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Hercules8/15/2001
A party is entitled to prejudgment interest running from the date payment is due. The determination of the date when payment is due is a matter of law subject to plenary review. "Where the underlying obligation to make payment arises ex contractu, we look to the contract itself to determine when interest should begin to accrue." In Citadel, a case involving advancement of funds to a former director of a corporation under an indemnification agreement with the corporation, we held that " nder this contractual scenario" interest should accrue "from the date of demand." We noted that date to be the "date when [the director] specified the amount of reimbursement demanded and produced his written promise to repay."
Although Hercules sent various forms of notice regarding potential liability, Hercules does not contend that it ever made a demand. In its Reply Brief it argues that an explicit request for payment is not required, and that "the facts in Citadel do not establish a rule of law that applies... when different contract provisions apply." This argument must fail. In this case, as in Citadel, no payment was due until Hercules made an unequivocal request for payment. The trial court found that "Hercules consistently corresponded with Defendants with respect to its potential, and building liability" and that Hercules notified its insurance broker and certain defendants of liability actions filed against Hercules in the 1980s. The trial court held that "it is not clear at what point" the policies attached and that it was only with filing of the complaint that the insurers "undeniably knew that Hercules was making a claim and undeniably decided not to pay." Hercules points to nothing in the record that suggests that this view was in error. We hold that in this case payment cannot be said to have been due until Hercules made a request for payment.
Allstate's Cross-Appeal Concerning Denial of Attorney's Fees and Costs
Allstate Insurance offered to settle with Hercules for $5,000. Hercules rejected the offer, and Allstate was subsequently dismissed from the suit. Allstate now seeks to recover costs and attorneys fees under Superior Court Civil Rule 68.
Allstate's argument must fail. Rule 68 does not authorize an award of costs unless the plaintiff obtains a judgment that is "not more favorable" than the offer. In Delta Airlines, Inc. v. August, the United States Supreme Court ruled that where, as here, the plaintiff obtains no judgment from the defendant seeking costs (i.e., judgment is for the defendant), Rule 68 does not apply. This is true even when the plaintiff obtains a judgment from defendants other than the one whose offer is rejected. Even if Rule 68 were to apply, it does not authorize recovery of attorneys fees.
Conclusion
The ruling of the trial court applying modified pro rata allocation to determine liability is reversed, and the Final Judgment Order is vacated. We affirm the rulings of the trial court on all other issues. This case is remanded for further proceedings consistent with this Opinion.
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