Court Opinion

ID: 9582762
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:31:03.989535+00
Date Added: 2024-06-11T13:38:19.208181
License: Public Domain

MOORE, Justice,
dissenting.
The court today ignores our long-standing analytical distinction between prejudgment and postjudgment interest. Prejudgment interest is an element of damages. Davis v. Chism, 513 P.2d 475, 481 (Alaska 1973). Postjudgment interest is “true” interest. See Allstate Ins. Co. v. Allen, 797 P.2d 46, 49-50 (Colo.1990). In the insurance context, our precedent for the past thirteen years has dictated that because prejudgment interest is an item of compensatory damages, it “falls within the liability damage clause in the insurance contract and is subject to the amount limitation contained therein.” Guin v. Ha, 591 P.2d 1281, 1287 (Alaska 1979) (emphasis added). In fact, we expressly stated that an “insurer is not liable for prejudgment interest in excess of policy limits,” id. at 1282, adopting the majority rule. See John A. Apple-man, Insurance Law & Practice § 4894.25 (Stephen Liebo ed., Supp.1991).
“[W]e believe our legislature is presumed to be aware of common law terms of art and the meaning such terms will carry into the courtrooms of this state.” Sears v. State, 713 P.2d 1218, 1219 (Alaska App. 1986). Nothing in AS 28.20.440(b)(2) or AS 28.22.101(d) suggests the legislature intended to eliminate the common law distinction between prejudgment and post-judgment interest. Nothing in the statutes suggests the legislature intended to remove the common law majority rule policy limit cap on an insurer’s liability for prejudgment interest. Rather, the legislature’s reason for including the “exclusive of interests” language in the statutes was to recognize that the law or policy provisions may require insurers to pay “true,” postjudgment interest.
The majority rule is that insurers are not liable for prejudgment interest in excess of the policy limits. It is highly doubtful that the Alaska legislature intended either the Motor Vehicle Safety Responsibility Act of 1959, ch. 163 SLA 1959, or the Mandatory Automobile Insurance Act of 1989, ch. 108 SLA 1989, to alter this rule. Hughes points to no legislative history in support of his legislative intent argument. The trial court’s ruling that Progressive need not indemnify Harrelson for prejudgment interest in ’ excess of policy limits should be affirmed.