USAA v. Parker

¶1dissenting.

¶2Although the majority opinion appears to involve little more than the interpretation of a statute, which can be amended by future legislative action, and the imposition of a slightly higher rate of prejudgment interest on certain damage awards against insurance companies, I believe its reasoning to be flawed and its ramifications likely to be more problematic than appears at first blush. I therefore respectfully dissent and briefly note some of my concerns.

¶3Through a series of logical equivalences, the majority purports to demonstrate that an award against an insurer for underinsured motorist coverage is actually an award of damages for personal injuries. It therefore concludes that prejudgment interest must be calculated according to the statutory provisions governing "actions brought to recover damages for personal injuries" rather than the statutory provisions for interest on moneys due but unpaid before judgment enters. While I object to the majority's characterization of the key statutory language and our prior constructions of it in a number of regards, I think the force of the majority's argument is primarily undercut by its use of the term "damages" to mean different things, at different times.

¶4"Damages" is usually used to denote an award of compensation for loss or injury, but on occasion it may be used less precisely to refer to the "damage" or injury itself.1 When section 10-4-609, C.R.S. (2008), de-seribes the obligation of insurance companies to make available uninsured or underinsured motorist coverage for bodily injury in terms of the "amount of damages sustained," it clearly uses the term in the latter sense. By contrast, when section 13-21-101, C.R.S. (2008), refers to "an action brought to recover damages for personal injuries sustained by any person," it just as clearly intends the former.

¶5Section 10-4-609 defines the particular kind of injuries, or damage, for which insurers must make underinsured motorist coverage available. Even then, the statute does not impose a duty on insurers to provide coverage for bodily injury caused by a tort-feasor but only to provide coverage for that bodily injury for which the tortfeasor has not himself provided liability coverage. Unlike liability coverage, underinsured motorist coverage does not make the insurer vicariously liable for bodily injury caused by its insured; it simply obligates the insurer to cover the cost of injuries suffered by its insured for which the liable driver has failed to provide coverage. Section 10-4-609 uses the term "damages," therefore, in reference to the insured party's injuries sustained at the hands of an uninsured or underinsured tortfeasor.

¶6By contrast, section 18-21-101 uses the term to describe the particular kind of legal actions to which its formulae for calculating interest apply. The statute itself indicates that its special interest formulae apply only in actions seeking damage awards for injuries caused by tort, not for any action seeking a recovery that is in some way related to or measured by the amount of damage caused by tortious conduct. On its face, this does not seem to be a particularly debatable proposition, and in the past we have simply characterized the statute as applying to "personal injury money judgments." See Rodriguez v. Schutt, 914 P.2d 921 (Colo.1996). The statute is directed at personal injury tort actions and cannot reasonably be expanded to include actions for breach of contract, whenever the contract obligates the defendant to insure the plaintiff against injury for which his tortfeasor has not adequately provided liability coverage.

¶7*362Nor do I believe our holding in Allstate Insurance Co. v. Starke, 797 P.2d 14 (Colo.1990), suggests (much less requires) a different interpretation. There we determined that an insurance contract providing lability coverage for bodily injury caused to someone else by the insurer's insured should be construed to include prejudgment interest on personal injury damages, for which the insured is also liable by statute. Rather than characterizing prejudgment interest as an element of, or included within, personal injury damages, we carefully characterized prejudgment interest as "a form of damages," which "arises out of bodily injury and therefore is comprehended within the bodily injury coverage of the policy and subject to its limit." Id. at 20-21. If our holding there could be considered applicable to underin-sured motorist coverage at all, the analogy would be that the contracted-for coverage must comprehend any uninsured prejudgment interest for which the tortfeasor would be Hable, along with the uninsured personal injury damages for which he is liable. Allstate implies absolutely nothing about interest on a money judgment against an insurer for breaching its insurance contract.

¶8Finally I must briefly comment on the references by both the trial court and majority to the "plain language" of section 13-21-101, and the majority's approval of the trial court's order granting prejudgment interest "from the date of the accident." Probably the only thing about the language of this statute that might be considered plain or clear is its self-limitation to actions for personal injury money judgments. If the provisions of the statute, as originally adopted by the legislature, governing the time period for which interest should be calculated (and over which it should be compounded), were not sufficiently confusing, the current version of the statute, following the severance of some words and the addition of others by this court, is facially indecipherable.2 See Rodriguez, 914 P.2d at 929; see also Sperry v. Field, 186 P.3d 133 (Colo.App.2008).

¶9As we noted in Rodrigues, the legislature's 1982 rewrite of the statute removed any differences between the applicable rates of prejudgment and postjudgment interest on personal injury judgments altogether. See Act of March 25, 1982, ch. 89, 1982 Colo. Laws 227. Although this court reestablished the distinction to overcome certain equal protection concerns, and simultaneously made clear that the rate of nine percent per annum would apply to prejudgment interest on all (and postjudgment interest on unappealed) personal injury money judgments, it left unclear the period for which such interest should be ordered. On its face, section 183-21-101(1) permits a plaintiff (after 1979) to claim, in his complaint, interest from the date the action accrues, but orders calculation of interest from the date of accrual only on appealed judgments, and only then at a market rate based on the existing discount rate. For other personal injury actions filed on or after July 1, 1975, the statutory language orders calculation at a rate of nine percent per annum, at least arguably from the date the action is filed, with annual compounding similarly computed from that date.

¶10While un-excised language requiring post-jadgment interest to be calculated "from the date the action accrued" and prejudgment interest to be calculated "to the date of satisfying the judgment" cannot possibly be squared with our holding in Schutt, and appears to have been left solely through inadvertence, see Sperry, 186 P.8d at 140, even allowing for this mistake, the redacted statute arguably continues to provide for an order of prejudgment interest for actions filed on or after July 1, 1975, at a nine percent interest rate calculated from the date the action is filed. The majority's approval of the trial court's calculation of interest "from the date of the accident" simply reflects the fact that a separate challenge to the period of calculation was not expressly mounted. As the majority makes clear, its opinion does not reflect any determination that calculation of interest from that date is ordered or even sanctioned by the statute.

¶11*363I note one other (perhaps unintended but nevertheless inexorable) consequence of the majority's decision to categorize actions to recover UM/UIM coverage as "actions brought to recover damages for personal injuries." - Although prejudgment interest aust therefore be calculated at nine percent per annum, rather than at the eight percent rate prescribed for other obligations, see § 512-102, C.R.S. (2008), postjudgment interest must similarly be calculated according to the statutory provisions governing "actions brought to recover damages for personal injuries." Unlike postjudgment interest on other kinds of judgments, which also varies with the discount rate but is not permitted under any circumstances to fall below eight percent, see §§ 5-12-102(4) and -106(2)(b), we expressly held in Schutt that section 13-21-101 does not establish a floor on the interest rate applicable to personal injury money judgments. 914 P.2d at 924.

¶12I do not, of course, suggest sleight of hand by the majority, but only its failure to note (and perhaps even to notice) the subtle, but I think meaningful, differences in its usage of the term "damages." Although the majority's interpretation may work to the advantage of the insured in this particular case, where the judgment has already been paid, I do not believe that will always or even usually be the case. In fact, the policy justifications offered in support of our statutory scheme appear to reflect the realities so imperfectly that only a legislative fix seems capable of returning the assessment of pre and postjudgment interest to a rational footing.

¶13Because I disagree, however, with the majority's construction of the applicable statutes in this case, I respectfully dissent.