law-of-the-case doctrine governs that prior rulings on legal issues control later stages of same litigation)
- Emmenegger v. Bull Moose Tube Co., 324 F.3d 616 (8th Cir. 2003) (equitable principles may not be considered when awarding prejudgment interest on a liquidated demand)
- Comens v. SSM St. Charles Clinic Med. Grp., Inc., 335 S.W.3d 76 (Mo. Ct. App. 2011) (damages may be ascertainable even amid expert dispute; exact calculation not required for prejudgment interest)
- Bailey v. Hawthorn Bank, 382 S.W.3d 84 (Mo. Ct. App. 2012) (three requirements for prejudgment interest: due, liquidated/ascertainable, and demand made)