90 Cal.App.5th 1281
Cal. Ct. App.2023Background
- Glassman witnessed her mother killed in a 2015 vehicle collision; she suffered severe PTSD and sought UIM (underinsured motorist) benefits under a Safeco umbrella policy with $1,000,000 excess limits.
- Glassman obtained $255,000 from her auto policy and $250,000 from the tortfeasor; she demanded the umbrella policy limits by arbitration and, before arbitration, served a CCP §998 offer for $999,999.99 on Feb. 12, 2020 (not accepted).
- Arbitration (Jan. 2021) resulted in an award finding Glassman’s recoverable damages exceeded the threshold needed to trigger the $1,000,000 umbrella limits; the arbitrator did not quantify total damages but concluded special damages and other items exceeded the policy threshold.
- Glassman petitioned to confirm the award and sought prejudgment interest under Civ. Code §3287(a) from the date of her §998 offer; the trial court confirmed the award but denied prejudgment interest, concluding damages were not certain or capable of being made certain as of the §998 offer.
- On appeal Glassman argued (1) a prevailing §998 policy‑limits offer in a UIM arbitration liquidates the insured’s claim for §3287(a) purposes and (2) on this record Safeco knew or could calculate that Glassman’s special damages exceeded policy limits as of the offer. The Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §3287(a) and CCP §998, read together, automatically convert a prevailing §998 offer in a UIM arbitration into a liquidated claim that mandates prejudgment interest from the offer date | Glassman: a prevailing policy‑limit §998 offer liquidates the UIM claim for §3287(a) so prejudgment interest runs from the offer date | Safeco: §3287(a) does not incorporate CCP §998; §998 is a cost‑shifting settlement device and cannot by itself create a liquidated claim under §3287(a) | Rejected. The statutes have different purposes and no textual basis ties §3287(a) to §998; §998 does not automatically liquidate a claim for §3287(a) purposes. |
| Whether Glassman’s damages were certain or capable of being made certain as of the §998 offer date so that §3287(a) interest is mandatory | Glassman: special (economic) damages exceeded the umbrella limits by the offer date and Safeco had sufficient information (including Safeco’s IME) to calculate that amount | Safeco: the record lacks proof it knew or could compute the required amount at the offer date; general damages (emotional distress) were disputed and not liquidated | Held for Safeco. On the record before the trial court there was no evidence Safeco actually knew or could have reasonably calculated the amount owed as of the offer date; trial court’s denial of §3287(a) interest from the offer date affirmed. |
| Whether Glassman may recover §3287(a) interest from the arbitration award date (alternative theory) | Glassman (on appeal): if not from the offer date, interest could run from the arbitrator’s award | Safeco: theory was not pursued below and is forfeited; trial court had no opportunity to rule on it | Held: Forfeited. Glassman did not seek interest from the award date in the trial court and may not raise that new theory for the first time on appeal. |
Key Cases Cited
- Pilimai v. Farmers Ins. Exchange, 39 Cal.4th 133 (Cal. 2006) (UIM proceedings are contractual/insurance actions; Civ. Code §3291 does not apply in UIM arbitrations)
- Steinfeld v. Foote-Goldman Proctologic Medical Group, Inc., 60 Cal.App.4th 13 (Cal. Ct. App. 1997) (Civ. Code §3291 incorporates CCP §998 to permit prejudgment interest as a cost in personal‑injury actions from the offer date)
- Collins v. City of Los Angeles, 205 Cal.App.4th 140 (Cal. Ct. App. 2012) (§3287(a) requires defendant’s actual knowledge or ability to compute damages from reasonably available information)
- Cassinos v. Union Oil Co., 14 Cal.App.4th 1770 (Cal. Ct. App. 1993) (same principle: ascertainability depends on defendant’s knowledge/ability to compute)
- Lakin v. Watkins Associated Industries, 6 Cal.4th 644 (Cal. 1993) (distinguishes automatic comparison under §3291 from the liquidated‑claim requirement of §3287(a))
- Bodell Constr. Co. v. Trustees of Cal. State Univ., 62 Cal.App.4th 1508 (Cal. Ct. App. 1998) (prejudgment interest under §3291 is treated as a cost; §3287 interest is an element of damages)
- Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541 (Cal. 2011) (limits on recoverable medical expenses can affect ascertainability of damages)