COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68542 FRANK T. LOVEWELL : : Plaintiff-appellee : : JOURNAL ENTRY vs. : and : OPINION PHYSICIANS INSURANCE COMPANY OF : OHIO : : Defendant-appellant : : and : : PRADIST SATAYATHUM, M.D. : : Defendant-appellee : : : DATE OF ANNOUNCEMENT OF DECISION : OCTOBER 19, 1995 CHARACTER OF PROCEEDING : Civil appeal from : Court of Common Pleas : Case No. 270,395 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For defendant-appellant TODD A. COOK Physicians Insurance GARY W. HAMMOND Company of Ohio : Attorneys at Law 24 East Gay Street Columbus, Ohio 43215 (Cont.) APPEARANCES: (Continued) For defendant-appellee SAM A. ZINGALE Pradist Satayathum, Attorney at Law M.D. : 614 Superior Avenue, N.W. 700 Rockefeller Building Cleveland, Ohio 44113-1332 - 3 - TIMOTHY E. McMONAGLE, J.: Appellant Frank T. Lovewell brought this declaratory judgment action against Physician's Insurance Company of Ohio (hereinafter "PICO") and Pradist Satayathum, M.D., seeking a declaration by the court that an award of prejudgment interest made to him in a mal- practice action was covered under a policy of professional liabil- ity insurance issued by PICO to Dr. Satayathum. Dr. Satayathum filed a cross-claim against PICO seeking similar relief. Mr. Lovewell and Dr. Satayathum were granted summary judgment and, from those decisions, this appeal arises. PICO assigns the following error for review: THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING THE MOTIONS FOR SUMMARY JUDGMENT FILED BY PLAINTIFF-APPELLEE, FRANK T. LOVEWELL, AND DEFENDANT-APPELLEE, PRADIST SATAYATHUM, M.D., RESPECTIVELY, AND DETERMINING THAT APPELLANT IS LIABLE FOR THE AWARD OF PRE-JUDGMENT INTEREST. The standard for reviewing the granting of a summary judgment is aptly set forth in Shaw v. J. Pollock & Co. (1992), 82 Ohio App.3d 656, 658-659, as follows: Pursuant to Civ.R. 56(C), summary judgment is proper if the trial court determines that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclu- sion, and viewing such evidence most strongly in favor of the party against whom the motion - 4 - for summary judgment is made, that conclusion is adverse to that party *** Once summary judgment is requested, the re- sponding party must set forth specific facts demonstrating triable issues on all essential matters for which he bears the initial burden of proof. Mere reliance upon the pleadings is insufficient ***. The issue to be tried must also be genuine, allowing reasonable minds to return a verdict for the nonmoving party ***. Further, a plaintiff may not rest upon mere allegations, but must set forth specific facts which show there is as issue for trial. (Citations omitted.). See, also, Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 111 (adopting Fed.Civ.R. summary judgment standard set forth in Celotex Corp. v. Catrett (1986), 477 U.S. 317). In this case, there are no genuine issues of material fact. All sides agree that Mr. Lovewell brought a malpractice action against Dr. Satayathum alleging that Dr. Satayathum negligently performed two surgical operations on his feet. The matter pro- ceeded to trial, which ultimately resulted in a jury verdict and judgment for Mr. Lovewell in the amount of $200,000. PICO paid this amount in full. Subsequent to the verdict, Mr. Lovewell filed a motion for prejudgment interest pursuant to R.C. 1343.03(C), alleging that Dr. Satayathum had failed to make a good faith effort to settle the case. Following a hearing, the court granted Mr. Lovewell's motion for prejudgment interest in the amount of $101,753.42. Thereafter, PICO denied coverage on the prejudgment interest award. - 5 - The remaining question for us to decide is whether Dr. Satayathum is entitled, as a matter of law, to coverage on the prejudgment interest award under the terms of the insurance poli- cy. See Harless v. Willis Day Warehousing (1978), 54 Ohio St.2d 64, 66. The relevant provisions of Dr. Satayathum's insurance policy are as follows: WHAT THIS POLICY COVERS -- (See Section D.1. below for the definitions of "DAMAGES" and "MEDICAL INCIDENT".) This is an Occurrence Policy. Your coverage is limited to liability for only those damages arising out of MEDICAL INCIDENTS which occur during the COVERAGE PERIOD as shown on the Certificate of Insurance. We will pay on your behalf all sums, up to the Limits of Liability stated on your Certificate of Insurance which you legally become obligated to pay as DAMAGES because of a MEDICAL INCIDENT arising out of your indivi-dual practice as a physician or surgeon during the COVERAGE PERIOD stated on the Certificate of Insurance *** We have the right and duty to defend and in- vestigate any claim or suit brought against you for DAMAGES covered under this policy and we will do so even if the suit or claim is groundless, false, or fraudulent. We will not defend a suit or pay any claim after the applicable Limits of Liability have been used up paying judgments or settlements. We will settle claims or suits only with your written consent. Supplementary Payments - All of the following are in addition to the Limits of Liability of your coverage. We will pay all reasonable costs of defending a suit, including interest on that part of any - 6 - judgment which accrues after entry of the judgment and before we have paid, tendered or deposited in court that part of the judgment which does not exceed the limit of our cover- age. We will also pay premiums for appeal bonds and premiums on bonds to release prop- erty that is being used to secure a legal obligation, but we will pay premiums for bonds valued only up to the your limit of liability. We will also pay all reasonable costs you incur at our request while helping us investigate or defend any claim or suit against you. This includes actual loss of earnings not to exceed $150 per day. *** D. CONDITIONS 1. Definitions - When used in this policy: *** "DAMAGES" means all DAMAGES which are payable because of INJURY (including damages for death) to which this insur- ance applies, including any counter claims in suits brought by you to collect fees. It does not include punitive or exemplary damages. "INJURY" means physical or mental injury, sickness, or disease sustained by any person which occurs during the COVERAGE PERIOD, including death resulting therefrom. (Emphasis added.) Here, as in the trial court, PICO presents two arguments against coverage. First, PICO asserts that coverage should be disallowed because the policy's statement of coverage, set forth above, does not explicitly provide coverage for the payment of prejudgment interest. PICO insists that while the policy explic- itly provides coverage for supplemental payments of certain expenses, including post-judgment interest, it is silent on the - 7 - issue of prejudgment interest. Second, PICO argues that a finding of coverage in this case, where the award is based on the insured's refusal to settle, is incongruous with the purpose of R.C. 1343.03(C). With regard to PICO's assertion that an award of prejudgment interest under R.C. 1343.03(C) is not covered under the policy as part of a liability damage award, we note that when called upon to examine a contract of insurance, a court applies long-standing rules of construction and interpretation applicable to contracts generally. Tomlinson v. Skolnick (1989), 44 Ohio St.3d 11. Under these rules, the intent of the contracting parties is to be gathered from the plain language of the policy and not the unex- pressed intentions of the parties. When the words used in the policy have a plain and ordinary meaning, it is unnecessary to resort to construction of that language. Karabin v. State Auto- mobile Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 166-167. The policy provides coverage for "*** all sums, *** which [the insured] *** legally become[s] obligated to pay as DAMAGES because of a MEDICAL INCIDENT." (Emphasis added.) Damages are defined as "*** all DAMAGES which are payable because of INJURY *** to which this insurance applies, including any counter claims in suits brought by you to collect fees. ***" (Emphasis added.) PICO acknowledges that compensatory damages are covered under this provision; it nevertheless contends that prejudgment interest is not remedial but, rather, is in the nature of a penalty for a - 8 - party's failure to make a good faith effort to settle a case and, therefore, falls outside the scope of this provision. We do not agree. Awards of prejudgment interest are compensatory in nature. Galayda v. Lake Hosp. Sys., Inc. (1994), 71 Ohio St.3d 421, 427- 428; Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638; Digital & Analog Design Corp. v. N. Supply Co. (1992), 63 Ohio St.3d 657; Dailey v. Nationwide Demolition Derby, Inc. (1984), 18 Ohio App.3d 39, 41; see, also, Lawrence RR. Co. v. Cobb (1878), 35 Ohio St. 94. In Galayda v. Lake Hosp. Sys., Inc., supra, the Ohio Supreme Court explained the nature of an award of prejudgment interest as follows: In Digital & Analog Design Corp. v. N. Supply Co. (1992), 63 Ohio St.3d 657, 590 N.E. 2d 737, we found a [prejudgment interest] award to be compensatory in nature rather than punitive. Writing for the majority, Justice Wright noted that the "prejudgment interest statute is designed to compensate the aggrieved party for the delay encountered by the failure of the tortfeasor to negotiate in good faith," and "ensures that just compensation to the tort victim is not eroded by the dilatory tactics of the tortfeasor. ***" Id. at 660-661, 590 N.E.2d at 746. In such a case, the defendant "allow[s] the interest on the [defendant's monetary reserves] to accumulate to the benefit of the party required to pay and to the detriment of the party to whom the money is to be paid." Dailey v. Nationwide Demolition Derby, Inc. (1984), 18 Ohio App.3d 39, 41, 18 OBR 108, 110, 480 N.E.2d 110, 112. Where a defendant benefits monetarily as a result of failing to negotiate possible settlement in good faith, R.C. 1343.03 does not constitute a penalty, but, to the contrary, is wholly compensatory, and indeed equitable in nature. (Emphasis added.) - 9 - Thus, the purpose of an award of prejudgment interest is to insure that an injured party is fully and fairly compensated for his loss. In other words, prejudgment interest is a means by which a party who is entitled to an award can collect the proceeds from funds he presumably would have had the use of had it not been for the defendant's conduct. Given this, we believe the language of the coverage provision, "*** all sums, *** which [the insured] *** legally become[s] obligated to pay as DAMAGES because of a MEDICAL INCIDENT," is broad enough to afford coverage for an award of prejudgment interest. PICO's second argument, that a finding of coverage where the prejudgment interest award is based on the insured's refusal to settle is incongruous with the purpose of R.C. 1343.03, is based 1 upon the assertion that the trial court found that Dr. Satayathum individually failed to comport with the good faith settlement requirement of R.C. 1343.03 by exercising his right under the policy to withhold consent to settlement. Specifically, PICO contends that because it was Dr. Satayathum, and not PICO, who refused to settle the case, Dr. Satayathum should not be absolved form personal liability for the prejudgment interest award as this would thwart the purpose and render meaningless the provisions of R.C. 1343.03. We do not agree. PICO's policy explicitly gives Dr. Satayathum the right to withhold consent to settlement. This 1 Contrary to PICO's assertions, the trial court did not enter findings of fact and conclusions of law in this case. - 10 - provision in the policy is unqualified. If PICO wished to place the risk of withholding consent to settlement on the insured, it could have done so in plain language in the policy. Karabin v. State Automobile Mut. Ins. Co., supra. This court will not in- dulge the unexpressed intentions of PICO on the assertion that Dr. Satayathum's exercise of his contractual right to withhold consent to settlement would thwart the purpose and render meaningless the provision of R.C. 1343.03(C). PICO's sole assignment of error is overruled, and the judg- ment of the trial court is affirmed. - 11 - It is ordered that appellees recover of appellant their costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Cuyahoga County Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. LEO M. SPELLACY, P.J. and ANN DYKE, J. CONCUR JUDGE TIMOTHY E. McMONAGLE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .