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Indiana Insurance Co. v. Farmers Insurance of Columbus9/9/2003
vides as follows:
"(A) In cases other than those provided for in sections 1343.01 and 1343.02 of the Revised Code, when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, upon all verbal contracts entered into, and upon all judgment, decrees, and order of any judicial tribunal for the payment of money arising out of tortuous conduct or a contract or other transaction, the creditor is entitled to interest at the rate of ten per cent per annum, and no more, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the rate provided in that contract." (Emphasis added.)
We find the General Assembly's use of the phrase "creditor is entitled to interest" is mandatory language which requires the trial court to award prejudgment interest. See Pioneer Rural Elec. Co-Op v. Strunk, Shelby App. No. 17-99-09, 1999-Ohio-939; Dwyer Elec., Inc. v. Confederated Builders, Inc. (Oct. 29, 1998), Crawford App. No. 3-98-18.
In Dwyer, the Third District Court of Appeals explained:
" he plain language of R.C. 1343.03(A) states in no uncertain terms that when money is due and payable on a written instrument or on a judgment for payment of money based on a contract, `the creditor is entitled to interest.' The statute references no predicate determinations which need to be made before a creditor will be entitled to interest. Thus, once a party has a judgment for an underlying contract claim, as in this case, we find that he is entitled to interest as a matter of law. * * * R.C. 1343.03(A) reposes no discretion in the trial court * * *. When the liability issue was determined in the plaintiffs' favor, they were then entitled to prejudgment interest pursuant to the statute." (Emphasis sic.) Id. at 5.
Based upon the above interpretation of R.C. 1343.03(A), the trial court abused its discretion when it determined appellees were not entitled to prejudgment interest because the arbitrators' award provided full compensation for their injuries. Upon remand, the trial court may use its discretion to determine the date money became "due and payable" upon Federal's policies. The trial court is required to make this determination pursuant to the Ohio Supreme Court's decision in Landis.
In the Landis decision, the Ohio Supreme Court addressed the issue of prejudgment interest in a case involving a claim for underinsured motorists coverage. Plaintiffs' claim was submitted to arbitration and plaintiffs received an award of $1,300,000. Id. at 339. Thereafter, plaintiffs sought recovery of prejudgment interest. On appeal to the Ohio Supreme Court, the Court first determined that plaintiffs were entitled to recover prejudgment interest under R.C. 1343.03(A). Id. at 341. The Court also specifically found that, " determination that the benefits became due and payable upon the entry of the arbitrator's award would, in this case, work an injustice by rewarding Grange for improperly denying benefits." Id. at 341-342.
Thus, the Court concluded:
"Whether the prejudgment interest in this case should be calculated from the date coverage was demanded or denied, from the date of the accident, from the date at which arbitration of damages would have ended if Grange had not denied benefits, or some other time based on when Grange should have paid Landis is for the trial court to determine. Upon reaching that determination, the court should calculate, pursuant to R.C. 1343.03(A), the amount of prejudgment interest due Landis and enter an appropria
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