Wanschura v. Western Nat. Mut. Ins. Co.

389 N.W.2d 927 (1986)

In re the Arbitration Between Michael WANSCHURA, Claimant, Appellant, v. WESTERN NATIONAL MUTUAL INSURANCE COMPANY, et al., Respondents.

No. CO-86-481.

Court of Appeals of Minnesota.

July 15, 1986.

Review Denied August 27, 1986.

James R. Schwebel, Peter H. Berge, Schwebel, Goetz, Sieben & Hanson, P.A., Minneapolis, for appellant.

James T. Martin, Gislason, Martin & Varpness, P.A., Minneapolis, for respondents.

Considered and decided by PARKER, P.J., and WOZNIAK and SEDGWICK, JJ., with oral argument waived.

SEDGWICK, Judge.

This appeal is from denial of pre-judgment interest on confirmation of an arbitration award. We affirm.

Appellant Michael Wanschura's daughter was killed in a traffic accident in 1983. Appellant, as trustee for the heirs, filed a claim against respondent Western National Mutual Insurance Company for underinsured motorist coverage and demanded arbitration of the claim pursuant to the policy. Appellant did not request pre-judgment interest from the arbitration panel. The panel awarded $250,000 to appellant.

Appellant then moved in district court for confirmation of the award and for pre-judgment and post-judgment interest. The parties stipulated to the amount of post-judgment interest owed, and the trial court denied the request for pre-judgment interest.

Did the trial court err in refusing to award pre-judgment interest on the arbitration award?

A party may move in district court for confirmation of an arbitration award. Minn.Stat. § 572.18 (1984). After confirmation of the award, judgment is to be entered "in conformity therewith." Minn. Stat. § 572.21 (1984). The statute also provides for vacation and modification or correction of an award. Minn.Stat. §§ 572.19 and 572.20 (1984).

In National Indemnity Co. v. Farm Bureau Mutual Insurance Co., 348 N.W.2d 748 (Minn.1984), the claimant specifically requested pre-judgment interest in the application for arbitration, but the arbitrators did not award any. The claimant then moved for an order confirming the award and for pre-judgment interest. The trial court granted the request, but the supreme court reversed. The court interpreted the arbitration statute (Minn.Stat. ch. 572) to preclude an award of pre-judgment interest when the application for arbitration included interest as an item of damages and the arbitrators did not award any. Id. at 752. A request for modification or correction of the award would have been the proper procedure to follow. Id.

Respondent argues that this case is controlled by Hedlund v. Citizens Security Mutual Insurance Co., 377 N.W.2d 460 (Minn.Ct.App.1985). Hedlund involved arbitration of an underinsured motorist claim in which the claimant did not request pre-judgment interest. The claimant then moved for confirmation of the award and for pre-judgment interest. The court denied the request for interest. This court affirmed the denial stating that the question was not properly before the trial court. Hedlund, 377 N.W.2d at 464 (citing National Indemnity Co. v. Farm Bureau Mutual Insurance Co., 348 N.W.2d 748 (Minn.1984)).

As the National Indemnity court noted, every reasonable presumption is to be exercised in favor of the finality and the validity of an arbitration award. Id. at 750 (citation omitted). Minnesota has consistently favored arbitration as a speedy and relatively inexpensive method of dispute resolution. See Crosby-Ironton Federation of Teachers, Local 1325 v. Independent School District No. 182, 285 N.W.2d 667, 669 (Minn.1979); Ehlert v. Western National Mutual Insurance Co., 296 Minn. 195, 199, 207 N.W.2d 334, 336 (1973). In this case, as in Hedlund, appellant should have submitted the request for pre-judgment interest to the arbitration panel. By not doing so, appellant waived his claim for pre-judgment interest.

The trial court did not err in denying appellant's request for pre-judgment interest on the arbitration award. Affirmed.