MacHela Transport Co. v. Philadelphia Indemnity Insurance ( 2013 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 12-3941
___________________________
Macheca Transport Company, doing business as Gateway Cold Storage; David
Macheca; Starlin Macheca
lllllllllllllllllllll Plaintiffs - Appellants
v.
Philadelphia Indemnity Insurance Company
lllllllllllllllllllll Defendant - Appellee
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: September 25, 2013
Filed: November 21, 2013
____________
Before RILEY, Chief Judge, BRIGHT and BYE, Circuit Judges.
____________
BYE, Circuit Judge.
This is an insurance coverage dispute between Macheca Transport Company
(Macheca) and Philadelphia Indemnity Insurance Company (Philadelphia) arising
from an ammonia leak which occurred in a refrigerated warehouse in November
2001. The dispute has resulted in extended litigation. An initial appeal to our court
reversed a summary judgment in favor of Philadelphia. See Macheca Transp. v.
Phila. Indem. Co., 463 F.3d 827, 834 (8th Cir. 2006) (Macheca I). On remand, the
district court again granted summary judgment to Philadelphia on one of Macheca's
two coverage theories and dismissed a vexatious refusal-to-pay claim. A jury then
resolved the remaining issues in Philadelphia's favor. Macheca filed a second appeal.
We concluded the district court erred in granting the second summary judgment to
Philadelphia and remanded for further proceedings. See Macheca Transp. v. Phila.
Indem. Co., 649 F.3d 661, 675 (8th Cir. 2011) (Macheca II). Following a second
trial, a jury awarded Macheca $174,964 in damages.
Macheca now appeals for a third time. Macheca contends its damages were
erroneously reduced by amounts it recovered from a separate insurance carrier, and
further claims the district court erred in denying its request for prejudgment interest.
We affirm in part, reverse in part, and remand.
I
We refrain from fully explaining the factual background involved in this case
and instead focus on the facts relevant to the limited issues raised in this appeal.1 The
second jury trial addressed solely the amount of damages Macheca claimed for certain
categories of loss covered under Philadelphia's policy. Significantly, Macheca had
a separate policy issued by another insurer, Travelers Insurance Company (Travelers),
which provided coverage for some of the same losses covered by the Philadelphia
policy. Travelers paid Macheca a total of $348,481.70 (hereinafter the Travelers
payment) for losses resulting from the ammonia leak, which included payments for
property damage and lost business income. In the jury instructions for the second
trial, the district court told the jury it "must not award damages to [Macheca] for any
amount already paid by Travelers Insurance Company." Appellant's Appendix at 178.
1
A more extensive discussion of the factual background is available in our
opinions in Macheca I and Macheca II.
-2-
The Travelers payment was at issue in the first jury trial. Macheca argued
Philadelphia's refusal to pay for property damage prevented it from making necessary
repairs to the warehouse and claimed it could not get its business back to full strength
without the repairs, causing it to suffer additional lost business income. In fact, based
on Philadelphia's breach of the insurance contract, Macheca claimed it could recover
all the damages it suffered notwithstanding the $500,000 policy limits for lost
business income.
The Travelers payment was relevant to Macheca's claim for the full amount of
lost business income in two ways. First, the parties disputed whether the Travelers
payment should have been sufficient to allow Macheca to make necessary repairs and
thereby stem any ongoing damage for lost business income. Second, there was an
issue whether Macheca's claims against Philadelphia should be reduced by the
amount Travelers had already paid.
The parties filed motions in limine addressing both the claim for an amount in
excess of the $500,000 lost business income policy limits, as well as the question
about whether the Travelers payment should reduce Macheca's overall damages.
With respect to the policy limits issue, Philadelphia filed a motion in limine seeking
to prohibit Macheca's witnesses from testifying about any claim to recover alleged
business interruption losses in excess of $500,000. Macheca, in turn, filed a motion
in limine asking to be allowed to introduce evidence of the full amount of its lost
business income without regard to the policy limits. With respect to the Travelers
payment, Philadelphia's second motion in limine sought, in part, to prohibit Macheca
from introducing evidence of damages covered by the Travelers payment, contending
Missouri law did not allow a party "to obtain duplicate damages in excess of their
actual injury [and thus] any damages recovered by [Macheca] must exclude those
elements for which Travelers has already compensated [Macheca]." District Court
Docket # 171 at 2-3.
-3-
At the motion hearing, Philadelphia's counsel clarified that Philadelphia did not
actually seek to exclude evidence of the Travelers payment during the trial, but rather
sought to prevent Macheca from "attempt[ing] to recover for those business income
losses which were already paid by Travelers . . . when it comes down to the analysis
of submitting this to the jury." First Trial Tr. at 29. In other words, Philadelphia
argued Macheca's evidence should account for the amounts paid by Travelers, and the
jury should be instructed to reduce those amounts from any damages it may award.
Id. at 30. In response, Macheca's counsel2 explained that all three motions in limine
were related. Macheca argued Philadelphia wanted the damage testimony on lost
business income to be artificially capped at $500,000 even if the overall damages
were greater than that, and then have the jury further reduce its award by the amount
Travelers had paid. Macheca posed the hypothetical of its lost business income
totaling $1 million, and having recovered $200,000 from Travelers, with remaining
damages of $800,000. Even assuming the district court ruled Macheca's lost business
income would be capped by the $500,000 policy limits, Macheca contended it should
be able to recover the full policy limits under the posed hypothetical because its
remaining damages would exceed $500,000. Macheca claimed Philadelphia instead
wanted the jury to be told the $500,000 policy limit was an absolute ceiling from
which the Travelers payment would be further subtracted, leaving a net recovery of
just $300,000. See id. at 86-90.
After the district court ruled that Philadelphia's alleged breach of contract did
not permit Macheca to recover more than the $500,000 policy limits, Macheca's
counsel twice stressed the importance of still allowing Macheca to present evidence
of the full amount of its lost business income, irrespective of the $500,000 policy cap
or the amount of the Travelers payment. In doing so, Macheca's counsel
acknowledged the Travelers payment would have to be deducted:
2
Two attorneys represented Macheca at the motion hearing. We refer to both
attorneys generically as "Macheca's counsel."
-4-
If because of their breach of the insurance policy our business
interruption claim now exceeds $500,000 and based upon Your Honor's
ruling just now that we are limited to the $500,000, we should be
entitled to put in evidence that our business interruption claim exceeded
the $500,000 and then deduct that portion of the Travelers payment
that relates to the business interruption so that we would be entitled . . .
to recover the maximum that the parties agreed to and that Your Honor
is limiting us to: $500,000.
Id. at 30 (emphasis added). Later in the hearing, Macheca's counsel again explained
Macheca's view of the district court's ruling that any recovery against Philadelphia
would be capped by the policy limits, and acknowledged the Travelers payment
would reduce the damage award:
We have no problem with reducing the universe of our lost business
income; the totality of it. We have no problem with reducing it by what
we got from Travelers. But you have to tell the jury what you are
subtracting it from; otherwise, you wind up with the totally inequitable
and artificial result that if you don't tell the jury that they're going to be
under the impression that you only had [$500,000 in total losses at] best.
"And now we're going to [further] reduce that by what Travelers gave
you," which is the worst of all possible worlds and utterly contrary to
law.
Id. at 90 (emphasis added).
The district court ruled "the plaintiffs should be allowed to present evidence
of their damages, even though they may not be able to recover the full amount of the
loss of the damages they're claiming." Id. at 93.
In the ensuing first trial, Macheca presented its damage evidence consistent
with the district court's ruling, that is, it offered testimony regarding the full amount
of its alleged lost business income, but acknowledged receipt of the Travelers
-5-
payment and deducted it. Likewise, the closing argument given by Macheca's
counsel tracked the evidence presented at trial by deducting the Travelers payment
from each respective category of loss claimed against Philadelphia. When it came
time to submit the issue to the jury, the district court told the jury it "must not award
damages to [Macheca] for any amount already paid by Travelers Insurance
Company." District Court Docket # 281 at 9. The transcript from the first trial's jury
charge conference does not indicate Macheca specifically objected to that sentence
in the jury instructions. See First Trial Tr. at 1014-26.
As noted above, Macheca appealed after the first trial, raising a host of
coverage, evidentiary, and post-trial issues. Notably absent from Macheca's appeal,
however, was any claim the district court erred with respect to its rulings on the
$500,000 policy limits, the manner in which Macheca was allowed/required to
discuss the Travelers payment when introducing its damage evidence, or a challenge
to the district court's instruction that the jury "must not award damages to [Macheca]
for any amount already paid by Travelers Insurance Company."
When this case went to trial for a second time, Macheca's evidence with respect
to the Travelers payment essentially mirrored the evidence presented at the first trial
for all material purposes. Macheca acknowledged receiving the Travelers payment
and accounted for it when calculating its overall losses. After being instructed that
it "must not award damages to [Macheca] for any amount already paid by Travelers
Insurance Company" (just as the first jury had been instructed), the second jury
ultimately returned a verdict in favor of Macheca awarding $90,981.28 for property
damage, $54,238.84 for lost business income during the period reasonably required
to repair the property, and $29,743.88 for necessary expenses incurred by Macheca,
for a total award of $174,964.
After judgment was entered, Macheca filed a post-trial motion under Rule 59(e)
of the Federal Rules of Civil Procedure. Macheca asked the judgment to be amended
-6-
to include an award of prejudgment interest under section 408.020 of the Missouri
Revised Statutes.3 Macheca also asked the judgment to be altered or amended "to
reverse the improper deduction from plaintiffs' damages of the amount paid by
Travelers Insurance to plaintiffs." Appellant's Appendix at 184. In the alternative,
Macheca asked for a new trial under Rule 59(a) "as a result of the deduction from the
judgment in favor of plaintiffs of the amount paid . . . by Travelers Insurance[,]"
arguing the payment was a collateral source under Missouri law. Id. at 195.
The district court denied Macheca's request for prejudgment interest,
concluding Macheca failed to show the damages awarded by the jury met the criteria
for an award of prejudgment interest under Missouri law. See, e.g., Bailey v.
Hawthorn Bank, 382 S.W.3d 84, 106 (Mo. Ct. App. 2012) ("Three requirements must
be met before [prejudgment] interest can be awarded on a claim: (1) the expenses
must be due; (2) the claim must be liquidated or the amount of the claim reasonably
ascertainable; and (3) the obligee must make a demand on the obligor for the amount
due.") (internal quotation marks and citation omitted). More specifically, the district
court held Macheca's damages were not reasonably ascertainable at the time a demand
for payment was made, focusing on the disputed and uncertain methods involved in
this litigation for calculating the damage amounts. In addition, the district court
determined Missouri law allowed it to be guided by equitable principles and fairness
in deciding whether to award prejudgment interest, and stated "[e]quitable principals
[sic] do not support plaintiffs' request for prejudgment interest because the damage-
3
Section 408.020 of the Missouri Revised Statutes, in relevant part, states as
follows:
Creditors shall be allowed to receive interest at the rate of nine percent
per annum, when no other rate is agreed upon, for all moneys after they
become due and payable, on written contracts, and on accounts after
they become due and demand of payment is made[.]
-7-
valuations demanded by plaintiffs were inconsistent with Missouri law." Addendum
at 6. From an equitable standpoint, the district court also found compelling the fact
that the jury's award of $174,964 was less than a settlement offer of $200,000
Philadelphia made in February 2005.
With respect to Macheca's argument about the allegedly improper reduction of
damages based on the Travelers payment, the district court said Macheca's position
is "contradictory to the position that the plaintiffs took at the earlier trial, which is
that the plaintiffs were not entitled to and were not seeking to recover damages that
included any amount that Travelers already paid. So I don't understand why you're
taking a 180-degree different position today." Second Trial Tr. at 489. The district
court ultimately denied Macheca's Rule 59(e) motion, stating the Travelers payment
was "not collateral source." Id. The district court also denied Macheca's alternative
request for a new trial, concluding the "Other Insurance" clause4 in Philadelphia's
policy would have prevented Macheca from recovering for amounts already paid by
Travelers in any event, where Travelers did not contest coverage and made payments
prior to Macheca filing a lawsuit against Philadelphia.
4
The "Other Insurance" clause provided as follows:
1. You may have other insurance subject to the same plan, terms, conditions and
provisions as the insurance under this Coverage Part. If you do, we will pay
our share of the covered loss or damage. Our share is the proportion that the
applicable Limit of Insurance under this Coverage Part bears to the Limits of
Insurance of all insurance covering on the same basis.
2. If there is other insurance covering the same loss or damage, other than that
described in l. above, we will pay only for the amount of covered loss or
damage in excess of the amount due from that other insurance, whether you
can collect on it or not. But we will not pay more than the applicable Limit of
Insurance.
District Court Docket #52-4 at 32.
-8-
Macheca filed a timely appeal. On appeal, Macheca claims the district court
erred in denying its Rule 59(e) motion on both the issue of prejudgment interest and
the reduction of damages to account for the Travelers payment. Macheca also raises
a number of other claims involving the Travelers payment, arguing the district court
erred by (1) admitting evidence of the Travelers payment for the purpose of reducing
Macheca's damages, (2) instructing the jury not to award damages for any amount
already paid by Travelers, (3) allowing Philadelphia to request a credit for the
Travelers payment without having asserted that issue as an affirmative defense prior
to trial, and (4) denying the motion for a new trial based on the "Other Insurance"
clause because Philadelphia failed to raise that issue as an affirmative defense prior
to trial.
II
A. The Travelers Payment
Macheca first contends the Travelers payment constitutes a collateral source
under Missouri law, and should not have been used to reduce its overall damage
award. As explained above, Macheca raised this argument in various contexts,
challenging certain evidentiary rulings the district court made during trial, one of the
district court's jury instructions, the denial of the Rule 59(e) motion, as well as the
denial of the motion for a new trial under Rule 59(a).
We do not recite the varying standards of review that apply to each of the
contexts in which Macheca raises it argument about the Travelers payment because
it is unnecessary to address each claim separately. Nor will we address the merits of
Macheca's collateral source argument. All of Macheca's claims regarding the
Travelers payment, in whatever context raised, are governed by the same principle:
under the law-of-the-case doctrine, Macheca is barred from claiming the Travelers
payment should not have reduced its damages because that issue was decided during
-9-
the first trial and Macheca did not appeal it. See Arizona v. California, 460 U.S. 605,
618 (1983) (stating the general principle that "when a court decides upon a rule of
law, that decision should continue to govern the same issues in subsequent stages in
the same case"); see also Alexander v. Jensen-Carter, 711 F.3d 905, 909 (8th Cir.
2013) (same).
For over one hundred years, our court has repeatedly barred parties from
litigating issues in a second appeal following remand that could have been presented
in the first appeal. See Clark v. Brown, 119 F. 130, 132 (8th Cir. 1902) (refusing to
allow an appellant to challenge the validity of an order appointing a receiver in a
second appeal where the appellant did not challenge the receiver's appointment in his
first appeal); Richardson v. Commc'ns Workers of Am., AFL-CIO, 486 F.2d 801, 804
(8th Cir. 1973) ("The earlier judgment of the district court is the law of the case as it
reflects upon any possible defenses to liability of the two unions. . . . The defendants'
failure to properly preserve these defenses in their motion for directed verdict in the
original trial and their total abandonment of these issues on the original appeal
precluded their consideration in the second trial and prevents the unions from
belatedly raising these issues on [the second] appeal."); Lupo v. R. Rowland & Co.,
857 F.2d 482, 484 (8th Cir. 1988) (concluding two attorneys challenging a district
court's jurisdiction to impose Rule 11 sanctions against them "waived any objection
they may have had regarding" the proper entry of judgment under Rule 58's separate
document requirement in a second appeal because "an [initial] appeal was heard by
this court on the merits of the case . . . and this issue was apparently not raised by the
parties"); United States v. Russ, 861 F.2d 184, 185 (8th Cir. 1988) (concluding the
law-of-the-case doctrine prevented an appellant from contesting, in a second appeal,
the amount of a deficiency judgment entered against him because he "should have
raised this issue in his appeal from the initial district court order finding him liable
for the amount stated in the complaint, and his failure to do so precludes further
consideration of this claim"); Kessler v. Nat'l Enters., Inc., 203 F.3d 1058, 1059 (8th
Cir. 2000) ("The general rule is that where an argument could have been raised on an
-10-
initial appeal, it is inappropriate to consider that argument on a second appeal
following remand.") (internal quotation marks and citation omitted); Sweat v. City
of Fort Smith, Ark., 265 F.3d 692, 696 (8th Cir. 2001) (same); United States v.
Castellanos, 608 F.3d 1010, 1019 (8th Cir. 2010) (same); United States v. Bloate, 655
F.3d 750, 754 (8th Cir. 2011) (same).5
Other circuits are in accord with us in recognizing this well-entrenched part of
the law-of-the-case doctrine. As Judge Friendly from the Second Circuit observed,
"[i]t would be absurd that a party who has chosen not to argue a point on a first
appeal should stand better as regards the law of the case than one who had argued and
lost." Fogel v. Chestnutt, 668 F.2d 100, 109 (2d Cir. 1981).6 A party who
5
The slightly different consideration we give to appellees, as opposed to
appellants, see, e.g., Castellanos, 608 F.3d at 1019, does not apply here because
Macheca was the appellant in both relevant appeals.
6
See also Stewart v. Dutra Const. Co., 418 F.3d 32, 36 (1st Cir. 2005) (noting
"a party who failed to present an argument in previous appellate proceedings may not
revive in the second round an issue he allowed to die in the first") (internal quotation
marks and citation omitted); Skretvedt v. E.I. DuPont De Nemours, 372 F.3d 193, 203
(3d Cir. 2004) ("We have consistently rejected . . . attempts to litigate on remand
issues that were not raised in a party's prior appeal and that were not explicitly or
implicitly remanded for further proceedings."); United States v. Adesida, 129 F.3d
846, 850 (6th Cir. 1997) ("The law-of-the-case doctrine bars challenges to a decision
made at a previous stage of the litigation which could have been challenged in a prior
appeal, but were not. A party who could have sought review of an issue or a ruling
during a prior appeal is deemed to have waived the right to challenge that decision
thereafter[.]") (internal citation omitted); Kossman v. Calumet Cnty., 849 F.2d 1027,
1030 (7th Cir. 1988) (declining to address an issue raised by a party in a second
appeal when the issue was not raised in a first appeal); Munoz v. Imperial Cnty., 667
F.2d 811, 817 (9th Cir. 1982) ("We need not and do not consider a new contention
that could have been but was not raised on the prior appeal."); United States v.
Escobar-Urrego, 110 F.3d 1556, 1560 (11th Cir. 1997) ("Under the law of the case
doctrine, a legal decision made at one stage of the litigation, unchallenged in a
subsequent appeal when the opportunity existed, becomes the law of the case for
-11-
successfully obtains a remand following an initial appeal has already gotten a second
bite at the apple. We should not permit such parties to hold in reserve an argument
regarding a particular issue, which is in play in both the first and second trials, just
so they can attempt to receive yet a third bite at the same apple in the event they do
not like the outcome of the second trial. To conclude otherwise would be unfair to
opposing parties, encourage piecemeal appeals, and undermine our procedural
efficiency. See Omni Outdoor Adver., Inc. v. Columbia Outdoor Adver., Inc., 974
F.2d 502, 505 (4th Cir. 1992) ("Regarding this issue as having been waived furthers
the judicial system's interests in avoiding piecemeal litigation. The most rudimentary
procedural efficiency demands that litigants present all available arguments to an
appellate court on the first appeal. If parties who lost on appeal were allowed to
return to appellate courts to advance different, previously available theories, cases
could languish for years before final resolution and already crowded court dockets
would swell even more. In addition, it is not fair for an adversary to have to defend
the same lawsuit on appeal over and over.").
The district court told the first jury not to award Macheca damages for any
amount already paid by Travelers, and Macheca did not raise that issue in its appeal
following the first trial. Macheca is thus barred from raising the issue in this appeal
under the law-of-the-case doctrine, and we therefore affirm the district court with
respect to all of Macheca's challenges on the issue of the Travelers payment.
future stages of the same litigation, and the parties are deemed to have waived the
right to challenge that decision at a later time.") (citation omitted); Nw. Ind. Tel. Co.
v. F.C.C., 872 F.2d 465, 470 (D.C. Cir. 1989) ("It is elementary that where an
argument could have been raised on an initial appeal, it is inappropriate to consider
that argument on a second appeal following remand."); cf. Lindquist v. City of
Pasadena, 669 F.3d 225, 239-40 (5th Cir. 2012) (making a distinction between the
law-of-the-case doctrine and the waiver doctrine but nonetheless recognizing "that
an issue that could have been but was not raised on appeal is forfeited" and may not
be considered "during a second appeal") (internal quotation marks and citations
omitted).
-12-
B. Prejudgment Interest
Macheca next contends the district court erred in denying its claim for
prejudgment interest. State law governs the issue of prejudgment interest in this
diversity action. See Reliance Ins. Co. in Liquidation v. Chitwood, 433 F.3d 660,
665-66 (8th Cir. 2006). We apply de novo review to the district court's interpretation
of state law. Williamson v. Hartford Life & Accident Ins. Co., 716 F.3d 1151, 1153
(8th Cir. 2013).
Prejudgment interest can only be awarded under Mo. Rev. Stat. § 408.020 on
liquidated damage claims. Watters v. Travel Guard Int'l, 136 S.W.3d 100, 111 (Mo.
Ct. App. 2004). Prejudgment interest is generally not available for unliquidated
claims because "where the person liable does not know the amount he owes, he
should not be considered in default because of failure to pay." Id. (citing Fohn v.
Title Ins. Corp. of St. Louis, 529 S.W.2d 1, 5 (Mo. 1975); Investors Title Co. v.
Chicago Title Ins. Co., 983 S.W.2d 533, 538 (Mo. Ct. App. 1998)). "In order to be
liquidated so as to allow interest, a claim must be fixed and determined or readily
determinable, but it is sufficient if the amount due is ascertainable by computation or
by a recognized standard." Id. In addition, "prejudgment interest on liquidated
claims is allowed only after demand of payment is made. If a demand for payment
was not made prior to filing of a lawsuit, then the filing itself constitutes a demand."
Id. (citations omitted).7 However, "[a]n exact calculation of damages need not be
presented in order for the claim to be considered liquidated. Damages may still be
ascertainable, even in the face of a dispute over monetary value or the parties' experts
compute different estimates of the loss." Comens v. SSM St. Charles Clinic Med.
7
Macheca's counsel conceded "there was never a specific dollar amount claim
submitted by the plaintiff before the claim was denied," First Trial Tr. at 17, so we
conclude the filing of the complaint on December 23, 2003, constituted the demand
for payment.
-13-
Grp., Inc., 335 S.W.3d 76, 82 (Mo. Ct. App. 2011) (internal quotation marks and
citation omitted).
With these principles of Missouri law in mind, we agree with the district court
that the damage awards for lost business income ($54,238.84) and for necessary
expenses ($29,743.88) were not reasonably ascertainable for purposes of awarding
prejudgment interest under § 408.020. Macheca's theories and claims for these two
categories of damages vacillated over the course of this litigation, leaving
Philadelphia unable to determine the amount it owed. For example, early in this
dispute Macheca agreed with its other insurer (Travelers) that the warehouse could
be repaired by March 2002 (which would thereby stem any ongoing claim for lost
business income). Later, however, in correspondence exchanged with Philadelphia's
counsel, Macheca represented it was financially unable to perform the necessary
repairs as of December 2004 or January 2005. Even later, at the second trial,
Macheca took the position that its poor financial condition entitled it to damages from
Philadelphia for lost business income through the end of 2006 because of its inability
to repair the warehouse. In addition, a claim for lost business income is very similar
to a claim for lost profits, a category of damages Missouri has identified as
inappropriate for an award of prejudgment interest. See Investors Title Co., 983
S.W.2d at 538-39 (holding prejudgment interest is not allowable in contract action
where measure of damages sought and awarded is lost profits); Bailey v. Hawthorn
Bank, 382 S.W.3d at 106-07 (indicating lost future profits is too uncertain to be
"readily ascertainable" for purposes of § 408.020).
We disagree, however, that the property damage award ($90,981.28) was not
reasonably ascertainable for purposes of allowing prejudgment interest on that
category of loss. The damage to the warehouse floors and walls (as well as the
product stored inside the warehouse) was calculable soon after the ammonia leak
occurred. Moreover, the measure of damages for this category of loss (i.e.,
replacement cost for property loss) was never in dispute. See St. John's Bank & Trust
-14-
Co. v. Intag, Inc., 938 S.W.2d 627, 630 (Mo. Ct. App. 1997) (identifying a dispute
over the proper measure of damages as a reason for denying prejudgment interest).
In such a situation, a dispute over the actual amount owed should not preclude an
award of prejudgment interest. See Comens, 335 S.W.3d at 82. Nor does Macheca's
request for damages greater than the amount ultimately decided by the jury preclude
such an award. See A.G. Edwards & Sons, Inc. v. Drew, 978 S.W.2d 386, 397 (Mo.
Ct. App. 1998) ("[A]n award of less damages than requested does not preclude an
award of prejudgment interest on the ascertained damages.").
We therefore affirm the district court's denial of prejudgment interest on the
claims for lost business income and necessary expenses, but reverse the denial of
prejudgment interest on the claim for property damage.8
8
We are not convinced the Missouri Supreme Court allows equitable principles
to be considered when awarding or denying prejudgment interest on a liquidated
damage claim. For this proposition, the district court relied upon City of Sullivan v.
Truckstop Rests., Inc., 142 S.W.3d 181, 195 (Mo. Ct. App. 2004), a decision from the
Missouri Court of Appeals. Although a number of recent decisions from the Missouri
Court of Appeals state this same principle, our court earlier concluded otherwise. See
Emmenegger v. Bull Moose Tube Co., 324 F.3d 616, 624 (8th Cir. 2003) ("Equitable
principles of fairness and justice may not be considered when awarding prejudgment
interest on a liquidated demand.") (quoting Huffstutter v. Mich. Mut. Ins. Co., 778
S.W.2d 391, 395 (Mo. Ct. App. 1989)). The divergent views of the Missouri Court
of Appeals appear to originate from conflicting interpretations of a Missouri Supreme
Court decision which held equitable principles may be considered when awarding
prejudgment interest. See Catron v. Columbia Mut. Ins. Co., 723 S.W.2d 5, 7 (Mo.
1987). As Huffstutter notes, however, Catron involved an unliquidated demand for
damages, not a liquidated demand. 778 S.W.2d at 395. Under our de novo review
of the prejudgment interest issue, we conclude Macheca is entitled to prejudgment
interest on its property damage claim and not entitled to prejudgment interest on its
other damage claims, without having to resort to equitable principles of fairness and
justice. We therefore find it unnecessary to resolve the discrepancy between
Emmenegger and some of the decisions from the Missouri Court of Appeals.
-15-
III
We affirm the judgment to the extent the damages were reduced by the
Travelers payment. We also affirm the denial of prejudgment interest on the amounts
the jury awarded for lost business income and necessary expenses. We reverse the
denial of prejudgment interest on the award for property damage, however, and
remand for further proceedings.
______________________________
-16-