In a matter of first impression, the Indiana Court of Appeals decided today that a summary judgment granting insurance policies isn't equivalent to a money judgment that would allow for 8 percent post-judgment interest.
In Bonita G. Hilliard, in her capacity as trustee of the H. David and Bonita G. Hilliard Living Trust v. Timothy E. Jacobs, No. 28A01-0904-CV-168, the trial court ordered Bonita Hilliard to pay post-judgment interest to Timothy Jacobs, who held several life insurance policies on her husband, H. David Hilliard. Jacobs and Hilliard got the policies on each other while they were co-owners of a business.
The company was eventually sold, but Jacobs refused to swap policies with Hilliard or terminate them. Hilliard sued Jacobs and won a judgment that Jacobs end the policies on Hilliard's life. Hilliard died while Jacobs appealed the decision. The Court of Appeals overturned the trial court and held Jacobs could retain the policies.
After years of more litigation between Bonita and Jacobs, and Bonita posting a $250,000 letter of credit as security pending appeal, the appellate court granted summary judgment in favor of Jacobs, granting him access to the $2.5 million in insurance funds. He received the money, plus 3 percent interest.
Jacobs sued Bonita, arguing he was entitled to 8 percent interest pursuant to Indiana Code Section 24-4.6-1-101 because the trial court order granting him possession of the policies was effectively a money judgment. The trial court agreed, granting him the 8 percent from the line of credit.
On appeal, Bonita argued the trial court order just transferred ownership of certain property to Jacobs but wasn't a judgment for money.
The appellate court couldn't find a case directly on point with this issue, but it examined several cases that addressed the nature of "judgment of money" and "money judgment." This research led Judges Paul Mathias and Margret Robb to determine the order wasn't a money judgment because the order didn't require the payment of a sum of money and didn't state the specific amount due. As such, post-judgment interest provisions of Section 101 don't apply, wrote Judge Mathias.
"The order did not require the payment of any specific amount due; it instead granted Jacobs ownership of the policies," he wrote.
The majority remanded the issue for further proceedings.
Judge Carr Darden dissented, writing the majority's analysis and result elevated form over substance. The subject of the dispute is certain insurance policies, which are contracts that have face values in specific sums.
"The court was asked to determine who rightfully owned the policies and was entitled to the proceeds. Therefore, I would find that such a determination, on these facts, constituted a money judgment in favor of the prevailing party," he wrote.