Court Opinion

ID: 9730140
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:02:31.22938+00
Date Added: 2024-06-11T18:26:04.477016
License: Public Domain

Shanahan, J.,
concurring in part, and in part dissenting.
I agree with the majority that judgment on the jury’s verdict should be affirmed, but I disagree on the disallowance of prejudgment interest.
The motel burned on August 17,1980. On August 18 United States Fidelity and Guaranty Company (U.S.F. & G.) learned about the fire, and on the same day a supervisor-adjuster of U.S.F. & G. inspected the devastation. There was no question that the loss was covered by insurance. As expressed by U.S.F. & G., the insurance company embarked on a determination of repairs to restore its insured to a “preloss condition.”
On October 22,2 months after the fire, a contractor hired by U.S.F. & G. surveyed the fire damage to the motel and then prepared an extensive written itemization of damages and repairs. U.S.F. & G.’s contractor meticulously classified and listed damages in 10 separate categories and estimated repairs at $111,310. U.S.F. & G. received its contractor’s estimate on November 24, 3 months after the fire.
After a series of collaborated adjustments by the insurance company and its contractor concerning the November 24 itemization, on February 26, 1981, U.S.F. & G. recognized the extent of the loss and repairs at the figure of $141,643, now 6 months after the fire. However, U.S.F. & G. quietly restrained its welling magnanimity until June 25, when U.S.F. & G. succumbed in a burst of its own largess by a letter to the motel owner and proposed a settlement, 10 months after the fire, 7 months after the exact nature and extent of the damage had been determined, and after 4 months of the insurance company’s self-imposed and inexplicable reclusion following determination of the monetary amount of necessary repairs in the esti*16mation of U.S.F. &G.
Therefore, as early as October 22,1980, not only was the fire loss determinable, but at February 26, 1981, the monetary amount of the loss in fact had been determined as far as U.S.F. & G. was concerned. The criterion for recoverable interest should not be whether the claim is liquidated or unliquidated; rather, the test should be determinability of the amount of damages claimed. See Note, Recovery of Prejudgment Interest on an Unliquidated State Claim Arising Within the Sixth Circuit, U. Cin. L. Rev. 151 (1977).
Today numerous courts award prejudgment interest as a basic element of damages, even in contract cases. See Cree Coach Co. v. Wolverine Ins. Co., 366 Mich. 449, 115 N.W.2d 400 (1962); cf. State v. Phillips, 470 P.2d 266 (Alaska 1970) (tort). Prejudgment interest has been recoverable for an insured fire loss, although an insured’s claim was unliquidated in the sense that the exact monetary amount of the loss was disputed and required resolution by litigation. See, Northwestern States Portland Cem. Co. v. Hartford F. I. Co., 360 F.2d 531 (8th Cir. 1966) (applying the law of Iowa); Aetna Insurance Company v. Barnett Brothers, Inc., 289 F.2d 30 (8th Cir. 1961); J. P. Cope Hotels Co. et al. v. Ins. Co., 126 Pa. Super. 260, 191 A. 636 (1937); Bernhard v. Rochester German Ins. Co., 79 Conn. 388, 65 A. 134 (1906); The Peoria Marine and Fire Insurance Co. v. Lewis et al., 18 Ill. 553 (1857).
Underlying recoverability of prejudgment interest is a fundamental aspect of our jurisprudence, namely, to provide full and adequate compensation to a claimant and to award damages for delay in payment of money otherwise due a claimant. In cases such as the one before us, interest should be recoverable and awarded as a judicial measure originating in basic fairness — the right to full and fair compensation on a just claim. Therefore, I believe that prejudgment interest should have been allowed in this case because there was never a question that the loss occurred, no question that the insurance company owed the loss, and no doubt that the extent of damages was indeed determinable, and the monetary amount of the loss had in fact been determined by the insurance company well in advance of any offer of settlement or ensuing litigation.
Grant, J., joins in this concurrence and dissent.