When calculating post-judgment interest, the statutory rate in effect when the judgment is entered applies for the entire time period between entry of the judgment and its payment.
In Coffey v. Coffey, No. E2021-00433-COA-R3-CV, 2022 WL 1085039 (Tenn. Ct. App. April 11, 2022), plaintiff had won a large judgment against defendant based on breach of fiduciary duty and conversion. Defendant appealed the judgment, but it was affirmed by the Court of Appeals and the Supreme Court denied review. The case then went back to the trial court for calculation of post-judgment interest.
The trial court used the interest rate calculated by the Administrative Office of the Courts based on Tenn. Code Ann. § 47-14-121 for January 13, 2020, the day the judgment was entered. The court applied that rate as the post-judgment interest rate for the entire period at issue, which was January 13, 2020 through April 26, 2021. In this appeal, defendant argued that a different interest rate should have been used for a portion of this time period, as the statutory interest rate fluctuated, but the Court of Appeals rejected this argument and affirmed the trial court’s calculation.
Defendant asserted that “the Trial Court should have used two different interest rates in its calculation of post-judgment interest because the rate on the website of the Tennessee Administrative Office of the Courts changed in July 2020 after entry of the judgment.” The Court of Appeals, however, found Tenn. Code Ann. § 47-14-121 to be “clear and unambiguous” in its direction to apply a single interest rate. The Court explained:
Although Defendant argues that the post-judgment interest rate should be modified for each six-month period that the judgment was owed, this is not how the General Assembly has chosen to calculate post-judgment interest rates. We hold that Tennessee Code Annotated § 47-14-121(a) requires a trial court to calculate post-judgment interest using only the statutory interest rate in effect when the judgment is entered. The applicable post-judgment interest rate does not fluctuate when applied to a particular judgment; instead, it remains the same for the entire period of time following entry of the judgment awarding damages until the judgment amount is paid.
The trial court’s judgment was accordingly affirmed.
NOTE: This opinion was released three months after oral arguments in this case.
Note: Chapter 24 of Day on Torts: Leading Cases in Tennessee Tort Law has been updated to include this decision.
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