Kosarko v. Padula

960 N.E.2d 810, 2011 Ind. App. LEXIS 1978, 2011 WL 6849674

• Court: Indiana Court of Appeals
• Decided: December 30, 2011
• Docket: 45A03-1012-CT-668
• Status: Published

Opinions

OPINION

BARTEAU, Senior Judge.

STATEMENT OF THE CASE

Plaintiff-Appellant Margaret Kosarko appeals the trial court’s denial of her motion for prejudgment interest. We reverse and remand.

ISSUE

Kosarko raises one issue, which we restate as: whether the trial court abused its discretion by denying her motion.

FACTS AND PROCEDURAL HISTORY

Kosarko and Daniel L. Herndobler were involved in an auto accident. On February 17, 2007, Kosarko sued Herndobler for injuries arising out of the accident. Hern-dobler died while the case was pending, and William A. Padula, in his capacity as administrator of Herndobler’s estate, was substituted as a defendant.

On March 18, 2008, Kosarko served Pa-dula with a settlement offer in the amount of $100,000, payable within sixty (60) days. Padula did not accept the offer. The case was presented to a jury, and the jury returned a verdict in favor of Kosarko in the amount of $210,000.

Subsequently, Kosarko filed a motion for prejudgment interest. After a hearing, the trial court denied Kosarko’s motion, concluding, “[Kosarko’s] damages, as determined by the jury in this case, were not ascertainable within a time frame that justifies granting [Kosarko’s] motion for prejudgment interest.” Appellant’s App. p. 12. This appeal followed.

DISCUSSION AND DECISION

A trial court may award prejudgment interest as part of a judgment in “any civil action arising out of tortious conduct.” Ind.Code § 84-51-4-1 (1998). The period during which prejudgment interest accrues may not exceed forty-eight months. Ind.Code § 34-51N-8 (1998). Prejudgment interest is not permitted if:

(1)within one (1) year after a claim is filed in the court, or any longer period determined by the court to be necessary upon a showing of good cause, the party who filed the claim fails to make a written offer of settlement to the party or parties against whom the claim is filed;

(2) the terms of the offer fail to provide for payment of the settlement offer within sixty (60) days after the offer is accepted; or

(3) the amount of the offer exceeds one and one-third (1 ½) of the amount of the judgment awarded.

Ind.Code § 34-51-4-6 (1998). The purpose of these statutes is to encourage settlement and to compensate the plaintiff for the lost time value of money. Hupfer v. Miller, 890 N.E.2d 7, 9 (Ind.Ct.App.2008). Prejudgment interest is recoverable not as interest but as additional damages to accomplish full compensation. Wayne Twp. v. Lutheran Hosp. of Fort Wayne, Inc., 590 N.E.2d 1130, 1134 (Ind.Ct.App.1992), trans. denied.

When reviewing a ruling regarding prejudgment interest, we consider whether the ruling was an abuse of the trial court’s discretion. Johnson v. Eldridge, 799 N.E.2d 29, 33 (Ind.Ct.App.2003), trans. denied. The decision to award prejudgment interest rests on a factual determination, and this Court may only consider the evidence most favorable to the judgment. Id. An abuse of discretion occurs when the trial court’s decision is clearly against the logic and effect of the facts and circumstances before the court, or if the court has misinterpreted the law. Id.

Here, Kosarko argues that the trial court abused its discretion by concluding that she was not entitled to prejudgment interest because her damages were not ascertainable within a set time frame. Prejudgment interest is allowable when the damages are capable of being determined by reference to some known standard, such as fair market value. Simon Prop. Group, L.P. v. Brandt Const, Inc., 880 N.E.2d 981, 993 (Ind.Ct.App.2005), trans. denied.1

In this case, on March 18, 2008, Kosarko tendered a qualified settlement offer to Padula, offering to settle for $100,000, payable within sixty days. In September 2008, Kosarko asserted in a filing that her medical expenses were $31,410.32. On March 25, 2009, the day before Padula took the deposition of Ko-sarko’s doctor, Kosarko turned over to Pa-dula new medical bills and asserted that her medical expenses now totaled $72,733.58. The case was tried to a jury on March 24, 2010.

We find no dispute as to the amount of Kosarko’s medical bills. Kosar-ko provided an accounting of her health care expenditures at all times during the case. As the trial court noted, Kosarko’s medical bills increased as the case progressed. Nevertheless, a year elapsed from March 2009, when Kosarko notified Padula of the biggest increase in her medical bills, and the beginning of the trial in March 2010. Thus, Padula had ample opportunity to evaluate the known dollar cost of the dispute and consider settlement. There is no indication in the record before us that Kosarko’s increased medical expenses were unnecessary, fraudulent, or unrelated to the automobile accident. There is also no evidence that Kosarko unduly delayed the surgery that caused the largest increase in her medical costs. Under such circumstances, “the defendant and not the plaintiff should bear the cost of the time value of money in the intervening period if the ultimate result is within the parameters set by the legislature.” Cahoon v. Cummings, 734 N.E.2d 535, 547 (Ind.2000). The trial court abused its discretion by denying Kosarko’s motion for prejudgment interest. Consequently, Ko-sarko is entitled to prejudgment interest in the amount of $79,627.40, which she requested in her motion.

CONCLUSION

For the reasons stated above, we reverse the judgment of the trial court and remand for further proceedings consistent with this opinion.

Reversed and remanded.

BAKER, J., concurs. MAY, J., dissenting with separate opinion.

1 . This standard has been applied in Indiana for decades. See N.Y., Chi. & St. Louis Rwy. Co. v. Roper, 176 Ind. 497, 507, 96 N.E. 468, 472 (Ind.1911) (stating, "The true test to be applied as to whether interest' should be allowed before judgment ... is ... whether the injury and consequent damages are complete, and must be ascertained as of a particular time and in accordance with fixed rules of evidence and known • standards of value"). Kosarko argues that the common law requirement that damages must be determinable by reference to a known standard ceased to apply to tort cases when Indiana Code section 34-51-4-1 et seq. was promulgated. It is unnecessary to address this argument due to the manner in which we have resolved this appeal.