Opinion ID: 2618737
Heading Depth: 1
Heading Rank: 3

Heading: dismissal of brinkerhoff's claim

Text: Brinkerhoff argues that the superior court erred in dismissing his claim. Upon receiving the jury determination that the fair market value of the plane was $950,000, the trial judge dismissed Brinkerhoff's claim. In this appeal, we are asked to determine whether this finding by the jury provided an adequate basis for dismissing the claim. Although his property damage was not found to exceed the amount he recouped through the salvage sale and insurance proceeds, Brinkerhoff asserts that he is still entitled to an award of prejudgment interest. We hold that despite the jury's finding as to the fair market value of the plane, Brinkerhoff retained a valid cause of action for pre-judgment interest for the period extending from the date of the accident to the date of his recovery from his insurer. The right to compensation accrues at the time of the injury. This court has recognized that because of the time value of money an award of interest is necessary in order to fully compensate an injured party. State v. Phillips, 470 P.2d 266, 273-74 (Alaska 1970). [P]re-judgment interest is in the nature of compensatory damages, ... Davis v. Chism, 513 P.2d 475, 480 (Alaska 1973); see also City and Borough of Juneau v. Commercial Union Insurance Co., 598 P.2d 957, 959 (Alaska 1979). In Davis we stated: The reason for awarding pre-judgment interest is that money is worth less the later it is received. Plaintiff is entitled to the amount to which he has been damaged by the defendant from the date his cause of action accrued. Thus it may be argued that plaintiff was entitled to the use of that amount from the same date, and the use of that money has real economic value, of which the plaintiff has been deprived. In this sense, pre-judgment interest is necessary to compensate the plaintiff, not only for the amount by which he has suffered damages in the usual sense but also for the loss of use of the money to which he has been entitled. Davis, 513 P.2d at 481. In this case, the fair market value of the plane at the time of the crash  as found by the jury  was $950,000 and the fair market value of the hull after the accident  as determined by the resale price  was $277,500. Therefore, the total property loss at the time of the accident amounted to $672,500  the amount eventually received in insurance proceeds. If, upon entry of judgment in his favor, Brinkerhoff were to receive interest on the $672,500 for the time span from the accident until the insurance settlement on June 8, 1977, during which he was deprived of the use of money rightfully his, he would only be compensated for an amount not paid by insurance. We must, however, reject Brinkerhoff's argument to the effect that he is entitled to recover more than this amount. Brinkerhoff argues that Swearingen is entitled to a setoff of only the $375,000 that it paid in settling with the insurance company and that the rest of the $672,500 loss is recoverable by Brinkerhoff because such an outcome, while permitting a double recovery, would not impose a double burden. We disagree. Although he could have sued to recover for the full amount of damage and held the appropriate portion of that recovery (including prejudgment interest on the $672,500 after June 8, 1977) in trust for his insurer whose subrogation rights arose upon payment under the policy, see Truckweld Equipment Co. v. Swenson Trucking & Excavating, Inc., 649 P.2d 234, 238 (Alaska 1982), the insurance company's decision to settle its claim foreclosed this option. We also attach no relevance to Brinkerhoff's allegation that the settlement agreement reached between Swearingen and his insurer was collusive. An insurance company is free to settle its subrogation claims for any amount. [6]