Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
|Agency of Natural Resources|
Glens Falls Insurance Company,
Washington Superior Court
Trial Judge: Alan W. Cheever
In this appeal from an order on remand from Agency of Natural Resources v. Glens Falls Insurance Co., 169 Vt. 426 (1999), Liberty Mutual Insurance Company alleges error in the trial court's calculation of prejudgment interest owed to it by Continental Insurance Company. For a second time, Liberty also attacks the trial court's order which was the subject of the 1999 appeal. We affirm.
In Agency of Natural Resources v. Glens Falls Insurance Co., 169 Vt. 426 (1999), we affirmed the trial court's decision allocating liability among the parties for payment of remediation costs for gasoline leaks from underground storage tanks at a service center owned by Tamarack Services of South Burlington. Prior to the trial court's order, Liberty had paid for remediation costs actually owed by Continental because Liberty and Continental believed Tamarack's insurance policy from Continental excluded coverage for some of the leaks. After the parties, including the Agency for Natural Resources ("ANR"), discovered Continental's policy exclusions were invalid, Continental entered a settlement agreement with Tamarack and ANR concerning Continental's liability for past and future remediation costs. The agreement requires Continental to reimburse ANR for amounts Liberty owed to it.
After trial on Liberty's and Continental's claims against each other, the court found Liberty liable for 92.437% of the remediation costs and Continental liable for 7.563%. The court calculated both parties' liability, finding that Liberty was entitled to restitution from Continental in the amount of $189,526.05, but offset by Continental's payment of $189,718.01 under the settlement agreement. The setoff resulted in a refund to Continental from Liberty in the amount of $191.96. The trial court also denied Liberty's request for prejudgment interest as a matter of right. We remanded that issue back to the trial court to allow it to consider whether prejudgment interest should be awarded "as a discretionary matter based upon Liberty's claim that it was wrongfully denied the use of the money" it paid on Continental's behalf. Id. at 435.
On remand, the trial court determined that prejudgment interest in the amount of $23,216.94 was appropriate to avoid injustice to Liberty resulting from Liberty's inability to earn interest on the funds it expended to cover Continental's liability. It determined that the starting date for interest was December 23, 1993, the date on which Liberty demanded payment by asserting a cross-claim against Continental. The ending point for interest, the court found, was the date on which Continental settled with Tamarack and ANR, December 30, 1994.
In its prejudgment interest order, the trial court also addressed Liberty's request for reconsideration of the court's original allocation which this Court previously affirmed. For the second time in the case, the trial court rejected Liberty's claim that it was entitled to restitution for $39,291.50 in costs it paid for two leaks occurring after its policy with Tamarack expired. The court determined that Liberty's restitution award already included those costs so no adjustment to the base restitution amount was necessary. The trial court declined to address Liberty's claim that the court incorrectly calculated Continental's setoff credit. The court reasoned that Liberty failed to raise this claim before it previously and failed to raise it in its first appeal to this Court. The court also rejected Liberty's assertion that the court retained jurisdiction to correct its order in the original suit, noting that our remand was limited to the issue of prejudgment interest only. Liberty subsequently took this appeal.
We first address Liberty's arguments concerning the correctness of the original trial court order in this matter. In this appeal, Liberty claims the credit award to Continental is erroneous because (1) Liberty did not have fair notice of the claim through Continental's pleadings; (2) the credit derogates Liberty's contract rights with Tamarack; (3) the evidence does not support the award both in theory and in amount; and (4) Continental is estopped from claiming any credit from Liberty. Liberty also argues that the trial court's 92.437% allocation of costs to Liberty was beyond its jurisdiction and an abuse of discretion and that the trial court miscalculated Liberty's restitution award. Liberty's arguments are either new or are slight variations on the arguments it previously presented in the first appeal and which we rejected. Our prior decision affirmed the liability allocation, the restitution award to Liberty and the credit due Continental, id. at 431-33, and we denied Liberty's motion to reargue the matter. We will not revisit those decisions here. See Perkins v. Vermont Hydro-Elec. Corp., 106 Vt. 367, 415-16 (1934) (Court will not reverse former decisions in the same case; to do otherwise would allow no end to litigation). We note that the trial court correctly declined to consider any issue other than prejudgment interest in the remand proceeding in light of the prior opinion's limited mandate. See Coty v. Ramsey Assocs., 154 Vt. 168, 171 (1990) (trial court is limited to following Supreme Court's specific directions in mandate on remand). We now turn to the issue in that mandate.
Liberty disputes the court's prejudgment interest award on the grounds that the beginning and end dates for interest accrual are erroneous. As we noted in our first opinion in this case, the trial court has discretion to award prejudgment interest to prevent injustice. Glens Falls Ins. Co., 169 Vt. at 435. We will not reverse the trial court unless Liberty shows that the trial court abused its discretion. Estate of Fleming v. Nicholson, 168 Vt. 495, 503 (1998). We find no such abuse here.
Generally, interest starts to accrue "from the time the debt becomes payable or payment is demanded, or when suit is brought, a judicial demand." Van Velsor v. Dzewaltowski, 136 Vt. 103, 106 (1978). In this case, the trial court relied on this general principle and concluded that interest began to accrue when Liberty first asserted its claim against Continental. That determination was reasonable because the court found that Continental had no notice of Liberty's claim prior to that time.
The court's determination that interest should cease accruing on the date Continental paid the debt on which it owed interest was likewise reasonable. See Mt. Mansfield Hotel Co. v. Bailey, 64 Vt. 151, 153 (1891) (interest on a debt accrues until final payment on the debt is made). Liberty was not entitled to interest as a matter of law; the court exercised its discretion to award interest to prevent injustice. The court did not abuse its discretion by denying Liberty interest on its restitution award for the time period after Continental had already satisfied the award.
BY THE COURT:_______________________________________
James L. Morse, Associate Justice
Ernest W. Gibson III, Associate Justice (Ret.)