* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 2 1997 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation,

Plaintiff,

v. EDMOND BLYSTRA; BARBARA BLYSTRA, individually and as parent and natural guardian of Kevin Blystra, a minor; and KEVIN BLYSTRA,

Defendants-Third-PartyPlaintiffs-Appellants,

v. FARMERS INSURANCE COMPANY OF ARIZONA,

Third-Party-DefendantAppellee. No. 97-2067 (D.C. No. CIV-94-1030-JP) (D. N.M.)

ORDER AND JUDGMENT *

Before BRORBY, LOGAN, and HENRY, Circuit Judges.1 All claims against State Farm have apparently been resolved, and State

Farm is not a party to this appeal. -2- After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9. The c ase is therefore ordered submitted without oral argument. In this appeal, we are asked to determine whether t he district court erred in refusing to award prejudgment interest on the amount recovered by Edmond and Barbara Blystra, individually and as parents of Kev in Blystra (the Blystras), pursuant to a settlement with their insurance compa ny, Farmers Insurance Company of Arizona (Farmers), under the Blystras’ u ninsured motorist coverage. Because we find no error in the district court’s de cision, we affirm. As Kevin Blystra was walking home from school, he w as shot in the leg by a pellet gun fired from a passing white pickup truc k. Neither the driver nor the passenger of the truck have been identified. At th e time of the shooting the Blystras held two automobile policies with State Farm Mutual Automobile Insurance Company (State Farm) and three with Farme rs. 1 Each of the policies provided uninsured motorist coverage. In response to the Blystras’ demand for benefits, S tate Farm brought suit for a declaratory judgment with respect to its liab ility under the policies. The-3-

Blystras answered and also filed a third party comp laint for declaratory relief against Farmers claiming that it also was liable fo r uninsured motorist and medical payments benefits. All parties filed motio ns for summary judgment. The district court granted summary judgment to State Farm and Farmers after concluding that a drive-by shooting did not constitute an “accident” under the policies. On appeal this court reversed, holding that Britt v . Phoenix Indem. Ins. Co. , 907 P.2d 994 (N.M. 1995), decided after the distric t court’s ruling, recognized that an intentional criminal act, such as a drive-b y shooting, can be an accident for purposes of uninsured motorist coverage and that Kevin Blystra’s injuries “arose out of the ownership, maintenance, or use of the uninsured vehicle” for policy purposes. State Farm Mut. Auto. Ins. Co. v. Blystra , 86 F.3d 1007, 1010- 14 (10th Cir. 1996). Nevertheless, because the pol icies would pay benefits only if Kevin “would be legally entitled to recover damages for his injuries from the owner or operator of the uninsured motor vehicle,” id. at 1014, we remanded for determination of that issue. We stated that there was a factual dispute as to whether the driver or the passenger in the white truck shot Kevin, and if the passenger shot him the owner or operator of the tru ck would be liable only if “the driver’s role in the shooting amounted to a tort un der New Mexico law.” Id.2 New Mexico law controls the issue of whether the tr ial court should have

awarded interest. See Moorhead v. Stearns-Roger Mfg. Co. , 320 F.2d 26, 29 (10th Cir. 1963). -4- Following remand, both State Farm and Farmers settl ed the case by agreeing and paying the policy limits to the Blystr as without prejudice to the Blystras’ right to seek prejudgment interest. The district court denied the Blystras’ motion for prejudgment interest. It conc luded that because the Blystras’ entitlement to uninsured motorist benefits remainedan unresolved factual question after this court’s remand neither insurer had breached any duty to pay a sum certain to the Blystras, making an award of pre judgment interest as a matter of right under N.M. Stat. Ann. § 56-8-3 inappropriate. 2 The court also declined to award interest under New Mexico’s alternative inter est statute, id. § 56-8-4(B). On appeal, the Blystras argue only that they are en titled to prejudgment interest as a matter of right under § 56-8-3. We t herefore limit our analysis to that statute, which provides: The rate of interest, in the absence of a written c ontract fixing a different rate, shall be not more than fifteen perc ent annually in the following cases: A. on money due by contract; B. on money received to the use of another and reta ined without the owner’s consent expressed or implied; and C. on money due upon the settlement of matured acco unts from the day the balance is ascertained. N.M. Stat. Ann. § 56-8-3.-5-

The payment of prejudgment interest under § 56-8-3 is intended to compensate an obligee for the lost opportunity to u se his or her money between the time a claim accrues and the time of judgment. See Sunwest Bank v. Colucci , 872 P.2d 346, 350 (N.M. 1994). In O’Meara v. Comme rcial Ins. Co. , 376 P.2d 486, 490 (N.M. 1962), the New Mexico Supreme Court declared that the statute is to be construed according to § 337 of the Restateme nt of Contracts which provides: If the parties have not by contract determined othe rwise, simple interest at the statutory legal rate is recoverable as damages for breach of contract as follows: (a) Where the defendant commits a breach of a contr act to pay a definite sum of money, or to render a performance t he value of which in money is stated in the contract or is ascertaina ble by mathematical calculation from a standard fixed in the contract o r from established market prices of the subject matter, interest is al lowed on the amount of the debt or money value from the time performanc e was due, after making all the deductions to which the defendant may be entitled. (b) Where the contract that is broken is of a kind not specified in Clause (a), interest may be allowed in the discreti on of the court, if justice requires it, on the amount that would have been just compensation if it had been paid when performance w as due. Restatement (First) of Contracts § 337 (1932). Thus, the award of prejudgment interest can be made either as a matter of right un der subsection (a), or at the court’s discretion under subsection (b). See Sunwest Bank , 872 P.2d at 351; see also United Nuclear Corp. v. Allendale Mut. Ins. Co. , 709 P.2d 649, 665 (N.M. 1985) (Bivens, C.J., concurring). The general rule in New Mexico is that3 The only evidence in the record related to this fac t is a demand in the

answer and counterclaim against defendant State Farm indicating that Kevin had sustained damages in excess of policy limits, see Appellant’s App. 8, and a letter from the Blystras’ attorney to the attorney for State Farm stating that Kevin’s medical expenses were almost $100,000 and that some of the supporting bills were attached. See id. at 66. The attachments to that letter are not inc luded in the record on appeal.

-6- prejudgment interest as a matter of right is approp riate “only when a party has breached a duty to pay a definite sum of money or t he amount due under the contract can be ascertained with reasonable certain ty by a mathematical standard fixed in the contract or by established market pric es.” Sunwest Bank , 872 P.2d at 351 (quotation marks omitted). The parties dispute whether the settlement paid by Farmers was money due by contract for purposes o f § 56-8-3, and whether, because Kevin’s damages exceeded the policy limits 3 ultimately paid by both State Farm and Farmers, the amount due was readily ascertainable and fixed by contract for purposes of the Restatement. In focus ing on these two issues, however, the parties lose sight of the threshold re quirement of the Restatement that the defendant commit a breach of contract. There could be no breach of the contract to pay uni nsured motorists’ benefits until the factual issue of liability that prompted the remand from this court was settled. This was not an obvious case of liability on the part of the insurance companies. Thus, only after a finding bythe district court that the-7-

insurers were liable, or as here occurred the parti es settled the case, would the duty to pay arise under the terms of the policies. Because Farmers promptly paid the settlement amount there was never any legal ent itlement to prejudgment interest. The Restatement § 337 requires a breach of contract for either interest as a matter of law under subsection (a) or discretionary interest under subsection (b). We note that even in instances in which prejudgmentinterest is awardable as a matter of right under subsection (a) of the Re statement, the trial court still has discretion to consider the equities in arriving at its decision regarding interest.
See Sunwest Bank , 972 P.2d at 351-52 (holding that, absent counterv ailing equities, the plaintiff should have been awarded pr ejudgment interest as a matter of right, but remanding for consideration of those equities); Aztec Well , 853 P.2d at 737 (noting that “the award of prejudgment inter est might very well be viewed as a matter of right since the amount due to each c laimant was fixed and readily ascertainable,” but affirming because the award of interest had not been an abuse of discretion). The Blystras point to no instances of abuse of discretion on the part of the district court or failure to consider t he equities, and our review of the record reveals none. The court properly gave its r easons for its ruling as required under Sunwest Bank , 872 P.2d at 352, and Mascarenas v. Jaramillo , 806 P.2d 59, 63-64 (N.M. 1991).
AFFIRMED.-8- Entered for the Court James K. Logan Circuit Judge