Court Opinion

ID: 4149104
Source: CourtListenerOpinion
Date Created: 2017-02-28 21:07:31.961288+00
Date Added: 2024-06-11T14:46:18.184047
License: Public Domain

COLORADO COURT OF APPEALS                                          2017COA25

Court of Appeals No. 16CA0416
City and County of Denver District Court No. 15CV30685
Honorable John W. Madden, IV, Judge

Joel Munoz,

Plaintiff-Appellant,

v.

American Family Mutual Insurance Company,

Defendant-Appellee.

                            JUDGMENT AFFIRMED

                                 Division IV
                          Opinion by JUDGE ASHBY
                       Hawthorne and Freyre, JJ., concur

                         Announced February 23, 2017

Franklin D. Azar & Associates, PC, Patricia A. Meester, Keith R. Scranton,
Aurora, Colorado, for Plaintiff-Appellant

Campbell Latiolais & Averbach, LLC, Clifton J. Latiolais, Jr., Denver, Colorado,
for Defendant-Appellee
¶1    Plaintiff, Joel Munoz, appeals from the trial court’s judgment

 entered in favor of defendant, American Family Mutual Insurance

 Company (American Family). We are asked to decide a question not

 yet resolved in Colorado: Must an insured file a lawsuit and proceed

 to judgment to be legally entitled to prejudgment interest, as

 provided by section 13-21-101(1), C.R.S. 2016, when the insured

 settles a claim under his or her uninsured motorist/underinsured

 motorist policy? We conclude that the answer is “yes” and affirm

 the judgment of the trial court.

                            I. Background

¶2    Munoz was injured in a collision with David L. McCormack, an

 uninsured motorist (UM). Munoz opened a UM claim with his

 insurer, American Family. Throughout the settlement process,

 American Family made settlement offers to Munoz but took the

 position that it was not required to pay prejudgment interest.

 Munoz asked American Family to consider including prejudgment

 interest when settling the UM claim because it was an element of

 damages he could have pursued against McCormack. American

 Family maintained that it was only required to pay prejudgment

 interest as determined by a court after a judgment had been

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 entered. Munoz accepted American Family’s final offer,

 understanding that it did not include interest, though he continued

 to try to persuade American Family to include payment of

 prejudgment interest. American Family declined and sought a

 release of all claims in exchange for its payment of the amount of

 the offer accepted by Munoz.

¶3    Munoz then filed a lawsuit against American Family and

 McCormack. Seeking prejudgment interest on damages payable

 from American Family, Munoz moved for the trial court, under

 C.R.C.P. 56(h), to determine whether American Family was required

 to include prejudgment interest as part of its settlement of the UM

 claim. American Family filed a cross-motion asking the court to

 determine the same legal question.

¶4    The trial court ruled that although an insured under a UM

 policy may recover prejudgment interest pursuant to section 13-21-

 101, as a matter of law, the insured is entitled to such interest only

 when a judgment has entered and interest is awarded as an

 component of damages assessed by the jury’s verdict or the court.

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     II. Prejudgment Interest Need Not Be Considered When Evaluating
                    or Settling a Claim for UM Benefits

¶5       Munoz contends that the trial court erred by determining that

 he, an insured motorist, is not legally entitled to collect

 prejudgment interest unless he has secured a judgment following

 an assessment of an amount of damages resulting from a jury

 verdict or court finding. He contends that prejudgment interest is a

 necessary element of compensatory damages that makes an injured

 party whole.

¶6       The purpose of prejudgment interest is to compensate the

 injured party for the time value of the money owed for his or her

 injuries. Morris v. Goodwin, 185 P.3d 777, 780 (Colo. 2008). And

 Munoz therefore asserts that he was legally entitled to collect

 prejudgment interest as an element of his compensatory damages

 even if no judgment has been entered. He contends that section

 13-21-101 merely “instructs” trial courts as to when, and at what

 rate, a prejudgment interest award is authorized and that the

 statute was not intended to limit the circumstances under which

 prejudgment interest may be awarded to those where a trial has

 occurred and a judgment has been entered. American Family

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 counters that under the plain language of section 13-21-101,

 prejudgment interest can only be awarded after a judgment, based

 upon a damages award determined by a trier of fact, has been

 entered. To resolve this dispute, we must construe section 13-21-

 101. We agree with American Family.

¶7    We review the trial court’s determination of a question of law

 under C.R.C.P. 56(h) de novo. Henisse v. First Transit, Inc., 247

 P.3d 577, 579 (Colo. 2011). We also review decisions related to

 statutory construction de novo. Bostelman v. People, 162 P.3d 686,

 689 (Colo. 2007). An entitlement to interest is created by statute

 and is in derogation of the common law. Clark v. Hicks, 127 Colo.

 25, 32, 252 P.2d 1067, 1070 (1953). When a statute is in

 derogation of the common law, we construe the statute strictly,

 Bertrand v. Bd. of Cty. Comm’rs, 872 P.2d 223, 229 (Colo. 1994),

 giving consistent, harmonious, and sensible effect to all its parts.

 People v. Adams, 2016 CO 74, ¶ 12.

¶8    In interpreting statutes, our primary task is to give effect to

 the intent of the General Assembly. Sperry v. Field, 186 P.3d 133,

 137 (Colo. App. 2008), aff’d, 205 P.3d 365 (Colo. 2009). We first

 look to the statute’s plain language. Id. If it is clear and

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  unambiguous, we interpret the statute as written. Id. Only if the

  terms used are susceptible of more than one interpretation may we

  employ extrinsic sources, such as legislative history, prior law,

  consequences of one interpretation over another, and the goal of the

  statutory scheme, to aid our interpretation. Id.

¶9     As relevant here, section 13-21-101(1) states as follows:

            In all actions brought to recover damages for
            personal injuries sustained by any person
            resulting from or occasioned by the tort of any
            other person, corporation, association, or
            partnership, whether by negligence or by
            willful intent of such other person,
            corporation, association, or partnership and
            whether such injury has resulted fatally or
            otherwise, it is lawful for the plaintiff in the
            complaint to claim interest on the damages
            alleged from the date said suit is filed; and . . .
            [w]hen such interest is so claimed, it is the
            duty of the court in entering judgment for the
            plaintiff in such action to add to the amount of
            damages assessed by the verdict of the jury, or
            found by the court, interest on such
            amount . . . .

¶ 10   Section 13-21-101(1) therefore sets forth specific conditions

  that must be met before prejudgment interest can be awarded: (1)

  an action must be brought; (2) the plaintiff must claim damages in

  the complaint; (3) there must be a finding of damages by a jury or

  the court; and (4) judgment is entered. In our view, the plain

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  meaning of the statute’s language is clear — a court’s authority to

  award prejudgment interest only exists if a plaintiff has lawfully

  requested prejudgment interest, there is a jury verdict or court

  finding that the plaintiff has damages, and a judgment is entered.

  And because we conclude that the language of the statute is clear

  and unambiguous, we need look no further.

¶ 11   Munoz contends that USAA v. Parker, 200 P.3d 350 (Colo.

  2009), compels a different result. We disagree. The issue decided

  in USAA was the proper rate of prejudgment interest to be applied

  to a judgment against an underinsured motorist (UIM) carrier. See

  id. at 357. The supreme court did not resolve the issue of whether

  an insurance company is required to pay prejudgment interest

  when evaluating and settling a claim with its insured under a UM

  or UIM policy. We recognize that certain language in USAA could be

  construed to support Munoz’s contention that because prejudgment

  interest is a type of compensatory damages, he would be entitled to

  recover prejudgment interest from McCormack in a direct action

  against him and Munoz is, therefore, entitled to recover the same

  from American Family. However, we conclude, as did the trial court

  in its well-reasoned order, that USAA does not stand for the

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  proposition that if the insured does not file a claim, a UM/UIM

  insurer is required to pay to the insured the same amount that

  could have been recovered from the UM or UIM as if the insured

  had filed an action. See Witt v. State Farm Mut. Auto. Ins. Co., 942

  P.2d 1326, 1327 (Colo. App. 1997) (holding the plaintiff was not

  entitled to prejudgment interest from UIM carrier on settlement

  amount negotiated with tortfeasor, and the plaintiff’s decision to

  settle waived right to seek prejudgment interest). Instead, the

  statute establishes the conditions upon which the insured’s right to

  interest exists, and it uses specific language to do so, including the

  following: “[i]n all actions brought”; “it is lawful for the plaintiff in

  the complaint to claim interest on the damages alleged from the date

  said suit is filed”; “[w]hen such interest is so claimed, it is the duty

  of the court in entering judgment for the plaintiff in such action to

  add to the amount of damages assessed by the verdict of the jury, or

  found by the court, interest on such amount.” § 13-21-101(1)

  (emphasis added).

¶ 12   Significantly, USAA also did not address an issue applicable

  here that had been previously resolved by the court of appeals in

  Parker v. USAA, 216 P.3d 7, 13-14 (Colo. App. 2007), aff’d, 200

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  P.3d 350 (Colo. 2009), holding that an insured was not entitled to

  recover prejudgment interest on the settlement amount from his

  UM/UIM carrier.

¶ 13   We therefore conclude that the trial court correctly determined

  that Munoz was not entitled to prejudgment interest in the

  settlement reached with American Family prior to litigation.

                            III. Conclusion

¶ 14   The judgment is affirmed.

       JUDGE HAWTHORNE and JUDGE FREYRE concur.

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