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Kraynick v. Nationwide Insurance Co.

Decided: August 5, 1963.

CAROL M. KRAYNICK, AN INFANT BY HER GUARDIAN AD LITEM, MARGARET E. KRAYNICK AND MARGARET E. KRAYNICK, INDIVIDUALLY, PLAINTIFFS,
v.
NATIONWIDE INSURANCE COMPANY, A CORPORATION OF THE STATE OF OHIO, DEFENDANT



Bennett, J.c.c. (temporarily assigned).

Bennett

[80 NJSuper Page 297] Plaintiff Carol M. Kraynick, an infant, recovered a judgment in the Superior Court, Law Division, for $62,000 against Richard W. Rodgers,

a resident of Pennsylvania, for personal injuries caused by his negligent operation of his automobile in Trenton, N.J. The judgment was entered December 9, 1959. Defendant herein, Nationwide Insurance Company (Nationwide), had issued to Rodgers in Pennsylvania an automobile liability insurance policy with limits of $10,000 and $20,000. An action was brought to recover the policy limits on the unsatisfied judgment. Nationwide denied liability on the ground that Rodgers had failed to cooperate, as required by the terms of the policy. The court submitted this issue to the jury which found for the plaintiff. An appeal was taken to the Appellate Division of the Superior Court which reversed and remanded for a new trial limited to the factual issue of the adequacy of Nationwide's investigation as to the whereabouts of the defendant Rodgers. Upon retrial the jury again rendered a verdict in favor of plaintiff Kraynick, who is now moving for the entry of judgment upon said special verdict. The sole issue before this court is whether plaintiff is entitled to interest upon the entire judgment originally entered in favor of Kraynick on December 9, 1959 in the sum of $62,000.

The provisions dealing with interest, contained in paragraph V(2)(d) of the policy issued to Richard Rodgers and upon which this suit has been brought, provide that the company shall:

"(d) pay all interest on the entire judgment accruing after entry of judgment until the Company has paid, tendered or deposited in court such part of such judgment as does not exceed the limit of the Company's liability thereon; * * *."

In asserting her right to interest on the entire judgment the plaintiff relies on a review of this subject found in Ramsey, "Interest on Judgments Under Liability Insurance Policies," Insurance Law Journal, No. 414, pp. 407, 411 (July 1957), where it was stated that:

"The new family combination automobile policy, issued by The National Bureau of Casualty Underwriters, now provides with

reference to this question that the insurance company is required to pay:

'* * * all interest on the entire amount of any judgment therein which accrues after entry of the judgment and before the company has paid or tendered or deposited in court that part of the judgment which does not exceed the limit of the company's liability thereon.'

The National Bureau of Casualty Underwriters has also issued a directory to its member companies reading:

'Several court cases have held that an insurer's obligation to pay interest extends only to that part of the judgment for which the insurer is liable. The respective rating committees have agreed that this is contrary to the intent. As a result, the wording with respect to payment of interest in the new Family Automobile Policy has been restated, in order that it be entirely clear that all interest on the entire amount of any judgment, which accrues after entry of the judgment, is payable by the insurer until the insurer has paid or tendered or deposited in court that part of the judgment which does not exceed the limit of the insurer's liability thereon.

'All Automobile and General Liability policies will be changed accordingly upon revision. In the meantime they should be interpreted ...


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