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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. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  2. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

  5. I have no doubt that the ADA and related laws provide that many disabilities must be addressed. The question, however, is "by whom?" Many people get dealt bad cards by life. Some are deaf. Some are blind. Some are crippled. Why is it the business of the state to "collectivize" these problems and to force those who are NOT so afflicted to pay for those who are? The fact that this litigant was a mere spectator and not a party is chilling. What happens when somebody who speaks only East Bazurkistanish wants a translator so that he can "understand" the proceedings in a case in which he has NO interest? Do I and all other taxpayers have to cough up? It would seem so. ADA should be amended to provide a simple rule: "Your handicap, YOUR problem". This would apply particularly to handicapped parking spaces, where it seems that if the "handicap" is an ingrown toenail, the government comes rushing in to assist the poor downtrodden victim. I would grant wounded vets (IED victims come to mind in particular) a pass on this.. but others? Nope.

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