Court Opinion

ID: 5138515
Source: CourtListenerOpinion
Date Created: 2021-12-21 15:03:54.761938+00
Date Added: 2024-06-11T08:24:09.248175
License: Public Domain

2017 UT App 28

               THE UTAH COURT OF APPEALS

         DAVID FULLER, RUTH M. FULLER, AND FULLER’S
             APPLIANCE PARTS AND SERVICE LLC,
                        Appellants,
                            v.
    DENISE BOHNE AND WESTERN STATES INSURANCE AGENCY,
                         Appellees.

                           Opinion
                       No. 20150146-CA
                    Filed February 9, 2017

          Third District Court, Salt Lake Department
              The Honorable Deno G. Himonas
               The Honorable Sandra N. Peuler
                         No. 100901093

        Stephen K. Christiansen, Attorney for Appellants
            Joseph P. Barrett, Attorney for Appellees

JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES
   J. FREDERIC VOROS JR. and DAVID N. MORTENSEN concurred.

ORME, Judge:

¶1     Appellants David Fuller, Ruth M. Fuller, and Fuller’s
Appliance Parts and Service LLC (collectively, the Fullers)
appeal the trial court’s judgment awarding them damages and
prejudgment interest in their suit against Denise Bohne and
Western States Insurance Agency (collectively, Western). Their
appeal is limited to the question of whether the trial court
calculated prejudgment interest on the jury award at the proper
rate. We affirm.
                         Fuller v. Bohne

                        BACKGROUND

¶2     The Fullers owned a home and a small business, both
located on the same property in Springville, Utah. The Fullers
purchased insurance from Western on the home, the business,
and their vehicles. Many years later, in June 2007, a fire
destroyed their home and business, and they filed a claim with
Western, only to learn that they were considerably
underinsured. They received $3,000, which, to their surprise,
was the maximum benefit payable under the policy.1

¶3      The Fullers sued Western and sought damages for, inter
alia, breach of various duties, breach of contract, and negligent
misrepresentation. Before the trial began, the Fullers and
Western stipulated, and the trial court agreed, that the jury
would receive the following instruction (Instruction 29) for
calculating interest if it awarded damages to the Fullers:

      The Fullers seek recovery of prejudgment interest
      as part of their loss. In Utah, prejudgment interest
      may be awarded in situations where the damage is
      complete, the loss can be measured by facts and
      figures, and the amount of loss is fixed as of a
      particular time. If you find for the Fullers on their
      claim of prejudgment interest, you should award
      them 10% annually on the value of their proven
      loss from the date of the fire to the date of your
      verdict.

¶4     Just before the court instructed the jury, however,
Western asked the trial court to withdraw Instruction 29 and to
decide the issue of prejudgment interest itself. The Fullers
challenged this request, and Western then conceded that

1. The $3,000 benefit is so small as to suggest a number of
questions, none of which find answers in the record before us.

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                          Fuller v. Bohne

prejudgment interest would be recoverable if the jury’s verdict
included an amount for property damages. Western indicated
that it was simply asking the court to do the math in calculating
the amount of prejudgment interest. The Fullers agreed with this
approach, and the trial court stated that it was ‚fine‛ with the
rate of ten percent and that it could readily make the appropriate
calculation: ‚it’s a 10 percent calculation and you can do it in
your head.‛ Thus, Instruction 29 was withdrawn.

¶5    The jury returned a verdict against Western on the claims
of negligent misrepresentation and breach of agency duties,
awarding the Fullers $101,595 for their lost property.

¶6     When the Fullers moved for the entry of judgment on the
verdict, Western opposed the inclusion of prejudgment interest
and the calculation of prejudgment interest at ten percent. After
a hearing, the court issued a memorandum decision that, in
relevant part, sought supplemental briefing as to the appropriate
interest rate. The court stated:

       From the record before me, it appears that
       [Western] did not stipulate to an absolute award of
       any prejudgment interest that [the Fullers]
       requested. Rather, in withdrawing the jury
       instruction on that issue, the parties agreed that the
       Court should make the final determination
       regarding prejudgment interest after the
       conclusion of the trial and add that amount to the
       final judgment.

¶7     In a telephonic hearing held after supplemental briefing
was complete, the trial court, ‚having gone back and listened to
the tape [of the prior hearing] very carefully,‛ concluded that the
parties had stipulated to the court’s awarding prejudgment
interest. But on the issue of the rate, the court did not agree with
the Fullers that the stipulation included the rate of ten percent,
even though the instruction that it supplanted had included that

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                           Fuller v. Bohne

rate. To begin the discussion, the judge commented that perhaps
the postjudgment rate, not the ten percent rate, was proper. The
court’s questions to counsel focused their attention on Utah
precedent suggesting that the ten percent statutory rate only
applies to certain contract-based claims.

¶8     Ultimately, the court determined that while Western had
stipulated to the award of prejudgment interest, its stipulation to
the rate of ten percent had fallen by the wayside when the jury
instruction was withdrawn. The court concluded that the proper
rate was the statutory postjudgment rate of 2.27% per annum. It
also determined that interest would accrue from the date of the
fire until the judgment is paid in full. The Fullers appeal.

            ISSUES AND STANDARDS OF REVIEW

¶9     The Fullers raise two main issues on appeal. First, they
assert that ‚*t]he district court abused its discretion by declining
to enforce the parties’ stipulation to apply a 10% prejudgment
interest rate‛ and, relatedly, that section 15-1-1 of the Utah Code
requires a ten percent prejudgment interest rate. See Utah Code
Ann. § 15-1-1 (LexisNexis 2013). The applicability and
interpretation of a statute are questions of law that we review for
correctness. Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 2009 UT
7, ¶ 11, 210 P.3d 263. The scope of a stipulation presents a
question of fact, see Prinsburg State Bank v. Abundo, 2011 UT App
239, ¶ 8, 262 P.3d 454, aff’d on other grounds, 2012 UT 94, ¶ 10, 296
P.3d 709, which we review for clear error. Brasher v. Christensen,
2016 UT App 100, ¶ 13, 374 P.3d 40.

¶10 Second, the Fullers claim that if the trial court was free to
choose the applicable rate, ‚*t+he district court *erred+ by
applying a low 2015 post-judgment interest rate when
prejudgment interest began running in 2007,‛ at which time the
rate was higher. The appropriate rate of prejudgment interest

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                          Fuller v. Bohne

ordinarily ‚is a question of law that we review for correctness.‛
USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 32, 372 P.3d 629.

                           ANALYSIS

 I. The Trial Court Did Not Abuse Its Discretion in Declining To
          Calculate Prejudgment Interest at Ten Percent.

¶11 The Fullers assert that the trial court was required, by
stipulation and by statute, to calculate prejudgment interest at
ten percent per annum. We conclude that neither the stipulation
regarding interest nor Utah Code section 15-1-1 bound the trial
court and that it did not abuse its discretion in rejecting the ten
percent rate that the Fullers advocated.

A.    Stipulation

¶12 The Fullers’ argument, in effect, is that the stipulation had
two distinct parts, each of which should have been enforced:
(1) stipulation to the award of prejudgment interest if the jury
awarded property damages and (2) stipulation to prejudgment
interest at a rate of ten percent per annum, as a carry-over from
Instruction 29, which the stipulation supplanted.2

2. The Fullers view this as a single stipulation that includes both
terms. Because of their view that the agreement was to both
terms, they argue, quoting Prinsburg State Bank v. Abundo, 2012
UT 94, ¶ 14, 296 P.3d 709, that Western needed to prove either
‚that the stipulation was ‘entered into inadvertently’ or that it
should be set aside ‘for justifiable cause’‛ to challenge the ten
percent rate. But that assumes the scope of the stipulation is
clear, which is not the case. See infra ¶¶ 13–15. For that reason,
we decline to address their claims that Western waived its right
                                                      (continued<)

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                           Fuller v. Bohne

1.     Stipulation to Prejudgment Interest

¶13 Stipulations generally ‚are binding on the parties and the
court.‛ Prinsburg State Bank v. Abundo, 2012 UT 94, ¶ 13, 296 P.3d
709. Where parties stipulate to a fact and the court accepts that
stipulation, the matter is settled and, generally, is not subject to
appellate review. Id. Here, the trial court determined that, during
the discussion of whether to allow the jury to be instructed about
prejudgment interest, the parties stipulated that prejudgment
interest would apply to any property damages award made by
the jury. The record showed that Western did not dispute the
Fullers’ entitlement to prejudgment interest. Thus, the court
concluded that Western had ‚stipulated away‛ its right to
challenge the availability of prejudgment interest when it
conceded that an award for property damage would bring with
it prejudgment interest. And the parties agree on appeal that this
conclusion was correct.

2.     No Stipulation to Interest Rate

¶14 The trial court did not clearly err by concluding that
Western did not stipulate to a particular prejudgment interest
rate. The scope and terms of a stipulation, like any other
contract, are construed ‚to give effect to the intentions of the
parties.‛ DeBry v. Occidental/Nebraska Fed. Sav. Bank, 754 P.2d 60,
62 (Utah 1988) (citation and internal quotation marks omitted).
See also Prinsburg State Bank v. Abundo, 2011 UT App 239, ¶ 8, 262
P.3d 454 (affirming that the parties’ intent, including the parties’
intended scope of the stipulation, is a ‚question*+ of fact that *is+
appropriately directed, in the first instance, to the district
court‛), aff’d on other grounds, 2012 UT 94, ¶ 10, 296 P.3d 709.

(2017 UT App 28
                          Fuller v. Bohne

¶15 After reviewing the trial transcript and briefing from the
parties, the trial court concluded that the parties’ stipulation,
unlike the earlier Instruction 29, did not include an agreement as
to the particular interest rate to be charged. The Fullers argue
this was clearly erroneous because Instruction 29, which the
stipulation negated, would have had the jury assess an annual
interest rate of ten percent on ‚the value of their proven loss.‛
And the Fullers note that the trial judge recited that rate during
the stipulation discussion when he said, ‚*I+t’s a 10 percent
calculation and you can do it in your head.‛

¶16 But the Fullers focus on facts that do not reveal the
parties’ intent in forming the stipulation. The parties’ discussion
about withdrawing Instruction 29, which ultimately led to the
stipulation in question, did not address the rate at which interest
was to be assessed even though the proposed instruction did
contain a reference to ten percent. Rather, they discussed
whether the calculation of interest should appear on the special
verdict form, which led to a discussion of whether prejudgment
interest was an appropriate question for the jury or if, instead,
the court should resolve the issue. Neither party raised the issue
of the precise interest rate to be charged if the jury awarded
property damages. Instead, only the court mentioned a rate,
apparently with the soon-to-be-withdrawn instruction in mind,
in a comment about the court’s ability to readily perform a ten
percent interest calculation.3

3. The court’s cursory reference to the ten percent rate, during
the discussion just before the case went to the jury, may only
have reflected the possibility that Utah Code section 15-1-1
might govern because there were, at that point, pending contract
claims. See Utah Code Ann. § 15-1-1(2) (LexisNexis 2013)
(‚Unless parties to a lawful contract specify a different rate of
interest, the legal rate of interest for the loan or forbearance of
any money, goods, or chose in action shall be 10% per annum.‛).
                                                      (continued<)

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                          Fuller v. Bohne

¶17 The Fullers point to no additional facts in the record that
demonstrate that the court was referring to the parties’ intent in
entering into their stipulation and not to Instruction 29 when it
mentioned the ten percent rate. Thus, it is entirely possible that
the parties did not intend at that time to address the rate at all
and instead assumed the rate would be resolved at a later date.
In light of the deference we give to the trial court’s assessment of
the parties’ intent in entering the stipulation—especially because
the stipulation was not written or otherwise memorialized,
which would allow us to more directly assess their intent—we
cannot conclude that the trial judge, who participated in the
discussion and approved the stipulation, clearly erred in
concluding that the stipulation did not include an agreement
that the ten percent rate would apply.

B.     Statute

¶18 The Fullers next contend that Utah Code section 15-1-1
entitles them to prejudgment interest on their successful
negligence claims at a rate of ten percent per annum because
those claims ‚are undoubtedly choses in action.‛4 See Utah Code
Ann. § 15-1-1(2) (LexisNexis 2013). The statute specifies that
‚*u+nless parties to a lawful contract specify a different rate of
interest, the legal rate of interest for the loan or forbearance of

(2016 UT 20, ¶ 106 n.189, 372 P.3d 629
(quoting Snow, Nuffer, Engstrom & Drake v. Tanasse, 1999 UT 49,
¶ 9, 980 P.2d 208).

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                           Fuller v. Bohne

any money, goods, or chose in action shall be 10% per annum.‛
Id. But, as the Utah Supreme Court recently determined, section
15-1-1 applies only to judgments arising out of certain types of
contract claims. See USA Power, LLC v. PacifiCorp, 2016 UT 20,
¶ 109, 372 P.3d 629 (limiting application of Utah Code section
15-1-1 to judgments for ‚contracts ‘for the loan or forbearance of
any money, goods, or chose in action’‛) (quoting Utah Code
Ann. § 15-1-1(2)).5 Given the statute’s limited reach, it follows
that it does not apply where, as here, the judgment is based on
tort claims. See Wilcox v. Anchor Wate Co., 2007 UT 39, ¶ 46, 164
P.3d 353 (declining to apply Utah Code section 15-1-1 to a
judgment for damages under the Utah Insurers Rehabilitation
and Liquidation Act because it ‚does not automatically apply to
all judgments based on statute where the legislature has failed to
specify the applicable rate‛). See also Klein v. Patterson, No. 2:11-
CV-723, 2013 WL 5445949, at *1 (D. Utah Sept. 30, 2013) (‚While
the statute does refer to a ‘chose in action,’ it does so within the
context of ‘a lawful contract.’‛) (quoting Utah Code Ann.
§ 15-1-1(2)).

¶19 The Fullers argue, nonetheless, that if a party has a chose
in action that it does not collect on immediately, forbearance has
occurred, triggering the statutory ten percent rate. Relying on
Fell v. Union Pacific Ry., 88 P. 1003, 1007 (Utah 1907), the Fullers
maintain that this reasoning ‚has continued to be followed since
*1907+ and remains good law down to the present day.‛ On the

5. USA Power, LLC v. PacifiCorp, 2016 UT 20, 372 P.3d 629, was
decided on May 16, 2016, after briefing in this case was
complete. The Fullers accordingly filed a letter pursuant to rule
24(j) of the Utah Rules of Appellate Procedure, notifying us of
the opinion. They did not challenge the applicability of the rule
announced in that opinion to their appeal—and appropriately
so. See SIRQ, Inc. v. The Layton Cos., 2016 UT 30, ¶ 6, 379 P.3d
1237.

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                           Fuller v. Bohne

contrary, at least one justice of the Utah Supreme Court has
expressed skepticism about that interpretation of the statute, as
far back as 1994. See Consolidation Coal Co. v. Utah Div. of State
Lands & Forestry, 886 P.2d 514, 524 n.13 (Utah 1994) (‚The author
of this opinion has serious reservations about the initial
correctness and therefore the continued vitality of . . . case[s] that
purport[] to tie prejudgment interest rates in all contract cases to
the section 15-1-1 rate*.+‛). Later, in Wilcox, the Utah Supreme
Court explained the reticence expressed in Consolidation Coal,
saying that it was ‚because *section 15-1-1] was meant to apply
only to loans or forbearances in contract actions.‛ 2007 UT 39,
¶ 45. True, this court has previously expressed some doubt
about whether Wilcox meant that section 15-1-1 no longer
applied to a chose in action that did not involve a contract for a
loan or forbearance. See Francis v. National DME, 2015 UT App
119, ¶ 44, 350 P.3d 615 (declining to conclude that the district
court erred in applying section 15-1-1’s ten percent rate because
‚interpret*ing] this statute requires a more complex analysis on
our part than *the appellant+’s sparse briefing seems to justify‛).
But USA Power conclusively limits the application of section
15-1-1 to such contracts. 2016 UT 20, ¶ 109. Therefore, section 15-
1-1 does not apply to the Fullers’ tort-based claims in this case.6

6. The Fullers also suggest that even if USA Power and Wilcox v.
Anchor Wate Co., 2007 UT 39, 164 P.3d 353, foreclosed the
application of section 15-1-1 to tort claims, they were nonetheless
entitled to a ten percent interest rate because the stipulation is a
contract within the confines those cases established. At oral
argument they advanced this position, asserting that the parties
mutually agreed to the availability of prejudgment interest at a
ten percent rate in exchange for the withdrawal of jury
Instruction 29 at Western’s request. While we agree that a
stipulation is a contract, see supra ¶ 13, the stipulation in this case
was not a contract for the loan or forbearance of any money,
                                                        (continued<)

20150146-CA                      10                 2017 UT App 28
                           Fuller v. Bohne

   II. The Trial Court Did Not Err by Assessing Prejudgment
                   Interest at a Rate of 2.27%.

¶20 Finally, the Fullers contend that even if they were not
entitled to a ten percent interest rate, the trial court erred in
setting the rate at 2.27%. Hence, they ask this court to remand
with instructions, presumably for recalculation at the 2007
postjudgment rate of 6.99%. The Fullers argue for the 2007 rate
based on three theories: (1) that ‚*i+f prejudgment interest is to
be applied using a post-judgment rate, it should at least be the
rate in effect at the time the prejudgment interest began
running‛; (2) that the purpose of prejudgment interest is to
compensate plaintiffs who experience loss after wrongful
conduct, which the Fullers claim ‚cannot be accomplished in this
case by using a low rate that came into effect years after the
tortious conduct and bears no resemblance to market rates at the
time‛; and (3) that the relevant case law suggests the proper
solution in a dispute is to find a ‚middle ground‛ figure.7

(2016 UT 20,
¶ 109.

7. The Fullers also argue that if the trial court relied on Wilcox in
setting the rate, it erred in doing so. See 2007 UT 39, ¶ 46 (relying
on federal bankruptcy law in determining the appropriate
prejudgment interest rate given the circumstances of that case).
They argue that Wilcox is inapposite, at least as to the particular
rate, because that case drew from relevant federal bankruptcy
law for the rate it applied. Id. ¶ 47. We decline to address the
applicability of Wilcox here because the Fullers have not shown
that the trial court relied on that case in reaching its conclusion.

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                          Fuller v. Bohne

¶21 When the Fullers raised these arguments below, there was
some question about what interest rate should apply if section
15-1-1 of the Utah Code did not apply. In USA Power, our
Supreme Court resolved that question: ‚*Utah Code+ section 15-
1-4 provides the appropriate interest rate‛ when ‚the interest
rate provided [in section 15-1-1+ does not apply.‛ 2016 UT 20,
¶ 109.

¶22 Utah Code section 15-1-4 provides, ‚Except as otherwise
provided by law, other civil and criminal judgments of the
district court and justice court shall bear interest at the federal
postjudgment interest rate as of January 1 of each year, plus 2%.‛
Utah Code Ann. § 15-1-4(3)(a) (LexisNexis 2013).8 Further, the
Utah Code specifies that ‚*t+he postjudgment interest rate in
effect at the time of the judgment shall remain the interest rate
for the duration of the judgment.‛ Id. § 15-1-4(3)(b).9 Because
section 15-1-1 does not apply here, see supra ¶¶ 18–19, section 15-
1-4 provides the proper prejudgment interest rate. The federal
postjudgment interest rate plus 2% on January 1, 2015, was
2.27%.

¶23 Thus, the trial court’s order that Western pay the Fullers
‚*p+re-judgment interest at the post-judgment statutory rate in
effect January 1, 2015 (2.27% per annum)‛ is fully consistent with
Utah law, and we affirm the trial court’s decision regarding the
appropriate rate of prejudgment interest.

8. The most recent codification of this provision refers to ‚all
other final civil and criminal judgments.‛ Utah Code Ann. § 15-1-
4(3)(a) (LexisNexis Supp. 2016) (emphasis added).

9. This language appears in subsection 4(3)(c) in the most recent
codification. See Utah Code Ann. § 15-1-4(3)(c) (LexisNexis Supp.
2016).

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                           Fuller v. Bohne

                          CONCLUSION

¶24 The Fullers have not demonstrated that the trial court
abused its discretion by limiting the scope of the stipulation to
the availability of prejudgment interest, while rejecting the
contention that the stipulation also called for the specific rate of
ten percent. And their argument that section 15-1-1 applies to
judgments arising from tort claims is unavailing. Therefore, they
have not shown that they were entitled to a prejudgment interest
rate of ten percent. Further, the trial court did not err in selecting
the postjudgment interest rate as the appropriate rate for
calculating prejudgment interest in this case.

¶25    Affirmed.

20150146-CA                      13                2017 UT App 28