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Travelers Property Casualty Co. of America v. Jet Midwest Technik Inc.

United States District Court, W.D. Missouri, St. Joseph Division

June 7, 2019




         On February 6, 2019, the jury returned a verdict in favor of Plaintiff in the amount of $416, 714.00. Doc. #140. On February 12, 2019, Plaintiff filed a motion for award of statutory prejudgment and postjudgment interest. Doc. #141. For the reasons stated below, Plaintiff's motion is granted.


         Plaintiff argues it is entitled to prejudgment interest at nine percent per annum from the premium due date, March 27, 2014. Docs. #141, 142. State law governs the issue of prejudgment interest in diversity actions. See Reliance Ins. Co. v. Chitwood, 433 F.3d 660, 665-66 (8th Cir. 2006). “Creditors shall be allowed to receive interest at the rate of nine percent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts…after they become due and demand of payment is made….” Mo. Rev. Stat. § 408.020.[1] Section 408.020 applies to insurance policies. Schultz v. Queen Ins. Co., 399 S.W.2d 230, 236 (Mo.Ct.App. 1965). “Interest has traditionally been used to compensate for the use or loss of use of money to which a person is entitled.” Travelers Prop. Cas. Ins. Co. of Am. v. Nat'l Union Ins. Co. of Pittsburgh, 735 F.3d 993, 1004-05 (8th Cir. 2013) (quoting Catron v. Columbia Mut. Ins. Co., 723 S.W.2d 5, 7 (Mo. banc 1987)). Missouri courts award prejudgment interest if three elements are satisfied: (1) the expenses must be due and payable; (2) the claim must be liquidated or the amount of the claim must be reasonably ascertainable; and (3) the obligee must make a demand on the obligor for the amount due. Barkley, Inc. v. Gabriel Bros., Inc., 829 F.3d 1030, 1039 (8th Cir. 2016) (quoting Jablonski v. Barton Mut. Ins. Co., 291 S.W.3d 345, 350 (Mo.Ct.App. 2010)).

         A. Due and Payable

         Prejudgment interest can only be awarded on “moneys after they become due and payable.” Mo. Rev. Stat. § 408.020. Defendant argues no moneys were “due” under the terms of the insurance policy until resolution of the parties' disputes regarding interpretation and application of the residual market rules. Defendant claims it had the right to dispute Plaintiff's bill and had no obligation to pay disputed amounts.

         “On a breach of a contract claim, interest ordinarily runs from the date of the breach or the time when payment was due under the contract.” Travelers Commercial Cas. Co. v. Vac-It-All Servs., Inc., 451 S.W.3d 301, 313 (Mo.Ct.App. 2014) (citation omitted). Here, the jury found Defendant breached the insurance contract by failing to pay the additional premium. The parties agree Plaintiff demanded the additional premium following the final audit by way of Plaintiff's March 7, 2014 invoice, which demanded Defendant pay the additional premium by March 27, 2014. Doc. #141-1. Therefore, the additional premium became due and payable on March 27, 2014.

         B. Liquidated or Reasonably Ascertainable

          For an award of prejudgment interest, there must be a liquidated claim or the amount of the claim must be reasonably ascertainable. McKinney v. State Farm Mut. Ins., 123 S.W.3d 242, 250 (Mo.Ct.App. 2003). “A liquidated claim is one which is fixed and determined or readily ascertainable by computation or a recognized standard.” Id. (quoting Schnucks Carrollton Corp. v. Bridgeton Health & Fitness, Inc., 884 S.W.2d 733, 740 (Mo.Ct.App. 1994)). The denial of prejudgment interest for unliquidated claims “is based, generally, on the idea that where the person liable does not know the amount he owes he should not be considered in default because of failure to pay.” Fohn v. Title Ins. Corp. of St. Louis, 529 S.W.2d 1, 5 (Mo. banc 1975). Missouri courts have held damages are not liquidated when the method used to calculate damages was genuinely disputed. See Fohn, 529 S.W.2d at 4, 5; see also Ritter Landscaping, Inc. v. Meeks, 950 S.W.2d 495, 497 (Mo.Ct.App. 1997). Missouri courts have also found damages to be unliquidated where the resolution of a claim or defense is necessary before damages can be calculated. See Children Int'l v. Ammon Painting Co., 215 S.W.3d 194, 205 (Mo.Ct.App. 2006).

         But Missouri courts have granted prejudgment interest, despite a dispute over the measure of damages, where the alternative measures offered by the defendant were not supported by evidence at trial. McNeil v. City of Kan. City, 459 S.W.3d 509, 517 (Mo.Ct.App. 2015) (affirming the decision to grant prejudgment interest when the amount of damages was disputed but the parties agreed on the proper method for calculating damages); Comens v. SSM St. Charles Clinic Med. Grp., Inc., 335 S.W.3d 76, 81-82 (Mo.Ct.App. 2011) (affirming the decision to grant prejudgment interest because the defendant's suggested alternative measures to calculate damages were not supported by evidence); Watters v. Travel Guard Int'l, 136 S.W.3d 100, 104-05, 111 (Mo.Ct.App. 2004) (finding prejudgment interest was properly granted where the parties disputed liability but the amount of damages was “readily determinable and ascertainable by simple computation”).

         Defendant argues the claim was unliquidated because it disputed Plaintiff's claim and method of calculating the premium. According to Defendant, resolution of multiple issues regarding Missouri law as well as interpretation and application of the residual market rules was necessary before liability or damages could be ascertained. Defendant claims that through the time of trial, it did not know the amount it owed, if anything. Plaintiff opposes this argument, claiming its March 7, 2014 invoice provided the exact amount Defendant owed.

         “The mere fact that a party denies liability or defends a claim against [it], or even the existence of a bona fide dispute as to the amount of the indebtedness, does not preclude recovery of interest.” Comens, 335 S.W.3d at 82 (citations omitted). “To hold otherwise would allow the opposing party to accrue pecuniary benefit unfairly by the simple expedient of producing conflicting estimates of value.” Id. (citations omitted). Further, “[a]n exact calculation of damages need not be presented in order for the claim to be considered liquidated.” Macheca Transp. Co. v. Philadelphia Indem. Ins. Co., 737 F.3d 1188, 1197 (8th Cir. 2013) (quoting Comens, 335 S.W.3d at 82). “Damages may still be ascertainable, even in the face of a dispute over monetary value or the parties' experts compute different estimates of the loss.” Id. (quoting Comens, 335 S.W.3d at 82).

         Here, Defendant did not provide evidence supporting a different calculation of the loss. At trial, both parties agreed the proper measure of damages was the number of payroll dollars multiplied by the applicable rate, which is determined by the corresponding classification code. From March 2014 through the jury's verdict in February 2019, Plaintiff consistently maintained how much additional premium Defendant owed, and the evidence presented at trial supported Plaintiff's calculation. Under the circumstances, the amount of premium Defendant owed was readily ascertainable by recognized standards, and therefore, Plaintiff has satisfied the second element for an award of prejudgment interest. See Jablonski, 291 S.W.3d at 350-51.

         C. ...

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