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Court hits on 2 first impression issues about prejudgment interest

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The Indiana Court of Appeals has reversed a trial judge decision against awarding a litigant prejudgment interest in an uninsured motorist case, examining two issues of first impression and finding that state statute warrants the litigant receive that money even when it exceeds insurance policy limits for those types of claims.

A unanimous decision came today in Kathy Inman v. State Farm Mutual Automobile Insurance Co., No. 41A01-1005-CT-223, which involves a Johnson County woman’s action against State Farm Insurance Company stemming from a November 2006 car collision. Kathy Inman sued on grounds that the other driver was negligent when he struck the rear of her vehicle. Though she later settled with that driver’s insurance company for the $50,000 limit, Inman amended her complaint against State Farm seeking an additional $50,000 in underinsured motorist benefits from her policy that had a $100,000 per person liability cap.

In June 2009, she filed a written offer to settle the case for the policy limit of $50,000, pursuant to Indiana Code 34-51-4-6. State Farm didn’t respond to that request, and earlier this year a jury returned a verdict in Inman’s favor for $50,000. She filed a motion for prejudgment interest in the amount of $3,616.44, plus $13.10 per day after that filing on April 12, 2010. Special Judge Richard Tandy summarily denied that motion.

Analyzing that state law known as the Tort Prejudgment Interest Statute, the appellate court looked at State Farm’s contention that Inman doesn’t meet the TPIS requirements because an underinsured motorist claim is not a civil action arising out of tortious conduct as required by the statute. Though no Indiana cases address that issue, the panel turned to Woods v. Farmers Insurance of Columbus, Inc, 666 N.E.2d 283 (Ohio Ct. App. 1995) for guidance, as well as rulings from Oklahoma, North Carolina, Georgia, and Louisiana.

“We find the reasoning of these cases, as well as similar ones in other jurisdictions, to be persuasive,” Judge Patricia Riley wrote. “We therefore hold that a claim against one’s insurer for underinsured motorist benefits is a civil action arising out of tortious conduct, and the award of prejudgment interest pursuant to IC 34-51-4-5 in such a case is appropriate.”

The court also looked at prejudgment interest in excess of the policy limits, a second issue that no Indiana court has addressed. They looked to Potomac Insurance Company v. Howard, 813 S.W.2d 557 (Tex Ct. App. 1991) for guidance, as well as the Michigan Supreme Court in Denham v. Bedford, 287 N.W.2d 168 (Mich. 1979).

“Here, based on the purpose of the TPIS as well as public policy considerations as already stated in Denham, we hold that an insurer can be required to pay prejudgment interest in excess of uninsured and/or underinsured motorist limits in an action brought by an insured for failure to pay uninsured and/or underinsured motorist coverage,” Judge Riley wrote.

The holding is consistent with what the Northern District of Indiana concluded in Schimizzi v. Illinois Farmers Insurance Company, 928 F. Supp. 760 (N.D. Ind. 1996), and also with the Indiana Supreme Court’s treatment in Cahoons v. Cummings, 734 N.E.2d 535, 547 (Ind. 2000) of prejudgment interest in medical malpractice cases where the court had held a qualified health care provider is responsible for collateral litigation prejudgment interest expenses over the statutory cap.

“The rationale for this treatment is the same rationale set forth in other civil actions arising out of tortious conduct,” the court wrote. “Specifically, in Cahoons, the Indiana supreme court explained that if the defendant has the option to terminate the dispute at a known dollar cost, and chooses not to do so, that defendant and not the plaintiff should bear the cost of the time and value of money in the intervening period if the ultimate result is within the parameters of the legislature.”

Noting State Farm didn’t challenge the prejudgment interest amount here, the appellate court reversed the trial judge and ordered that amount be paid.
 

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  1. How nice, on the day of my car accident on the way to work at the Indiana Supreme Court. Unlike the others, I did not steal any money or do ANYTHING unethical whatsoever. I am suing the Indiana Supreme Court and appealed the failure of the district court in SDIN to protect me. I am suing the federal judge because she failed to protect me and her abandonment of jurisdiction leaves her open to lawsuits because she stripped herself of immunity. I am a candidate for Indiana Supreme Court justice, and they imposed just enough sanction so that I am made ineligible. I am asking the 7th Circuit to remove all of them and appoint me as the new Chief Justice of Indiana. That's what they get for dishonoring my sacrifice and and violating the ADA in about 50 different ways.

  2. Can anyone please help this mother and child? We can all discuss the mother's rights, child's rights when this court only considered the father's rights. It is actually scarey to think a man like this even being a father period with custody of this child. I don't believe any of his other children would have anything good to say about him being their father! How many people are afraid to say anything or try to help because they are afraid of Carl. He's a bully and that his how he gets his way. Please someone help this mother and child. There has to be someone that has the heart and the means to help this family.

  3. I enrolled America's 1st tax-free Health Savings Account (HSA) so you can trust me. I bet 1/3 of my clients were lawyers because they love tax-free deposits, growth and withdrawals or total tax freedom. Most of the time (always) these clients are uninformed about insurance law. Employer-based health insurance is simple if you read the policy. It says, Employers (lawyers) and employees who are working 30-hours-per-week are ELIGIBLE for insurance. Then I show the lawyer the TERMINATION clause which states: When you are no longer ELIGIBLE! Then I ask a closing question (sales term) to the lawyer which is, "If you have a stroke or cancer and become too sick to work can you keep your health insurance?" If the lawyer had dependent children they needed a "Dependent Conversion Privilege" in case their child got sick or hurt which the lawyers never had. Lawyers are pretty easy sales. Save premium, eliminate taxes and build wealth!

  4. Ok, so cheap laughs made about the Christian Right. hardiharhar ... All kidding aside, it is Mohammad's followers who you should be seeking divine protection from. Allahu Akbar But progressives are in denial about that, even as Europe crumbles.

  5. Father's rights? What about a mothers rights? A child's rights? Taking a child from the custody of the mother for political reasons! A miscarriage of justice! What about the welfare of the child? Has anyone considered parent alienation, the father can't erase the mother from the child's life. This child loves the mother and the home in Wisconsin, friends, school and family. It is apparent the father hates his ex-wife more than he loves his child! I hope there will be a Guardian Ad Litem, who will spend time with and get to know the child, BEFORE being brainwashed by the father. This is not just a child! A little person with rights and real needs, a stable home and a parent that cares enough to let this child at least finish the school year, where she is happy and comfortable! Where is the justice?

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