Opinion ID: 2978973
Heading Depth: 4
Heading Rank: 2

Heading: Pre-Judgment Interest for Travelers

Text: Under Kentucky law, courts have discretion to award either simple or compound prejudgment interest, though the default is simple interest. See Reliable Mech., 125 S.W.3d at 858. Principles of equity are used in order to determine whether compound interest is appropriate in a particular case, which might include unreasonable delay. Id. at 857. Travelers argues that it should have been awarded compound pre-judgment interest because Hillerich knew of the amount in controversy and refused to pay under threat of filing suit for bad faith against Travelers. Travelers points to several Kentucky cases awarding compound interest in situations where there was a significant delay in payment of liquidated damages. See Thomas & Betts Corp., Inc. v. A & A Mech., Inc., 2008 WL 2696877, at  (Ky. Ct. App. 2008); Clay v. K. Petroleum, Inc., 2008 WL 2308118, at  (E.D. Ky. 2008); Leasure v. Coleman Am. Co., 2008 WL 2065235, at  (Ky. Ct. App. 2008) (appellate court awarding compound pre-judgment interest when trial court denied pre-judgment interest on liquidated damages). However, Travelers does not point to authority, and this Court has Case Nos. 09-5113/5136 Travelers Prop. Cas. Co., et al. v. Page 23 Hillerich & Bradsby Co., Inc. found none, where a trial court’s award of simple interest was found to be an abuse of discretion. Since Hillerich refused to pay the $500,000 in settlement costs because it believed that its insurance coverage should include the costs of settlement, it was not an abuse of discretion for the district court to weigh the equities and find that simple prejudgment interest was sufficient to make Travelers whole.