Judgment Interest Is Capped at 10 Percent No More, No Less
ALM Media
Updated
In a personal injury action, after the fact finder renders a verdict or the court enters judgment, a plaintiff is entitled to interest on the amount rendered until it is paid. [See Conn. Gen. Stat. 37-3b (2017)].
Effective May 27, 1997, the legislature amended Connecticut General Statute Section 37-3b to read:
"[I]nterest at the rate of ten per cent a year, and no more, shall be recovered and allowed in any action to recover damages for injury to the person, or to real property, caused by negligence, computed from the date that is twenty days after the date of judgment or the date that is ninety days after the date of verdict, whichever is earlier, upon the amount of the judgment."
The amendment also added a provision that tolls the accrual of post-judgment interest when a plaintiff delays by filing a post-verdict or post-judgment motion or appeal.
Prior to the legislative amendment, Section 37-3b mirrored the language of Section 37-3a, and read:
"[I]nterest at the rate of ten per cent a year, and no more, may be recovered and allowed in any action to recover damages for injury to the person, or to real or personal property, caused by negligence, computed from the date of judgment."
[See C.G.S. 37-3b (1996)].
Under the old version, judicial discretion was built into the statute. A judge need not award post-judgment interest. Under the current version, post-judgment interest is mandatory. Despite this change, confusion persists regarding whether the mandatory interest to be awarded under Section 37-3b is at the rate of 10 percent or something less. Adding to the confusion is the Connecticut Supreme Court case Dilieto v. County Obstetrics & Gynecology Group, 310 Conn. 38 (2013), which interpreted the pre-amendment version of 37-3b but did so several years after the statute was amended to its current language because the cause of action accrued before 1997.
The plain language of the statute, as well as the Connecticut Supreme Court's discussion of the statutory history, suggest that the current version of Section 37-3b mandates interest at the rate of 10 percent, and that the post-judgment interest rate can never exceed that rate regardless of any other statutorily allowable interest for the same period.
Dilieto went to the Connecticut Supreme Court four times. On the third appearance, the court addressed whether, and to what extent, the plaintiff was entitled to post-judgment interest under Section 37-3b. [See Dilieto v. County Obstetrics & Gynecology Group, 316 Conn. 790 (2015), or Dilieto III.] In that case, the cause of action accrued in 1995, resulting in post-judgment interest as allowed under the pre-amendment version of Section 37-3b. Although the court addressed the Section 37-3b claim at length in its 2015 opinion, it noted repeatedly that it was interpreting the permissive pre-amendment version of Section 37-3b, rather than the current mandatory version of the statute [see Dilieto III, at 793 n.1]. So Dilieto III should not be viewed as authority on how the amended version of Section 37-3b is to be interpreted.
So what exactly does Section 37-3b mean?
There appears to be no appellate authority on the interpretation of the current version of Section 37-3b. Two principles guide the determination of a statute's plain meaning. First, "the meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes." [See Conn. Gen. Stat. 1-2z.] Second, there is a presumption that every sentence, clause, or phrase used in an act has meaning and that no part is superfluous. [See Sears, Roebuck v. Board of Tax Review, 241 Conn. 749, 765 (1997).]
Looking to the current version of Section 37-3b and applying these simple rules, Section 37-3b mandates an award of 10 percent post-judgment interest no more, no less.
In the past, when Section 37-3b contained the word "may," courts construed the judicial discretion afforded by the use of that term to include the discretion to award any amount up to 10 percent. [See Dilieto v. County Obstetrics & Gynecology Group, 310 Conn. 38, 60 (2013).]
But Section 37-3b went through a significant overhaul in 1996. First, the statute now contains the term "shall." Generally, the use of the term "shall" in a statute suggests a mandate [see Marciano v. Jimenez, 324 Conn. 70, 77 (2016)]. Thus, the award of post-judgment interest is no longer discretionary. Under the previous version of the statute, the Connecticut Supreme Court interpreted the clause "and no more" in conjunction with the term "may" to hold that interest may be awarded up to the rate contained in the statute. See Sears, Roebuck v. Board of Tax Review, 241 Conn. 749, 765 (1997). This interpretation is logical when a statute permits judicial discretion to award interest in the first instance. But when Section 37-3b was amended to replace the word "may" with "shall," the legislature overtly acted to remove upward and downward discretionary departures from the set interest rate.
Second, Section 37-3b contains the clause "interest at the rate of ten per cent a year" as well as the clause "and no more." Applying principles of statutory construction, both clauses must have meaning neither should be superfluous. If the phrase "and no more" is interpreted to allow a downward variance of the rate proposed by the statute, then the phrase "at the rate of ten per cent a year" becomes superfluous. In common parlance, when your boss tells you "I will pay you at the rate of twenty dollars per hour, and no more," you would not expect to receive a pay check reflecting a rate of ten dollars an hour. Interpreting "and no more" to mean "up to" renders the clause "at the rate of" superfluous, which is contrary to both principles of statutory interpretation articulated above.
So if the clause "and no more" does not mean "up to" then what does the clause "and no more" mean? Our principles of statutory interpretation tell us to view Section 37-3b in conjunction with other statutes [see Conn. Gen. Stat. 1-2z]. The Connecticut Supreme Court did just that in its decision of Gionfriddo v. Avis Rent A Car Sys., 192 Conn. 301, 308 (1984), overruled in part by Dilieto III. In Gionfriddo, the Connecticut Supreme Court considered whether offer-of-compromise interest awarded under 52-192a stops accruing at the time of payment or on the date of judgment. In determining that offer-of-compromise interest stops accruing on the date of judgment, the court relied on the clause "and no more" contained within Section 37-3a. In so doing, the court held that because Section 37-3a provides for the accrual of interest between judgment and payment, the clause "and no more" prevents any interest awarded under other statutes from adding to the rate set in the statute for the accrual period covered by the statute.
Interpreting Section 37-3b as limiting interest to the rate of 10 percent gives meaning to each word of Section 37-3b and provides a mandate that no other statute awarding interest for the same period can be added to it. In other words, the application of two statutes providing for interest over the post-judgment period cannot be applied such that the interest rate would exceed 10 percent.
For example, offer-of-compromise interest awarded under C.G.S. 52-192a accrues from the date of the offer until judgment [see Gionfriddo]. Section 37-3b provides that the accrual of interest begins at the earlier of 90 days post-verdict or 20 days post-judgment. In any given case, if the earlier date of accrual for interest under 37-3b case is 90 days post-verdict, then without the clause "and no more" contained within Section 37-3b, a plaintiff can be awarded 18 percent interest for this period of time. The purpose of the phrase "and no more" operates to cap a plaintiff's post-verdict or post-judgment interest at 10 percent. The plainest construction of the statute sets the interest rate under Section 37-3b at 10 percent. No more, no less.
