Florida's Post-Judgment Interest Rate (Adjusted Quarterly)

Previously, Florida's Chief Financial Officer established the post-judgment interest rate on an annual basis. However, beginning July 1, 2011, the CFO sets the interest rate on December 1, March 1, June 1, and September 1 of each year. 

The interest rates for 2011 and the first quarter of 2012 are listed below by date:

• 01/01/2011-09/30/2011: 6%
• 10/01/2011-12/31/2011: 4.75%
• 01/01/2012-03/31/2012: 4.75%

The image below was created by Florida's Chief Financial Officer:

A post when the 2011 statutory rate of interest was announced can be viewed HERE.

A post when the 2010 statutory rate of interest was announced can be viewed HERE.

Florida's 2011 Statutory Interest Rate Is 6% Per Annum Or .0001644 Per Day

The Florida Department of Financial Services announced that the Statutory Interest Rate for 2011 will be 6% per annum or .0001644 per day.  That is the same rate that applied in 2010.  The interest rate for each year from 1981 through 2011 is below.
2011 Statutory Rate of Interest - Florida Department of Financial Services



A post when the 2010 statutory rate of interest was announced can be viewed HERE.

Prejudgment Interest Not Available On Anticipated Lost Profits & Actions In Trial Court After Notice of Appeal

In Lauderdale Marine Center, LTD. v. MYD Marine Distributors, Inc. (4D08-3638 & 4D09-446), the Fourth District addressed two issues.  First, the court addressed prejudgment interest.  The court stated:

Prejudgment interest may be awarded where the plaintiff suffers an out-of-pocket pecuniary loss and establishes a fixed date of the loss...Damages are liquidated 'when a verdict has the effect of fixing damages as of a prior date.'...Future damages, such as “anticipated business profits,” are not vested property rights and cannot be liquidated as of a past date certain.

The second issue addressed was issues that happen in the trial court after the filing of a notice of appeal and the court stated:

We also note that we may not consider appellant’s arguments regarding the attorneys’ fee hearing. This court may review only proceedings occurring prior to the date of appellant’s notice of appeal. Fla. R. App. P. 9.110(h). As the notice of appeal was filed months prior to the hearing on attorneys’ fees, we lack jurisdiction to consider the issue.

Florida Supreme Court Accepts Jurisdiction To Determine Whether Fourth District Previously Erred On Remand

The Florida Supreme Court accepted jurisdiction, again, in the case of Butler v. Yusem, et al (SC09-1508).  The order accepting jurisdiction can be found HERE.  The petitioner's brief on jurisdiction can be found HERE.  The respondent did not file a jurisdictional brief.  The issue raised by the petitioner is:

WHETHER THE DECISION ON REMAND BY THE FOURTH DISTRICT COURT OF APPEAL CONFLICTS WITH THIS COURT'S OPINION IN THIS VERY CASE AND WITH THIS COURT'S PRECEDENT ON THE TIPSY COACHMAN DOCTRINE.

A prior post, HERE, and stated as follows:

On remand from the Florida Supreme Court (Butler v. Yusem, 3 So. 3d 1185 (Fla. 2009)), the Fourth District applied the tipsy coachmen doctrine to affirm the decision from the Palm Beach County Circuit Court. The Fourth District, as instructed by the Supreme Court, did reverse as to prejudgment interest. The May 27, 2009 decision from the Fourth District can be found here. The decision by the Fourth District reversed by the Florida Supreme Court (966 So. 2d 405 (Fla. 4th DCA 2007)) can be found here.

Justice Canady and Justice Polston dissented from the decision to accept jurisdiction. 

Date Of Prejudgment Interest Must Be Set By Trial Court - Amount By Statute

In Cohen & Cohen, P.A., Cobis v. Gerson, Preston, Robinson & Company, P.A. (4D08-1479), the Fourth District affirmed in part and reversed in part a decision relating to prejudgment interest.  Briefly, the facts are as follows: "Following a bench trial, the trial court denied the Cohen Entities’ claims and awarded Conrad Scherer the principal sum of $159,543.09 for costs incurred during its representation of the Cohen Entities and $10,127.93 in prejudgment interest." 

Interestingly, the parties agreed as to the first issue, the trial court erred in failing to fix a specific date for the award of prejudgment inerest.

Both parties cite H & S Corp. v. U.S. Fidelity & Guaranty Co., 667 So. 2d 393 (Fla. 1st DCA 1995), in which the court held that the trial court’s failure to make a finding regarding a fixed date of actual expenditure before awarding and calculating prejudgment interest required the case to be remanded for further proceedings. Id. at 399.

On that basis the case was remanded.  However, the court rejected the appellant's argument that the trial court erred in failing to make a finding about the amount of prejudgment interest.  The court stated:

The Cohen Entities’ argument that the trial court erred in failing to make a finding as to the interest rate applied is without merit.

The amount of interest to be paid, absent a controlling contractual provision, is a matter of policy to be determined by the legislature. The judiciary does not have discretion in this matter but must apply the statutory interest rate in effect at the time the interest accrues.

Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985). Accordingly, we reverse and remand for the trial court to determine a date on which prejudgment interest began to accrue.

Notably (or not), the now defunt firm of Rothstein, Rosenfeldt & Adler represented the appellee.

Florida's 2010 Statutory Interest Rate Is 6% Per Annum Or .0001644 Per Day

The Florida Department of Financial Services announced that the Statutory Interest Rate for 2010 will be 6% per annum or .0001644 per day.  The interest rate for each year from 1981 through 2010 is below.

Florida Statutory Interest 2010

Florida Supreme Court To Determine Whether Trial Court Can Reserve Jurisdiction To Determine Prejudgment Interest

The Florida Supreme Court has accepted jurisdiction in Westgate Miami Beach, Ltd. v. Newport Operating Corp. (SC09-1881).  The order accepting jurisdiction can be found here.  The decision from the Third District under review was discussed here.  The order granting ceritification was discussed here.  The questions certified were:

WHERE THERE HAS BEEN AN AGREEMENT ON, OR NO OBJECTION TO, A RESERVATION OF JURISDICTION TO AWARD PREJUDGMENT INTEREST, SHOULD THE RESERVATION BE UPHELD IN ORDER TO PREVENT AN INJUSTICE NOTWITHSTANDING THE RULE IN MCGURN V. SCOTT, 596 So. 2d 1042 (Fla. 1992)?

WHERE A JUDGMENT CONTAINS A RESERVATION OF JURISDICTION TO AWARD PREJUDGMENT INTEREST, SHOULD THE APPEAL OF SUCH A JUDGMENT BE TREATED AS A PREMATURE APPEAL UNDER FLORIDA RULE OF APPELLATE PROCEDURE 9.100(l), OR MUST THE APPEAL BE TREATED AS ACCOMPLISHING A WAIVER OF PREJUDGMENT INTEREST PURSUANT TO MCGURN V. SCOTT, 596 So. 2d 1042 (Fla. 1992)?

WHETHER A TRIAL COURT SHOULD BE ALLOWED TO RESERVE JURISDICTION TO AWARD PREJUDGMENT INTEREST POST-APPEAL AS IT CAN WITH ATTORNEYS’ FEES AND COSTS?

Fourth District Chief Judge Gross Suggests Court Will Recede From Chapman v. Chapman & O’Neill v. O’Neill

In Mathers v. Brown (4D08-1470), the Fourth District denied a motion for rehearing and rehearing en banc of THIS opinion released on September 9, 2009.  Chief Judge Gross wrote a concurring opinion stating:

Appellant’s motion for rehearing en banc was directed at the issue of prejudgment interest. In the proper case, when the issue is before us, this court should recede en banc from Chapman v. Chapman, 866 So. 2d 118 (Fla. 4th DCA 2004), and O’Neill v. O’Neill, 868 So. 2d 3 (Fla. 4th DCA 2004). Read together, these cases hold that the appreciation in the value of a non-marital brokerage account during a marriage is a marital asset to the extent that it exceeds the passive appreciation in the brokerage account as measured by an appropriate stock index. These cases have gone beyond the language of the statute to create complexity where a spouse brings assets to a marriage.

Reservation Of Jurisdiction To Award Prejudgment Interest Questions Certified To The Florida Supreme Court

In Westgate Miami Beach, Ltd. v. Newport Operating Corp. (3D09-264),  the Third District granted a motion for certification of questions of great public importance.  The underlying decision was previously discussed here.  The Second District also recently discussed the issue [see here].  The questions certified by the Third District to the Florida Supreme Court as questions of great public importance are below:

WHERE THERE HAS BEEN AN AGREEMENT ON, OR NO OBJECTION TO, A RESERVATION OF JURISDICTION TO AWARD PREJUDGMENT INTEREST, SHOULD THE RESERVATION BE UPHELD IN ORDER TO PREVENT AN INJUSTICE NOTWITHSTANDING THE RULE IN MCGURN V. SCOTT, 596 So. 2d 1042 (Fla. 1992)?

WHERE A JUDGMENT CONTAINS A RESERVATION OF JURISDICTION TO AWARD PREJUDGMENT INTEREST, SHOULD THE APPEAL OF SUCH A JUDGMENT BE TREATED AS A PREMATURE APPEAL UNDER FLORIDA RULE OF APPELLATE PROCEDURE 9.100(l), OR MUST THE APPEAL BE TREATED AS ACCOMPLISHING A WAIVER OF PREJUDGMENT INTEREST PURSUANT TO MCGURN V. SCOTT, 596 So. 2d 1042 (Fla. 1992)?

WHETHER A TRIAL COURT SHOULD BE ALLOWED TO RESERVE JURISDICTION TO AWARD PREJUDGMENT INTEREST POST-APPEAL AS IT CAN WITH ATTORNEYS’ FEES AND COSTS?

Verdict Against NOVA Upheld -- Prejudgment Interest Reversed

In Nova Southeastern University of the Health Sciences, Inc., d/b/a College of Osteopathic Medicine v. Sharick (3D08-2507), the Third District held that "we agree that the court below correctly refused to award prejudgment interest on the loss of past earnings award because the jury failed to fix a date of that loss," however, "Because no prejudgment interest was appropriate in this case, awarding such interest between the date of the verdict and the date of the judgment was error."

See Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985) (finding that prejudgment interest is awardable based on a mathematical computation “[o]nce a verdict has liquidated the damages as of a date certain”); cf. Herrero v. Pearce, 571 So. 2d 96, 97 (Fla. 1st DCA 1990) (where a monetary judgment was entered against a father requiring him to pay back child support, ordering that prejudgment interest be calculated at the statutory rate “from each monthly date of loss when [the father] should have made each payment”); Metro. Dade County v. Bouterse, Perez & Fabregas Architects Planners, Inc., 463 So. 2d 526, 527 (Fla. 3d DCA 1985) (where a party breached a contract calling for progress payments over a period of time, finding that prejudgment interest should be calculated on each progress payment from the date it would have become due). We also agree that no such interest was proper in this case as to the loss of future earnings. See Mission Square, Inc. v. O’Malley’s, Inc., 783 So. 2d 1151, 1152 (Fla. 1st DCA 2001) (finding that prejudgment interest is not recoverable where a judgment awards the present value of lost future damages, explaining that “[b]ecause present value actually replaces future losses, and takes into account an interest rate, it would be incongruent to tack onto the present value figure an additional interest rate representing a time prior to the time future losses begin to occur”).

Prior appeals in the same underlying disputes can be found at Sharick v. Southeastern University of Health Sciences, Inc., 780 So. 2d 136 (Fla. 3d DCA 2000).  A retrial took place in January 2008 which led to the most recent dispute.  An article in the SunSentinel titled "Appeals court upholds $4.3 million judgment against Nova Southeastern" can be found here.

Prejudgment Interest Due To Insured From Date Payment Was Due

In North Point Insurance Company v. Thomas (3D08-2245), the Third District again held that "The general rule is that interest on a loss payable under an insurance policy is recoverable from the date payment is due pursuant to the provisions of that policy." Further, "Once the insurer denies coverage, it is deemed to have waived the policy provision for deferred payment and, should it pay, becomes responsible for prejudgment interest from the date of loss. "[I]f the insurer denies liability, interest begins to run from the date of the loss, even where the policy provides for payment at a later date."

Review of Arbitration Awards and Prejudgment Interest

In The Keyes Company v. Spencer (4D07-3837), the Fourth District discussed the review of arbitration awards.

With respect to the award of attorney’s fees to Spencer, Spencer waived her right to have the court modify the arbitration award and award fees. She had three opportunities to seek modification or clarification of the award...She filed a timely motion to correct the award in which she asked the arbitrator to award her prevailing party fees and costs. § 682.10, Fla. Stat. (2007). The arbitrator denied that motion on the ground that he had properly decided those issues. The trial court then confirmed the award, and Spencer did not file motions to vacate or modify the award within ninety days of its entry, as required by sections 682.13(2) and 682.14(1), Florida Statutes (2007). As a result, the trial court erred in later granting Spencer fees against appellant Keyes. We reverse that portion of the award.

As this court has explained, “[r]eview of arbitration proceedings is extremely limited. A high degree of conclusiveness attaches to an arbitration award because the parties themselves have chosen to go this route in order to avoid the expense and delay of litigation.” Davenport v. Dimitrijevic, 857 So. 2d 957, 961 (Fla. 4th DCA 2003) (citations omitted).

***

On cross-appeal, we also reverse the denial of prejudgment interest to Spencer.

Spencer argues that she is entitled to interest on the amount of the deposit that she recovered in the arbitration award from the date of the arbitration award, which was September 5, 2006. We agree. The law governing this issue was set out in Okun v. Litwin Securities, Inc., 652 So. 2d 387, 388-89 (Fla. 3d DCA 1995), as follows:

Prejudgment interest must be awarded, where the claim is liquidated, from the date when payment of the claim is due. Metropolitan Dade County v. Bouterse, Perez, & Fabregas Architects, Inc., 463 So. 2d 526 (Fla. 3d DCA 1985). An arbitration award is akin to a verdict, see U.S.A.A. v. Smith, 527 So. 2d 281 (Fla. 1st DCA 1988), and once an arbitration award is confirmed by the court it becomes, like a verdict, the judgment of that court and interest on that judgment runs from date of its entry until satisfaction of same. The trial court may not award interest which predates an arbitration award. . . . The arbitration award liquidated the amount owed the Okuns and Braunstein from the date of its entry until that award was reduced to judgment, thus prejudgment interest was not only proper but was required.

Accordingly, we hold the trial court erred in its order denying Spencer prejudgment interest as well as in its award of attorney’s fees to Spencer. We reverse as to those issues and affirm as to all other issues raised.

Third District Reverses Summary Judgment

In Bonilla v. Yale Mortgage Company (3D08-2160), the Third District reversed the trial court's summary judgment and stated:

Based upon the following circumstances, we agree with Bonilla that the trial court abused its discretion by denying Bonilla’s motion for rehearing: (1) Yale Mortgage moved for summary judgment seven days after Bonilla (who was unrepresented by counsel) filed and was granted an extension of time to obtain counsel and answer the complaint; (2) the attorney who received the pro bono referral package appeared at the hearing and requested a continuance, explaining that he had not yet spoken to Bonilla and therefore could not file a notice of appearance; (3) the trial court denied the request to continue the hearing; (4) pro bono counsel subsequently filed a notice of appearance and a timely motion for rehearing on Bonilla’s behalf, raising several issues; (5) the trial court did not address the issues articulated by Bonilla in her motion for rehearing; (6) the final summary judgment of foreclosure indicates that Bonilla was charged interest at an annual rate of 18% plus a 7% “prepayment penalty”; and (7) the trial court failed to resolve a critical legal issue: whether the 7% “prepayment penalty” qualifies as additional interest upon default, and if it does, when added to the 18% interest charged to Bonilla by Yale Mortgage, is the total interest charged by Yale Mortgage upon default usurious and unlawful.

Prejudgment Interest On Attorneys Fees...

In McCarthy v. Estate of Robert Frederick Krohn (4D08-1742), the Fourth District considered and held the following:

We consider challenges to the circuit court’s rulings on prejudgment interest on attorney’s fees and costs established in a charging lien proceeding arising from the claim of a law firm discharged by the client in a personal injury action. We hold that prejudgment interest runs from the date the client received the proceeds of settlement, a time fixed by the contract between the client and the law firm.

***

Where a law firm obtains a quantum meruit recovery after being discharged in a contingent fee case, the firm is entitled to prejudgment interest on the award set by the court. See Quality Engineered, 670 So. 2d at 931; Arabia v. Siedlecki, 789 So. 2d 380, 384 (Fla. 4th DCA 2001). “[I]nterest accrues from the date the entitlement to attorney fees is fixed through agreement, arbitration award, or court determination. . . .” Quality Engineered, 670 So. 2d at 933. Here, the underlying fee agreement made entitlement to attorney’s fees contingent on the “proceeds of recovery.” Thus the firm is entitled to prejudgment interest on the attorney’s fee award from the date McCarthy received the proceeds of settlement.

Prejudgment Interest After an Insurance Appraisal and What is a Denial of Coverage?

In Sunshine State Insurance Company v. Davide (3D08-2376), the Third DCA held prejudgment interest is awarded from the date payment is due and not the date the insured suffers his loss.

The insured and the insurer participated in an appraisal which contained the following question:

This appraisal award is in total, and money previously paid by the carrier to its insured on the subject claim, if any, should bededucted from this award. This appraisal award is subject to the terms and conditions of the policy of insurance (e.g., deductible) and thelaws of the State of Florida.

After the appraisal, the insurer could not determine if it should deduct depreciation from the payment. Unable to get a response from the umpire, the insurer paid the award and subtracted the depreciation. "Some three months later, Davide brought suit to confirm the appraisal award. According to Sunshine, that same day, Davide’s counsel obtained a letter from the umpire which, according to Davide’s counsel, confirmed counsel’s understanding that the award was an actual cash value award which took depreciation into account. This information was provided to Sunshine on March 8, 2007, and the amount previously withheld by Sunshine was paid to Davide on April 4, 2007."

The insured argued deducting the depreciation was a denial of coverage and the trial court agreed. The Third DCA, however, did not. "The record before us confirms that Sunshine has never denied coverage of Davide’s claim, but rather only disputed the amount to be paid under the policy to satisfy this claim...As the court in Mallett makes plain, the provisions governing appraisal deal with “covered” claims and 'determine the date from which the coverage payment is due, as well as when interest is due on the amounts payable'.”

Here, Sunshine’s debt became due when the appraisal liquidated Davide’s loss. That amount came due under the policy sixty days after “[t]here [was] a filing of an appraisal award. . . with [Sunshine].” Davide is therefore entitled to pre-judgment interest on that portion of the appraisal award not timely paid within sixty days of the filing of the appraisal award with Sunshine, not from the date that Davide’s home was damaged.

Reservation of Jurisdiction to Determine Prejudgment Interest is Improper

In Westgate Miami Beach, Ltd. v. Newport Operating Corp. (3D09-264), the Third District affirmed the trial court's order denying the movant's motion for prejudgment interest.

The trial court entered a judgment in favor of plaintiff, however, reserved jurisdiction to award prejudgment interest, costs and attorneys fees. Neither party objected to the trial court reserving jurisdiction and both parties believed the trial court could do so.

The plaintiff appealed the final judgment [arguing 7.7 million was insufficient]. In June 2008, the Third District issued its mandate in that appeal affirming the judgment. See Newport Operating Corp. v. Westgate Miami Beach, Ltd., 982 So. 2d 698 (Fla. 3d DCA 2008) (table).

After the issuance of the mandate by the Third District, the parties attended a hearing in the trial court on Plaintiff's motion to assess prejudgment interest. The trial court indicated it was going to deny the motion and the plaintiff petitioned the Third District for a writ of prohibition, writ of mandamus and to enforce the June mandate. Three different panels of the Third District denied each of the three filings.

In January 2009, the trial court entered the order it had previously indicated it was going to enter and denied the plaintiff's motion for prejudgment interest.

Citing McGurn v. Scott, 596 So. 2d 1042 (Fla. 1992), the Third District held that the original order appealed was not a final order. However, "While a judgment that reserves jurisdiction to award prejudgment interest technically is not a final order, the Florida Supreme Court in McGurn held that:

[I]f a trial court improperly renders such a judgment which appears to be, or has the attributes of a final judgment, the order will be deemed to have become a final judgment requiring review by immediate appeal. Further, because an appellate court’s jurisdiction is exclusive with respect to the subject matter of an appeal, once the appeal is taken the trial court will lack the jurisdiction to take any further action in the matter. Thus, the parties will be deemed to have waived any matter reserved for future adjudication by the trial court, with the exception of attorneys’ fees and costs.

Further, the fact that the trial court determined entitlement to prejudgment interest does not change the analysis. "The harshness of the ruling in McGurn is softened, to some extent, by Florida Rule of Civil Procedure 1.530(b), and Florida Rule of Appellate Procedure 9.600(b). Rule 1.530(b) empowers the plaintiff to file a motion for rehearing to correct the improper final judgment." Since the plaintiff did not seek to correct the improper final judgment, and waited until after a mandate was issued from the appellate court, the plaintiff waived its right to prejudgment interest.

Notably, Judge Cope issued a concurring opinion in which he agreed the court was bound by McGurn and that he agreed entirely with the majority opinion. He, however, believes McGurn should be revisited. He stated: "It would better serve that policy to modify the McGurn rule to eliminate the automatic waiver. An appeal containing an improper reservation of jurisdiction should be subject to dismissal on motion of a party, or the court. This is the procedure for dealing with other premature appeals, and it is hard to see a good reason why an improvident retention of jurisdiction should be treated differently."

On Remand the Fourth DCA Affirms Applying the Tipsy Coachmen Doctrine

On remand from the Florida Supreme Court (Butler v. Yusem, 3 So. 3d 1185 (Fla. 2009)), the Fourth District applied the tipsy coachmen doctrine to affirm the decision from the Palm Beach County Circuit Court. The Fourth District, as instructed by the Supreme Court, did reverse as to prejudgment interest. The May 27, 2009 decision from the Fourth District can be found here. The decision by the Fourth District reversed by the Florida Supreme Court (966 So. 2d 405 (Fla. 4th DCA 2007) can be found here.

Detailed Eleventh Circuit on Preferential Transfers

In Carrier Corp. v. Buckley (08-11098) Judge Cudahy wrote a detailed published opinion. (Judge Richard D. Cudahy is a Seventh Circuit Judge sitting on the Eleventh Circuit by designation.) The opinion goes into detail about "ordinary course of business," "preferential transfers" and other bankruptcy theories.

The opinion explains the issues in great detail but concludes the trustee was entitled to recover the preferential transfer and:

1.) The payments were not in the ordinary course of business (and an explanation of this issue); and

2.) A trustee is not entitled to recover prejudgment interest when it recovers preferential transfers. However, an award of prejudgment interest is appropriate in the bankruptcy court's discretion.

Prejudgment Interest on Fees and Costs Begins on Date of Entitlement

In Lorillard Tobacco Company v. French (3D08-1525) the Third DCA held "plaintiff’s counsel became “entitled” to the fees and costs as of the date the plaintiff obtained a judgment substantially higher than 125% of her written settlement offer, we affirm."

The holding speaks for itself, however, the facts are worth mentioning.

"The plaintiff was one of several thousand flight attendants who sued tobacco companies for second-hand exposure to smoke. On November 13, 2000, Ms. French’s attorney tendered an offer of judgment to settle her claim for $2,676. Lorillard did not accept the offer. At trial of the case in 2002, a jury awarded Ms. French $5,500,000. On September 24, 2002, the court granted a motion for remittitur and entered an amended final judgment in the amount of $500,000."

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).