A Matter of Interest
February 13, 2018 § 1 Comment
It is well settled in Mississippi that a money judgment must bear interest from the date of rendition. I discussed the point in a previous post that you can read at this link.
But is the interest award to be simple interest or compound interest? The difference can be significant.
The question arose in the COA case, Orcutt v. Chambliss, et al., decided January 16, 2018. The case arose from a chancellor’s decision voiding a tax sale and finding that the tax-sale purchaser did not acquire title by adverse possession. In awarding a judgment for statutory damages, the chancellor compounded the interest. The COA reversed. Judge Lee’s opinion explained:
¶35. … The chancellor erroneously calculated the statutory damages based upon compound interest … . As noted above, the statutes do not explicitly authorize compound interest. “The general rule is that ‘when interest is allowable, it is to be computed on a simple rather than compound basis in the absence of express authorization otherwise.’” Exxon Corp. v. Crosby-Miss. Res. Ltd., 40 F.3d 1474, 1489 (5th Cir. 1995) (citing Stovall v. Ill. Cent. Gulf R.R., 722 F.2d 190, 192 (5th Cir. 1984)). Therefore, we reverse and remand in part for the chancellor to recalculate the amount of statutory damages—based upon simple interest—on all of the taxes Orcutt has paid since the tax sale in 1993.
That’s pretty much it. Interest on a judgment is to be simple unless the statute directs otherwise.