Opinion ID: 2593103
Heading Depth: 3
Heading Rank: 3

Heading: The Settlement of Claims is Encouraged

Text: ¶ 19 The Gurneys assert that awarding prejudgment interest on the parties' settlement amount in this case is contrary to Utah's public policy of encouraging settlements. We agree. ¶ 20 We have long held that the public policy of Utah is to encourage settlements. See Slusher v. Ospital, 777 P.2d 437, 441 (Utah 1989); Alvin G. Rhodes Pump Sales v. Indus. Comm'n, 681 P.2d 1244, 1248 (Utah 1984). The purpose behind this policy is to `promote harmony and to prevent the waste of assets.' R & R Indus. Park, L.L.C. v. Utah Prop. & Cas. Ins. Guar. Ass'n, 2008 UT 80, ¶ 46, 199 P.3d 917 (quoting In re Estate of Chasel, 725 P.2d 1345, 1348 (Utah 1986)). When parties agree to settle their claims, they move their dispute outside the realm of the judicial process. In so doing, they effectively agree to forego the assistance of the court in exchange for the immediacy and certainty of a settlement. ¶ 21 In this case, the parties' settlement was agreed upon in order to prevent the further expenditure of their assets on protracted litigation. The agreement did not include an admission or finding of liability, and no judgment was entered against either party. Additionally, the agreement did not specify what values and conditions made up the stipulated amount. These facts preclude the settlement amount from being characterized as damages and from falling within the standard of an amount of loss that can be calculated to a mathematical certainty. ¶ 22 For the reasons stated above, we hold that an award of prejudgment interest in this case was error. Further, we doubt whether a judicial award of prejudgment interest would ever be appropriate on a settlement amount stipulated to by the parties. [2]