Tennessee’s post-judgment interest rate is now 9.5%.
Tennessee law changed several years ago to provide that a new post-judgment interest rate is computed every six months. Tenn. Code Ann. § 47-14-121. The rate is two percent below the formula rate published by the Tennessee Department of Financial Institutions and is officially published on the website of the Tennessee Administrative Office of the Courts.
A 2022 decision of the Tennessee Court of Appeals cleared up controversy about whether the interest rate changed every six months or whether the interest rate in effect at the time the judgment was entered remained in effect until the judgment was paid in full. The Court said
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.
Coffey v. Coffey, No. E2021-00433-COA-R3-CV, 2022 WL 1085039, at *4 (Tenn. Ct. App. April 11, 2022).
Notwithstanding the language in Coffey, one assumes that Tenn. Code Ann. § 47-14-122 is still good law. That statute provides as follows: “Interest shall be computed on every judgment from the day on which the jury or the court, sitting without a jury, returned the verdict without regard to a motion for a new trial.”
Thus, in a jury case, interest begins to run on the date that the jury announces its verdict, not the date that the trial court enters judgment on that verdict. This can make a material difference in the amount actually due from the judgment debtor.
But what about nonjury cases? The statute seems to suggest that interest begins to run on the date of the “verdict.” But there is no “verdict” in a nonjury case, so what is the rule is those cases? Davis v. Davis, 924 S.W.2d 351 (Tenn. 1996) answers those questions, after saying that the statute is “not a model of clarity:”
The ambiguity lies, of course, in the meaning of—a verdict of the court sitting without a jury. Since a “verdict” of the court is unknown in judicial proceedings in Tennessee, it would appear that the legislature must have intended that in non-jury cases, interest would begin to accrue upon the occurrence of *353 the event which is the practical equivalent of a jury verdict. In a jury case, the verdict constitutes the findings of fact and the application of the law thereto. State ex rel Myers v. Brown, 209 Tenn. 141, 351 S.W.2d 385, 388 (1961). It is the basis for the judgment, and the judgment must be in accordance with the verdict. Sam B. Gilreath, Caruthers’ History of a Lawsuit, § 385 (7th ed. 1951); see e.g. George v. Belk, 101 Tenn. 625, 49 S.W. 748, 749 (1899). Judgment is rendered on the verdict without the necessity of any further formality. Tenn.Code Ann. § 18–4–103(3) (1994); Leek v. State, 216 Tenn. 337, 392 S.W.2d 456, 457–58 (1965). Obviously, a judgment is not the legal or practical equivalent of a jury verdict.
A trial court’s finding of facts and conclusions of law, where announced by the court after completion of the trial of the case, is the event in the trial of a non-jury civil case most comparable to the entry of a jury verdict. The court’s findings and conclusions essentially dispose of all issues to be decided and constitute the basis for the judgment to be entered.
…
In the case before the Court, the trial court’s letter of January 2, 1992, contains the essentials of those findings of facts and conclusions of law required for purposes of precipitating the accrual of interest. It sets forth the court’s decision regarding alimony, child support, the division of marital property, and attorney’s fees. The judgment entered by the court conformed to the provisions set forth in the letter. The only additional determination made in the final judgment was the allowance of interest on the alimony in solido from the date of the letter. Even though counsel for the husband filed a notice for findings of fact and conclusions of law after having received the trial court’s letter, no further findings or statements were entered prior to the entry of the judgment. It appears that, except for the formality, the parties treated the letter as the findings of fact and conclusions of law. Consequently, the date of the court’s letter setting forth the court’s decision on each disputed issue is the date on which interest began to accrue on the award of alimony in solido. This conclusion is supported by the language of Rule 41 of the Tennessee Rules of Appellate Procedure, which provides:If a judgment for money in a civil case is affirmed or the appeal is dismissed, whatever interest is allowed by law shall be payable computed from the date of the verdict of the jury or the equivalent determined by the court in a non-jury case, which date shall be set forth in the judgment entered in the trial court….
The letter in this case was the “equivalent determination” of the court in a non-jury case.
Davis v. Davis was recently affirmed in Grace v. Grace, No. M2021-00116-COA-R3-CV, 2022 WL 4138889, at *11, fn. 15 (Tenn. Ct. App. Sept. 13, 2022) so one assumes that Coffey was not meant to trump Tenn. Code Ann. § 47-14-122 or the cases interpreting it.
Practice Tip: when drafting a judgment after receiving a jury verdict, include a paragraph that addresses the accrual of interest on the judgment. For example, if the jury returns a verdict on January 10, 2023 and the interest rate is 9.5%, include language like this in the judgment submitted to the Court for approval:
As provided by Tenn. Code Ann. §§ 47-14-121 and 122, interest shall accrue on this judgment from January 10, 2023, the date of the jury’s verdict, at the rate posted on the website of the Tennessee Administrative Office of the Courts for the six-month period beginning January 1, 2023. A review of that website indicates the posted rate is 9.5%, and thus interest shall accrue at 9.5% per annum from January 10, 2023 until the judgment is paid in full. The rate of interest on the judgment will not increase or decrease during the life of the judgment.
Be sure to provide the Court with a copy of the printout of the webpage that shows the interest rate in effect on the date of the jury verdict so that it can confirm that the correct rate was used.
Finally, remember that some statutes have a special provision for the accrual of interest. For example, Tenn. Code Ann. § 36-5-101 provides for prejudgment interest on unpaid child support.