Merrill v. Trenn

706 A.2d 1305, 1998 R.I. LEXIS 50, 1998 WL 79171
CourtSupreme Court of Rhode Island
DecidedFebruary 18, 1998
Docket96-602-Appeal
StatusPublished
Cited by16 cases

This text of 706 A.2d 1305 (Merrill v. Trenn) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merrill v. Trenn, 706 A.2d 1305, 1998 R.I. LEXIS 50, 1998 WL 79171 (R.I. 1998).

Opinion

OPINION

FLANDERS, Justice.

This case concerns the method that should be used to calculate the damages liability of alleged tortfeasors and to compute prejudgment interest thereon when the injured party has previously obtained a pretrial-settlement payment from one of the alleged tortfeasors and then enters into a later settlement with or obtains a verdict or decision against the other allegedly responsible parties.

I

Facts and Travel

On the afternoon of October 31, 1991, plaintiffs Christopher R. Merrill (Merrill) and James Pakuris (Pakuris) were passengers in an automobile driven by defendant Edward Trenn, Jr. (Trenn). Trenn and his passengers were motoring in an easterly direction on Route 102 in North Kingstown, Rhode Island, when their car overtook a school bus. The defendant Arthur Bennett owned, the bus, which was registered to defendant Town of North Kingstown and oper *1306 ated by defendant Betty Williams (collectively the North Kingstown defendants). At this part of the road Route 102 is a four-lane highway. Trenn attempted to pass the school bus on the right while driving at a high rate of speed. Simultaneously the school bus began negotiating a lane change from the left to the right lane of the highway. The two vehicles collided — causing Merrill and Pakuris to sustain substantial personal injuries and property damage.

Merrill and Pakuris 1 filed suit in the Superior Court on June 18, 1993, against Trenn, Edward Trenn, Sr. (Trenn Sr.), the registered owner of the motor vehicle operated by Trenn, 2 and the North Kingstown defendants. Trenn and Trenn Sr. thereafter filed a cross-claim against the North Kingstown defendants. 3 On or about April 25, 1995, Trenn’s insurer paid $25,000 to Merrill ($25,000 Trenn payment), 4 the limit of the per-person liability coverage under Trenn’s automobile-liability-insurance policy. Because the Superior Court record does not include any of the settlement documents relating to the $25,000 Trenn payment and because the North Kingstown defendants’ settlement agreement with Merrill makes no reference to any release that Merrill may have given to Trenn, the Superior Court had no basis for knowing whether Merrill had released Trenn from all liability relating to the accident and, if so, what other claim-reduction terms may have been included in such release. Rather the only information the parties presented to the Superior Court was that Trenn’s insurer had paid $25,000 to Merrill in settlement of Merrill’s claims against Trenn. 5 Therefore, for purposes of this opinion only, we shall assume that Merrill’s settlement with Trenn did not discharge the North Kingstown defendants from any liability to Merrill or include language that would reduce Merrill’s claim against them by more than the $25,000 Trenn payment. We shall also assume that the North Kingstown defendants agreed to a settlement with Merrill independent of and without regard to whether Merrill had released Trenn from liability or included any other claim-reduction terms in any such release that would reduce the North Kingstown defendants’ damages liability to Merrill beyond the $25,-000 Trenn payment. 6 Accordingly we express no opinion regarding whether the North Kingstown defendants may pursue a contribution claim against Trenn in a future lawsuit.

After he received the $25,000 payment from Trenn’s insurer, Merrill proceeded to court-annexed arbitration against the North Kingstown defendants. The arbitrator is *1307 sued a decision that attributed the accident to both drivers’ negligence and assigned 35 percent liability to the North Kingstown defendants and 65 percent to Trenn. The arbitrator then determined that Merrill had sustained $66,250 in total damages as a result of the accident. Although the parties asked the arbitrator to assess interest on the awards, he declined, believing himself “not authorized” to do so under Rules 4 and 6 of the Superior Court’s Rules Governing Arbitration of Civil Actions.

Rather than accept the arbitration award, Merrill filed a timely notice of rejection with the Superior Court, thereby allowing the case to proceed to a trial de novo. Before the parties were reached for trial, however, Merrill and the North Kingstown defendants entered into a settlement agreement (the North Kingstown settlement) on April 12, 1996, whereby the North Kingstown defendants agreed to pay Merrill for the balance of his total damages that were not covered by the Trenn payment. Although the rejected arbitration award had no binding legal effect, the parties agreed to adopt the arbitrator’s $66,250 damages assessment as Merrill’s total damages. 7 As part of their settlement agreement Merrill and the North Kingstown defendants also agreed that the latter should pay some amount for “prejudgment interest” calculated at 12 percent per annum over the fifty-three-and-one-half-month period between the accident and the North Kingstown settlement, or 53.5 percent interest on their portion of Merrill’s total damages. 8 However, the settling parties could not agree either on how the $25,000 Trenn payment should be credited in favor of the North Kingstown defendants or on the method of interest computation to be used.

Merrill contended that he should receive interest on his entire damages amount of $66,250 from the date of the accident to the date of the North Kingstown settlement, although he conceded that the North Kingstown defendants should obtain credit for $3,000 in interest that he says would have accrued on the $25,000 Trenn payment during the twelve months between Merrill’s receipt of the Trenn payment and the date of the North Kingstown settlement. 9

The North Kingstown defendants, on the other hand, advocated subtracting the Trenn *1308 payment from Merrill’s total damages at the outset and then computing interest only on the difference (the North Kingstown method). 10 The two methods of interest computation produce different bottom-line results that are a little over $10,000 apart, representing a 16.4 percent swing in the settlement costs from the perspective of the North Kingstown defendants. 11

Unable to agree on what method of interest computation should be used and on how the North Kingstown defendants’ portion of the $66,250 total damages to be paid to Merrill should be calculated, the settling parties agreed to submit these questions to the Superior Court, for its determination. Thus on September 16, 1996, Merrill filed a motion for entry of judgment praying that the court “enter a judgment for unpaid interest pursuant to R.I. Statute 9-21-10 and the attached agreement of the Parties * * 12

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Bluebook (online)
706 A.2d 1305, 1998 R.I. LEXIS 50, 1998 WL 79171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merrill-v-trenn-ri-1998.