Cranney v. Mutual of Enumclaw Insurance

175 P.3d 168, 145 Idaho 6, 2007 Ida. LEXIS 227
CourtIdaho Supreme Court
DecidedDecember 24, 2007
Docket33501
StatusPublished
Cited by4 cases

This text of 175 P.3d 168 (Cranney v. Mutual of Enumclaw Insurance) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cranney v. Mutual of Enumclaw Insurance, 175 P.3d 168, 145 Idaho 6, 2007 Ida. LEXIS 227 (Idaho 2007).

Opinions

EISMANN, Chief Justice.

This is an appeal from the district court's refusal to modify an arbitration award by deleting the prejudgment interest awarded by the arbitrator. Because Idaho Code § 7-913(a)(1) does not permit an arbitration award to be modified for a nonmathematical error in awarding prejudgment interest, we affirm the judgment of the district court.

I. FACTS AND PROCEDURAL HISTORY

On January 29, 2003, Arden Cranney was involved in a motor vehicle accident. He and his wife filed suit against the other driver and ultimately settled that case for an amount exceeding the limits of the other driver’s liability insurance coverage.

At the time of the accident, the Cranneys were insured by Mutual of Enumelaw Insurance Company under a policy that provided underinsured motorist coverage. They were unable to reach agreement regarding the [8]*8amount due under that coverage, and on February 17, 2004, the Cranneys filed this lawsuit. The Cranneys insurance policy provided for arbitration of the amount due under the underinsured motorist coverage, and Mutual of Enumclaw demanded that the matter be arbitrated. The district court stayed the proceedings until it was.

The arbitrator issued his award on May 26, 2006, which included a sum of $61,262 for prejudgment interest. On May 31, 2006, the Cranneys filed a motion to confirm the arbitration award. On June 5, 2006, Mutual of Enumclaw filed an objection to the award, stating that the arbitrator had incorrectly calculated the interest based upon this Court’s opinion in Greenough v. Farm Bureau Ins. Co. of Idaho, 142 Idaho 589, 130 P.3d 1127 (2006). The district court confirmed the arbitration award and awarded the Cranneys court costs, including a reasonable attorney fee pursuant to Idaho Code § 41-1839. Mutual of Enumclaw then timely appealed.

II. ISSUES ON APPEAL

1. Did the district court err in failing to modify the arbitration award?
2. Are the Cranneys entitled to an award of attorney fees on appeal pursuant to Idaho Code § 41-1839.

III. ANALYSIS

A. Did the District Court Err in Failing to Modify the Arbitration Award?

Idaho Code § 28-22-104(1) provides for interest at the rate of 12% per annum on “[mjoney due by express contract.” In Brinkman v. Aid Ins. Co., 115 Idaho 346, 766 P.2d 1227 (1988), the Court held that money was “due” pursuant to underinsured motorist coverage at the time of the accident “because that is the date [the insurer’s] contractual duties accrued.” Id. at 354, 766 P.2d at 1235. That construction of the word “due” was manifestly wrong, and in order to remedy the continued injustice of utilizing it we overruled that portion of the Brinkman opinion in Greenough v. Farm Bureau Ins. Co. of Idaho, 142 Idaho 589, 130 P.3d 1127 (2006).

In applying Idaho Code § 28-22-104, this Court has also held that “damages must be liquidated or capable of mathematical computation for prejudgment interest to be awarded.” Dillon v. Montgomery, 138 Idaho 614, 618, 67 P.3d 93, 97 (2003). Mutual of Enumelaw asks us to hold that prejudgment interest is not recoverable on an award of benefits under an underinsured motorist policy until the amount due under that coverage is liquidated. We have already so held. In American Foreign Ins. Co. v. Reichert, 140 Idaho 394, 400, 94 P.3d 699, 705 (2004), a case that involved the arbitration of the amount due under an underinsured motorist coverage, we stated the law regarding the awarding of prejudgment interest in such cases as follows, “Absent an agreement to the contrary, an arbitrator has authority under I.C. § 7-910 to award prejudgment interest. Prejudgment interest is allowed on money due by an express contract, I.C. § 28-22-104, and should be awarded when it is capable of mathematical computation.” In support of that statement, we cited Dillon v. Montgomery, quoted above.

The issue presented by this appeal is whether the district court had authority to modify the arbitrator’s award of prejudgment interest. “Judicial review of an arbitrator’s decisions is limited to an examination of the award to determine whether any of the grounds for relief stated in Idaho Code §§ 7-912 and 7-913 exists.” American Foreign Ins. Co. v. Reichert, 140 Idaho 394, 398, 94 P.3d 699, 703 (2004). “Although a reviewing court might believe that some of the arbitrator’s rulings are erroneous, the decision is nevertheless binding unless one of the grounds for relief set forth in I.C. §§ 7-912 or 7-913 are present.” Pacific Alaska Seafoods, Inc. v. Vic Hoskins Trucking, Inc., 139 Idaho 472, 474, 80 P.3d 1073, 1075 (2003).

Mutual of Enumclaw argues that the arbitrator’s award can be modified because the arbitrator’s award of prejudgment interest constitutes “an evident miscalculation of figures” under Idaho Code § 7-913(a)(l). It relies upon our opinion in Schilling v. Allstate Ins. Co., 132 Idaho 927, 930, 980 P.2d 1014, 1017 (1999), wherein we held that an arbitrator’s award under an underinsured [9]*9motorist policy could be modified to include prejudgment interest because the failure to award prejudgment interest constituted an evident miscalculation of figures under Section 7-913(a)(l). The Court in Schilling reasoned:

There is no question that the arbitration panel did not correctly calculate the correct amount of the total award, for it failed to include prejudgment interest in the award. Therefore, we conclude that the district court correctly modified the arbitration award due to the arbitration panel’s miscalculation of the award amount. See I.C. § 7-913(a)(l). The amount of prejudgment interest on the award from the date of the injury was readily calculable by the arbitrators.

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Cranney v. Mutual of Enumclaw Insurance
175 P.3d 168 (Idaho Supreme Court, 2007)

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Bluebook (online)
175 P.3d 168, 145 Idaho 6, 2007 Ida. LEXIS 227, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cranney-v-mutual-of-enumclaw-insurance-idaho-2007.