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Head Industrial Coatings & Services Inc. v. Maryland Insurance Co.7/29/1998
mits and any accrued interest-which under Plasky would have stopped the interest clock in its tracks. Further, the record reflects that the underlying case was tried, not that an agreement between the parties set the level of damages. See Discussion in Maryland Ins. Co. v. Head Indus. Coatings & Servs., Inc., 906 S.W.2d at 235-237.
The insurer now attempts to obtain the same relief without the necessity of tender. If the insurer is correct, the insurer wins on several fronts. First, the insurer may deny coverage and refuse to pay without penalty, while interest on a judgment obtained because of his denial continues to accrue to the detriment of the insured. Second, the insurer has no incentive to act quickly and resolve matters. Third, the insurer's position would undo the stated purpose of Plasky, which was to encourage insurers to admit coverage when coverage existed and not to unnecessarily penalize the insured by the insurer's recalcitrance. We will not now adopt this position.
We find the interest was properly calculated by the trial court on the amount of Judgment # 1 between its entry on May 11, 1992 and the entry of the second judgment on December 9, 1993. Head is entitled to an award of postjudgment interest under the Supplementary Payments clause of its contract.
The Correct Rate Determination
Maryland also contends that the trial court used the wrong interest rate in determining the amount of prejudgment interest to be paid. Maryland has not informed us what figure was actually used by the court, and this percentage figure is not set forth in the judgment before us on this appeal. Maryland contends that the court should have used 6% based upon the requirements of Tex. Fin. Code Ann. § 302.002 (Vernon 1998) (formerly Tex. Rev. Civ. Stat. Ann. art. 5069-1.03) and our opinion in Birmingham Fire Ins.Co., 947 S.W.2d at 606. In that opinion, this court applied the 6% figure to an award of postjudgment interest under a supplementary payments clause.
Section 302.002 of the Finance Code provides as follows:
When no specified rate of interest is agreed on by the parties, interest at the rate of six percent per year is allowed on all accounts and contracts ascertaining the amount payable, beginning on the 30th day after the date on which the amount is due and payable.
This provision does not require that the amount owed under the contract be liquidated at the time or its precise dollar amount of damages be ascertained before the jury verdict. H.B. Zachary Co. v. Terry, 195 F.2d 185 (5th Cir. 1952); Pickens v. Alsup, 568 S.W.2d 742 (Tex. Civ. App.-Austin 1978, writ ref'd n.r.e.). Thus, an agreed rate would be allowed in lieu of the 6% by the language of the statute.
We held in Maryland Ins. Co. v. Head Indus. Coatings & Servs., 906 S.W.2d at 238, that prejudgment interest was computed at 10% because of "a special policy provision." Since such a provision exists, then prejudgment interest on the $500,000 accrues as set out in our previous opinion. Thus, the $74,931, award of prejudgment interest on the policy amount of $500,000 calculated from November 10, 1990 through May 11, 1992, is correct.
Alternatively, Maryland argues that the running of prejudgment interest on the policy limit of $500,000 was tolled by its settlement offer, citing Tex. Fin. Code Ann. § 304.105 (Vernon 1998) as authority. The cited section applies only to wrongful death, personal injury, or property damage cases as shown by the beginning section of this subchapter, which limits its application. Tex. Fin. Code Ann. § 304.101 (Vernon 1998). It does not apply to the present case, which the Supreme Court made abundantly
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