COURT AWARDS PREJUDGMENT INTEREST TO REINSURER ON PAST DUE BILLINGS
Munich Reinsurance America, Inc. and Tower Insurance Co. of New York were parties to certain reinsurance and retrocessional agreements. A billing dispute arose and Munich Re brought suit. Tower had resisted payment of the billings due because it had not received sufficient information demonstrating its liability for the billed amounts. During the course of discovery the parties reconciled the billings, and determined and agreed that Tower owed Munich $3,287,597. They disputed how much interest Tower should be charged for its withholding, and moved for summary judgment on the issue, with Tower contending interest should be limited to $5,404.27, and Munich Re contending it was owed $673,806.00, based on differing views of the rate and accrual date. Citing its equitable powers, and with guidance from state civil procedure rules applicable to interest on contract debts, the Court split the baby, finding Tower owed Munich Re $168,093.61 in pre-judgment interest. Munich Reinsurance America, Inc. v. Tower Ins. Co. of New York, No. 09-2598 (USDC D.N.J. Mar. 26, 2012).
This post written by John Pitblado.
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