The Minnesota Supreme Court recently rejected an attempted double recovery when calculating preverdict interest.
On August 13, 2025, the Minnesota Supreme Court confirmed the purpose of preverdict interest is to compensate plaintiffs for the lost time-value of money not yet received. It clarified that if interest was awarded on money plaintiffs had already received (i.e., awarding preverdict interest on money received from collateral sources) that would provide plaintiffs with more than full compensation—“a consequence the Legislature [“likely”] did not intend when enacting [Minnesota’s statute governing interest on verdicts, awards and judgments].”
In Scheurer v. Shrewsbury, the Supreme Court addressed two issues: (1) whether a prevailing party is entitled to preverdict interest on the full amount of a verdict, or on a lesser amount entered as a judgment and reflecting the jury verdict amount less sums previously obtained from collateral sources such as payments received on account of health, automobile and other insurance coverages and benefits; and (2) whether serving a written offer of settlement negates the requirement that an action must be commenced within two years for preverdict interest to begin to accrue.
With respect to the second issue, the Supreme Court confirmed that a written offer of a settlement does not negate the statutory requirement that an action must be commenced within two years of a written notice of claim for preverdict interest to begin accruing from the time a party serves its notice of claim.
This article focuses on the first issue. Specifically, it focuses on the calculation of preverdict interest pursuant to Minnesota Statutes section 549.09, subdivision 1(b) when the verdict amount is reduced by payments from collateral sources. Further details about the Scheurer v. Shrewsbury preverdict interest calculation are discussed below.
Ultimately, the Minnesota Supreme Court held that under Minnesota’s statute governing interest on verdicts (i.e., Minn. Stat. § 549.09, subdivision 1(b)), a prevailing party is entitled to preverdict interest on the judgment, which does not include collateral sources deducted from the jury verdict.
In the Scheurer case, the jury rendered a verdict awarding Scheurer a total of $292,340 in compensatory damages. The defendant moved for determination of collateral sources and reduction of the damage award. As a result, the district court reduced the total jury verdict from $292,340 to $194,631 based on its determination of the collateral source payments received by the plaintiff.
Scheurer sought to add preverdict interest. He argued preverdict interest should be calculated on the $292,340 total jury verdict, before the collateral source reductions. Defendant responded that preverdict interest should be calculated on the $194,631 net jury verdict, after the collateral source reductions. The trial court held in favor of the defendant. The Court of Appeals reversed. The Supreme Court reinstated the trial court’s order concerning the award of preverdict interest.
The Supreme Court weighed whether to calculate preverdict or prejudgment interest based on the amount of damages awarded by the jury before deducting the compensation plaintiff already received from collateral sources or after deducting the compensation from collateral sources. The Supreme Court explained that “[t]he purpose of providing preverdict interest is to compensate the plaintiff for the lost time-value of that money, and that purpose is not served if a plaintiff is awarded interest on money the plaintiff actually and already received.”
The Supreme Court appears to have accepted the defendant’s argument that awarding preverdict interest on collateral sources from insurance benefits would amount to a double recovery. In doing so, the Supreme Court implicitly rejected the notion that preverdict interest is an element of compensatory damages to reimburse plaintiffs for the premiums they paid for insurance policies that provide those benefits.
The Supreme Court explained that allowing plaintiffs “to collect interest on money they obtained months before the jury returns its verdict compensates a plaintiff for money they are not owed,” and “may provide a plaintiff with more than full compensation.”
For example, using the amounts at issue in the Scheurer case, if a court calculated interest on a jury verdict amount of $292,340 at the statutory rate of 10%, preverdict interest would accrue at a rate of $29,234 per year. In contrast, calculating interest on a judgment amount of $194,613 provides for interest to accrue in the amount of $19,461.30 per year—a reduction of $9,772.70 per year in accrued preverdict interest. With statutory preverdict interest beginning to accrue up to two (2) years before commencement of an action, and many cases taking well-over a year to reach verdict, the savings realized by calculating preverdict interest on the verdict amount less collateral payments potentially provides considerable reductions to the ultimate judgment amount entered by a court.
While the Scheurer case initially may not appear significant because the verdict was under $300,000, the impact of the Supreme Court’s decision may manifest more clearly in nuclear verdict cases which involve larger damages amounts and can span for several years. Additionally, the Scheurer case provides further grounds for rejecting inflated settlement demands seeking to leverage settlement on unsupportable calculations of preverdict interest.
Lastly, although Scheurer involved Minnesota law, it provides a potential opportunity in other jurisdictions to seek a similar reduction in the ultimate amount of a judgment by deducting collateral source payments prior to calculating accrued preverdict interest.
Read the opinion here.