§17.18 - Prejudgment Interest

• Jurisdiction: Washington

§17.18 Prejudgment Interest

Whether prejudgment interest will be allowed in an environmental insurance case is discussed below.

(1) Case law

An issue that can arise at the post-judgment stage is whether prejudgment interest must be paid. Under Washington law, prejudgment interest can only be assessed on a liquidated sum. It cannot be assessed on an unliquidated sum. A sum is unliquidated when a court must exercise discretion in setting the exact amount. Hanson v. Rothaus, 107 Wn.2d 468, 472, 730 P.2d 662 (1986). Thus, a claim for defense costs in a coverage action cannot be subject to prejudgment interest, because a determination of the amount depends upon a discretionary decision by the court. Puget Sound Power & Light Co. v. Aetna Cas. & Sur. Co., No. C92 0119C (Order on Motions at 3) (W.D. Wash. May 10, 1994) (Coughenour, J.) (no award of prejudgment interest on claim for defense costs), affd on other grounds sub nom. Puget Sound Power & Light Co. v. Great Am. Ins. Co., 51 F.3d 282, No. 94-35072, 1995 WL 150588 (9th Cir. Apr. 5, 1995) (unpublished table decision). This is the rule even when an insurer is held to have breached a defense obligation. See Greer v. Nw. Natl Ins. Co., 109 Wn.2d 191, 202-03, 743 P.2d 1244 (1987); Lawrence v. Nw. Cas. Co., 50 Wn.2d 282, 311 P.2d 670 (1957).

In Weyerhaeuser Co. v. Commercial Union Ins. Co., 142...