Court Opinion

ID: 9883733
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:14:47.444338+00
Date Added: 2024-06-11T07:48:29.807611
License: Public Domain

NIERENGARTEN, Judge,
dissenting:
I respectfully dissent. The majority holds that the separate purposes of the no-fault interest provision and the prejudgment interest statute allow for imposition of both against a no-fault insurer in a claim made for payment of overdue benefits. Its holding, however, fails to recognize the dual purposes underlying the interest provision in the No-Fault Act, one of which is compensation to the claimant for the loss of use of money during the period when payment is overdue.
In Record v. Metropolitan Transit Commission, 284 N.W.2d 542, 545 (Minn.1979), the supreme court cited with approval the comments to the Uniform Motor Vehicle Accident Reparations Act in determining the intent behind Section 65B.54 of the No-Fault Act. The comments indicate that imposition of interest serves not only to encourage prompt payment by the no-fault insurer, but also to compensate the insured for the loss of the use of his money. See Uniform Motor Vehicle Accident Reparations Act § 23 comment (1980). It states:
Subsection (b), subjecting overdue payments to [18] percent interest, is another provision encouraging periodic payment of benefits without delay. The 18 per cent figure is recommended because it is the interest rate which an insured would be required to pay in many transactions involving consumer credit, and it is sufficiently high to induce the reparation obli-gor to pay promptly. A figure substantially lower, 6 per cent for example, would neither compensate an ordinary consumer for loss of use of the funds nor provide sufficient inducement for prompt payment.

Id.

Under Section 549.09 prejudgment interest is not available when compensation is “otherwise provided by contract or allowed by law.” Minn.Stat. § 549.09 (1984). Section 65B.54 of the No-Fault Act “otherwise provides” for interest in the present situation. See id. § 65B.54, subd. 2.
The compensatory purpose of the No-Fault Act’s interest provision is consistent with the compensatory purpose underlying the prejudgment interest statute. Thus, by the prejudgment interest statute’s own terms, no further interest is available to the claimant beyond the 15% provided for under the No-Fault Act.