Second Substitute S.B. 69

Senator Stephen H. Urquhart proposes the following substitute bill:

1 PREJUDGMENT INTEREST REVISIONS
2 2014 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Stephen H. Urquhart
5 House Sponsor: Mike K. McKell
6
7 LONG TITLE
8 General Description:
9 This bill requires that in order for a plaintiff to receive prejudgment interest, the
10 plaintiff shall have tendered an offer of settlement.
11 Highlighted Provisions:
12 This bill:
13 . requires a plaintiff to have tendered an offer of settlement before claiming
14 prejudgment interest on a verdict;
15 . provides that prejudgment interest is only calculated from the date of a qualifying
16 offer;
17 . sets limits on the award of prejudgment interest based upon the offer of settlement
18 amount vis-a-vis the verdict amount;
19 . sets the percentage rate the court shall use to calculate prejudgment interest at two
20 percentage point above the prime rate; and
21 . sets 5% and 10% as the limits on the rate the court uses.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 None

26 Utah Code Sections Affected:
27 AMENDS:
28 78B-5-824 , as last amended by Laws of Utah 2009, Chapter 276
29
30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 78B-5-824 is amended to read:
32 78B-5-824. Personal injury judgments -- Interest authorized.
33 (1) In all actions brought to recover damages for personal injuries sustained by any
34 person, caused by the negligence or willful intent of another person, corporation, association,
35 or partnership, and whether the injury was fatal or otherwise, the plaintiff, including a
36 counterclaim plaintiff, in the complaint may claim interest on special damages actually
37 incurred [from the date of the occurrence of the act giving rise to the cause of action].
38 [(2) It is the duty of the court, in entering judgment for plaintiff in that action, to add to
39 the amount of special damages actually incurred that are assessed by the verdict of the jury, or
40 found by the court, prejudgment interest on that amount calculated at 7.5% simple interest per
41 annum, from the date of the occurrence of the act giving rise to the cause of action to the date
42 of entering the judgment, and to include it in that judgment.]
43 (2) A plaintiff, including a counterclaim plaintiff, seeking to recover damages for
44 personal injury or wrongful death may claim prejudgment interest if for cases classified as tier
45 1, pursuant to the Utah Rules of Civil Procedure, the plaintiff tenders:
46 (a) a written settlement demand, including settlement demands under Utah Rule of
47 Civil Procedure 68; and
48 (b) the amount of the demand does not exceed 1-1/3 of the amount of the judgment
49 eventually awarded at trial.
50 (3) A defendant may preclude a plaintiff's right to recover any prejudgment interest on
51 a tier 1 claim, as defined by the Utah Rules of Civil Procedure, by tendering a written
52 settlement offer, including settlement offers under Utah Rule of Civil Procedure 68 and the last
53 offer is made no later than 90 days after the defendant has received the plaintiff's written
54 settlement demand, or no later than 60 days after the plaintiff has filed initial disclosures,
55 whichever time frame comes last, and the offer is at least 2/3 of the amount of the judgment
56 award.

57 (4) Any qualifying counteroffer from the defendant shall be left open for 10 days.
58 (5) For purposes of this statute, the determining offer and counteroffer shall be the last
59 written offer or counteroffer timely tendered by a party, provided that the offer or counteroffer
60 is tendered at least 120 days before trial or arbitration.
61 (6) Cases classified as tier 2 or tier 3 by the Utah Rules of Civil Procedure may not be
62 subject to the requirements outlined in Subsections (2) and (3).
63 (7) (a) Any prejudgment interest shall be computed as simple interest. For first special
64 damages incurred during the year of the occurrence of the act giving rise to the cause of action,
65 any prejudgment interest shall be computed as simple interest accruing from the date on which
66 the first date special damages were actually incurred.
67 (b) For special damages incurred in successive years, prejudgment interest shall be
68 calculated from January 1 of each year special damages were incurred. The court shall
69 calculate prejudgment interest using a per annum rate, which is two percentage points above
70 the prime rate, as published by the Board of Governors of the Federal Reserve System on the
71 first business day in January of the calendar year in which the judgment is entered, although the
72 prejudgment interest rate applied may not be lower than 5% or higher than 10%.
73 [(3)] (8) As used in this section, "special damages actually incurred" does not include
74 damages for future medical expenses, loss of future wages, or loss of future earning capacity.
75 (9) This section applies to any cause of action arising on or after July 1, 2014.