Barnes v. Hardy

EXUM, Chief Justice.

Plaintiff Helen Barnes was injured in a collision with the insured defendants Hardy. Plaintiffs filed suit and defendant insurer, United States Fidelity & Guaranty Company (“USF&G”), offered $49,900 in settlement. The liability limit on the policy was $50,000, and coverage included “all defense costs we incur.”

Plaintiffs eventually accepted $50,000 from defendant insurer, but the parties could not agree on whether USF&G was responsible for prejudgment interest in excess of its liability limits. They submitted to a declaratory judgment action in which the trial court held…