Walker v. Life Insurance Company of North America

Filing 203

MEMORANDUM OPINION: the court will amend the final judgment to provide for post-judgment interest at the federal statutory rate. Signed by Magistrate Judge Herman N Johnson, Jr on 7/15/21. (BJL)

FILED
2021 Jul-15 AM 08:31
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
CHERRI WALKER,
Plaintiff
vs.
LIFE INSURANCE COMPANY OF
NORTH AMERICA,
Defendant

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) Case No. 5:16-cv-00506-HNJ
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MEMORANDUM OPINION
On May 21, 2021, the jury found in favor of Plaintiff, Cherri Walker, on her claim
against Defendant, Life Insurance Company of North America (LINA), for breach of
a long-term disability contract, and awarded Walker $160,342.00 in damages. (Doc.
189). On June 24, 2021, the court entered a memorandum opinion resolving the
parties’ disputes regarding the calculation of interest on the jury’s award (Doc. 197).
On the same date, the court entered a final judgment providing, in relevant part:
(1)
Cherri Walker shall have and recover from Life Insurance
Company of North America the amount of $160,342.00, plus prejudgment interest in the amount of $94,602.11, for a total judgment
amount of $254,944.11.
(2)
Cherri Walker also shall have and recover from Life
Insurance Company of North America interest on the total of her pastdue benefits and accrued pre-judgment interest ($254,944.11), calculated
at the contractual rate of 1.5%, and accruing monthly from the date of

judgment until such time as Life Insurance Company of North America
delivers payment to Cherri Walker.
(3)
Life Insurance Company of North America shall reinstate
Cherri Walker’s long-term disability policy and shall pay her monthly,
long-term disability benefits pursuant to the terms of the long-term
disability insurance policy.
(Doc. 198, at 1-2).
On June 25, 2021, Plaintiff moved to amend the June 24, 2021, final judgment.
(Doc. 199). LINA responded to the motion on July 2, 2021 (Doc. 201), and on the
same day, Plaintiff filed a reply. (Doc. 202). This opinion addresses the motion to
amend.
I.

The Court Will Amend the Judgment to Provide Pre-Judgment Interest
Accruing Through June 11, 2021
The court awarded $94,602.11 in pre-judgment interest based upon LINA’s

calculations through June 11, 2021 (Doc. 197, at 15), but the court did not enter final
judgment until June 24, 2021. (Doc. 198). Accordingly, the court agrees that Plaintiff
should receive pre-judgment interest through June 24, 2021.1 The court again accepts
LINA’s calculations of pre-judgment interest as consistent with the applicable
contractual language and Alabama law, and it will adjust Plaintiff’s pre-judgment interest
award to $95,643.10 through June 24, 2021, the date of judgment.

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LINA did not object to amending the final judgment to provide for the award of pre-judgment
interest through June 24, 2021. (Doc. 201, ¶ 3).
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II.

The Court Will Amend the Judgment to Provide for Reinstatement of
Long-Term Disability Benefits as of the Date of Judgment
As discussed, the final judgment required LINA to reinstate Plaintiff’s long-term

disability policy and pay her monthly benefits, but it did not state the date on which the
reinstatement should commence. Plaintiff requests the court to specify that the
reinstatement should commence as of May 21, 2021, the date of the jury’s verdict.
LINA did not object to Plaintiff’s request, and the court will amend the final judgment
to reflect that date.
III.

The Court Will Amend the Judgment to Require Post-Judgment Interest
at the Federal Rate
As discussed, the final judgment required LINA to pay post-judgment interest

“at the contractual rate of 1.5%.” (Doc. 198, at 2). LINA objects that the court
should have awarded post-judgment interest at the federal statutory rate, rather than
the contractual rate.
28 U.S.C. § 1961(a) provides that “[i]nterest shall be allowed on any money
judgment in a civil case recovered in a district court,” and the district court should
calculate such interest “from the date of the entry of the judgment, at a rate equal to
the weekly average 1-year constant maturity Treasury yield, as published by the Board
of Governors of the Federal Reserve System, for the calendar week preceding[] the date
of the judgment.” The Eleventh Circuit has described a

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significant difference between pre- and post-judgment interest. . . . Postjudgment interest can hardly be considered part of an award for
compensation on a claim. However, a successful claimant is theoretically
entitled to receive the compensation on the date of entry of the judgment;
in practice, this is not feasible, and post-judgment interest serves to
reimburse the claimant for not having received the money in hand on that
day. This is effectuated by the federal statute providing interest on all
federal court judgments. 28 U.S.C. § 1961. This is to be distinguished
from pre-judgment interest, which forms part of the actual amount of a
judgment on a claim.
Ins. Co. of N. Am. v. Lexow, 937 F.2d 569, 572 n.4 (11th Cir. 1991) (quoting FIGA v.
R.V.M.P. Corp., 874 F.2d 1528, 1533 (11th Cir. 1989)) (ellipsis in original).
Consequently, “in awarding postjudgment interest in a diversity case, a district
court will apply the federal interest statute, 28 U.S.C. § 1961(a), rather than the state
interest statute.” Id. (citing Brod & Co. v. U.S. Home Corp., 759 F.2d 1526, 1542 (11th
Cir. 1985)). An exception exists for contract cases if the parties “agree to a different
post-judgment interest rate.” Vision Bank v. Garrett Invs., LLC, No. CIV.A. 11-00169CB-B, 2012 WL 628915, at *3-4 (S.D. Ala. Feb. 27, 2012) (citing FCS Advisors, Inc. v.
Fair Finance Co., Inc., 605 F.3d 144, 148-49 (2nd Cir. 2010); In re Riebesell, 586 F.3d 782,
794 (10th Cir. 2009); Cent. States, Se. & Sw. Areas Pension Fund v. Bomar Nat’l, Inc., 253
F.3d 1011, 1020 (7th Cir. 2001); In re Lift & Equip. Serv., Inc., 816 F.2d 1013, 1018 (5th
Cir. 1987); Carolina Pizza Huts, Inc. v. Woodward, 67 F.3d 294 (4th Cir. 1995)).2 Even so,
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The district court observed in Vision Bank that the Eleventh Circuit had not yet addressed the issue,
and the court’s research does not reflect any more recent rulings from the appellate court. Even so,
“the consensus among courts that have is that parties may agree to a different post-judgment interest
rate” than § 1961(a) provides. Vision Bank v. Garrett Invs., LLC, No. CIV.A. 1-00169-CB-B, 2012 WL
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“federal law requires ‘language expressing an intent that a particular
interest rate apply to judgments or judgment debts’ to be ‘clear,
unambiguous and unequivocal.’” Jack Henry & Associates, Inc. v. BSC,
Inc., 753 F. Supp. 2d 665, 670 (quoting FCS Advisors, 605 F.3d at 148).
This requirement arises from the principal that the debt is extinguished
upon entry of judgment and a new debt, a judgment debt, is
created. Id. “The parties must explicitly state that they are agreeing to a
postjudgment interest rate.” Id.
Vision Bank, 2012 WL 628915, at *3.3
In the present case, the long-term disability insurance contract states that LINA
“will pay the insured one and one-half percent per month on the amount of any claim
which is considered overdue until it is finally settled and adjudicated.” (Pl. Tr. Ex. 1,
at Walker01586). Plaintiff argues that provision should encompass post-judgment
interest calculations because her claim will not be fully settled and adjudicated until she

628915, *3 (S.D. Ala. Feb. 27, 2012).
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Plaintiff also argues that Alabama Code § 27-1-17(c) requires a 1.5 percent post-judgment interest
calculation. That provision states:
Any claim which has not been denied with notice, made pending with notice,
or paid to the provider by the insurer, health service corporation, or the health benefit
plan shall be overdue if the notice or payment is not received by the provider within
the time periods specified in subsection (a). No further notice by the provider to the
insurer, health service corporation, or health benefit plan shall be required under this
section. If the insurer, health service corporation, or health benefit plan fails to deny
or pay a clean written claim or clean electronic claim within the time periods, then the
following shall occur: The amount of the overdue claim shall include an interest
payment of 1.5 percent per month prorated daily which shall accrue from the date the
payment was overdue and which shall be payable at the time that the claim is paid.
Ala. Code § 27-1-17(c). However, that provision applies to health insurance claims and does not
control here.
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receives full payment of the final judgment. But other courts have rejected similar
arguments about similar contractual language, in the absence of a specific statement
that the contractual rate extends to post-judgment interest. See e.g., In re Riebesell, 586
F.3d at 794 (awarding post-judgment interest at the statutory rate, not the contractual
rate, when the contract stated that all amounts due “shall accrue interest until
payment”); Ngena Found. v. F&R Crous Found., No. CV 20-793 (CKK), 2021 WL
1546457, at *4 (D.D.C. Apr. 20, 2021) (awarding post-judgment interest at the statutory
rate, not the contractual rate, when the contract provided for interest until the loan was
“paid in full”); Magic Carpet Ski Lifts, Inc. v. S&A Co., Ltd, No. 14-CV-02133-REBKLM, 2015 WL 4237950, at *7 (D. Colo. June 8, 2015), report and recommendation
adopted, No. 14-CV-02133-REB-KLM, 2015 WL 4162586 (D. Colo. July 9, 2015)
(awarding post-judgment interest at the statutory rate, not the contractual rate, when
the parties’ agreement “ma[de] no particular mention of post-judgment interest”); Noe
v. LPP Mortg. Ltd., No. CV H-11-3798, 2013 WL 12141261, at *4 (S.D. Tex. Dec. 5,
2013) (awarding post-judgment interest at the statutory rate, not the contractual rate,
when the relevant agreement stated: “Interest will be charged on unpaid principal until
the full amount of Principal has been paid. I will pay interest at a yearly rate of
8.3500%. [This interest rate] is the rate I will pay both before and after any default.”)
(alteration in original); Branch Banking & Tr. Co. v. Garrett, No. 1:11-CV-2070-SCJ, 2012
WL 13009092, at *4 (N.D. Ga. Apr. 26, 2012) (awarding post-judgment interest at the
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statutory rate, not the contractual rate, when the contract contained “a provision for
interest until the debt is paid”).
Similarly, here, the contractual language does not clearly, unambiguously, and
unequivocally reflect the parties’ intent for the 1.5 percent contractual rate to apply to
post-judgment interest calculations. In fact, if anything, the provision of 1.5 percent
interest until the insurance claim is “finally . . . adjudicated” indicates an intent not to
deviate from the statutory post-judgment rate, as the court finally adjudicated the case
when it entered final judgment. Accordingly, the court will amend the final judgment
to provide for post-judgment interest at the federal statutory rate.
DONE this 15th day of July, 2021.

____________________________________
HERMAN N. JOHNSON, JR.
UNITED STATES MAGISTRATE JUDGE

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