Procedural Posture

Procedural Posture

May 8, 2021

Appellants, insured corporations, sought review of a judgment of the Superior Court of Los Angeles County (California), which denied them prejudgment interest under Cal. Civ. Code § 3287(a) in their suit against appellee insurer for damages from fire and other losses due to business interruptions.

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Overview

Appellants, insured corporations, filed a claim for damages that occurred during riots with appellee insurer. The claims were for loss under their fire policy and for loss under their business interruption policy. Appellee offered to settle their claims at a substantially lower rate and appellants brought suit. After a jury trial, appellants were awarded damages for breach of their insurance contract but denied prejudgment interest under Cal. Civ. Code § 3287(a). On review sought by appellants, the court affirmed the denial of prejudgment interest for the losses claimed under the business interruption policy because the damages were uncertain, and therefore, did not qualify under § 3287(a). The court further held that the trial court had not abused its discretion in denying interest. However, the court reversed the denial of interest for the losses under the fire policy, finding that the damages were certain.

Outcome

The court reversed the trial court’s judgment denying interest to appellants, insured corporations, in their suit for damages against appellee insured under their fire policy because the damages incurred were certain. The court affirmed the trial court’s denial of interest on appellants’ claim for losses from business interruptions because those losses were uncertain.

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