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Patton v. Mutual of Enumclaw Insurance Co.

Court of Appeals of Oregon

February 27, 2019

Lowell E. PATTON, Plaintiff-Respondent,
v.
MUTUAL OF ENUMCLAW INSURANCE COMPANY, a Washington corporation, Defendant-Appellant, and HOPP INSURANCE AGENCY, INC., an Oregon corporation, and Randy W. Hopp, Defendants.

          Argued and submitted March 28, 2018.

          Multnomah County Circuit Court 031112054 John A. Wittmayer, Judge.

          Thomas M. Christ argued the cause for appellant. Also on the briefs were Julie A. Smith and Cosgrave Vergeer Kester LLP.

          Kathryn H. Clarke argued the cause and fled the brief for respondent.

          Before Ortega, Presiding Judge, and Powers, Judge, and Brewer, Senior Judge.

         Case Summary:

         This case is before the Court of Appeals for a third time. On appeal, Mutual of Enumclaw Insurance Company (MOE) challenges, amongst other things, the trial court's award of prejudgment interest. MOE first asserts that the court erred in ruling that issue preclusion barred it from challenging plaintiff's entitlement to prejudgment interest. Second, MOE argues that the court erred in concluding that plaintiff was entitled to prejudgment interest under ORS 82.010(1)(a) because the amount owed and the date from which interest should run were not easily ascertainable.

         Held:

         Based on the circumstances [296 Or.App. 267] of this case, the trial court erred in applying the doctrine of issue preclusion. Furthermore, because the record does not establish a readily ascertainable date from which interest should run, the trial court lacked a basis on this record to award prejudgment interest.

         [296 Or.App. 268] ORTEGA, P. J.

         This insurance coverage case is before us for a third time. In the first appeal, we reversed a judgment that awarded plaintiff damages on his breach of contract claim, and remanded for a new trial. Patton v. Mutual of Enumclaw Ins. Co., 238 Or.App. . 101, 242 P.3d 624 (2010), rev den, 349 Or. 654 (2011) (Patton I). In the second appeal, we reversed and remanded the case again because the trial court erred in granting a motion for summary judgment by defendant Mutual of Enumclaw Insurance Company (MOE). Patton v. Mutual of Enumclaw Ins. Co., 266 Or.App. . 154, 337 P.3d 874 (2014), rev den, 337 Or. 874 (2015) (Patton II). On that second remand, the case proceeded to trial, and the jury returned a verdict in favor of plaintiff, awarding him $2, 556 million in damages. The court entered a judgment awarding damages in that amount, along with $1, 023 million in prejudgment interest and $1, 382 million in attorney fees.

         MOE appeals and raises four assignments of error, all of which challenge the award of prejudgment interest and attorney fees. We reject, without written discussion, MOE's third and fourth assignments of error-that is, its challenges to the court's award of attorney fees and costs- and write only to address MOE's first two assignments of error. MOE first asserts that the trial court erred in ruling that issue preclusion barred it from challenging plaintiff's entitlement to prejudgment interest. Second, MOE argues that the trial court erred in concluding that plaintiff was entitled to prejudgment interest under ORS 82.010(1)(a) because the amount owed and the date from which interest should run were not easily ascertainable. We agree, based on the circumstances of this case, that the trial court erroneously applied the doctrine of issue preclusion. Further, in reviewing the court's award of prejudgment interest for legal error, Tasaki v. Moriarty, 233 Or.App. . 51, 55, 225 P.3d 68 (2009), we conclude that the trial court lacked a basis on this record for an award of prejudgment interest because the record does not establish a readily ascertainable date from which such interest should run. Accordingly, we reverse the award of prejudgment interest and otherwise affirm the judgment.

         [296 Or.App. 269] We offer a limited description of the relevant procedural and background facts for purposes of this appeal, but a more detailed recitation of the facts can be found in Patton I and Patton II. Patton I, 238 Or.App. . at 101; Patton II, 266 Or.App. . at 154.

         Plaintiff's house burned down on November 8, 2001. Patton I, 238 Or.App. . at 105. He notified MOE that he intended to take advantage of the policy's replacement cost endorsement and that he was considering rebuilding. Id. That endorsement stated, in part, that, in the event of loss, MOE agreed to pay

"not more than the lesser of:
"1. The replacement cost of that part of the building damaged for like construction and use on the same ...

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