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Moholland v. Empire Fire & Marine Ins., corrected 3-7-00

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MAINE SUPREME JUDICIAL COURT						Reporter of Decisions
Decision:2000 ME   26 
Docket:Was-99-295
Submitted
on Briefs:November 17, 1999
Decided:	February 11, 2000


Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.

WILLIAM MOHOLLAND

v.

EMPIRE FIRE & MARINE INSURANCE CO.

WATHEN, C.J.


	[¶1]  William Moholland appeals from a judgment entered in Superior
Court (Washington County, Mead, J.) in an action against his underinsured
motorist insurance carrier, Empire Fire & Marine Insurance Co. (Empire).
Although he obtained a judgment against Empire, Moholland contends that
the court erred when it refused to award him costs, prejudgment interest,
and post-judgment interest on the ground that Empire's total exposure
could not exceed the liability limits in his policy.  We agree that Moholland
is entitled to costs and post-judgment interest and vacate that part of the
judgment.
	[¶2]  The facts in this case are undisputed and may be summarized as
follows: In 1992, Moholland was involved in an automobile accident with
Joyce Garland.  Moholland received payment from Garland's insurer in the
amount of $20,000; this money represented the limits of her liability
insurance coverage. Empire was Moholland's insurer and his policy
contained an underinsured motorist endorsement.  Moholland sent a notice
of claim to Empire shortly after the accident.  Empire refused to honor the
claim, and Moholland instituted this action.  
	[¶3]  The parties stipulated before trial that Moholland was not
negligent in the accident.  Although the jury verdict awarded Moholland
$45,000 in damages, the court entered judgment for Moholland in the
amount of $20,000, representing the difference between Moholland's
underinsured policy limits{1} and the settlement with Garland.  Moholland
submitted a bill of costs{2} and filed a motion approximately two weeks later
to alter or amend the judgment to include costs and interest.  The court
denied this motion and the bill of costs ruling that Empire's total exposure
could not exceed its policy limits.  Moholland appeals from this judgment. 
	[¶4]  Moholland first argues that he is entitled to prejudgment
interest{3} even though such interest would exceed the policy limitations.  In
Trask v. Automobile Ins. Co., 1999 ME 94, 736 A.2d 237, decided during
the pendency of this appeal, we reaffirmed our prior decision in Simpson v.
Hanover Insurance Co., 588 A.2d 1182 (Me. 1991) and held that
prejudgment interest is a species of compensatory damages and is therefore
governed by policy language limiting an insurer's exposure for damages.  See
id., ¶ 8, 736 A.2d at 239.  Moholland's underinsured motorist policy
specifically limits Empire's exposure for damages.{4}  Prejudgment interest is
therefore unavailable because its grant would exceed the contractual limits
on damages found in Moholland's policy.  	[¶5]  On the other hand, the
parties do not dispute that Trask now allows the court to award costs to
Moholland irrespective of the policy limits.  Because, as we held in Trask,
costs are "not a form of compensatory damages," they are not subject to the
policy's contractual limitations.  See id. ¶ 13, 736 A.2d at 240.  Costs should
therefore be awarded to Moholland in conformity with Trask.
	[¶6]  Moholland's request for an award of post-judgment interest{5}
presents an issue of first impression in Maine.{6}  Nonetheless, Trask sets
forth the analytical framework for deciding this issue.  The contractual
language involved in both Trask and the present case limits liability for
damages.  If post-judgment interest is a species of compensatory damages, it
would be governed by the policy limits on liability.  Compensatory damages
are those which "compensate an injured person for loss, detriment, or
injury . . . ."  Id.  ¶ 13, 736 A.2d at 240.  Prejudgment interest falls within
this definition because it compensates the insured for the delay and expense
that occurs when the insurance company litigates a meritorious claim. 
	[¶7]  Post-judgment interest, on the other hand, does not compensate
the insured for additional damage arising from delay in litigation.  Litigation
has concluded and the court has entered judgment in favor of the insured. 
The nonprevailing party is not free to flout that judgment.  Post-judgment
interest is an enforcement tool to ensure that, once litigants have
successfully invoked the power of the courts, the award of just compensation
will not be diminished by delay in payment.
	[¶8]  Finally, the parties also disagree as to the proper remedy on
remand.  Moholland argues that the court has already decided the issue of
costs and interest, and that Empire's failure to cross-appeal necessarily
requires us to modify the judgment to award him the full amount of his bill
of costs.  Empire argues in turn that the court did not decide which costs
and interest to award and requests that the case be remanded for this
determination.{7}  
	[¶9]  The court in the present case stated that if costs were allowable
beyond the policy limits, it "would have been otherwise inclined to approve
costs as presented in the Plaintiff's Bill of Costs (and award appropriate
interest on the Judgment) . . . ."  Although we agree that if this language
indicated a ruling in the alternative, Empire would be required to file a
cross-appeal to challenge that ruling, see Bourgoin v. J. P. Levesque & Sons,
1999 ME 21, ¶ 8, 726 A.2d 201, 203, the court's language, considered in
context, does not reflect a ruling in the alternative.{8}  The amount of costs
and post-judgment interest was not decided and remains for detailed
consideration.
	The entry is:
The judgment denying costs and post-judgment
interest is vacated.  Remanded to the Superior Court
for further proceedings consistent with this opinion.

Attorney for plaintiff:	

Arthur J. Greif, Esq.	
Gilbert & Greif	
P O Box 2339	
Bangor, ME 04402-2339	

Attorney for defendant:

Steven J. Mogul, Esq.
Gross, Minsky, Mogul & Singal, P.A.
P O Box 917
Bangor, ME 04402-0917