Opinion
02 C 5910.
July 7, 2004
MEMORANDUM OPINION
The court has considered the memoranda of the parties and makes the following rulings on Plaintiff's Petition for Prejudgment Interest and Attorneys Fees and Costs.
Prejudgment Interest
The case is governed by Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc., 874 Fd.2d 431, 436 (7th Cir. 1989), where the Court stated:
For the future, we suggest that district judges use the prime rate for fixing prejudgment interest where there is no statutory interest rate. That is a readily ascertainable figure which provides a reasonable although rough estimate of the interest rate necessary to compensate plaintiffs not only for the loss of the use of their money but also for the risk of default.
While the court's "suggestion" of the prime rate was not intended as a "straitjacket" for district judges, id. at 437, the only reason the court mentioned for not applying the prime rate would be a concern that it might not be high enough to account for the risk of default "in deciding what a compensatory rate of interest would be." Id. at 436. In this case, there is no indication that the Prudential Insurance Company of America would be likely to default in the payment of the judgment. The prime rate seems appropriate in the circumstances, and plaintiff's suggestion that we apply the 9% rate provided for in the Illinois Insurance Code for overdue insurance payments has no logic to recommend it over the language of the Seventh Circuit in Gorenstein. Prejudgment interest will be awarded at the prime rate.
Attorneys' Fees
Here, we agree with plaintiff, whose memorandum lays out in accurate detail just why there was no "solid basis" for the defendant's position in the case. It is true that we did express uncertainty as to whether there was any job plaintiff could perform notwithstanding her disability. We found the question to be close, but in reviewing the discussion of it in the transcript of our decision, we note that all of the evidence pertaining to it had been produced by plaintiff. Nothing had been produced by defendant, and, as plaintiff points out, the issue was never relied upon as a basis for denying payment. Defendant did not raise it until just before trial. It appears to have been an afterthought, and defendant made no attempt to develop it at trial. In any event, the court resolved the issue against the defendant and, proceeding to the real issue in the case, found the evidence to be overwhelming that defendant had no basis for refusing payment on the basis of the psychiatric exclusion in the policy. Indeed, as plaintiff points out, defendant made no real effort to prove the applicability of the exclusion either in preparation for trial or at trial. It conducted no discovery and offered only the deposition of Dr. Winkler, whose conclusory opinions we found wholly unpersuasive.
Accordingly, the court finds that plaintiff is entitled to her reasonable attorneys' fees and costs. The parties are directed to confer pursuant to Local Rule 54.3 and attempt to agree on the amount. If agreement cannot be reached, then plaintiff shall file a fee petition, in accordance with the Rule, by August 6, 2004, and defendant may respond by August 20, 2004.
In the meantime, in order to permit post-judgment interest to begin accruing, the parties may prepare a judgment order for the amount of benefits and prejudgment interest calculated according to the prime rates applicable at the various relevant times. The order may be presented when ready. It will be entered with a reservation of jurisdiction over the question of fees and costs.