Prejudgment Interest: Liquidated Claims, Tort Claims
After a Judgment is obtained against a Defendant in Missouri, 9% interest per annum generally accrues on the Judgment (tort cases have a different interest rate). Is there a situation in which the interest can be retroactive before the Judgment was entered? Yes, pursuant to the Missouri prejudgment interest statutes. Under Section 408.020, prejudgment on liquidated claims is allowed after a demand for payment is made. The demand doesn’t need to come in a certain form, but it needs to occur at a definite time and be for a definite amount. The filing of the lawsuit itself may constitute a demand if the Petition is worded properly. A “liquidated claim” is a claim in which the damages are readily ascertainable/certain or are capable of being easily calculated. Examples of this would include a promissory note or breach of contract action. Under Section 408.020, the Court does not have discretion; prejudgment interest must be retroactive to the time of a demand, if any.
For tort claims, the matter is more complicated. Per Section 408.040, the demand must comport with specific statutory requirements: (1) be in writing and sent via certified mail, (2) be accompanied by an affidavit detailing the nature and extent of the damages, (3) be accompanied by a list of medical providers/records, and (4) reference the statutory section and be left open for acceptance by the defendant for ninety (90) days. The reason the tort statute has more specific requirements is that damages in a tort case are often very difficult to pinpoint. As a case in point: it’s infinitely easier to assign a monetary value to money due and owing under a contract, rather than a bodily injury claim. Contact us with questions.