Wells v. Marleau

NEWMAN, J.

Defendants are the sellers of residential real property. In this action for breach of contract and fraud, they appeal from a judgment entered on June 18, 1984, on a jury verdict. Plaintiff buyers pleaded breach of contract and fraud and sought the same amount of compensatory damages of $8,500 on both claims and punitive damages on the fraud claim. They alleged that defendants had violated their agreement to provide a satisfactory septic system and concealed material facts concerning the condition of the system and the suitability of the surrounding soil. At the close of the evidence the court struck plaintiffs’ claim for punitive damages. Plaintiffs cross-appeal from this ruling.

Both the contract and fraud claims for compensatory damages were submitted to the jury. Its verdict found specially for plaintiffs on both claims and recited that “we assess plaintiffs [sic] damages in the sum of $8,500.” Although the judgment recites that the jury found damages of $8,500 on each claim, it orders that plaintiffs shall have judgment against defendant “in the sum of $8,500, plus interest at the rate of 9 percent per annum from August 14, 1980,” but does not state whether that sum is on the contract claim, the fraud claim or on both.¹

Defendant’s first two assignments require no discussion. In their third assignment, they assert that the trial court erred by awarding prejudgment interest to plaintiffs from the date on which the transaction closed. We agree. Plaintiffs failed to prove that the exact pecuniary amount of the loss that they suffered was either ascertained or ascertainable by simple computation as of the date of closing. See Public Market Co. v. Portland, 171 Or 522, 625, 130 P2d 624, 138 P2d 916 (1943); Arden-Mayfair v. Patterson, 46 Or App 849, 857, 613 P2d 1062, rev den 290 Or 149 (1980). Plaintiffs did not assert that prejudgment interest could accrue beginning on the happening of any event other than the closing. Accordingly, on the appeal, we reverse the award of prejudgment interest, but otherwise affirm.

We turn to the cross-appeal. There was abundant evidence from which the jury could find that defendants committed intentional fraud and that they had acted with the requisite aggravation, malice or wantonness to permit the imposition of punitive damages. The trial court therefore erred by striking plaintiffs’ claim for punitive damages. 2-D’s Logging v. Weyerhaeuser, 53 Or App 677, 632 P2d 1319, rev den 292 Or 109 (1981); see also Schmidt v. Pine Tree Land Dev., 291 Or 462, 631 P2d 1373 (1981).

The remaining question is what issue or issues must be retried in the light of that error. Plaintiffs argue that only the question of punitive damages should be retried. Defendants argue that if we conclude — as we have — that the failure to submit the claim for punitive damages to the jury was error, a plenary retrial is necessary.² Appellate courts have given diverse treatment to the questions of whether and what issues must be retried on remand other than the specific issue on which the trial court erred. See, e.g., Wolf v. Nordstrom, 291 Or 828, 637 P2d 1280 (1981); Maxwell v. Port. Terminal RR. Co., 253 Or 573, 456 P2d 484 (1969); Canton v. Hauge, 72 Or App 548, 696 P2d 1126 (1985); Wilson v. B.F. Goodrich, 52 Or App 139, 627 P2d 1280 (1981), aff’d 292 Or 626, 642 P2d 644 (1982). The general rule was stated in Maxwell that retrial should be had on all factual issues. In Maxwell, however, the court made it clear that it was referring to the “ordinary two-party personal-injury case,” and also recognized that there could be “exceptional cases in which the trial court, in the exercise of judicial discretion, properly will limit the issues for a new trial.” 253 Or at 577. Moreover, in Maxwell, the court noted that in earlier non-personal injury cases the court had remanded for a new trial on limited issues. See Brown v. Bonesteele, 218 Or 312, 344 P2d 928 (1959); Western Feed Co. v. Heidloff, 230 Or 324, 370 P2d 612 (1962).

A conclusion that Maxwell requires complete retrial of the fraud claim would be at odds with the court’s more recent decision in Wolf v. Nordstrom, supra. In Wolf, a false imprisonment case, the court, after deciding that the trial court improperly set aside the jury’s verdict for punitive damages, did not vacate the plaintiffs judgment. Rather, it found that Maxwell did not govern the case and, on remand, it limited retrial to the issue of punitive damages. Although the issues of liability and general damages went to the jury in the first trial, the court chose not to resubmit those issues to the jury and force the plaintiff to reprove his entire case on retrial. It stated that

“recklessness, by itself, will not support an award of punitive damages. Although recklessness may be a part of aggravating circumstances which justify an award of punitive damages, the trial judge erred in instructing the jury on recklessness alone as sufficient to justify an award of punitive damages. We cannot determine the standard actually used by the jury in arriving at its verdict for punitive damages and must therefore remand this case for retrial on the issue of punitive damages.”291 Or at 835. (Emphasis supplied.)

Similarly, in McGregor v. Barton Sand & Gravel, Inc., 62 Or App 24, 660 P2d 175 (1983), an action for trespass, nuisance, negligence and ultrahazardous activity arising out of the spillage of water and debris onto the plaintiffs’ property from artificial ponds on the defendant’s property, the court reversed, because of the trial court’s erroneous instruction on punitive damages, and remanded for a new trial only on the issue of punitive damages. We stated:

“In Wolf v. Nordstrom, supra, under materially identical circumstances, the court stated:

<* * *[W]e find this case to be exceptional and not within the general rule of Maxwell [v. Port. Terminal RR. Co., 253 Or 573, 456 P2d 484 (1969)] that retrial should be on all factual issues. * * *’ 291 Or at 835.

“It therefore remanded for further proceedings on the issue of punitive damages only. Similarly, here, we remand only on the punitive damages issue. We emphasize,, however, that the questions on remand are both whether punitive damages are warranted by defendants’ conduct and, if so, what if any amount plaintiffs should recover as punitive damages.” 62 Or App at 35. (Emphasis in original.)

The case before us is also not a case on which retrial should be had on all factual issues. The jury has already determined that defendants are liable for fraud. What is left is for plaintiffs to prove on remand that defendants committed the fraud with requisite intent so that plaintiffs may recover punitive damages. Although the evidence of intent may also bear on liability, the two issues are no more connected than they were in Wolf and McGregor. Moreover, if we were to vacate plaintiffs entire fraud judgment, particularly the jury’s determination of fraud liability, we would impose on plaintiffs an unnecessarily heavy burden for prevailing on their cross-appeal, and we would break stride with the Supreme Court in Wolf and with our own decision in McGregor.

We do not disturb plaintiffs’ judgment on the contract and fraud claims for compensatory damages.

On the appeal, reversed and remanded with instructions to delete the award of prejudgment interest and award statutory interest from June 18, 1984; otherwise affirmed; on the cross-appeal, reversed and remanded for further proceedings on punitive damages only not inconsistent with this opinion.

1 Defendants do not assign as error that the special verdict was inadequate to show that the damages awarded were attributable to both the contract and fraud claims or that the judgment is at variance with the verdict. Accordingly, we interpret the judgment to award a judgment of compensatory damages to plaintiffs, exclusive of interest and costs, of $8,500 on the contract claim and $8,500 on the fraud claim, but not more than $8,500 in total. The parties do not appear to be in dispute that this interpretation is correct.

2 It is unclear whether defendants mean that the breach of contract claim as well as the fraud claim should be retried. If that is their contention, we do not agree that the breach of contract claim must be retried.