Jacobs v. Brown et al

Filing 105

ORDER Directing the Clerk to Enter Judgment against Defendant Monroe in favor of Plaintiff Interstate Fire & Casualty Co. in the amount of $632,198.53. The Clerk is further directed to terminate all deadlines and close this case. Signed by Chief Judge J. Randal Hall on 3/15/2018. (pts)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
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RENAISSANCE RECOVERY

SOLUTIONS, LLC, UNITED STATES
FIRE INSURANCE COMPANY, and
INTERSTATE FIRE AND CASUALTY

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5

*
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COMPANY,

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CV 1:14-102

5

Plaintiffs,

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V.
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•k

MONROE GUARANTY INSURANCE

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COMPANY and FCCI INSURANCE
COMPANY,

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Defendants.

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■k

ORDER

In a previous order ruling on the parties' cross motions for

summary judgment, the Court ruled that Defendant Monroe owed Plaintiffs
$632,198.53

and

requested the

parties

issue

a

proposed

judgment

detailing the amount of interest, if any, owed by Defendant Monroe to
Plaintiffs.
an agreement.

(Doc. 96.)

The parties, unsurprisingly, could not come to

This Order settles their dispute.
I.

BACKGROUND

The background of this case has been amply discussed in the

Court's previous orders.

(Docs. 65, 96.)

Nevertheless, the Court will

include an abbreviated and simplified history of the proceedings for
the reader's convenience.

In 2009 Michael Brown killed William Jacobs while attempting to

repossess a truck.

Jacobs' wife brought suit (the

Jacobs Action")

against Brown, Nuvell Auto Finance, Renaissance Recovery Solutions,
LLC, and Renovo Services, LLC (the ^^Tortfeasors").

After a trial in

Columbia County, Georgia, a jury awarded a joint and several liability

verdict against the Tortfeasors in the amount of $2.5 million dollars
(the ''Jacobs Verdict").

The parties to this case insured the Tortfeasors.

During the

Jacobs Action, Defendants in this case — Monroe and FCCI — refused to

participate.

Plaintiffs in this case — U.S. Fire and Interstate —

attempted to force Defendants' participation by filing a third-party

complaint claiming Defendants were contractually obligated to defend
the Tortfeasors.

Prior to trial in the Jacobs Action, the trial court

severed the third—party complaint from the Jacobs Action and granted
summary judgment in favor of Defendants in this case.

On appeal, the Georgia Court of Appeals found that Defendants did
owe coverage to the Tortfeasors.
case was removed to this Court.

After remand to the trial court, the
In this Court's previous summary

judgment order, the Court revised portions of its initial summary

judgment order and found Defendant Monroe liable to Plaintiffs in the
amount of $632,198.53.

The Court requested the parties to submit "a

joint proposed judgment detailing how Monroe's coverage obligations,
including any interest, should be distributed among Plaintiffs.

96, at 44.)

(Doc.

The parties, however, could not agree on the amount of

interest owed by Defendant Monroe.

Plaintiffs argue that under Georgia law, O.C.G.A. § 7-4-12, they
are entitled to post-judgment interest on the $632,198.53 granted by

this Court's previous order and calculated from the date of the Jacobs
Verdict.

Defendants counter that Plaintiffs are not entitled to post-

judgment interest under § 7-4-12 and that they are no longer entitled
to interest under Michigan law, M.C.L. § 500.2006, as this Court

previously found in its order dated July 13, 2016 {doc. 65). The Court
concludes that Plaintiffs are not entitled to interest under Georgia

law, § 7-4-12, or Michigan law, § 500.2006.

II. O.C.G.A. § 7-4-12

Plaintiffs argue that they are entitled
O.C.G.A.

§

7-4-12.

Section

7-4-12

provides

to interest under
that

parties

are

automatically entitled to post-judgment interest ''to all judgments in

[Georgia] and the interest shall be collectable as a part of each

judgment whether or not the judgment specifically reflects the
entitlement to postjudgment interest."

Plaintiffs argue that the

judgment to which the Court should look for purposes of calculating
interest is the Jacobs Verdict.

Accordingly, Plaintiffs assert that

the Court's award of $632,198.53 in its previous order should be
treated as if it was awarded in December 2011.

Thus, Plaintiffs argue

that they are entitled to $232,094.80 of interest (calculated according
to the rate set by § 7-4-12(a) and accruing from the date of December
8, 2011) for a total award of $864,293.33.

Section

situation.

7-4-12,

however,

does

not

apply

to

the

present

The operative judgment for § 7-4-12 is the final

judgment entered in this action, not the final judgement entered
in the Jacobs Action.

The state trial court severed the present

action from the Jacobs Action.

Thus, this action cannot relate

back to the judgment entered against the Tortfeasors.
Court

has

emphasized,

this

action

is

a

As this

contribution

action

amongst co-insurers that seeks to divide a common liability
incurred by their co-insured as a result of the Jacobs Verdict.
(Doc. 96, at 25-26.)

This action only relates to the Jacobs

Verdict because the Jacobs Verdict established how much money is

potentially owed between the parties to this case as co—insurers
of the Tortfeasors.

The Jacobs Verdict has long been paid and

satisfied by Plaintiffs in this case.

Accordingly, any post-

judgment interest under § 7-4-12 would apply to the final
judgment entered in this case only — a judgment which has not
yet been entered.

Plaintiffs, therefore, are not entitled to

any interest under § 7-4-12.
III. M.C.L. § 500.2006

Defendants argue that this Court's ruling on September 12,

2017, characterizing the present action as one for contribution
rather than subrogation, altered the Court's ruling on July 13,
2016,

with

§ 500.2006.

regards

to

the

Court's

Defendants are correct.

application

of

M.C.L.

In its July 13, 2016 ruling, this Court characterized the

present action as one for subrogation.

(Doc. 65, at 8.)

In its

September 12, 2017 ruling, however, this Court reversed course
and characterized the present action as one for contribution.

(Doc. 96, at 26.)
as

one

for

The Court's characterization of this action

contribution

fundamentally

alters

the

Court's

application of M.C.L. § 500.2006.
Section 500.2006 states:

A person must pay on a timely basis to its insured, a person
directly entitled to benefits under its insured's insurance
contract, or a third party tort claimant the benefits provided
under the terns of its policy, or, in the alternative, the

person must pay to its insured, a person directly entitled to
benefits under its insured's insurance contract, or a third

party tort claimant 12% interest, as provided in subsection (4),
on claims not paid on a timely basis. Failure to pay claims on a

timely basis or to pay interest on claims as provided in
subsection (4) is an unfair trade practice unless the claim is
reasonably in dispute.

Originally, the Court's description of this action as one for
subrogation led it to consider Plaintiffs to be an

insured

under

§ 500.2006. ''Because a subrogee stands in the shoes of the insured and
is entitled to the same rights as the insured, a subrogee has the same

rights as the insured to recover interest under § 500.2006." (Doc. 65,
at 24.)

After this Court's characterization of the present action as

one for contribution to be governed under Georgia law, however, the

Court's original reasoning is no longer applicable. Because Plaintiffs
no longer stand in the shoes of their insured, they do not qualify as
(1) an "insured"; (2) "a person directly entitled to benefits under
[an] insured's insurance contract"; or

(3) a "third

party tort

claimant."

Thus, § 500.2006 does not apply and Plaintiffs are not

entitled to 12% interest.

VI. CGNCLUSION

Because Plaintiffs have identified no additional laws which might

entitle them to interest, the Court concludes that Plaintiffs are not

entitled to any interest — besides any potential post-judgment interest

provided by 28 U.S.C. § 1961 - related to this Court's final judgment.
The Court DIBECTS the Clerk to ENTER JUDGMENT against Defendant

Monroe and in favor of Plaintiff Interstate Fire & Casualty Co. in the

amount of $632,198.53.^

The Court FURTHER DIRECTS the Clerk to CLOSE

this case and TERMIN2^TE all deadlines.

ORDER ENTERED at Augusta, Georgia, this /s^day of March,
2018.

v..

HALL< CHIEF JUDGE

UNITED,^ATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

^ Plaintiffs have informed this Court that "Plaintiff Interstate

Fire & Casualty is the property [sic] party to whom payment is owed."
(Doc. 99, at 2.)