Munoz v. American Family Mutual Insurance Co

Excerpt

Prejudgment Interest under CRS § 13-21-101(1). Munoz was injured in a collision with an uninsured motorist (UM). Munoz opened a UM claim with his insurer, American Family Mutual Insurance Co. (American Family). American Family made settlement offers to Munoz but maintained it was not required to pay prejudgment interest because it was only required to do so after a judgment had been entered by a court. Munoz accepted American Family's final offer, understanding that it did not include interest. Munoz then sued American Family and the UM. Munoz moved under CRCP 56(h) for a determination whether American Family was required to include prejudgment interest as part of its UM claim settlement. The trial court ruled, as a matter of law, that the insured is entitled to such interest only when a judgment has been entered and interest is awarded as a component of damages assessed by the jury's verdict or the court. On appeal, Munoz argued that the trial court erred because prejudgment interest is a necessary element of compensatory damages that makes an injured party whole. American Family countered that the plain language of CRS § 13-21-101 states that prejudgment interest can only be awarded after a judgment, based on a damages award determined by a trier of fact, has been entered. The Court of Appeals determined the plain language of the statute requires, prior to prejudgment interest being awarded, that (1) an action must be brought (2) the plaintiff must claim damages in the complaint (3) there must be a finding of damages by a jury or the court and (4) judgment is entered. The judgment was affirmed.