## Facts

- Arthur Long’s parked automobile was struck and damaged beyond repair when a farm wagon owned by Dan McAllister and McAllister Seed Company rolled down an incline.
- McAllister and the seed company had property-damage liability coverage through I.M.T. Insurance Company and another insurer.
- Liability and total-loss status were not disputed; the parties disputed the amount and components of compensation and the timing of payment.
- After insurers resolved contribution issues, I.M.T. offered Long $1,250 to settle on behalf of McAllister and the seed company; Long initially accepted but rejected it the same day as inadequate.
- Through counsel, Long demanded $1,500; I.M.T. increased its offer to $1,300 and received no response.
- Long sued McAllister and the seed company for negligence seeking the vehicle’s value (pleaded at $1,300), interest from the date of loss (and higher interest after filing), and $500 for substitute transportation allegedly rented while he awaited adjustment.
- Long also sued I.M.T. alleging bad faith in adjusting the property-damage claim, including refusal to pay interest and loss-of-use and allegedly wrongful handling of the adjustment process.
- The trial court granted summary judgment for defendants, limiting recovery to the vehicle’s value with interest only from the date of judgment, denying loss-of-use damages, and dismissing the bad-faith claim against I.M.T.

## Issues

1. Whether a plaintiff whose vehicle is totally destroyed may recover prejudgment interest on the vehicle’s value from a date prior to judgment.
2. Whether loss-of-use damages (such as rental costs for substitute transportation) are recoverable when a vehicle is a total loss, at least for a reasonable period while the loss is adjusted.
3. Whether a third-party claimant may sue the tortfeasor’s liability insurer in tort for bad faith in adjusting the claimant’s property-damage claim.

## Decision

- The court affirmed in part, reversed in part, and remanded.
- The court held Long was entitled to prejudgment interest as part of compensatory damages; the trial court erred by limiting interest to post-judgment.
- The court held Long was entitled to an opportunity to prove loss-of-use damages; denial as a matter of law was error.
- The court upheld dismissal of the bad-faith claim, refusing to recognize a third-party bad-faith cause of action against the tortfeasor’s liability insurer based on claim adjustment conduct.

## Legal Principles

- When property-damage loss is reasonably ascertainable, prejudgment interest may be awarded as compensatory damages to account for the time the plaintiff is deprived of the value of the property.
- Damages for destruction of a motor vehicle may include consequential loss-of-use for a reasonable period, if proven, even when the vehicle is a total loss.
- A third-party claimant generally may not maintain a tort action for “bad faith” against the tortfeasor’s liability insurer based on the insurer’s handling or negotiation of the claimant’s loss.

## Conclusion

The Iowa Supreme Court required that the plaintiff be allowed to seek prejudgment interest and to attempt to prove loss-of-use damages stemming from the total destruction of his vehicle, but it declined to create a tort remedy permitting a third-party claimant to sue the tortfeasor’s liability insurer for alleged bad faith in adjusting the claim.


Long v. McAllister, 319 N.W.2d 256 (Iowa 1982)