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Click here for the full text of this decision FACTS:Jimmie R. Norris was injured during a car accident with Allen Johnston on Dec. 8, 1997. Norris sued Johnston on March 29, 1999, and subsequently settled with Johnston for $40,000 ($10,000 less than Johnston’s policy limit). On the same day that he dismissed his claims against Johnston, Norris added State Farm as a defendant, seeking to recover benefits under his UIM policy. Although State Farm paid Norris $5,000 in personal injury protection (PIP) benefits, it never offered to settle Norris’s UIM claim. A jury found that: 1. Johnston’s negligence caused the accident; 2. Norris suffered only past damages in the amount of $51,200; and 3. Norris’s attorney’s fees were $11,500 for trial, $5,000 for appeal to the court of appeals, and $7,500 for appeal to the Supreme Court. The trial court applied a $55,000 credit (the sum of Johnston’s policy limit and the PIP benefits already paid to Norris) and signed a take-nothing judgment in State Farm’s favor, finding that Norris was not entitled to attorney’s fees or prejudgment interest. Reversing the trial court’s judgment, the 10th Court of Appeals held that Norris was entitled to both prejudgment interest and attorney’s fees. HOLDING:Affirmed in part, reversed and remanded in part, reversed and rendered in part. The Texas Supreme Court applied the “declining principal” formula to calculate prejudgment interest in the UIM case. As Chief Justice Tom Gray of the 10th Court of Appeals correctly observed, however, the record in this case does not reflect the dates of either the PIP or the settlement payments. Because prejudgment interest cannot be calculated until those dates are established, the court remanded the case to the trial court for determination of those dates. The court held that State Farm is entitled to a take-nothing judgment with respect to attorneys’ fees. An insured may recover attorneys’ fees under Texas Civil Practice & Remedies Code ��38.001 and 38.002 only if the insurer does not tender the UIM benefits within 30 days after the trial court signs a judgment establishing the liability and underinsured status of the other motorist. Chapter 38 requires Norris to present a claim to State Farm, which must pay the “just amount owed” within 30 days of presentation. Under a UIM policy, however, there can be no “just amount owed” until the trial court establishes liability and damages. Thus, Norris could not seek attorney’s fees until, at the earliest, 30 days after the trial court rendered judgment assuming that State Farm refused to pay the amount due under the UIM contract. Therefore, the court held that the trial court did not err in refusing to award Norris attorneys’ fees, and the 10th Court of Appeals erred in reversing that judgment. OPINION:Jefferson, C.J., delivered the opinion of the court. O’Neill, J., did not participate in the decision.

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