Court Opinion

ID: 9851245
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:09:22.292591+00
Date Added: 2024-06-11T09:20:51.880595
License: Public Domain

*294BUTTLER, J.,
concurring in part; dissenting in part.
I concur with all of the issues resolved by the majority, except the affirmance of prejudgment interest. On that point, although I agree with the majority’s statement that the cases do not appear to be consistent, I am not as certain as the majority appears to be that the rule on the subject is clear. Because I view the rule as being less than clear, both as enunciated by the Supreme Court and as applied by this court and the trial courts, and do not think prejudgment interest should be allowed here, I dissent. Not only is the rule murky, but the Supreme Court has not, to my knowledge, articulated any policy considerations behind whatever the rule is to aid in its application.
One of the earliest statements of the rule is found in Baker County v. Huntington, 48 Or 593, 603, 87 P 1036, 89 P 144 (1906):
“When the right to recover in an action is in good faith denied, interest will not be allowed on the demand prior to its liquidation by judgment * *
That statement of the rule tells me that if either liability or the amount demanded is contested in good faith, prejudgment interest is not allowable. That case has not been overruled; it was cited as recently as City of Portland v. Hoffman Const. Co., 286 Or 789, 596 P2d 1305 (1979), a quantum meruit case, which distinguished Baker County on the ground that it was not a quantum meruit case. One might reasonably conclude from that treatment of Baker County that it remains good law in other than quantum meruit cases.
In Public Market Co. v. Portland, 171 Or 522, 130 P2d 624, 138 P2d 916 (1943), it was argued that the fact that the damages were unliquidated necessarily barred prejudgment interest. The court, quoting from 1 Sedg. on Damages 571, § 300 (9th ed), said that the distinction between liquidated and unliquidated damages is disregarded where
“ ‘the demand is of such a nature that its exact pecuniary amount was either ascertained, or ascertainable by simple computation, or by reference to generally recognized standards such as market price,’ and where ‘the time from which interest, if allowed, must run, — that is, a time of definite *295default or tort feasance, — can be ascertained.’ ” 171 Or at 625. (Emphasis in original.)
That rule was restated in Krieg v. Union Pacific Land Res. Corp., 269 Or 221, 234, 525 P2d 48 (1974), with only slight modification: The words “ascertainable by simple computation” in Public Market were changed to “readily ascertainable.”
It seems clear that, at least in quantum meruit cases, the Baker County exception to the allowance to prejudgment interest based on a good faith denial of a demand for payment is not, if it ever was, the law. The rationale appears to be that the amount of a quantum meruit claim is readily ascertainable in the market place by determining the reasonable value of the labor and materials and, in some instances, a reasonable profit. City of Portland v. Hoffman Const. Co., supra.
This court has generally allowed prejudgment interest in quantum meruit cases: Carlson v. Blumenstein, 54 Or App 380, 635 P2d 380 (1981), mod on other grounds 293 Or 494 (1982); Laro Lumber Company v. Patrick, 52 Or App 1035, 630 P2d 400 (1981). However, in at least two quantum meruit cases, we reversed awards of prejudgment interest. In Dale’s Sand & Gravel v. Westwood Construction 62 Or App 570, 576, 661 P2d 1378, rev den 295 Or 259 (1983), we stated:
“* * * Dale’s own brief provides ample evidence that the unit value assigned to the compaction work and the manner of calculating total value of the work were not matters of simple computation for the trial court.”
We did, however, affirm the award of prejudgment interest on the amount determined to have been owed for the delivery of rock, because it was readily ascertainable. In Cloud v. Riddell, 54 Or App 917, 636 P2d 996 (1981), rev den 292 Or 581 (1982), we reversed an award of prejudgment interest on the defendant’s counterclaim for lost profits resulting from delay in completion of the work. We note that the plaintiff had offered evidence that they had never expressly agreed to the extra work performed by the contractor and that some of the work was not properly performed, requiring a setoff. If there is a distinction between the two groups of cases, it has not been articulated. There is a suggestion that the damages must be ascertainable by simple computation, Dale’s Sand & Gravel, supra, and also a suggestion that a good faith dispute defeats *296entitlement to prejudgment interest (shades oí Baker County). Cloud v. Riddell, supra.
In cases that did not involve quantum meruit claims, we have been equally inconsistent. In McKean v. Bernard, 54 Or App 540, 635 P2d 673 (1981), and Isler v. Shuck, 38 Or App 233, 589 P2d 1180 (1979), there were questions of fact that had to be resolved before the amount of liability could be determined; in each case, we held prejudgment interest was allowable. On the other hand, in Arden-Mayfair v. Patterson, 46 Or App 849, 857, 613 P2d 1062, rev den 290 Or 149 (1980), we reversed an award of prejudgment interest, stating:
“Given the conflicting claims of the parties, it can hardly be said that the exact pecuniary amount owed by plaintiff was easily ascertained, or ascertainable, by simple computation. A review of the evidence clearly shows that the parties did not agree upon the amount in dispute. In Catlin v. Knott, 2 Or 321 (1868), the Supreme Court addressed the same issue * * * [and said] ‘It is very evident there was no mutual understanding as to any certain amount of difference between them.’ ”
It appears to me that none of the cases has attempted to put “the rule” together; we can pick and choose — throw darts at a dart board: deny prejudgment interest if the computation of damages is complicated, or there is a good faith dispute, or if the parties did not agree on the amount in dispute or, generally, it strikes us that it should be denied. On the other hand, we may allow it when, somehow at some time, the plaintiff is able to come up with a definite figure, or the defendant acted in bad faith or, generally, we think it is appropriate.
In an effort to find an anchor, I would be inclined to accept the statement from Arden-Mayfair v. Patterson, supra, as the most complete one, consistent with the opinions of the Supreme Court in Public Market Co. v. Portland, supra, and Krieg v. Union Pacific Land Res. Corp., supra. If I am correct in that, the initial question is whether in this case the various amounts claimed by plaintiff were “easily ascertained, or ascertainable, by simple computation.” It is not clear from the majority opinion exactly what plaintiffs prejudgment interest claims are based on. The trial court’s instructions indicate the various categories the jury was told to consider:
“Under the facts, the law of this case, interest, if any, is a *297matter that must be determined by the jury. Accordingly, you may include in your determination of the amount that is due Banister, if anything, interest as herein provided.
“First, the contract required Banister to pay invoices within 20 days after receipt subject to Northwest’s right to retain ten percent of all invoices pending receipt of their completion affidavit signed by the contractor’s representative. With respect to any untimely payment of a Banister’s invoice, you must calculate the number of days for which any specific amount of money was late and you must then apply the legal rate of interest at nine percent per annum thereto which will yield thé amount of that interest to which Banister is entitled.
“Second, if you find Banister has submitted invoices to Northwest which Northwest improperly refused to pay, then with respect to those invoices you must calculate the number of days for which any specific amount of money was late and you must then apply the legal rate of interest at nine percent per annum thereto, which would yield the amount of that interest to which Banister is entitled.
“Third, with respect to the retainage, Northwest had the right to retain ten percent of all invoices pending receipt of proper invoices and of an executed contractor completion affidavit on forms furnished by the company, certifying that all bills for labor and material had been paid. If you find that Northwest improperly refused to release all or part of the retention, then you must calculate the number of days for which any specific amount of retainage was late in being released. And you must then apply the legal rate of interest at nine percent per annum thereto, which will yield the amount of that interest to which Banister is entitled.
“Fourth, with respect to the damage claim of Banister, if you determine that any damages have been suffered by Banister as a result of the material breaches of the contract by Northwest, as of any specific date on or after May 3rd, 1982, for any such specific amount of damage, you must apply the legal rate of interest of nine percent per annum thereto, from and after the date, not earlier than May 3rd, 1982, a specific amount of damage was ascertainable which will yield the amount of that interest to which Banister is entitled.
“The interest on any such award would begin to run at the time any such principal item was certain enough in value to be reasonably quantified if at or before that time the claim had been presented to the defendant and rejected. In order to make this award of interest, you must determine the date or *298dates upon which the plaintiffs particular claims for which you make an award were reasonably calculable and were rejected by the defendant. You are entitled to compensate the plaintiff from such dates for interest at the rate of nine percent per annum.”
The first category of claims outlined by the instructions is no problem, because, in my view, it does not constitute prejudgment interest. Because the contract required Banister to pay invoices within 20 days after receipt, the instruction simply requires the jury to determine the number of days for which any specific amount of money was paid late and to award interest on that specific amount for that number of days. That part of the interest is part of Banister’s claim under the contract, not prejudgment interest.
The second category involves invoices that were submitted but improperly rejected by Northwest. In that category, the amount is ascertained and the date the payment is due is also ascertained. Those claims fall squarely within the rule allowing prejudgment interest.
The third category relates to the amount of the 10 percent retainage that Northwest improperly withheld. The jury was instructed that, if Northwest had improperly refused to release all or part of the retention, then Banister was entitled to interest on the amounts improperly retained for the number of days during which it was withheld. Again, the amount is definite and the date on which the payment was due is definite.
It is the fourth category that creates problems. The case was submitted to the jury on a special verdict containing numerous interrogatories, the last two of which related to fixing the amount of damages. There were two categories of claims: The first category related to losses claimed in plaintiffs Exhibit B-128, for which there was to be no prejudgment interest. The total damages asserted in Exhibit B-128 was $3,517,834. The jury awarded $884,619.94. The second category related to damages arising from all other losses and matters “proved herein as damages,” for which plaintiffs final claim appears to have been $26,383,734. The jury awarded $11,167,734.11, plus prejudgment interest of $4,637,132.60 (which was later substantially reduced). Because the prejudgment interest on all four categories was awarded in a lump *299sum, we do not know how much was attributed to the fourth category.1
The lawsuit was filed in June, 1981, and it was not until May 3,1982, that plaintiff set forth with any specificity the amount of damages it was claiming, and the numerous bases for those damages. Although the trial court initially ruled that prejudgment interest was not allowable, it finally concluded that plaintiffs damages were readily ascertainable as of May 3,1982, and therefore prejudgment interest should be allowed from no earlier than that date. It appears, however, that even after the May 3, 1982, schedules were submitted, plaintiff amended the amounts several times, including such things as lost profits and loss of productivity, using different accounting techniques.
Clearly, plaintiffs damages had not been ascertained; I find it extremely difficult to say that its damages were readily ascertainable; they were certainly not ascertainable by simple computation. It is also clear that the parties were not in agreement on the amount in dispute. Whether prejudgment interest ought to be allowed in a given case must depend, in part at least, on the policy behind the rule allowing it. So far, I do not believe that the Supreme Court or this court has articulated what that policy is, other than to relate it to the statute providing for interest on “all moneys after they become due.” ORS 82.010(2). Presumably, the allowance of prejudgment interest in certain kinds of cases would encourage settlements, a laudable goal. However, if the defendant has no reasonably ascertainable figure to offer, on a rational basis, that reason would not appear to be applicable here. Another reason for allowing prejudgment interest is to make the plaintiff whole, the assumption being that readily ascertainable amounts were due on a readily ascertained date. That reason does not appear to be applicable here, either. If the defendant could not avoid paying interest by paying or offering to pay a definite amount on or as of a certain date, why should plaintiff be entitled to it after a jury verdict has *300reduced the amount to which plaintiff is entitled to an amount that bears no discernable relationship to the amounts claimed?
Because I would reverse the judgment for prejudgment interest, I dissent from that part of the opinion affirming it.

Defendant objected to the giving of that instruction for reasons which it had argued to the court earlier. During the earlier arguments, each of the four categories of prejudgment interest claims was argued, and defendant objected to each of them. Defendant also moved at the close of the evidence for a directed verdict “on the issue of interest and prejudgment interest” on the grounds that, as a matter of law, it was not appropriate and that it was not for the jury to decide.