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FRUNZAR v. ALLIED PROPERTY AND CAS. INS.5/22/1996
nterest rate on the UM judgment. After the trial, the district court rendered judgment in favor of plaintiff and against Allied in the amount of $191,985.00 plus "interest" and the court costs of the action. In a later ruling on Allied's rule of civil procedure 179(b) motion, the court ordered that interest at a rate of ten percent per year be taxed on the entire judgment from the date of the commencement of the action. See Iowa Code § 535.3 (1995); Vasquez v. LeMars Mut. Ins. Co., 477 N.W.2d 404, 409-10 (Iowa 1991).
Allied contends on appeal that the district court erred by awarding interest under Iowa Code section 535.3 and, in the alternative, that an interest award under section 535.3 in the present case is unconstitutional. We address each argument in turn.
1. Interest rate under Iowa Code section 535.3. In Vasquez, 477 N.W.2d at 410, an under insured motorist (UIM) case relied on by the district court, we held that Iowa Code section 535.3 controlled the application of the interest on the judgment entered against an insurer and in favor of an insured. That section provides in pertinent part:
Interest shall be allowed on all money due on judgments and decrees of courts at the rate of ten percent per year, unless a different rate is fixed by the contract on which the judgment or decree is rendered. . . . The interest shall accrue from the date of the commencement of the action.
This section does not apply to the award of interest for judgments and decrees subject to section 668.13.
Iowa Code § 535.3 (emphasis added). If the court's judgment is subject to the interest provision of the comparative fault act, see id. § 668.13 (1995), then section 535.3 expressly does not apply. An action is "subject to section 668.13" if the action is "brought pursuant to [chapter 668]. . . ." Id. (emphasis added).
In the Vasquez case, we concluded that the plaintiff's UIM claim against the insurer was not "brought pursuant to" the comparative fault act but rather was brought based on an alleged contractual breach by the insurer against one of its insureds. Vasquez, 477 N.W.2d at 410. According to the decision, "the claim essentially a contractual one." Id.; see Wetherbee v. Economy Fire & Cas. Co., 508 N.W.2d 657, 659 (Iowa 1993) (a claim for UIM benefits was based on the insurance policy).
Like plaintiff Vasquez's claim for UIM coverage against his insurer, we believe plaintiff Frunzar's UM claim in the present case was contractual in nature and not, as contended by Allied, one "brought pursuant to" chapter 668. In fact, Allied contended under its insurance policy contract that plaintiff was not a resident of her parents' household and [548 NW2d Page 891]
had not proved the vehicles involved in the accident were uninsured.
In Lemrick v. Grinnell Mutual Reinsurance Co., 263 N.W.2d 714 (Iowa 1978), a case in which an insured filed an action against his insurer seeking UM coverage, we noted that the insured was seeking contract benefits under the policy:
o an extent the uninsured motorist clause puts the insured in a position he would occupy if the uninsured motorist had insurance and the insured sued him. Yet the insured is not in fact suing the uninsured motorist, and may never sue him. Indeed, the situation may involve a hit-and-run driver who is never identified. Actually, the insured has bought and paid for a contract by an insurer to pay him if he has the misfortune to be injured by a culpable uninsured motorist or hit-and-run driver. If the insured and insurer cannot agree and the insured is compelled to sue the insurer under the uninsured motorist clause, we think in reality the action
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