Andreason v. Aetna Casualty & Surety Co.
207 Utah Adv. Rep. 33, 848 P.2d 171, 1993 Utah App. LEXIS 26 (1993)
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Rule of Law:
Damages awarded under the doctrine of promissory estoppel are not sufficiently fixed or calculable by a known standard of value prior to a fact-finder's determination, and therefore do not permit an award of prejudgment interest.
Facts:
- On April 4, 1986, a fire caused extensive damage to the home of Dana and Derek Andreason.
- For three weeks following the fire, agents for Aetna Casualty & Surety Company mistakenly represented to the Andreasons that their losses were covered by their insurance policy.
- An Aetna adjuster visited the home, instructed the Andreasons on how to proceed with repairs, and authorized them to begin work.
- Relying on Aetna's promise of coverage, the Andreasons immediately began extensive repairs, including discarding and replacing items they otherwise would have tried to repair themselves.
- Three weeks after the fire, Aetna discovered that the Andreasons' policy had been canceled six weeks prior to the fire.
- Upon this discovery, Aetna denied insurance coverage for the Andreasons' fire losses.
Procedural Posture:
- Dana and Derek Andreason sued Aetna Casualty & Surety Company in a state trial court.
- The trial court granted partial summary judgment to Aetna, concluding the insurance contract was validly canceled before the fire.
- The case proceeded to a jury trial solely on the Andreasons' theory of promissory estoppel.
- The jury returned a verdict in favor of the Andreasons, awarding them $37,500.00 in damages.
- Aetna filed a post-trial motion for a new trial or remittitur, which the trial court denied.
- The Andreasons requested prejudgment interest on the jury award, which the trial court also denied.
- Aetna appealed the trial court's denial of its motion to the Utah Court of Appeals, and the Andreasons cross-appealed the denial of prejudgment interest.
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Issue:
Are damages awarded under a theory of promissory estoppel sufficiently fixed and calculable by a known standard of value to permit an award of prejudgment interest?
Opinions:
Majority - Greenwood, J.
No. Damages awarded under a theory of promissory estoppel are not sufficiently fixed to permit an award of prejudgment interest. Under Utah law, prejudgment interest is only available where the loss can be measured by facts and figures and is fixed as of a particular time. Promissory estoppel damages, however, are based on the flexible and equitable principle of remedying detrimental reliance to the extent justice requires. The amount of such damages is not fixed until a fact-finder, using its best judgment rather than a known standard of value, quantifies the injustice caused by the detrimental reliance. Unlike a tort claim where a defendant directly causes property damage of a measurable value, Aetna only impacted the Andreasons' method of repairing pre-existing damage, requiring a fact-finder to assess the value of that reliance. Because the amount of damage must be ascertained by the trier of fact at trial, it is not sufficiently certain to warrant prejudgment interest.
Analysis:
This decision clarifies the nature of damages available under the modern, flexible application of promissory estoppel as adopted from the Restatement (Second) of Contracts. By holding that such damages are inherently unliquidated until a fact-finder's verdict, the court distinguishes promissory estoppel claims from standard contract or tort actions where damages are often more certain. This precedent effectively bars the recovery of prejudgment interest in promissory estoppel cases in this jurisdiction, reinforcing the doctrine's status as an equitable remedy focused on reliance, rather than a substitute for full, contract-style expectation damages. It highlights that the remedy's goal is to correct injustice on a case-by-case basis, a process that precludes the mathematical certainty required for prejudgment interest.
