Opinion
FSTCV166027436S
10-11-2017
Rosemary Rigakos v. Sean Oneill
UNPUBLISHED OPINION
MEMORANDUM OF DECISION re MOTION FOR RECONSIDERATION (#142.00)
Kenneth B. Povodator, J.
Factual/Procedural Background
The plaintiff and the defendant were involved in a motor vehicle accident. For purposes of this proceeding, the defendant admitted responsibility for causing the accident. The plaintiff already had been compensated for her claimed personal injuries and her car was repaired shortly after the accident. What remained were claims that the vehicle provided to the plaintiff during the course of repairs was sufficiently inferior to the car being repaired (the car she owned) that she was not fully compensated for the loss of use of her vehicle during repairs. Additionally, although the car was repaired, the claim is that a vehicle that has been involved in an accident requiring extensive repairs has a decreased value, even after the repairs are fully completed, and that she was entitled to compensation for that diminution in value.
After a trial to the court, judgment was entered in favor of the plaintiff. Currently before the court is the plaintiff's motion for reconsideration, limited to the issue of interest--principally pre-judgment interest. (The court also did not address postjudgment interest, which will be addressed below.) The plaintiff correctly notes that the court failed to address that issue, especially in explicit terms, and a motion for reconsideration (or to reargue) is an appropriate vehicle for bringing such an omission to the court's attention.
Discussion
An appropriate starting point is the plaintiff's analysis of the interest issue, as set forth in the motion for reconsideration:
The measure of damage for this case is unambiguous. It is " the value of the vehicle before and after the loss with interest from the date of loss " (emphasis added), Littlejohn v. Elionsky, 130 Conn. 541, at 543, 36 A.2d 52 (1944). After emphasizing the true rule of damage as laid down in Littlejohn, the Supreme Court again said, " The owner [is] entitled to the difference between the fair market value of the car before the collision and its value after the collision, plus interest " (emphasis added), Stults v. Palmer, 141 Conn. 709, 109 A.2d 592 (1954); Hammarlund v. Troiano, 146 Conn. 470, 152 A.2d 314 (1959). After noting the true rule in a diminished value case, " Interest is assessed at the statutory rate of 10% per annum from the date of loss . . ." Corridino v. Kovacs et al., 2013 WL 8118969, Conn.Sup.Ct., Oct. 9, 2013. None of the Supreme Court decisions in diminished value cases allow for the discretion of whether or not to award the interest. The Court is bound by the law to award interest. The amount (or rate) of interest is at the discretion of the court, whether or not to award interest is not. We acknowledge that the Superior Court Judges have a split opinion regarding awarding prejudgment interest, however, the Supreme Court and Appellate Court have been consistent in their allocation of prejudgment interest and obedience to the true rule of law.
Although the decision itself bears a caption with the name " Corridino, " the actual name, as reflected in the court file, is " Corrindino" (J.D. Hartford, HHD-CV12-6031646-S). (The court also notes that emphasis was added by the plaintiff in quoting from the decision, and the court has indicated that modification, as quoted above.)
The first case cited by the plaintiff in the above passage is Littlejohn v. Elionsky, 130 Conn. 541, 543, 36 A.2d 52 (1944). The decision articulated the then-recognized rule that in a case involving a damaged vehicle, the plaintiff would be entitled to interest from the date of loss. The court notes that the case involved a vehicle that had not been repaired. The court further notes that in that decision, a distinction was made between a vehicle that had been repaired to good working condition as opposed to a vehicle that had been restored substantially to its pre-accident condition; inferentially, interest would not be allowed in the latter situation. (Alternatively, the court did not foresee the type of claim being asserted here--a vehicle restored substantially to pre-accident condition, but with a rejection of the principle that the cost of repair to restore a vehicle to pre-accident condition was " the" measure of damages.)
The plaintiff next cites Stults v. Palmer, 141 Conn. 709, 109 A.2d 592 (1954), which repeats the foregoing in summary fashion, citing Littlejohn (at p. 712):
The true rule is that the measure of damages is the difference between the fair market value of the car before the collision and its fair market value afterwards, plus interest from the date of loss. However, if the automobile damage may be repaired and the repairs will restore the car to substantially its former condition, the cost of repair will ordinarily furnish proper proof of the loss.
On the merits, the Stults court concluded that the vehicle could not be repaired (substantially) to its pre-accident condition.
The plaintiff then cites Hammarlund v. Troiano, 146 Conn. 470, 152 A.2d 314 (1959)--the decision relies upon Stults for a recitation of the proper measure of damages, but does not mention interest at all. Therefore, it has no bearing on the issue currently before the court.
After the court could not find the word " interest" in the decision, the court did a computerized word-search of the decision, which also proved negative.
Finally, the plaintiff cites a trial court decision, Corrindino v. Kovacs . As cited by the plaintiff, it appears that the plaintiff is claiming that it stands for the proposition that not only must interest be awarded on the property damage claim (there, as here, the claim involved diminution in value, post-repair) but also that the rate should be (is required to be?) 10%. The plaintiff further notes/acknowledges that not all trial judges have followed the rule being proposed by the plaintiff, and in a footnote makes reference to two such trial court decisions that are attached to her motion.
The appellate-level cases cited by the plaintiff may be the most recent decisions specifically addressing the issue of interest in connection with motor vehicle property damage claims, but the court does not need to go back 60 years to find decisions addressing pre-judgment interest in connection with tort claims. In recent years, a series of decisions in the case of DiLieto v. County Obstetrics & Gynecology Group have given our Supreme Court an opportunity to discuss, in detail, the operation/application of the statutes governing claims of pre-judgment interest and postjudgment interest in the tort context. The decisions discuss the application of General Statutes § 37-3a and § 37-3b as well as the interrelationship between those statutes (and discuss other cases involving various aspects of the award of interest).
In a 2013 decision, DiLieto v. County Obstetrics & Gynecology Group, 310 Conn. 38, 74 A.3d 1212 (2013), there was a discussion that appears to be pertinent to the issues before this court.
It is well established that [§ ]37-3a provides a substantive right [to prejudgment interest] that applies only to certain claims. As early as 1814, [this] [c]ourt stated that [prejudgment] interest [under § 37-3a] ought to be allowed only . . . where there is a written contract for the payment of money on a day certain, as on bills of exchange, and promissory notes; or where there has been an express contract; or where a contract can be presumed from the usage of trade, or course of dealings between the parties; or where it can be proved that the money has been used, and interest actually made. Section 37-3a also authorizes prejudgment interest in cases involving tortious injury to property when the damages were capable of being ascertained on the date of the injury. See Sosin v. Sosin, 300 Conn. 205, 235, 14 A.3d 307 (2011) (award of prejudgment interest for damage to property " is limited to cases in which the damage is of a sort [that] could reasonably be ascertained by due inquiry and investigation on the date from which the interest is awarded" [internal quotation marks omitted]). Prejudgment interest is permitted in such cases on the theory that [a] loss of property having a definite money value is practically the same as the loss of so much money; the loss of the use of the property is practically the same as the loss of the use (or interest) of so much money. Thus, [§ 37-3a] does not allow prejudgment interest on claims that are not yet payable, such as awards for punitive damages . . . or on claims that do not involve the wrongful detention of money, such as personal injury claims . . . Prejudgment interest is not permitted on such claims for the simple reason that, until a judgment is rendered, the person liable does not know what sum he owe[s], and therefore cannot be in default for not paying.; see also Travelers Property & Casualty Co. v. Christie, supra, at 764, 916 A.2d 114 (" requests for prejudgment interest [on] personal injury claims do not typically constitute a claim for the wrongful detention of money before the rendering of judgment . . . [because] damages are typically uncertain [until that time]" . . .; Lockard v. Salem, 130 W.Va. 287, 294, 43 S.E.2d 239 (1947) (" unless a claim is liquidated, or readily susceptible of ascertainment by computation, interest is not allowable until there is an ascertainment of the amount due"). Once a plaintiff's damages are known, however, which typically occurs at the time of judgment, they are due and payable for purposes of an award of postjudgment interest under § 37-3a. (Most internal quotation marks and citations, omitted.) 310 Conn. 38, 50, n.11, 74 A.3d 1212, 1219 (2013).
The DiLieto decision makes it clear that except to the extent that statutory language mandates a different result, the two statutes--§ 37-3a and § 37-3b--are to be interpreted in a similar fashion, particularly with respect to the discretion of the trial court to determine the appropriate rate of interest. (See, also, the latest DiLieto decision at 316 Conn. 790, 114 A.3d 1181 (2015).) Thus, the court discussed interchangeably, cases involving application of each statute--including specific reference to the rationale for usually disallowing pre-judgment interest in negligence-based cases.
Synthesizing the foregoing cases, there appear to be two intertwined issues that must be resolved. First, were the damages reasonably knowable as of the date of the accident, the date from which the plaintiff claims interest should begin to run? Also, was the vehicle merely restored to good operating condition, or was it restored to a condition that was substantially equivalent to its pre-accident condition?
The burden of proof generally is on the plaintiff to prove her damages. There was no dispute but that the vehicle has been repaired, and no evidence was offered by either party as to any material deficiencies in the repairs that might negate the vehicle having been restored to substantially equivalent to pre-accident condition, establishing that it was only restored to good operating condition. The defendant offered evidence that there was a relatively minor/modest problem with repairs, but that was a matter that should and could have been cured by returning to the repair shop, assuming the repair defect were to be accepted as proven. In other words, the only specific deficiency claimed by any party was readily correctable. The plaintiff's expert testified that there were hypothetical concerns, including questions about the ability to restore rustproofing in areas needing repairs to the equivalent of factory rustproofing. Additionally, the plaintiff's expert articulated what sounded like a theoretical concern that even with modern frame-straightening equipment, using modern technologies, the frame might not have been restored to factory-level quality.
The cases cited by the plaintiff do not require that a vehicle be restored perfectly to pre-accident condition, but rather that it be substantially equivalent to the pre-accident condition. The court believes that that allows for the minimal and/or hypothetical concerns expressed--plaintiff's expert examined the vehicle and did not find any material deficiencies that would keep the vehicle from being characterized as substantially restored to pre-accident condition.
The court's assignment in determining the loss of value was to attempt to measure the hybrid stigma-uncertainty impact of an accident on the subsequent value of the subject vehicle, after repairs. There is at least a theoretical possibility of some difference--material--between pre-accident and post-accident condition. There also is a stigma-type quality to a repaired vehicle, largely based on the foregoing uncertainty. (By analogy, even open-box electronics sell for a modestly-reduced price, based on the uncertainty as to what might have happened once original packaging has been opened.) But again, there was no evidence of any material shortcoming in the repairs that might preclude characterization as substantially restored to pre-accident condition.
Further, the court cannot conclude that this is a situation where the post-repair loss of value is sufficiently precise or liquidated that it can be said to have been knowable as of the date of the accident--the date from which the plaintiff claims interest should run. The plaintiff clearly has rejected the measure of damages usually applied and adopted by the defendant--the cost of repairs. It appears to be the plaintiff's position that no matter how " perfect" the repairs may be, there always will be a substantial diminution in value, above and beyond the cost of repairs. Other than adopting the methodology of the plaintiff's expert (or some variation)--which does not substantially depend upon the quality of repairs--there is nothing before the court that suggests a possible methodology for determining the amount of damages due to diminution in value, as of the date of the loss, in the sense of that value being knowable at or around the time of the loss. As reflected by the court's decision on the merits and some other trial court decisions on this same issue, the expert retained by the plaintiff is typically giving an opinion of a diminution in value in the range of 25%, which in some cases, including this one, has been rejected. In other words, until there is a trial on the merits, at which time a court can evaluate the testimony of the plaintiff's expert, there is no relatively fixed value or ascertainable value for which interest can start to accrue, dating back to the date of accident. If the vehicle were a total loss, a reasonably certain estimate of value of the damage could have been generated. If the vehicle had not been repaired, and if repair costs were deemed the measure of damages, again, a reasonably certain estimate of value of the damage could have been generated. But there is no suggested or plausible guide or methodology that is reasonably applicable for the situation of repairs plus a claim of residual diminution in value.
The court must emphasize its observation that the plaintiff's expert does not rely on any perceived actual (identified) deficiency in repairs to the subject vehicle; in this case, he essentially found no fault with the repairs other than the theoretical observations about such matters as inability to restore rustproofing to factory-installed condition and a potential concern about less than perfection in frame alignment (without suggesting that there was any indication of such a deficiency in the repairs). Rather, the claimed value differential appears to be based solely on the claimed ability to determine a difference in valuation in the marketplace, in turn solely based on the fact that the vehicle had been repaired after an accident (an accident in which the expert opines that it suffered severe damage). The court believes that the uncertain amount of damages, unknowable until after a trial (with a dispute as to whether there is any such differential) and the lack of any evidence that the repairs did not restore the vehicle substantially to pre-accident condition (with a reasonable inference from the testimony of both experts that the vehicle had been restored substantially to pre-accident condition), provides two bases compelling the court to reject the claim for pre-judgment interest.
Again, the defendant's expert identified one correctable defect, that should be (or have been) corrected by the repair shop that performed the repairs shortly after the accident.
To the extent that the plaintiff relies upon the trial court decision in Corrindino v. Kovacs, this court is not bound by the decision of another trial court. The court especially rejects any suggestion that there is a " statutory" interest rate of 10%--as the DiLieto cases make clear, going back at least to Sears, Roebuck & Co. v. Board of Tax Review, 241 Conn. 749, 763-66, 699 A.2d 81 (1997), interest under § 37-3a (and by extension, § 37-3b) is at a rate to be determined by the court, exercising its discretion, with 10% the maximum allowable rate.
See discussion in Mayer v. Historic Dist. Comm'n of Groton, 325 Conn. 765, 773-80, 160 A.3d 333 (2017), relating to limited (inapplicable) circumstances under which a trial court decision might be entitled to some deference as authoritative.
While a trial court is permitted, as appropriate, to apply a 10% rate, this court more typically starts with the analysis set forth in a decision of Judge Adams in Alarmax Distributors, Inc. v. New Canaan Alarm Company, Inc., J.D. Stamford, FST CV-09-5012255S, 2013 WL 3613890 (June 19, 2013) (after remand, 141 Conn.App. 319, 61 A.3d 1142 (2013) ). Using the financial analysis in that decision as a starting point, and recognizing that interest rates have not changed substantially in the last 4 years, this court usually has determined that an interest rate in the 4-6% range is appropriate (when interest is to be awarded). DiLieto (316 Conn. 790, 114 A.3d 1181) recognizes that a trial court may consider a variety of evidence, relating to a determination of the proper interest rate, but in this case, the court does not recall any evidence being offered with respect to establishing an appropriate rate, especially one other than in the 4-6% range.
Just recently, in Riley v. Travelers Home & Marine Insurance Co., 173 Conn.App. 422, 458-62, 163 A.3d 1246 (2017), the court discussed the issue of an appropriate rate of interest under § 37-3a, rejecting the claim that 10% is the presumptive rate (at page 461). The Appellate Court referred to the trial court's observation that the prevailing rate of interest as awarded by trial courts (in 2014) was in the range of 3-6%, consistent with Alarmax and this court's recent approach to interest awards. As noted in Riley, the court may take these ranges into consideration, but must fashion an appropriate rate based on the record before it, and the court has done so (see, below).
The discussion above has centered on the claim for pre-judgment interest, but as noted at the outset, the court failed to discuss postjudgment interest in its decision. Section 37-3a is the interest statute of general applicability, except to the extent that an enumerated statute might otherwise be applicable, and given the negligence basis for the claims in this proceeding, § 37-3b is the controlling statute for purposes of postjudgment interest. The court is required to award interest, using the same considerations as are applicable under § 37-3a in determining the appropriate rate of interest. Under the circumstances, the court concludes that postjudgment interest, to the extent that the judgment is not paid within the time allowed under the statute, should be at a 4% annual rate.
Conclusion
The court acknowledges that it failed to discuss interest in its memorandum of decision. The foregoing discussion cures that omission.
The court finds no basis for awarding pre-judgment interest, under the circumstances presented by this case, notwithstanding the claim of the plaintiff to entitlement to such interest.
To the extent that there might be a need to establish an applicable interest rate--specifically for postjudgment interest under § 37-3b but applicable to any claim under § 37-3a if applicable--the court has concluded that a 4% rate is appropriate.
Accordingly, the court has granted the motion for reconsideration to the extent that the plaintiff has requested that the court address interest. The court denies any relief with respect to pre-judgment interest, but awards interest at 4% annually with respect to postjudgment interest under § 37-3b, to the extent that the time allowed for payment of a judgment under that statute is exceeded.