Thursday, April 23, 2009

Prejudgment Interest Not Available on Lost Profits Claim

Last week in Bosem v. Musa Holdings, Inc. (4D07-3383) the Fourth DCA held (again) that prejudgment interest is not available on claims for lost profits. Prejudgment interest is only available when the amount the defendant refuses to pay "is known from the beginning." The court stated:

Florida case law suggests that on a claim for lost profits or price-erosion damages, prejudgment interest is not warranted because the amount of damages is generally unknown. For example, in Jones v. Sterile Products Corp., 572 So. 2d 519, 520 (Fla. 5th DCA 1990), the court held that lost profit and price erosion damages resulting from a breach of a noncompete agreement were unliquidated and, thus, that prejudgment interest was not warranted.

Moreover, “[t]o date, cases recognizing a right to prejudgment interest have all involved the loss of a vested property right,” and anticipated business profits are not a vested property right. See Scheible v. Joseph L. Morse Geriatric Ctr., Inc., 988 So.2d 1130, 1134 (Fla. 4th DCA 2008).


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