dissenting.
{¶ 33} I respectfully dissent. I agree with the analysis of the court of appeals below that the arbitrators lacked authority to award prejudgment interest. Arbitrators are assigned the task of deciding issues of liability and damages, whereas the issue of entitlement to prejudgment interest is a matter for the court to decide. In addition, I believe that the court of appeals correctly held that the total amount of damages and prejudgment interest is limited to the applicable policy limits.
{¶ 34} This court first recognized that prejudgment interest was recoverable on a claim for underinsured motorist (“UIM”) coverage in Landis v. Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 339, 695 N.E.2d 1140. The Landis court reasoned that a UIM claim was a contract claim “for the payment of money” that was “due and payable” based on an “instrument of writing.” Therefore, the court concluded that prejudgment interest was allowed pursuant to R.C. 1343.03(A). Id. at *367341-342, 695 N.E.2d 1140. However, the Landis court specifically held that the issue of prejudgment interest was a question for the trial court to determine. Id. at 342, 695 N.E.2d 1140. This court has held in other types of cases that prejudgment interest under R.C. 1343.03(C) likewise is a matter for the court to decide. See Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638, 658, 635 N.E.2d 331. Once a court decides to award prejudgment interest, the court then calculates the amount of the interest pursuant to R.C. 1343.03(A). Id. at 665, 635 N.E.2d 331. Consequently, I believe that case law supports the conclusion that it is best left to a court to decide if and when prejudgment interest should be awarded whether the award is pursuant to (A) or (C) of R.C. 1343.03.
{¶ 35} Arbitrators generally determine types of damages that are proven with more specificity, such as medical damages or loss of income. However, a court, not a panel of arbitrators, is best suited to decide upon an award of prejudgment interest under R.C. 1343.03(A). I am not convinced that the Federal Arbitration Act or case law based on collective bargaining agreements, upon which the majority’s opinion relies, necessarily dictates what arbitrators must do under Ohio contract law in an Ohio court. Therefore, I would find that the arbitration award should be vacated to the extent that it includes prejudgment interest, because the arbitrators exceeded their authority.
{¶ 36} I also dissent from the majority’s conclusion that an insurer is liable for an entire award of prejudgment interest combined with a damage award that exceeds the insured’s policy limits for UIM coverage. The majority contends that prejudgment interest is necessary to make the aggrieved party whole. That position, however, is inconsistent with the intent and purpose of UIM coverage. Underinsured motorist benefits are based on contract, not tort. And this court has repeatedly articulated that the purpose of underinsured and uninsured motorist coverage is to place an injured party in the same position that he or she would have been if the tortfeasor had been insured. Clark v. Scarpelli (2001), 91 Ohio St.3d 271, 275-276, 744 N.E.2d 719; Bartlett v. Nationwide Mut. Ins. Co. (1973), 33 Ohio St.2d 50, 52, 62 O.O.2d 406, 294 N.E.2d 665.
{¶ 37} The amount of under- or uninsured motorist coverage that the insured contracted for is a finite amount set forth in the policy. Although this may be inadequate to make the aggrieved party whole, it is nevertheless all that is available by contract to put the injured party in the same position that he or she would be if the tortfeasor had been insured. With no limitation upon the amount of prejudgment interest and damages, the majority now places the insured in a better position than he or she would have been had the tortfeasor been insured. To allow contract recovery in an amount that exceeds the contract amount is contrary to well-established law.
Pratt, Singer & Thomas Co., L.P.A., Gregory K. Pratt and Martina M. Dillon, for appellants. Jack C. McGowan & Associates and Jack C. McGowan, for appellee.{¶ 38} Finally, an implicit result of the majority’s opinion is the tacit approval of an award of prejudgment interest accruing on a UIM claim from the date of the accident. The Landis court recognized prejudgment interest on a UIM claim under R.C. 1343.03(A) because the benefits were due and payable upon an instrument of writing. I agree with the court of appeals that the accrual date for prejudgment interest on a UIM claim can be no earlier than the date the insured made a claim under the policy after having exhausted the tortfeasor’s liability coverage. It is illogical to award interest beginning on the date of the accident when no UIM claim then existed.
{¶ 39} As the court of appeals reasoned, an accrual date based on the date the insured made a UIM claim, or a later event, comports with Landis. This takes into account the time value of the money being held by the insurer between the time the claim is made and its eventual payment. (There can be no money owed on the date of the accident until it is known that the tortfeasor’s policy is exhausted.) And contrary to the majority’s statement that an insurer would have little incentive to settle a meritorious claim, this would encourage the parties to settle the claim.
{¶ 40} Therefore, for the foregoing reasons, I respectfully dissent.