Opinion ID: 1248620
Heading Depth: 1
Heading Rank: 2

Heading: Prejudgment Interest on the Tort Judgment.

Text: Iowa Code section 668.13 provides the commencement date and the rules for the determination of interest: Interest shall be allowed on all money due on judgments and decrees on actions brought pursuant to this chapter, subject to the following: 1. Interest, except interest awarded for future damages, shall accrue from the date of the commencement of the action. . . . . 3. Interest shall be calculated as of the date of judgment at a rate equal to the coupon issue yield equivalent, as determined by the United States secretary of the treasury, of the average accepted auction price for the last auction of fifty-two week United States treasury bills settled immediately prior to the date of the judgment plus two percent. The state court administrator shall distribute notice monthly of that rate and any changes to that rate to all district courts. 4. Interest awarded for future damages shall not begin to accrue until the date of the entry of the judgment. 5. Interest shall be computed daily to the date of the payment, except as may otherwise be ordered by the court pursuant to a structured judgment under section 668.3, subsection 7. Our review of the interest issues is for error at law. Wilson v. IBP, Inc., 589 N.W.2d 729, 730 (Iowa 1999). Allied argues the prejudgment interest awarded against it should not be computed from the date the original petition was filed against the tortfeasors but only from the date Allied was brought into the case approximately ten months later. Allied relies on Mossman v. Amana Society, 494 N.W.2d 676 (Iowa 1993). That case is inapposite. Mossman involved a defendant who was brought in by impleader after the original suit was commenced. We held prejudgment interest would not commence until that party was brought into the case. Id. at 678. Mossman was not an underinsured-motorist case in which the added party stepped into the shoes of the underinsured motorist as we have in this case. Here, the insurance company is liable for all interest the tortfeasor would owe and, under Iowa Code section 668.13, that would begin to accrue when the action was filed against the original tortfeasor. The commencement of interest does not turn on when Allied was brought into the litigation. It is true, as Allied claims, that a claim against an insurance company for underinsured-motorist insurance benefits is a claim under a contract. See Vasquez, 477 N.W.2d at 410. Allied argues that the initial suit by the Oppermans was a tort suit, and when the amended petition was filed adding Allied to the case, this for the first time inserted a contract action in what had been a purely tort action. It cites Baumler v. Hemesath, 534 N.W.2d 650, 656 (Iowa 1995), in which we said: When monetary damages arise from distinct new claims made in an amended petition, we allow interest on the judgment only from the date plaintiff filed its amended petition. Baumler is distinguishable because that case involved damages for two distinct accidents  not, as in this case, a suit under a contract to ascertain the insurance benefits, as established under tort principles. We reject Allied's argument on this point. Allied bound itself under its insurance policy to pay its insured what the insured would have recovered against a third party if that party had been adequately insured. By statute that includes interest on past damages from the date the tort suit was filed. Houselog, 473 N.W.2d at 55. Allied distinguishes Houselog on the basis there was a judgment in that case against the tortfeasor, while in the present case there was no judgment against the tortfeasor; rather the amount of damages sustained by the plaintiffs was established in a suit against the insurance company. This is a distinction without a substantive difference, however, because the issue in both cases is what it would take to fully compensate the plaintiffs for the damages they suffered. In both cases, the amount of prejudgment interest would be determined by the court in accordance with Iowa Code section 668.13.