Court Opinion

ID: 9848139
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:13:32.170068+00
Date Added: 2024-06-11T09:18:03.648251
License: Public Domain

Schroeder, C.J.,
dissenting: Travelers Insurance Company in my opinion was obligated to pay the $100,000 which became due under the terms of the policy upon proof of loss (proof of death in this case). Travelers does not challenge the fact that proof of loss was made within a reasonable time, shortly after the death of Thad Sandstrom on May 3, 1977. Travelers had the use of *574$100,000, a liquidated sum, upon which it paid no interest until August 6, 1979. This was a period of 27 months during an economic period when interest rates were astronomical in comparison to past years.
Where the only issue confronting Travelers concerning the payment of its liquidated liability under the policy was a determination of the proper claimant, Travelers on its own initiative should have paid the funds into court and requested the court to make a determination of the proper claimant entitled to the funds. This procedure would relieve Travelers of any obligation to pay interest on the funds. If the contending claimants then quibbled over investment of the funds in the custody of the court, it would be at their expense.
During the 27-month period the prime rate of interest charged by banks advanced from 6.75% to 12.25%. Under the court’s decision, assuming Travelers made an average of 10% per annum on investment of the funds, Travelers has benefited by more than $20,000 at the claimant’s expense. This is not applying equity to the facts confronting the court.
On my theory of equity, insurance companies would not be permitted to maneuver, as Travelers did in this case, to avoid payment of their proven liability under an insurance policy.
It is respectfully submitted the trial judge should have determined when Travelers received proof of death in this case and awarded prejudgment interest from that date.
Holmes and Herd, JJ., join the foregoing dissenting opinion.