Title: Lakin v. Senco Products, Inc.

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed:  October 7, 1999

IN THE SUPREME COURT OF THE STATE OF OREGON

JOHN LAKIN and ANN MARIE LAKIN,
husband and wife,

	Respondents on Review,

	v.

SENCO PRODUCTS, INC., an Ohio
corporation,	Petitioner on Review,

	and	

WESTERN SUPPLY CORPORATION,
an Oregon Corporation, dba 
WESTERN TOOL SUPPLY,

	Defendant.

(CC 9211-07901; CA A83575; SC S44110)

	On petitioner's motion for clarification dated August 3,
1999.*

	M. Elizabeth Duncan, of Greene & Markley, P.C., Portland,
submitted the motion for clarification for petitioner on review.

	Kathryn H. Clarke, Maureen Leonard, and William A. Gaylord,
Portland, submitted the response to the motion for clarification
for respondents on review.

	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, and Kulongoski, Justices.**

	VAN HOOMISSEN, J.

	Opinion clarified; legal interest on the jury's full award
of noneconomic damages accrues from the date when the trial court
entered judgment.

	*Lakin v. Senco Products, Inc., 329 Or 62, ___ P2d ___
(1999).

	**Leeson, and Riggs, JJ., did not participate in the
consideration or decision of this case.

		VAN HOOMISSEN, J.

		John Lakin and Ann Marie Lakin (plaintiffs) brought an
action at law against defendant Senco Products, Inc. (Senco)
seeking economic, noneconomic, and punitive damages for personal
injury and loss of consortium arising out of allegations of
negligent failure to warn and strict products liability.  The
jury returned a special verdict finding Senco liable.  The jury's
award included $2,000,000 in noneconomic damages to John Lakin
and $876,000 in noneconomic damages to Ann Marie Lakin.

		The trial court applied ORS 18.560(1) to limit the
noneconomic damages award to each plaintiff to $500,000 and then
reduced that amount by the jury's finding that John Lakin had
contributed five percent to his injuries.  As a result of the
application of the statutory "cap" on noneconomic damages and the
five-percent reduction for contributory negligence, plaintiffs
each received judgment for $475,000 in noneconomic damages.(1) 

		In Lakin v. Senco Products Inc., 329 Or 62, 67, ___ P2d
___ (1999), this court held that ORS 18.560(1), the statutory cap
on noneconomic damages, violates Article I, section 17, of the
Oregon Constitution.  Accordingly, this court reversed the trial
court's judgment in part and remanded the case to the trial court
for further proceedings.  The effect of that remand will be to
reinstate the jury's full award of noneconomic damages.

		The parties seek clarification of the date from which
legal interest should accrue on the full amount of noneconomic
damages awarded by the jury.  For the reasons that follow, we
hold that legal interest on the increased award of noneconomic
damages begins to accrue from the date when the trial court
entered judgment.

		Senco argues that, where a judgment is increased on
appeal, interest on the amount set out in the trial court's
judgment begins to accrue on the date of that judgment, but that
interest on the additional amount resulting from the appellate
court's decision begins to accrue only on the date of entry of
the modified or supplemental judgment.  Senco further argues that
its proposed rule is consistent with the plain wording of
Oregon's interest statute, ORS 82.010(2)(a), which provides: 
"Interest on a judgment under this subsection accrues from the
date of the entry of the judgment unless the judgment specifies
another date."  Senco asserts that interest on the increased
award in noneconomic damages of $1,782,200 in this case has yet
to be entered in a judgment and, therefore, interest on that
increase should not begin to accrue until the modified judgment
is entered by the circuit court.  Plaintiffs argue that interest
should begin to accrue on the additional amount as of the date
when the trial court entered judgment on the verdict.  We agree
with plaintiffs.

		In Compton v. Hammond Lumber Co., 153 Or 546, 55 P2d
21, 58 P2d 546 (1936), the trial court entered judgment for the
plaintiff on his claims of negligence and maintenance.  This
court reduced the maintenance judgment on the ground that a
certain instruction affecting only the maintenance claim was
erroneous and directed the trial court to enter judgment for the
reduced amount.  Id. at 564.  On the plaintiff's motion for
correction or modification of the mandate which followed, this
court held that only the claim that was not modified accrued
interest from the date of the trial court's judgment.  The
modification of the judgment required that interest on the
maintenance claim would not begin to accrue until this court
determined the proper amount on the judgment.  This court said: 
"[T]he amount of the judgment did not become due until this court
had determined the same."  Compton v. Hammond Lumber Co., 154 Or
650, 652, 61 P2d 1257 (1936).  Thus, under Compton, a
modification of the maintenance judgment postponed the accrual of
interest on that claim until a final decision on appeal.  

		In Pearson v. Schmitt, 260 Or 607, 610, 492 P2d 269
(1971), however, this court overruled Compton.  In Pearson, the
plaintiff sued to recover for personal injuries due to the
defendant's negligence.  The jury returned a verdict for the
plaintiff for $10,239.50.  On appeal, the plaintiff's recovery
was reduced by $4,900.  Pearson v. Schmitt, 259 Or 439, 487 P2d
84 (1971).  In its decision on plaintiff's motion to recall the
mandate, this court acknowledged the rule set out in Compton that
interest on a judgment runs only from entry of the modified
judgment in the trial court.  260 Or at 608-09.  The court then
described and adopted the contrary rule, explaining:

		"The view as now taken by a majority of the states
is that where a money award has been modified on appeal
and the only action necessary in the trial court is
compliance with the mandate of the appellate court,
then the interest on the award, as modified, should run
from the date of the original judgment or from the date
that judgment should have been entered on a jury
verdict in the lower court, as if no appeal had been
taken.  The only exception to this rule appears to be
that if the action of the appellate court in reversing
the opinion of the lower court has the effect of wiping
out the original judgment, then interest should run
only from the time when the amount of the new award is
fixed, whether that is done directly by the appellate
court or by the trial court's compliance with the
appellate court's mandate."  

Id. at 609.

		The rule as articulated in Pearson has been applied in
cases in which a judgment for a party was modified on appeal to
reduce or to increase a judgment.  For example, in Sause Bros.
Ocean Tow. v. Gunderson, 265 Or 568, 510 P2d 541 (1973), the
trial court entered a judgment for the plaintiff after making a
deduction that this court later concluded was improper.  This
court directed that the judgment be increased and, citing
Pearson, that interest on the modified amount should accrue from
the date of the trial court's judgment.  265 Or at 584-85.  We
conclude that Pearson directs that interest on the uncapped award
should accrue from the date when the trial court entered
judgment.   

		Opinion clarified; legal interest on the jury's full
award of noneconomic damages accrues from the date when the trial
court entered judgment.		

1. 	If the trial court had not applied ORS 18.560(1) to the
jury verdict, John Lakin would have received judgment for
$1,900,000 in noneconomic damages, and Ann Marie Lakin would have
received judgment for $832,200 in noneconomic damages.  The
difference between the amount that John Lakin actually received
in the judgment and the amount he would have received had ORS
18.560(1) not been applied is $1,425,000.  The difference between
the amount Ann Marie Lakin actually received in the judgment and
the amount that she would have received had ORS 18.560(1) not
been applied is $357,200.  The total difference resulting from
the application of the statutory "cap" on noneconomic damages is
$1,782,200.  Legal interest on that amount alone since entry of
the original judgment exceeds $868,000.