City and Borough Juneau v. Commercial

On February 22, 1972, a fire severely damaged the "Fifth Street School" in Juneau. The school was owned by the City and Borough of Juneau, which had leased it to the University of Alaska. The university had insured the building with the Commercial Union Insurance Company. The City/Borough sued the university and Commercial Union. The trial court granted summary judgment to the City/Borough on the issue of liability, and, following a trial on the issue of damages, the jury returned a verdict against the defendants for $425,000. The parties stipulated that Commercial Union would be solely liable for judgment entered on the verdict and whatever prejudgment interest, costs and attorneys fees were awarded. The superior court, after considering memoranda submitted by the parties on the rate of prejudgment interest, awarded interest to the City/Borough at the rate of 6% from February 22, 1972 to September 12, 1976, and at 8% from the latter date until entry of judgment. The City/Borough has appealed, claiming that it should have received 8% interest for the entire period.