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Dibenedetto v. Estate of Antoinette Dibenedetto

Decided: May 21, 1987.


On Appeal from Superior Court of New Jersey, Law Division, Burlington County.

Brody and D'Annunzio. The opinion of the court was delivered by Brody, J.A.D.


This is an appeal by a liability insurance carrier from an order requiring it to pay post-judgment interest on the entire amount of a liability judgment against its insured even though the carrier had deposited the liability limit of its policy into court pending appeal, 218 N.J. Super. 143. The judgment creditor (plaintiff) obtained the judgment in a personal injury negligence action. Commercial Union Insurance Company (Commercial) is the primary liability insurer of Versatile Concrete Company (the insured), one of two judgment debtors. Plaintiff was a passenger in an automobile that collided with a crane that had fallen off the insured's truck and onto the highway. Plaintiff's wife, the operator of the automobile, was killed in the accident. The jury returned a verdict in the amount of $400,000. Commercial provided the insured $100,000 coverage. We affirmed the liability judgment and the Supreme Court denied certification.

The liability judgment was entered in the amount of $514,542.46, which included $114,542.46 prejudgment interest. The insured appealed on the ground that the verdict was excessive. Commercial, in the insured's name, moved in the trial court for leave to deposit into court the liability limit of its policy and for a stay of the judgment pending appeal. The trial judge denied the motion for a stay but ordered that Commercial, which was not then a party, "deposit the sum of $100,000 plus interest into Court pending resolution for [ sic ] this appeal." A week later Commercial deposited in court $103,813.70, the amount of its $100,000 coverage plus $3,813.70 post-judgment interest on that sum.

We stayed the judgment pending appeal, granted Commercial leave to intervene "solely for the purpose of post-judgment proceedings," and ordered that Commercial supplement the deposit by posting a supersedeas bond in the amount of $450,000. Because of Commercial's objection, we denied plaintiff's

motion to execute against the deposit in court. The Supreme Court affirmed that order.

After the appeal process had run its course, the trial judge resolved a dispute over the amount Commercial owed plaintiff by ordering that it pay plaintiff the amount of its coverage plus 12% post-judgment interest*fn1 on that sum until the clerk of the court pays plaintiff the cash on deposit. The trial court also ordered Commercial to pay 12% interest on the entire judgment to the date Commercial pays plaintiff what it owes under its policy. Finally the order allowed Commercial credit for the cash it had placed on deposit in court and the interest it earned there. Commercial appeals that order, contending that the court erred by requiring it to pay additional post-judgment interest.

Commercial's obligation to pay plaintiff post-judgment interest is defined by the terms of its policy. The policy provides in relevant part:

The company will pay, in addition to the applicable limit of liability: (a) . . . all costs taxed against the insured in any suit defended by the company and 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 language of the policy unambiguously requires Commercial to pay more than the $100,000 "limit of liability." It must also pay post-judgment interest "on the entire amount of any judgment," here 12% interest a year on $514,542.46, and taxed costs. Kraynick v. Nationwide Insurance Co., 80 N.J. Super. 296 (Law Div.1963). See generally 8A Appleman, Insurance Law and Practice ยง 4894.25 (1981); Annot., Liability Insurer's Liability for Interest and Costs on Excess of Judgment Over Policy Limit, 76 A.L.R. 2d 983 (1961).

The more difficult question is whether Commercial is responsible for post-judgment interest that accrued after making its deposit in court. We hold that it is, because a cash deposit in court made as a condition to obtaining a stay of judgment pending appeal is not the kind of deposit that stops the running of ...

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