The First Circuit held that the insurer was obligated to pay postjudgment interest pursuant to its policy until such time as policy limits were exhausted. Vazquez-Filippetti v. Cooperativa De Seguros Multiples De Puerto Rico, 2013 U.S. App. LEXIS 14251(1st Cir. July 15, 2013).
Cooperativa's insured was found liable for striking a pedestrian with his vehicle. Judgment was entered for the plaintiff in the amount of $6 million on March 22, 2005. Cooperativa did not appeal the judgment. On September 29, 2005, Cooperativa paid into the court $75,000, the remainder of its policy limit. The District Court denied the request for postjudgment interest on the full six million dollar judgment because it was untimely.
Cooperativa's policy provided it would pay interest accrued after a ruling on a claim defended. The duty to pay or defend ended when the liability limit was exhausted.
On appeal, the First Circuit held that Cooperativa was obligated to pay postjudgment interest. Further, the timeliness issues was inapplicable. The prevailing view was that insurers must pay postjudgment interest on the entire amount of the judgment against an insured, even though the policy limit covered only a portion of the judgment. The policy itself left no doubt that Cooperativa obligated itself to pay postjudgment interest on the entire judgment against its insureds, notwithstanding the policy's limit. Therefore, Cooperative was responsible for postjudgment interest on six million dollars.
Regarding the duration of the obligation to pay postjudgment interest, the policy language restricted it to the five-month period before Cooperativa deposited the policy limit. At this point, Cooperative had paid the corresponding part of a ruling and its duty to pay interest ended. So Cooperative was responsible for postjudgment interest for the period between March 22, 2005, the date of the entry of the judgment, and September 29, 2005, the date of the deposit of the policy limit.
