Court of Appeals Division III

State of Washington

Opinion Information Sheet

Docket Number: 21342-1-III

Title of Case: Melvin Lakes, et al v. Paul Vondermehden, et ux

File Date: 06/05/2003

SOURCE OF APPEAL

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Appeal from Superior Court of Benton County

Docket No: 98-2-00440-9

Judgment or order under review

Date filed: 07/11/2002

JUDGES

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Authored by John a Schultheis

Concurring: Frank L Kurtz

Stephen M Brown

COUNSEL OF RECORD

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Counsel for Appellant(s)

Allen Duane Brecke

Allen Brecke Law Offices

3360 W Clearwater Ave

Kennewick, WA 99336-2733

Joey Cano

Allen Brecke Law Offices

3360 W Clearwater Ave

PO Box 6104

Kennewick, WA 99336-0104

Counsel for Respondent(s)

Alfred Gordon Schweppe

Meyer Fluegge & Tenney PS

230 S 2nd St

PO Box 22680

Yakima, WA 98907-2680

Robert C. Tenney

Attorney at Law

PO Box 22680

Yakima, WA 98907-2680

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MELVIN LAKES and MELVIN LAKES ) No. 21342-1-III

as parent and guardian for )

SHAKEEM LAKES, a minor and )

SHANICE LAKES, a minor and )

SHANIAE LAKES, a minor, )

) Division Three

Appellants, ) Panel Five

)

v. )

)

PAUL VONDERMEHDEN and JANE DOE )

VONDERMEHDEN, husband and wife )

and the marital community )

thereof, if any there may be, )

) PUBLISHED OPINION

Respondents. )

SCHULTHEIS, J. -- The prevailing party in a lawsuit is generally

entitled to prejudgment interest on liquidated damages. Kiewit-Grice v.

State, 77 Wn. App. 867, 872, 895 P.2d 6 (1995). Melvin Lakes sued Paul von

der Mehden for injuries sustained in an automobile collision. Pretrial,

Mr. von der Mehden's insurer, Safeco Insurance Company, agreed in its

response to requests for admissions that certain medical expenses were

reasonably necessary. The jury was instructed that those medical expenses

were to be awarded to Mr. Lakes, along with any additional damages

supported by the evidence.

Following entry of judgment for Mr. Lakes, he requested prejudgment

interest on the amounts Safeco admitted owing. The trial court denied the

request. Mr. Lakes's motion for reconsideration was also denied and he now

appeals, contending he is entitled to prejudgment interest because the

admitted medical expenses were liquidated. Because we find that the

medical expenses were not liquidated until the jury was ordered to award

them, we affirm.

Facts

In May 1996, Melvin Lakes and his three minor children were injured in

an automobile collision. Where traffic on a Benton County highway merged

into one lane due to highway construction, Mr. von der Mehden failed to

stop in time and rear-ended a car that in turn rear-ended Mr. Lakes's van.

Mr. von der Mehden admitted liability.

In April 1997, Safeco, Mr. von der Mehden's insurer, offered Mr. Lakes

the following amounts in full settlement (representing 50 percent of the

subrogated amounts provided by Mr. Lakes's insurer): $2,395 for Mr. Lakes's

injuries; $485.50 for his daughter Shaniae; $243 for his son Shakeem; and

$27.50 for his daughter Shanice--a total of $3,151.1 Mr. Lakes responded

by offering to settle for $60,000 for his injuries and $20,000 for each of

his three children. The offer to settle was accompanied by documentation

for the medical expenses to treat his cervical, thoracic, and lumbar joint

injuries and constant severe headaches, and for his children's lower back

injuries. Safeco refused to settle for those amounts. By February 1998,

Mr. Lakes had reduced his settlement demand to $35,000 for his injuries and

$5,000 each for his children. Safeco responded by increasing its offer to

a total of $3,400 for all injuries to the Lakeses.

On March 17, 1998, Mr. Lakes filed suit against Mr. von der Mehden

seeking damages for personal injuries and prejudgment interest on all

special damages, including the expenses for medical care and treatment.

The parties entered into mandatory arbitration in November 1998, and the

arbitrator awarded Mr. Lakes $19,621 for his injuries; $3,067 for

Shaniae's; $1,844 for Shakeem's; and $511 for Shanice's--a total of

$25,043. One month later, Safeco requested a trial de novo and demanded a

jury trial.

On two occasions during pretrial discovery, Mr. Lakes sent requests

for admissions to Safeco regarding medical expenses for Mr. Lakes and his

three children. Safeco admitted that most of those medical expenses were

reasonably necessary for the diagnosis and treatment of the Lakeses'

injuries. The total of these admitted expenses was $7,191--more than

double the settlement earlier offered by Safeco. Then, in February 2001,

Safeco wrote Mr. Lakes's counsel and asked if his clients would be

interested in exploring a reasonable settlement. No other mention of

settlement negotiations is contained in the record.

After numerous continuances (mostly due to court administrator changes

in the dates), trial was held in November 2001. Because Mr. von der Mehden

admitted liability, the only issue at trial was the measure of damages.

The jury was instructed that the defendant admitted that the following

medical expenses were reasonably necessary for the diagnosis and treatment

of the Lakeses: $5,115 for Mr. Lakes; $1,469 for Shaniae; $668 for Shakeem;

and $55 for Shanice. These figures were included in the special verdict

form as past economic damages, along with blanks for adding past non-

economic damages, future economic damages, future non-economic damages, and

any additional past economic damages. The jury added $2,767 to Mr. Lakes's

past economic damages and $4,700 as total additional past non-economic

damages for the Lakeses. The final judgment for Mr. Lakes and his children

was $15,928, including costs and statutory attorney fees.

Citing Hansen v. Rothaus, 107 Wn.2d 468, 730 P.2d 662 (1986)

(agreement to the reasonableness of a settlement does not render the

settlement amount liquidated), the trial court denied Mr. Lakes's request

for $3,748 in prejudgment interest on the admitted medical expenses. Mr.

Lakes moved for reconsideration of the judgment in March 2002. At the

hearing on the motion, he argued that Safeco had never stipulated to the

amounts contained in the directed verdicts. He further argued that because

the jury had no discretion in awarding the admitted medical expenses, those

expenses were liquidated and subject to prejudgment interest. The trial

court held that although the equities were with Mr. Lakes, the policy

supporting the fostering of settlements outweighed the policy supporting

compensation for the use of a party's money. The motion for

reconsideration was denied. This appeal followed.

Effect of Admissions on Prejudgment Interest

Prejudgment interest is awarded to compensate a party who has lost the

use of money to which he or she was entitled. Hansen, 107 Wn.2d at 473;

Seattle-First Nat'l Bank v. Wash. Ins. Guaranty Ass'n, 94 Wn. App. 744,

759, 972 P.2d 1282 (1999). Such interest is awardable (1) when the amount

claimed is liquidated, or (2) when the amount claimed is unliquidated but

is determinable by computation with reference to a fixed standard in a

contract. Prier v. Refrigeration Eng'g Co., 74 Wn.2d 25, 32, 442 P.2d 621

(1968); Kiewit-Grice, 77 Wn. App. at 872. A claim is liquidated if data in

the evidence makes it possible to compute the amount with exactness,

without reliance on opinion or discretion. Lester N. Johnson Co. v. City

of Spokane, 22 Wn. App. 265, 277, 588 P.2d 1214 (1978). Generally

prejudgment interest is favored because the law assumes that one who

retains money owed to another should be charged interest on it. Kiewit-

Grice, 77 Wn. App. at 873. On the other hand, the law recognizes that a

defendant should not have to pay prejudgment interest when he or she is

unable to ascertain the amount owed. Hansen, 107 Wn.2d at 473.

The sole question before this court is whether Safeco's admission that

certain medical expenses were reasonably necessary rendered those expenses

liquidated for the purposes of prejudgment interest. By their nature,

medical expenses are not liquidated until the judge or jury determines that

the expenses were reasonably and necessarily incurred. Hansen, 107 Wn.2d

at 477; Fox v. Mahoney, 106 Wn. App. 226, 230, 22 P.3d 839 (2001). 'It is

not enough that the medical bills be paid, the amounts must be reasonable.'

Hansen, 107 Wn.2d at 477. Mr. Lakes contends the medical expenses admitted

by Safeco pretrial were established as both reasonable and necessary.

Because neither the jury nor the trial court exercised discretion in

awarding these expenses, Mr. Lakes argues they were liquidated and subject

to prejudgment interest.

This argument fails to take into consideration the fact that the only

reason the medical expenses were established at trial and included in the

directed verdict was because Safeco admitted--pursuant to CR 36--that the

expenses were reasonably necessary for the diagnosis and treatment of the

Lakeses' injuries. CR 36 requests for admissions 'eliminate from

controversy matters which will not be disputed.'2 Coleman v. Altman, 7 Wn.

App. 80, 86, 497 P.2d 1338 (1972). Such admissions

'promote both efficiency and economy in resolving disputes. If a point is

conceded, litigants need not expend effort in investigations concerning it

nor incur expense in presenting evidence to prove it. Judicial

administration is also aided. Admissions reduce the time required to try a

case. Indeed, they often make summary judgment possible. Finally,

admissions encourage litigants to evaluate realistically the hazards of

trial, and thus tend to promote settlements.'

8A Charles Alan Wright et al., Federal Practice and Procedure sec. 2252, at

522 (1994) (quoting Finman, The Request for Admission in Federal Civil

Procedure, 71 Yale L.J. 371, 376 (1962)).

Unliquidated claims are not rendered liquidated by the fact that the

defendant stipulates to the damages or agrees to the reasonableness of a

settlement. Hansen, 107 Wn.2d 477-78 (citing Pearson Constr. Corp. v.

Intertherm, Inc., 18 Wn. App. 17, 20, 566 P.2d 575 (1977)); Dautel v.

Heritage Home Ctr., Inc., 89 Wn. App. 148, 154, 948 P.2d 397 (1997). To

hold otherwise would penalize stipulating parties by exposing them to the

risk of prejudgment interest, contrary to the express public policy of this

state that strongly encourages stipulations and settlements. City of

Seattle v. Blume, 134 Wn.2d 243, 258, 947 P.2d 223 (1997); Hansen, 107

Wn.2d at 477-78. The policy that favors settlements also supports CR 36

admissions, which narrow the issues and avoid unnecessary delay and

expenses, benefiting the court and all parties to the proceedings. 8A

Wright, supra, at 521 n.2 (quoting In re Stein, 43 F. Supp. 845, 848 (D.C.

Ill. 1942)). The party who responds to a request for admissions by

admitting that certain medical expenses are reasonably necessary--and

therefore need not be supported by expert testimony at trial--should not be

penalized by prejudgment interest on those expenses.

Mr. Lakes argues that CR 36 admissions should not be treated like

settlements or stipulations because a party faces sanctions if he or she

does not admit the truth of a matter. CR 37(c); Brust v. Newton, 70 Wn.

App. 286, 294-95, 852 P.2d 1092 (1993). Pursuant to CR 37(c), if a party

fails to admit the truth of any factual matter that is later proved true,

the other party may request an order requiring the non-admitting party to

pay the reasonable expenses incurred in making that proof, including

attorney fees. Brust, 70 Wn. App. at 294. Concession of factual matters--

such as medical expenses--does not, however, convert unliquidated claims to

liquidated claims. Hansen, 107 Wn.2d at 477-78. The purpose of CR 36

admissions is to eliminate from controversy undisputed factual matters, not

legal conclusions. Brust, 70 Wn. App. at 295. The fact remains that

Safeco may not have admitted that the Lakeses' medical expenses were both

reasonable and necessary if it faced the risk of prejudgment interest on

those expenses. In the interest of encouraging judicial economy, we hold

that admissions made pursuant to CR 36 will not expose a party to

prejudgment interest on a claim that is otherwise unliquidated.

We review the trial court's denial of the motion for reconsideration

of the damages award for abuse of discretion. Lund v. Benham, 109 Wn. App.

263, 266, 34 P.3d 902 (2001). Because the Lakeses' medical expenses were

not liquidated until the jury was instructed to award them, and because

Safeco's admission of most of those expenses did not render them

liquidated, the trial court did not abuse its discretion in denying Mr.

Lakes's motion for reconsideration of the damages award.

Attorney Fees

Safeco requests attorney fees and costs as the prevailing party on

appeal. RAP 18.1(b) requires a party to devote a separate section of the

appellate brief to the fee issue. 'This requirement is mandatory.' Wilson

Court Ltd. P'ship v. Tony Maroni's, Inc., 134 Wn.2d 692, 710 n.4, 952 P.2d

590 (1998) (citing Phillips Bldg. Co. v. An, 81 Wn. App. 696, 705, 915 P.2d

1146 (1996)). Although Safeco devoted a separate section of its brief to

attorney fees and costs, it merely cited RAP 14.2, RAP 18.1, and 'other

applicable statutory provisions.' Br. of Resp't at 9. RAP 14.2 authorizes

an award of costs--defined by RAP 14.3 as statutory attorney fees and

reasonable expenses actually incurred--to the substantially prevailing

party on appeal. Safeco fails to support additional attorney fees or costs

with argument or citation to authority. Austin v. U.S. Bank of Wash., 73

Wn. App. 293, 313, 869 P.2d 404 (1994). Consequently, we award Safeco only

statutory attorney fees and actual costs pursuant to RAP 14.2.

Affirmed.

Schultheis, J.

WE CONCUR:

Brown, C.J. Kurtz, J.

1 Because the real issue here is the dispute of medical expenses and not

liability, from this point on we will usually refer to Safeco as the

defendant.

2 The rule provides in part that '{a} party may serve upon any other party

a written request for the admission, for purposes of the pending action

only, of the truth of any matters within the scope of rule 26(b) set forth

in the request that relate to statements or opinions of fact or of the

application of law to fact, including the genuineness of any documents

described in the request.' CR 36(a).