This matter comes before the court by way of a complaint and order to show cause, in accordance with the provisions of R. 4:67-1 et seq., and presents for the court's consideration the status of an arbitrator's award rendered pursuant to the terms of the uninsured motorist (UM) endorsement of an automobile liability insurance policy. As a matter of first impression, the court is asked to decide whether such award should be modified to include interest running from the date that arbitration was instituted, as well as plaintiff's costs of arbitration.
Plaintiff Marlene H. Goldblatt was injured in a motor vehicle accident occurring on February 9, 1980. This accident was of the hit-and-run variety, and plaintiff consequently asserted claims under the UM endorsements of insurance policies issued by defendant Universal Underwriters Insurance Company (the insurer of the vehicle plaintiff was operating) and by defendant Transamerica Insurance Company (the insurer of plaintiff's father, with whom she resided at the time of this accident). The insurers agreed between themselves that Universal should bear primary responsibility for plaintiff's claims.
It is unclear from the record before the court why efforts at settlement of this matter were frustrated, but in any event the parties were unable to reach an agreement with respect to plaintiff's claims under these policies. Accordingly, and in pursuance of the terms of the UM endorsement of the Universal policy, which provided that matters in dispute "shall be settled by arbitration, which shall be conducted in accordance with the rules of the American Arbitration Association," the parties submitted plaintiff's claims to arbitration on January 25, 1982. Arbitration was conducted on August 25, 1982 and an award
entered in plaintiff's favor in the amount of $22,500 on October 7, 1982.
Plaintiff now seeks enforcement of that award pursuant to the provisions of N.J.S.A. 2A:24-7. Plaintiff also urges that such award be modified to include interest running from the date that this matter was submitted to arbitration, as well as the costs incurred by plaintiff as a consequence of this matter having proceeded to arbitration. Assuming the court to be empowered to effectuate the changes plaintiff seeks herein, the court proceeds to an analysis of the legality of those proposed changes.
It is a recognized principle of law in this State that a court called upon to confirm an arbitrator's award should include in its judgment of confirmation interest running from the date of that award. Ukrainian Nat'l Urban Renewal Corp. v. Joseph L. Muscarelle, Inc., 151 N.J. Super. 386 (App.Div.1977); Harsen v. West Milford Tp. Bd. of Ed., 132 N.J. Super. 365 (Law Div.1975). Defendants in the present case concede the validity of this proposition, and accept that the court's judgment herein should reflect an adjustment for interest appropriately calculated.
Plaintiff, however, seeks even greater compensation. It is her contention that because she is a tort victim, she is entitled to all of the benefits afforded that class of litigants, including the right of prejudgment interest provided under R. 4:42-11(b) of the rules governing the courts of this State. Drawing a parallel between the commencement of arbitration and the institution of a civil suit, plaintiff maintains that interest should be assessed against the arbitrator's award herein from the date that her claim was submitted to arbitration. She suggests that such an analogy is appropriate because arbitration is the only recourse available to tort victims like herself who seek compensation under the UM endorsements of automobile liability insurance policies.
The civil practice rules of the Superior Court of this State make express provision for the addition of prejudgment interest to damages awards rendered in tort actions. In such actions,
In the case of Busik v. Levine, 63 N.J. 351 (1973), former Chief Justice Weintraub discussed the rationale for awarding prejudgment interest to a tort victim despite the fact that the claim of such a plaintiff is by its very nature unliquidated until a verdict for damages has been rendered by the trier of facts. It was his view that an award of this kind was warranted for two reasons. The ...