Opinion ID: 1468588
Heading Depth: 2
Heading Rank: 1

Heading: appellee firemen's

Text: The language in Firemen's policy of insurance is substantially the same as the language involved in Hafer. Although Hafer is factually distinguishable from this case in that the insurance company in Hafer unquestionably tendered the policy limit of its liability before judgment, our interpretation of the relevant statutory provision leads us to conclude that Hafer was wrongly decided at least insofar as it distinguished verdict and judgment for purposes of computing an insurance company's liability for interest. The Act of April 6, 1859, P.L. 381, § 1, 12 P.S. § 781 provides: From and after the passage of this act it shall be lawful for any party or parties, in whose favor any verdict may be rendered for a specific sum of money, to collect and receive interest upon such sum from the date of the verdict; and every general judgment entered upon such verdict, whether by a court of original jurisdiction, or by the supreme court, shall be deemed and held to be a judgment for the sum found by the verdict, with interest thereon from the date of such finding: Provided, That nothing in this act contained shall prevent any court from directing special verdicts, or entering special judgments whenever the same shall be deemed just and proper. The import of § 781 is clear. At least for purposes of computing interest, judgment and verdict are synonymous, and the date from which interest accrues is the date of verdict, not the date judgment is finally entered. See Kelly v. Allegheny County Redevel. Auth., 411 Pa. 210, 191 A.2d 393 (1963); Sharp v. Keiser, 292 Pa. 142, 140 A. 772 (1928). As articulated by Mr. Justice Roberts, verdict plus interest and judgment are in Pennsylvania identical. Hafer v. Schauer, 429 Pa. 290, 302, 239 A.2d 785, 792 (1968) (dissenting opinion). We adhere to the general rule stated in Hafer that absent an insurer's agreement to do so, an insurer is not liable for interest in excess of policy limits. We hold today, however, contrary to Hafer, that when an insurance company contracts with an insured to pay . . . all interest accruing after entry of judgment, Pennsylvania law requires that the defendant pay interest computed from the date of verdict to the entry of the judgment and interest on the amount of the judgment entered thereafter. To decide otherwise would ignore the language and legislative intent embodied in § 781. Our conclusion does not mean that an insurer must pay more than the total policy coverage. Although we speak of policy limit in referring to the amount of liability coverage, that amount is not really the policy limit. The policy limit includes not only the liability coverage but also all other amounts for interest, costs or expenses which the insurer has contracted to pay. The insurer contracts to pay these other items to be fair to the insured since the insurer has control of the litigation until all legal recourse is exhausted. If a stated policy limit enabled an insurer to escape paying the interest accruing during the time appeals were pending, appeals which the insurer itself initiated, the insured will be liable for the interest accumulating from the date of verdict despite his or her complete lack of control over the litigation. It is therefore both fair and sensible to hold the insurer liable for interest accruing from the date of verdict notwithstanding its stated policy limit. See Appleman, 8 Insurance Law and Practice § 4899, at 364 (1964). We therefore hold that Firemen's is liable for interest computed from the date of verdict, regardless of so-called policy limits, when, as here, it agreed to pay all interest accruing after entry of judgment. The issue remains as to the amount of Firemen's liability for interest. Appellant Parke-Davis contends that Firemen's is liable for one-third of the accrued interest on the entire verdict. Firemen's argues that its interest liability should be calculated on the basis of the ratio of its policy limit to the total judgment. We find Firemen's argument without merit. Here again the contract between insured and insurer is controlling. Firemen's easily could have limited its interest liability on a large judgment against its insured to that portion of the judgment covered by its policy. No such provision appears in the contract between Fireman's and its insured. We read Firemen's policy as saying, in effect, it will pay all interest on the judgment until it tenders its part of such judgment, not as saying it will pay interest on its part of the judgment until it tenders its part of the judgment. Other reasons justify this result. Firemen's insured, Levin, is liable as a joint tortfeasor for the entire amount of the judgment entered on behalf of plaintiff. Greco v. Bucciconi Engineering Co., 283 F.Supp. 978, 985 (W.D.Pa. 1967), aff'd, 407 F.2d 87 (3d Cir. 1969); Hafer v. Schauer, 429 Pa. at 295, 239 A.2d at 788. The same is true as to interest due; a party with a judgment could look to any one of the joint tortfeasors for full payment of interest. Neither of these rights is in any way affected by a tortfeasor's right to contribution under the Uniform Contribution Among Tortfeasors Act, 12 P.S. §§ 2082-2089.14 (Purdon 1967 & Supp. 1977-1978). Hafer v. Schauer, 429 Pa. at 295, 239 A.2d at 788. In light of this fact, and the fact that the insurer is in control of the litigation, obligating the insurer to pay interest on the full amount of the verdict is the only means of giving realistic protection to the insured. See Underwood v. Buzby, 136 F.Supp. 957, 959 (E.D.Pa. 1955), aff'd, 236 F.2d 937 (3d Cir. 1956). We therefore hold that Firemen's liability for interest is for the interest on the full amount of the verdict. See cases cited at Hafer v. Schauer, 429 Pa. at 296, 239 A.2d at 789 (Roberts, J., dissenting).