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Griffith v. Wausau Business Insurance Co.3/4/2003
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.In First Bank of Marietta v. L.C. Ltd. (Dec. 28, 1999), Franklin App. No. 99AP-304, this court explained:
."Prejudgment interest `acts as compensation and serves ultimately to make the aggrieved party whole.' Royal Electric Constr. Corp. v. Ohio State University (1995), 73 Ohio St.3d 110, 117, 652 N.E.2d 687. Prejudgment interest is to compensate the plaintiff for the period of time between accrual of the claim and judgment, regardless of whether the judgment is based on a claim which was liquidated or unliquidated and even if the sum due was not capable of ascertainment until determined by the court. Id. at paragraph one of the syllabus."
.UIM claims are contract claims subject to prejudgment interest under R.C. 1343.03(A) because the benefits are due and payable based on an instrument of writing, an insurance contract. Landis v. Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 339, 341. Whether UIM benefits were denied in good faith is irrelevant because an award of prejudgment interest under R.C. 1343.03(A) is not predicated on lack of a good-faith effort to settle, as is an award of prejudgment interest under R.C. 1343.03(C). Id. The trial court has discretion under R.C. 1343.01(A) to determine whether prejudgment interest should be calculated from the date of the automobile accident, the date coverage was demanded or denied, or some other time the insurance company should have made payment. Landis at 342; Roberts at 625.
.Wausau does not dispute that if plaintiffs are entitled to UIM benefits under Granville's insurance policy, they are entitled to prejudgment interest pursuant to R.C. 1343.03(A). Rather, Wausau contends the trial court should have calculated prejudgment interest from the date Wausau's obligation to pay UIM benefits became due and payable under the terms of its contract with Granville. Because the insurance policy provides that exhaustion of the tortfeasor's coverage is a precondition to Wausau's payment of damages to its insured, Wausau asserts the date from which the trial court should have calculated prejudgment interest is the date plaintiffs exhausted their tortfeasor's insurance coverage: when Riley's insurer paid plaintiffs its $100,000 liability limit, apparently around August 6, 2001. Wausau contends the trial court abused its discretion in failing to consider the Granville policy language when it calculated the prejudgment interest in this case.
.The trial court concluded the date State Farm, Riley's liability insurance company, paid plaintiffs has no relevance in this case. The trial court noted plaintiffs had an offer from the tortfeasor to pay his limits long before they were actually paid, but Wausau refused to give plaintiffs the consent they needed to release the tortfeasor and to accept the tortfeasor's money. Without Wausau's consent, plaintiffs' accepting the money exposed them to a claim that they failed to protect Wausau's subrogation interests. The court concluded it would unfairly prejudice plaintiffs to allow Wausau to avoid paying prejudgment interest while plaintiffs protected Wausau's subrogation rights. In order to fully compensate plaintiffs, the trial court awarded prejudgment interest from September 14, 1999, the date plaintiffs began to accrue damages from the accident.
.The court in Landis has vested the trial court with a wide degree of discretion in selecting the time from which prejudgment interest will accrue, specifically deeming the date of the accident to be a permissible time for the accrual of interest to begin. Id. at 342. See Roberts (concluding prejudgment interest appropriately accrued from the date of the accident where the insurer asserted a later date was proper, but the i
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