Prejudgment Interest in Equity Actions
Simple interest of nine-percent (9%) typically accrues on court judgments awarding money. This post-judgment interest begins on the date of the judgment and accrues until the the judgment is paid. In certain circumstances, a party may be entitled to pre-judgment interest on any amounts awarded dating back to the date of the demand or lawsuit. Because lawsuits are often lengthy, and because monetary amounts of judgments can be large, this can mean a big difference. Generally, to be entitled to pre-judgment interest, the damages must be liquidated (e.g., readily ascertainable or fixed). An example of liquidated damages would be a fixed, set amount due under a contract or promissory note. The policy behind awarding this pre-judgment interest is to encouarge settlement and to award the wronged party additional funds to accommodate for the loss of not having it and being able to utilize it sooner.
In equity actions, whether to award prejudgment interest is in the court’s discretion. McDonald v. Ins. Co. of State of Pa., 460 S.W.3d 58, 67 (Mo. Ct. App. 2015). When an equitable remedy is sought, the court is permitted to flexibly way the equitable principles of fairness and justice when deciding whether to apply prejudgment interest. Ins. Co. of N.Am. v. Skyway Aviation, Inc. 828 S.W.2d 888, 892 (Mo. Ct. App. 1992). If the trial court decides to award pre-judgment interest in an equity action, then the rate should be the amount listed in Section 408.020, RSMo (presently, 9%). Vogel v. Lake Timerline Prop. Owners Voluntary Ass’n, 741 S.W.2d 869, 872 (Mo. Ct. App. 1987).