Opinion ID: 171217
Heading Depth: 2
Heading Rank: 1

Heading: The Prejudgment Interest

Text: The district court awarded Mr. Weber prejudgment interest and tied this award to the rate specified by Oklahoma law (15% per annum). GE challenges that award, contending that the award is punitive and therefore unlawful under this court's ERISA jurisprudence. We review a district court's award of prejudgment interest to an ERISA plaintiff for an abuse of discretion. Allison v. Bank One-Denver, 289 F.3d 1223, 1243 (10th Cir.2002). Under ERISA, [p]rejudgment interest is ... available in the court's discretion. Benesowitz v. Metropolitan Life Ins. Co., 514 F.3d 174, 176 (2d Cir.2007); see also Allison, 289 F.3d at 1243 (The award of prejudgment interest is consider proper in ERISA cases.). This is because ERISA permits a participant to seek appropriate equitable relief. 29 U.S.C. § 1132(a)(3)(B); see also Allison, 289 F.3d at 1243 (Prejudgment interest is appropriate when its award serves to compensate the injured party and its award is otherwise equitable.). Calculation of the rate for prejudgment interest also rests firmly within the sound discretion of the trial court. Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1287 (10th Cir.2002); id. at 1287-88 (rejecting argument that 28 U.S.C. § 1961(a) rate should be applied in context of ERISA claim for prejudgment interest). Courts commonly look to state statutory prejudgment interest provisions as guidelines for a reasonable rate. See, e.g., Allison, 289 F.3d at 1244 (holding that district court did not abuse its discretion in awarding prejudgment interest at the Colorado statutory rate of 8 percent); cf. Cottrill v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220, 224-25 (1st Cir.1996) (noting that because ERISA is inscrutable on the subject of the appropriate rate of prejudgment interest, courts have discretion to select an appropriate rate, and they may look to outside sources, including state law, for guidance). Nevertheless, this court has held squarely that punitive damages are not available in an ERISA action and that an excessive prejudgment interest rate [which] would overcompensate an ERISA plaintiff, thereby transform[s] the award of prejudgement interest from a compensatory damage award to a punitive one. Allison, 289 F.3d at 1243 (quoting Ford v. Uniroyal Pension Plan, 154 F.3d 613, 618 (6th Cir.1998)). Here, the district court looked to Oklahoma law to determine the appropriate rate of prejudgment interest. Under Oklahoma law, [it] shall be the duty of the insurer, receiving a proof of loss, to submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt of that proof of loss. Upon a judgment rendered to either party, costs and attorney fees shall be allowable to the prevailing party. For purposes of this section, the prevailing party is the insurer in those cases where judgment does not exceed written offer of settlement. In all other judgments the insured shall be the prevailing party. If the insured is the prevailing party, the court in rendering judgment shall add interest on the verdict at the rate of fifteen percent (15%) per year from the date the loss was payable pursuant to the provisions of the contract to the date of the verdict. Okla. St. Ann. tit. 36, § 3629(B). GE contends that this Oklahoma law provides the appropriate rate where the insurer has acted in bad faith. Accordingly, GE reasons that it amounts to a punitive rate of interest. However, [r]ecovery under § 3629(B) embraces both contract-and tort-related theories of liability so long as the insured loss is the core element of the prevailing litigant's recovery.  Taylor v. State Farm Fire & Cas. Co., 981 P.2d 1253, 1262 (Okla.1999). Because (1) the § 3629 prejudgment interest rate is of broad applicability  and is not necessarily punitive  and (2) nothing in the record suggests that the award of 15% here is punitive, we conclude that the district court did not abuse its discretion in awarding the prejudgment interest in this case. See Fox v. Fox, 167 F.3d 880, 884 (4th Cir.1999) (upholding district court's award of 12% prejudgment interest in ERISA case); Smith v. Am. Int'l Life Assur. Co. of N.Y., 50 F.3d 956, 957-59 (11th Cir. 1995) (same); Biava v. Insurers Admin. Corp., 48 F.3d 1231 (table), 1995 WL 94461, at - (10th Cir. Mar.1, 1995) (unpublished) (upholding award of prejudgment interest in ERISA case at 15% rate provided for under New Mexico law); Florence Nightingale Nursing Serv., Inc. v. Blue Cross/Blue Shield of Ala., 41 F.3d 1476, 1484 (11th Cir.1995) (upholding prejudgment interest at rate of 18% per annum by reference to Alabama law).