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Mastering Prejudgment Mastering Prejudgment
InterestInterest
R. Brent CooperR. Brent CooperDiana L. FaustDiana L. Faust
Cooper & Scully, P.C.Cooper & Scully, P.C.900 Jackson Street, Suite 100900 Jackson Street, Suite 100
Tel: (214) 712Tel: (214) 712--95009500Fax: (214) 712Fax: (214) 712--95409540
Brent.Cooper@CooperScully.comBrent.Cooper@CooperScully.comDiana.Faust@CooperScully.comDiana.Faust@CooperScully.com
www.CooperScully.comwww.CooperScully.com
©© 20112011
This paper and/or presentation provides information on general lThis paper and/or presentation provides information on general legal issues. It is not intended to provide advice on any specifegal issues. It is not intended to provide advice on any specific legal matter or factual ic legal matter or factual
situation, and should not be construed as defining Cooper and Scsituation, and should not be construed as defining Cooper and Scully, ully, P.C.'sP.C.'s position in a particular situation. Each case must be evaluateposition in a particular situation. Each case must be evaluated on its own d on its own
facts. This information is not intended to create, and receipt facts. This information is not intended to create, and receipt of it does not constitute, an attorneyof it does not constitute, an attorney--client relationship. Readers should not act on this client relationship. Readers should not act on this
information without receiving professional legal counsel.information without receiving professional legal counsel.
Significance of Prejudgment Significance of Prejudgment
InterestInterest
8,123,2861995
8,796,2631996
12,220,3971997
14,481,6021998
19,654,5961999
32,102,1122000
5,337,4012001
12,495,6102002
6,935,9762003
6,511,0132004
2,885,2562005
3,673,1372006
4,012,0292007
8,181,6502008
1,229,2532009
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Closed Claim Data
Prejudgment Interest in Judgments by Year
Cooper & Scully, P.C. 3
Sources of Prejudgment InterestSources of Prejudgment Interest
There are two legal sources for an award of There are two legal sources for an award of
prejudgment interest: (1) general principles of prejudgment interest: (1) general principles of
equity and (2) an enabling statute. equity and (2) an enabling statute. CavnarCavnar v. v. Quality Control Parking, Inc.Quality Control Parking, Inc., 696 S.W.2d 549, 552 , 696 S.W.2d 549, 552
(Tex. 1985); (Tex. 1985); Phillips Petroleum Co. v. Stahl Phillips Petroleum Co. v. Stahl Petroleum Co.Petroleum Co., 629 S.W.2d 480, 483, 629 S.W.2d 480, 483--85 (Tex. 85 (Tex.
1978).1978).
�� See Johnson & Higgins of Texas, Inc. v. Kenneco See Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc.Energy, Inc., 962 S.W.2d 507, 528 (1998)., 962 S.W.2d 507, 528 (1998).
Cooper & Scully, P.C. 4
Sources of Prejudgment InterestSources of Prejudgment Interest
�� StatutesStatutes--
�� 304.102 Finance Code304.102 Finance Code
�� 2260.106 Government Code2260.106 Government Code
Cooper & Scully, P.C. 5
Sources of Prejudgment InterestSources of Prejudgment Interest
�� EquityEquity--
�� If prejudgment interest is not authorized by If prejudgment interest is not authorized by
statute, the court can award prejudgment statute, the court can award prejudgment
interest under the general principles of equity. interest under the general principles of equity.
Perry Roofing v Perry Roofing v OlcottOlcott, 744 SW2d 929 (Tex. , 744 SW2d 929 (Tex.
1988)1988)
Cooper & Scully, P.C. 6
History of Prejudgment InterestHistory of Prejudgment Interest
1978: Equity as Basis (Economic Damages)1978: Equity as Basis (Economic Damages)
�� Phillips Petroleum Co. v. Stahl Petroleum Co.,Phillips Petroleum Co. v. Stahl Petroleum Co., 569 569
S.W.2d 480 (1978)S.W.2d 480 (1978)
�� 1985: Recoverable in Personal Injury Cases 1985: Recoverable in Personal Injury Cases
(Rate Tied to Statute)(Rate Tied to Statute)
�� CavnarCavnar v. Quality Control Parkingv. Quality Control Parking, 696 S.W.2d 549 , 696 S.W.2d 549
(Tex. 1985)(Tex. 1985)
�� Tied to Statutory Rate & CompoundedTied to Statutory Rate & Compounded
�� Accrual 180 days following injury or deathAccrual 180 days following injury or death
Cooper & Scully, P.C. 7
History of Prejudgment InterestHistory of Prejudgment Interest
�� 1987: Tort Reform Codified and Modified 1987: Tort Reform Codified and Modified
CavnarCavnar Rule Providing for Prejudgment Rule Providing for Prejudgment
Interest in Wrongful Death, Personal Interest in Wrongful Death, Personal
Injury, and Property Damage CasesInjury, and Property Damage Cases
�� Tex. Rev. Civ. Stat. Ann. art. 5069Tex. Rev. Civ. Stat. Ann. art. 5069--1.05, 1.05, §§ 66
�� 1997: 1997: RecodifiedRecodified Into Finance Code Into Finance Code –– No No
Modification of Existing Statutory LawModification of Existing Statutory Law
Cooper & Scully, P.C. 8
History of Prejudgment InterestHistory of Prejudgment Interest
�� 1998: Common Law Based on Art. 50691998: Common Law Based on Art. 5069--1.051.05�� Johnson & Higgins of Texas, Inc. v. Kenneco Johnson & Higgins of Texas, Inc. v. Kenneco
Energy, Inc.Energy, Inc., 962 S.W.2d 576 (Tex. 1998), 962 S.W.2d 576 (Tex. 1998)
�� 2003: House Bill 42003: House Bill 4�� Accrual on Past Damages OnlyAccrual on Past Damages Only
�� Rate adjusted down: 5% to 15%Rate adjusted down: 5% to 15%
�� Simple InterestSimple Interest
Cooper & Scully, P.C. 9
Rates of Prejudgment Interest Rates of Prejudgment Interest ––
State Courts:State Courts:
�� §§ 304.103. PREJUDGMENT INTEREST 304.103. PREJUDGMENT INTEREST RATE FOR WRONGFUL DEATH, RATE FOR WRONGFUL DEATH, PERSONAL INJURY, OR PROPERTY PERSONAL INJURY, OR PROPERTY DAMAGE CASE. The prejudgment DAMAGE CASE. The prejudgment interest rate is equal to the interest rate is equal to the postjudgment interest rate applicable at postjudgment interest rate applicable at the time of judgment.the time of judgment.
�� Amended by Acts 1999, 76th Leg., ch. Amended by Acts 1999, 76th Leg., ch. 62, 62, §§ 7.18(a), eff. Sept. 1, 1999. 7.18(a), eff. Sept. 1, 1999.
Cooper & Scully, P.C. 10
Rates of Prejudgment Interest Rates of Prejudgment Interest ––
State Courts:State Courts:�� §§ 304.003. JUDGMENT INTEREST RATE: 304.003. JUDGMENT INTEREST RATE:
INTEREST RATE OR TIME PRICE INTEREST RATE OR TIME PRICE DIFFERENTIAL NOT IN CONTRACT. (a) A DIFFERENTIAL NOT IN CONTRACT. (a) A money judgment of a court of this state to money judgment of a court of this state to which Section 304.002 does not apply, which Section 304.002 does not apply, including court costs awarded in the judgment including court costs awarded in the judgment and prejudgment interest, if any, earns and prejudgment interest, if any, earns postjudgment interest at the rate determined postjudgment interest at the rate determined under this section. (b) On the 15th day of each under this section. (b) On the 15th day of each month, the consumer credit commissioner shall month, the consumer credit commissioner shall determine the postjudgment interest rate to be determine the postjudgment interest rate to be applied to a money judgment rendered during applied to a money judgment rendered during the succeeding calendar month. the succeeding calendar month.
Cooper & Scully, P.C. 11
�� (c) The postjudgment interest rate is: (1) the (c) The postjudgment interest rate is: (1) the
prime rate as published by the Board of prime rate as published by the Board of
Governors of the Federal Reserve System on the Governors of the Federal Reserve System on the
date of computation; (2) five percent a year if date of computation; (2) five percent a year if
the prime rate as published by the Board of the prime rate as published by the Board of
Governors of the Federal Reserve System Governors of the Federal Reserve System
described by Subdivision (1) is less than five described by Subdivision (1) is less than five
percent; or (3) 15 percent a year if the prime percent; or (3) 15 percent a year if the prime
rate as published by the Board of Governors of rate as published by the Board of Governors of
the Federal Reserve System described by the Federal Reserve System described by
Subdivision (1) is more than 15 percent.Subdivision (1) is more than 15 percent.
Cooper & Scully, P.C. 12
Rates of Prejudgment Interest Rates of Prejudgment Interest ––
State Courts:State Courts:
�� §§ 304.004. PUBLICATION OF JUDGMENT 304.004. PUBLICATION OF JUDGMENT
INTEREST RATE. The consumer credit INTEREST RATE. The consumer credit
commissioner shall send to the secretary commissioner shall send to the secretary
of state the postjudgment interest rate of state the postjudgment interest rate
for publication, and the secretary shall for publication, and the secretary shall
publish the rate in the Texas Register.publish the rate in the Texas Register.
�� Amended by Acts 1999, 76th Leg., ch. Amended by Acts 1999, 76th Leg., ch.
62, 62, §§ 7.18(a), eff. Sept. 1, 1999. 7.18(a), eff. Sept. 1, 1999.
Cooper & Scully, P.C. 13
Rate of Prejudgment InterestRate of Prejudgment Interest
http://http://www.occc.state.tx.us/pages/int_rateswww.occc.state.tx.us/pages/int_rates
/index.html/index.html
Cooper & Scully, P.C. 14
Rates of Prejudgment Interest Rates of Prejudgment Interest ––
Federal CourtsFederal Courts
�� For state law claims, Texas law would For state law claims, Texas law would
control. control. Gilbane Bldg. Co. v. Empire Steel Erectors, L.P., Civ. No. H-08-1707, 2010 WL 4791493 (Tex. App.—S.D. Houston, Nov. 16, 2010).
Cooper & Scully, P.C. 15
Accrual of Prejudgment InterestAccrual of Prejudgment Interest
�� Texas Finance Code 304.104Texas Finance Code 304.104
�� Accrues on amount of judgment during period Accrues on amount of judgment during period
beginning on the earlier of the 180beginning on the earlier of the 180thth day after day after
the date D receives written notice of claim or the date D receives written notice of claim or
the date suit is filed, and ending on the day the date suit is filed, and ending on the day
preceding the date the judgment is rendered.preceding the date the judgment is rendered.
�� Computed as simple interestComputed as simple interest
Cooper & Scully, P.C. 16
Accrual of Prejudgment InterestAccrual of Prejudgment Interest
�� ““ClaimClaim”” Under 304.104Under 304.104�� For purposes of calculating prejudgment interest, For purposes of calculating prejudgment interest,
““claimclaim”” is a demand for compensation or an assertion is a demand for compensation or an assertion of a right to be paid. of a right to be paid. MCN Energy Enters., Inc. v. MCN Energy Enters., Inc. v. OmagroOmagro de Colombia, L.D.C.de Colombia, L.D.C., 98 S.W.3d 766 (Tex. , 98 S.W.3d 766 (Tex. App.App.——Fort Worth 2003, pet. denied).Fort Worth 2003, pet. denied).
�� 180 days after UIM carrier receives written notice of 180 days after UIM carrier receives written notice of accident. accident. State Farm Mut. Auto Ins. Co. v. NorrisState Farm Mut. Auto Ins. Co. v. Norris, , 216 S.W.3d 819 (Tex. 2006).216 S.W.3d 819 (Tex. 2006).
�� But if tort liability disputed, from date tort liability But if tort liability disputed, from date tort liability established by judgment. established by judgment. Henson v. Southern Farm Henson v. Southern Farm Bureau, Bureau, 17 S.W.3d 652 (Tex. 2000).17 S.W.3d 652 (Tex. 2000).
Cooper & Scully, P.C. 17
Accrual of Prejudgment InterestAccrual of Prejudgment Interest
�� Negligence suit: Date original petition filed Negligence suit: Date original petition filed
against company, not date of amended against company, not date of amended
petition naming individual doing business petition naming individual doing business
under name of company.under name of company.
�� Hughes v. ThrashHughes v. Thrash, 832 S.W.2d 770 (Houston , 832 S.W.2d 770 (Houston
[1[1stst Dist.] 1992, no writ).Dist.] 1992, no writ).
�� Brownsville Pediatric AssBrownsville Pediatric Ass’’n v. Reyesn v. Reyes, 68 , 68
S.W.3d 184 (Tex. App.S.W.3d 184 (Tex. App.——Corpus Christi 2002, Corpus Christi 2002,
no writ).no writ).
Cooper & Scully, P.C. 18
Accrual of Prejudgment InterestAccrual of Prejudgment Interest
�� Prejudgment interest may not be assessed Prejudgment interest may not be assessed
or recovered on an award of future or recovered on an award of future
damages or punitive damages. damages or punitive damages.
�� Tex. Fin. Code 304.1045Tex. Fin. Code 304.1045
�� Tex. Civ. Prac & Rem. Code 41.007Tex. Civ. Prac & Rem. Code 41.007
�� Exceptions: Tolling Exceptions: Tolling
�� Tex. Fin. Code 304.105(a) & (b)Tex. Fin. Code 304.105(a) & (b)
Cooper & Scully, P.C. 19
Accrual of Prejudgment InterestAccrual of Prejudgment Interest
�� Not Recoverable when prohibited by Not Recoverable when prohibited by
statute or case law. statute or case law. Concord Oil Co. v. Concord Oil Co. v. Pennzoil Pennzoil ExplExpl. & Prod. Co.. & Prod. Co., 966 S.W.2d , 966 S.W.2d
451, 462 (Tex. 1998).451, 462 (Tex. 1998).
�� Statutory (punitive damages, future damages, Statutory (punitive damages, future damages,
DTPA treble damages)DTPA treble damages)
�� Case Law (AttorneyCase Law (Attorney’’s fees, interpleaded s fees, interpleaded
funds, prejudgment interest, or under both funds, prejudgment interest, or under both
statutory and common law)statutory and common law)
Cooper & Scully, P.C. 20
Tolling ProvisionsTolling Provisions
�� Sec.Sec. 304.105.304.105. EFFECT OF SETTLEMENT OFFER ON EFFECT OF SETTLEMENT OFFER ON ACCRUAL OF PREJUDGMENT INTEREST. (a) If judgment ACCRUAL OF PREJUDGMENT INTEREST. (a) If judgment for a claimant is equal to or less than the amount of a for a claimant is equal to or less than the amount of a settlement offer of the defendant, prejudgment interest settlement offer of the defendant, prejudgment interest does not accrue on the amount of the judgment during does not accrue on the amount of the judgment during the period that the offer may be accepted.the period that the offer may be accepted.
�� (b)(b) If judgment for a claimant is more than the amount If judgment for a claimant is more than the amount of a settlement offer of the defendant, prejudgment of a settlement offer of the defendant, prejudgment interest does not accrue on the amount of the interest does not accrue on the amount of the settlement offer during the period that the offer may be settlement offer during the period that the offer may be accepted.accepted.
�� Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999.eff. Sept. 1, 1999.
Cooper & Scully, P.C. 21
Tolling ProvisionsTolling Provisions
�� Sec.Sec. 304.106.304.106. SETTLEMENT OFFER SETTLEMENT OFFER
REQUIREMENTS TO PREVENT PREJUDGMENT REQUIREMENTS TO PREVENT PREJUDGMENT
INTEREST ACCRUAL. To prevent the accrual of INTEREST ACCRUAL. To prevent the accrual of
prejudgment interest under this subchapter, a prejudgment interest under this subchapter, a
settlement offer must be in writing and delivered settlement offer must be in writing and delivered
to the claimant or the claimant's attorney or to the claimant or the claimant's attorney or
representative.representative.
�� Amended by Acts 1999, 76th Leg., ch. 62, Sec. Amended by Acts 1999, 76th Leg., ch. 62, Sec.
7.18(a), eff. Sept. 1, 1999.7.18(a), eff. Sept. 1, 1999.
Cooper & Scully, P.C. 22
Tolling ProvisionsTolling Provisions
�� Sec.Sec. 304.107.304.107. VALUE OF SETTLEMENT OFFER VALUE OF SETTLEMENT OFFER
FOR COMPUTING PREJUDGMENT INTEREST. If FOR COMPUTING PREJUDGMENT INTEREST. If
a settlement offer does not provide for cash a settlement offer does not provide for cash
payment at the time of settlement, the amount payment at the time of settlement, the amount
of the settlement offer for the purpose of of the settlement offer for the purpose of
computing prejudgment interest is the cost or computing prejudgment interest is the cost or
fair market value of the settlement offer at the fair market value of the settlement offer at the
time it is made.time it is made.
�� Amended by Acts 1999, 76th Leg., ch. 62, Sec. Amended by Acts 1999, 76th Leg., ch. 62, Sec.
7.18(a), eff. Sept. 1, 1999.7.18(a), eff. Sept. 1, 1999.
Cooper & Scully, P.C. 23
PASSWORD:PASSWORD:
SCHOOLSCHOOL
Cooper & Scully, P.C. 24
Tolling of Prejudgment InterestTolling of Prejudgment Interest
1)1) Offer must be in writingOffer must be in writing
2)2) Offer must be delivered to claimant or Offer must be delivered to claimant or attorneyattorney
3)3) Offer should be outside mediationOffer should be outside mediation
4)4) Offer should be left open as long as Offer should be left open as long as possiblepossible
5)5) Rejection may terminate offer Rejection may terminate offer –– include include language that it remains open after it language that it remains open after it has been rejectedhas been rejected
Cooper & Scully, P.C. 25
Tolling of Prejudgment InterestTolling of Prejudgment Interest
�� JUDGMENT NOT MORE THAN OFFERJUDGMENT NOT MORE THAN OFFER--If If
the judgment for the claimant is less than the judgment for the claimant is less than
or equal to the amount offered as or equal to the amount offered as
settlement, prejudgment interest does not settlement, prejudgment interest does not
accrue at all during the period the offer accrue at all during the period the offer
could be accepted.could be accepted.
Cooper & Scully, P.C. 26
Tolling of Prejudgment InterestTolling of Prejudgment Interest
�� JUDGMENT MORE THAN OFFERJUDGMENT MORE THAN OFFER--If the If the
judgment for the claimant is greater than judgment for the claimant is greater than
the amount offered as settlement, the amount offered as settlement,
prejudgment interest accrues only on the prejudgment interest accrues only on the
portion of the judgment in excess of the portion of the judgment in excess of the
settlement offer during the period the settlement offer during the period the
offer could be accepted.offer could be accepted.
Cooper & Scully, P.C. 27
Tolling of Prejudgment InterestTolling of Prejudgment Interest
�� Tex. Fin. Code 304.108 allowed the courts Tex. Fin. Code 304.108 allowed the courts
to toll the accrual of prejudgment interest to toll the accrual of prejudgment interest
during periods of delay in trial caused by during periods of delay in trial caused by
either party. This section was repealed in either party. This section was repealed in
2003; Acts 2003, 782003; Acts 2003, 78thth Leg., R.S., ch 204, Leg., R.S., ch 204,
Sec 6.03, eff. Sept. 1, 2003.Sec 6.03, eff. Sept. 1, 2003.
�� This discretion is no longer provided to the This discretion is no longer provided to the
trial courts.trial courts.
Cooper & Scully, P.C. 28
Calculation of Prejudgment Interest Calculation of Prejudgment Interest
in Judgmentsin Judgments
�� Computed as Simple Interest, calculated Computed as Simple Interest, calculated
on principal amount:on principal amount:
�� Amount of damages found by TOF minus any Amount of damages found by TOF minus any
amounts on which prejudgment interest is amounts on which prejudgment interest is
prohibited by state or case law (exemplary prohibited by state or case law (exemplary
damages, future damages)damages, future damages)
�� Rate is the same as postRate is the same as post--judgment judgment
interest (Tex. Fin. Code 304.103)interest (Tex. Fin. Code 304.103)
Cooper & Scully, P.C. 29
Calculation of Prejudgment Interest Calculation of Prejudgment Interest
in Judgmentsin Judgments
�� Time of Accrual is Earlier of:Time of Accrual is Earlier of:�� (1) 180(1) 180thth day after Dday after D’’s receipt of written notice of s receipt of written notice of
claim orclaim or
�� (2) Date suit is filed(2) Date suit is filed
�� SettlementSettlement�� Credit for settlement must be deducted from the Credit for settlement must be deducted from the
judgment using the declining principal formula. judgment using the declining principal formula. Brainard v. Trinity Brainard v. Trinity UnivUniv’’ll Ins. Co.Ins. Co., 215 S.W.3d 809 , 215 S.W.3d 809 (Tex. 2006).(Tex. 2006).
�� Amount deducted according to when settlement Amount deducted according to when settlement made.made.
Cooper & Scully, P.C. 30
Calculation of Prejudgment Interest Calculation of Prejudgment Interest
in Judgmentsin Judgments
�� SettlementSettlement
�� Before PJI Accrues (Advance Payments)Before PJI Accrues (Advance Payments)
�� Reduce Past Damages by Settlement Amount and Reduce Past Damages by Settlement Amount and
then Add PJIthen Add PJI
�� After PJI Accrues After PJI Accrues
�� Apply first to reduce any PJI interest that has Apply first to reduce any PJI interest that has
accrued to date of settlement, and then to reduce accrued to date of settlement, and then to reduce
past damages, and then accrues on past damages past damages, and then accrues on past damages
remaining from date of settlement to day before remaining from date of settlement to day before
date of judgmentdate of judgment
Cooper & Scully, P.C. 31
Calculation of Prejudgment Interest Calculation of Prejudgment Interest
in Judgmentsin Judgments
�� TollingTolling�� Standstill Agreements: Could toll accrual of Standstill Agreements: Could toll accrual of
PJI while agreement in effect, unless PJI while agreement in effect, unless otherwise contractually provided. otherwise contractually provided. Johnson & Johnson & Higgins,Higgins, 962 S.W.2d at 531962 S.W.2d at 531
�� Settlement Offer: Can Toll while P decides Settlement Offer: Can Toll while P decides whether to accept Dwhether to accept D’’s offers offer�� Judg Judg ≤≤ offer: No accrual during period could offer: No accrual during period could
acceptaccept
�� Judg > offer: PJI only on portion in excess of Judg > offer: PJI only on portion in excess of settlement offer during period P could accept.settlement offer during period P could accept.
Cooper & Scully, P.C. 32
Effect of Reformation of JudgmentEffect of Reformation of Judgment
�� Court of Appeals Affirms and Orders Court of Appeals Affirms and Orders Reformation of the Judgment Reformation of the Judgment �� PJI Accrual ends on day before date of PJI Accrual ends on day before date of
original judgment.original judgment.�� See Cessna Aircraft Co. v. Aircraft Network, LLC,See Cessna Aircraft Co. v. Aircraft Network, LLC,
___ S.W.3d ___ (Tex. App.___ S.W.3d ___ (Tex. App.——Dallas May 27, 2011)Dallas May 27, 2011)
�� D.C. Hall Transport, Inc. v. HardD.C. Hall Transport, Inc. v. Hard, 355 S.W.2d 257 , 355 S.W.2d 257 (Tex. Civ. App.(Tex. Civ. App.——Fort Worth), writ refFort Worth), writ ref’’d n.r.e., 163 d n.r.e., 163 Tex. 504, 358 S.W.2d 117 (Tex. 1962)Tex. 504, 358 S.W.2d 117 (Tex. 1962)
�� Lewis v. HillLewis v. Hill, 429 S.W.2d 572 (Tex. Civ. App., 429 S.W.2d 572 (Tex. Civ. App.——Tyler 1968, no writ)Tyler 1968, no writ)
Cooper & Scully, P.C. 33
Impact of CapsImpact of Caps
�� Because PJI Accrues on Amount of Because PJI Accrues on Amount of
Judgment, Damages Must be Capped Judgment, Damages Must be Capped
Before PJI Can Be ComputedBefore PJI Can Be Computed
�� PJI Included within CPRC 74.301 and PJI Included within CPRC 74.301 and
74.303 Damages Limitations?74.303 Damages Limitations?
Cooper & Scully, P.C. 34
Coverage for Prejudgment Interest Coverage for Prejudgment Interest
-- CGLCGL�� Supplementary Payments Supplementary Payments –– Coverages A Coverages A
and Band B
1.1. We will pay with respect to any claim we investigate We will pay with respect to any claim we investigate
or settle, or any or settle, or any ““suitsuit”” against an insured we against an insured we
defend:defend:
* * ** * *
f.f. Prejudgment interest awarded against the insured on that Prejudgment interest awarded against the insured on that
part of the judgment we pay. If we make an offer to pay part of the judgment we pay. If we make an offer to pay
the applicable limit of insurance, we will not pay any the applicable limit of insurance, we will not pay any
prejudgment interest based on that period of time after the prejudgment interest based on that period of time after the
offer.offer.
Form CG 00 01 12 04Form CG 00 01 12 04
Cooper & Scully, P.C. 35
Coverage for Prejudgment Interest Coverage for Prejudgment Interest
Personal Personal -- AutoAuto�� Supplementary Payments Supplementary Payments ––
�� In addition to our limit of liability, we will pay In addition to our limit of liability, we will pay on behalf of an on behalf of an ““InsuredInsured””::
�� * * ** * *3.3. Interest accruing after a judgment is entered in Interest accruing after a judgment is entered in
any suit we defend. Our duty to pay interest any suit we defend. Our duty to pay interest ends when we offer to pay that part of the ends when we offer to pay that part of the judgment which does not exceed our limit of judgment which does not exceed our limit of liability for this coverage.liability for this coverage.
Form PP 00 01 06 98Form PP 00 01 06 98
Cooper & Scully, P.C. 36
Coverage for Prejudgment Interest Coverage for Prejudgment Interest
–– Business AutoBusiness Auto2.2. Coverage ExtensionsCoverage Extensions
�� a. Supplementary Payments a. Supplementary Payments ––We will pay for the We will pay for the ““insuredinsured””::
(6)(6) All interest on the full amount of any All interest on the full amount of any judgment that accrues after entry of the judgment that accrues after entry of the judgment in any judgment in any ““suitsuit”” against the against the ““insuredinsured””we defend, but our duty to pay interest ends we defend, but our duty to pay interest ends when we have paid, offered to pay or when we have paid, offered to pay or deposited in court the part of the judgment deposited in court the part of the judgment that is within our Limit of Insurance.that is within our Limit of Insurance.
Form CA 00 01 03 10Form CA 00 01 03 10
Cooper & Scully, P.C. 37
Coverage for Prejudgment Interest Coverage for Prejudgment Interest
-- HomeownersHomeowners
�� Incidental Liability CoveragesIncidental Liability Coverages
* * ** * *
�� 2.2.Claims and Defense Cost Claims and Defense Cost –– ““We pay for:We pay for:
* * ** * *
e.e. prejudgment interest awarded against an prejudgment interest awarded against an
““insuredinsured”” on that part of the judgment on that part of the judgment ““wewe”” pay. pay.
If If ““wewe”” offer to pay the offer to pay the ““limitlimit”” that applies, that applies, ““wewe””
will not will not apyapy any prejudgment interest based on any prejudgment interest based on
that period of time after the offer.that period of time after the offer.
Form HO 0003 01 06Form HO 0003 01 06
Cooper & Scully, P.C. 38
THE ENDTHE END
Recommended