§23.15 Prejudgment Interest on Personal Injury Cases

The Case: Francois v. Willis , 205 S.W.3d 915 (Tenn. Ct. App. 2006).

The Basic Facts: The plaintiffs rejected the defendant’s offer of judgment in a personal injury case of $16,900.00. The case proceeded to trial and the jury returned a verdict for the plaintiffs. The court entered a judgment for the plaintiffs for $27,787.50 and denied the plaintiffs’ motion for prejudgment interest based on the $16,900.00 offer of judgment.

The Bottom Line:

• “The sole issue on this appeal is whether the trial court erred by declining to award Ms. Francois prejudgment interest on the ground that prejudgment interest is not available in personal injury cases” 205 S.W.3d at 916.
• “One of the legal principles firmly embedded in our jurisprudence is that prejudgment interest is not available in personal injury cases. The Tennessee Supreme Court first recognized this principle in Louisville & Nashville R.R. v. Wallace, [17 S.W. 882, 884 (Tenn. 1891)], and this court has recently reiterated it in no uncertain terms. Hollis v. Doerflinger, 137 S.W.3d at 630.^FN1

  FN1 While other unreported decisions of this court are more equivocal about the availability of prejudgment interest in personal injury cases, [Tenn. S. Ct. R. 4(H)(2)] requires us to consider Hollis v. Doerflinger as ‘controlling authority.’ We also find it significant that the Tennessee Supreme Court directed that Hollis v. Doerflinger be published in accordance with [Tenn. S. Ct. R. 4(D)].”

  Id .
• “Thus, when faced with a motion for prejudgment interest in a personal injury case, the trial court must take this legal principle into account and, therefore, must deny the motion because to do otherwise would be to apply an incorrect legal standard.” Id.
• “We have noted a factual distinction between this case and Hollis v. Doerflinger that bears mentioning. In this case, Ms. Willis made a $16,900 offer of judgment in accordance with [Tenn. R. Civ. P. 68]. No such offer of judgment was made in Hollis v. Doerflinger. One could argue that personal injury damages become ascertainable when a defendant makes an offer of judgment. We reject this argument for two reasons. First, it is inconsistent with the plain language of [Tenn. R. Civ. P. 68] limiting the rule’s application to costs.^FN2 Second, permitting offers of judgment to trigger prejudgment interest would undermine the utility of [Tenn. R. Civ. P. 68]. The purpose of the rule is to promote settlements. [Tenn. R. Civ. P. 68] Committee Cmt.; 4 Nancy Fraas MacLean et al., Tennessee Practice: Rules of Civil Procedure Annotated § 63:3, at 451 (3d ed. 2000). Defendants will be deterred from offering to settle a case if their offer exposes them to liability for prejudgment interest.

  FN2 Other jurisdictions have enacted statutes or rules that explicitly allow an offer of judgment to trigger the accrual of prejudgment interest.”

  Id . at 916-17.

Recent Cases: Ferguson v. Jenkins , No. E2007-02501-COA-R3-CV, 2008 WL 4949233 (Tenn. Ct. App. Nov. 20, 2008) (finding trial court erred in awarding prejudgment interest that resulted in award against uninsured motorist carrier in excess of coverage limit).