Eltzroth v. Devers

Filed 5/3/06 Eltzroth v. Devers CA4/1

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Michael M. Anello, Judge. Affirmed.

Plaintiff Barbara Eltzroth was involved in a car accident with defendant Charles Devers. Eltzroth originally sought more than $155,500 in damages. After trial, a jury awarded Eltzroth $5,500. Eltzroth appeals a posttrial order denying her request for prejudgment interest under Civil Code^[1] section 3287, subdivision (a). We affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

In December 2002, Eltzroth and Devers were involved in a car accident. Eltzroth filed a personal injury suit against Devers, alleging wage loss, loss of use of property, hospital and medical expenses, general damage, property damage and loss of earning capacity. Eltzroth served Devers with a statement of damages, claiming $150,000 in general damages, $5,500 in medical and incidental expenses, other losses according to proof and prejudgment interest under section 3291, or any similar provisions of law.

In February 2004, Devers served Eltzroth with an offer to compromise under Code of Civil Procedure section 998, offering to allow judgment to be entered in favor of Eltzroth in the amount of $8,500. The offer to compromise was not accepted. A year later, Devers served another offer to compromise, offering to allow judgment to be entered in favor of Eltzroth in the amount of $8,515.01. The offer to compromise was again not accepted.

The matter proceeded to trial and a jury returned a verdict in favor of Eltzroth for $5,500. Judgment was entered accordingly.

After entry of judgment each party filed a memorandum of costs and corresponding motions to strike and/or tax costs. Eltzroth also filed a motion for new trial. The trial court issued an order granting in part and denying in part each party's motion to tax costs and denying Eltzroth's motion for new trial. This appeal arises from the portion of the posttrial order denying Eltzroth's request for prejudgment interest under section 3286, subdivision (a).

DISCUSSION

I.

Recovery of prejudgment interest on damages is authorized by section 3287. "An award of prejudgment interest is intended to make the plaintiff whole 'for the accrual of wealth which could have been produced during the period of loss.' " (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 958.) Section 3287, subdivision (a), provides in part: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him [or her] upon a particular day, is entitled also to recover interest thereon from that day . . . ." Section 3287, subdivision (a) can apply to contract and tort actions. (Marine Terminals Corp. v. Paceco, Inc. (1983) 145 Cal.App.3d 991, 995.)

The certainty requirement of section 3287, subdivision (a) has been reduced to two tests: (1) whether the defendant actually knows the amount owed or (2) whether the defendant could have computed that amount from reasonably available information. (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 960; Chesapeake Industries, Inc. v. Togova Enterprises, Inc. (1983) 149 Cal.App.3d 901, 911.) "Where a defendant does not know what amount he [or she] owes and cannot ascertain it except by accord or judicial process, he [or she] cannot be in default for not paying it." (Levy-Zentner Co. v. Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 798.) Thus, where the amount of damages cannot be resolved except by verdict or judgment, damages are not certain, and prejudgment interest is not authorized by section 3287, subdivision (a). (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 960.)

The appropriateness of prejudgment interest is also determined by evaluating the disparity between the claimed damage and that which was awarded. (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 961.) The greater the disparity, "the less likely prejudgment interest is appropriate." (Ibid.) However, where there is no significant disparity between the amount originally sought and awarded, the more likely damages are certain or capable of calculation, making prejudgment interest appropriate. (Ibid.)

II.

Eltzroth contends the trial court's order denying prejudgment interest under section 3287, subdivision (a) was erroneous. Eltzroth argues because the general verdict of $5,500 was identical to the amount of medical and incidental expenses identified in the statement of damages, Devers actually knew the amount owed. Therefore, the damages were certain under section 3287, subdivision (a) and prejudgment interest was appropriate. The determination of entitlement to prejudgment interest is a question of law we review de novo. (Shewry v. Begil (2005) 128 Cal.App.4th 639, 642.)

Recovery of medical expenses under general tort law, however, is limited to the reasonable value of necessary medical treatment. (Ferguson v. Workers' Compensation Appeals Bd. (1995) 33 Cal.App.4th 1613, 1625.) Accordingly, medical expenses are subject to dispute and are necessarily uncertain.

Here, the parties did not stipulate to the amount of medical and incidental expenses. Instead, medical expenses were contested. At trial, Devers offered the testimony of Dr. Vance, an expert witness, who specifically disputed both the reasonable value and necessity of the medical treatment Eltzroth received. Damages are deemed certain or capable of being made certain where there is essentially no dispute between the parties concerning the basis of computation of damages. (Esgro Central, Inc. v. General Ins. Co. (1971) 20 Cal.App.3d 1054, 1060.) As the focus of this case at trial was computation of damages, the damages were neither certain nor capable of being made certain and prejudgment interest was not appropriate.

Eltzroth also asserts there is no significant disparity between the amount claimed in the complaint and the amount awarded at final judgment and as such, the damages are certain or capable of being made certain by calculation. The total amount originally sought, as identified in the statement of damages, was more than $155,500. The jury returned a general verdict awarding Eltzroth $5,500. Plainly, the disparity between the amount originally sought and the amount awarded at judgment is substantial. In Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 435, the court, determining whether the damages were certain and prejudgment interest appropriate, evaluated the disparity between the amount originally sought, $55,000, and the amount awarded, $7,836. The Polster court concluded this was a large discrepancy, "inconsistent with a sum certain or capable of being made certain." (Id. at p. 436.) Here, the disparity between the original amount sought and the amount awarded is more than three times that of Polster. "[W]here there is a large discrepancy between the amount of damages demanded in the complaint and the size of the eventual award, that fact militates against a finding of the certainty mandated by . . . section 3287, subdivision (a)." (Id. at p. 435.)

Further, 96 percent of the original damages sought were general damages for pain and suffering. As the amount of damages to which Eltzroth was entitled depended heavily upon the valuation of her pain and suffering, which was a subject of genuine disagreement, they were not capable of calculation prior to the adjudication of the issues. Thus, the trial court properly found the damages were neither certain nor capable of being made certain under section 3287.^{[2] [3]} (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 960.)

DISPOSITION

The order is affirmed. Devers is awarded costs on appeal.

McCONNELL, P. J.

WE CONCUR:

BENKE, J.

NARES, J.

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^[1] Statutory references are to the Civil Code unless otherwise specified.

^[2] Eltzroth suggests prejudgment interest should be applied in a "piecemeal" fashion because the amount awarded by the jury was identical to the medical and incidental expenses listed in the statement of damages. "Piecemeal" calculation of prejudgment interest has been supported by the California Supreme Court in Bullis v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801, 815. (See also Stien v. Southern Cal. Edison Co. (1992) 7 Cal.App.4th 565, 573.) Bullis specifically upheld an award of interest on each of several unauthorized withdrawals from a bank account of over a four-year period, from the date of each individual withdrawal. Each unauthorized withdrawal was readily ascertainable and stipulated to by the parties. These circumstances are not present here, and therefore a "piecemeal" application of prejudgment interest is not appropriate.

^[3] Devers contends Eltzroth's request for prejudgment interest was untimely. Given our holding, we need not reach this issue.