Lagstein v. Certain Underwriters

A plaintiff that is awarded an arbitration award including interest on contract damages is not precluded from a district court also awarding interest on the remaining portions of the arbitration award, and Nevada law allows a plaintiff to collect “post-award, pre-judgment interest on the non-contract damages portions of the arbitration award from the date of the awards through the date of payment” as well as attorney’s fees.

Upon becoming disabled and no longer able to practice medicine, Dr. Zev Lagstein filed a claim for benefits under his disability insurance with Certain Underwriters at Lloyd’s of London (“Lloyd’s”). Lloyd’s denied the claim, and Lagstein sued in District Court for the District of Nevada. Lloyd’s was granted a motion for arbitration from which Lagstein was awarded $6 million. Lloyd’s had the award dismissed. Lagstein appealed to the Ninth Circuit, which reversed and remanded “with instructions to confirm the award.” The award was confirmed, but Lagstein was denied his requested attorney fees and interest. Lagstein appealed. Lloyd’s cross-appealed for the “return of an alleged overpayment to Dr. Lagstein.” The Ninth Circuit noted that in Mausbach v. Lemke, the Nevada Supreme Court ruled that courts are permitted “to award post-award, pre-judgment interest running from the date of the arbitration award.” Thus, under Nevada law, Lagstein was entitled to “collect post-award, pre-judgment interest on the non-contract damages portion of the arbitration award from the date of the awards through the date of payment.” Since 28 U.S.C. § 1961 mandates the awarding of “post-judgment interest on a district court judgment,” the panel ruled that Lagstein was entitled to “collect post-judgment interest on his post-award, prejudgment interest from the date of [the panel’s] opinion until the date [Lloyd’s] pays the interest.” The panel found that Lagstein should be awarded his attorney’s fees pursuant to Nev. Rev. Stat. § 689A.410(5). Finally, for the alleged overpayment, the panel found that the first arbitration award “provided for interest on the contract damages through the date of payment,” and the subsequent award did not change that. Also, Lloyd’s had stipulated the method of interest calculation that was used. Thus, Lagstein had not been overpaid. REVERSED AND REMANDED IN PART and AFFIRMED IN PART.