Although this is not a family-law case, it addresses an issue that often arises in family-law cases.

Facts: A successful business owner died in a plane crash. His father was the executor of his estate, and his widow was the beneficiary of his estate.

The executor purchased the business from the estate for $1.6 million. At the time of the sale, the business’s profits remained in the company and had not been distributed to the beneficiary.

Nineteen years later, the executor sold the business for $45 million.

The widow sued the executor for breach of fiduciary duty, among other things.

The widow was awarded $522,000 in damages plus prejudgment interest at 10% and postjudgment interest at 6.75%, for a total judgment of $1.9 million. The trial court ruled that the interest rate would not change even if the statutory interest rate applicable to postjudgment interest changed.

The executor appealed.

On Appeal: The Court of Appeals affirmed the trial court.

Tennessee Code Annotated § 47-14-121 requires that the postjudgment interest rate be assessed at the statutory rate when the judgment was entered. The statutory rate can be found here (lawyers should bookmark this link).

This judgment was entered on January 13, 2020, when the statutory interest rate was 6.75%. In July 2020, it dropped to 5.25%.

The executor argued it was error for the trial court to use only one interest rate in calculating postjudgment interest for the entire postjudgment period.

The Court found the statute says otherwise:

Upon our analysis of Tennessee Code Annotated § 47-14-121, we determine that the statute is clear and unambiguous. Because the statute is clear and unambiguous, it is not necessary to look outside the text of the statute enacted by the General Assembly. Pursuant to subsection (a), the relevant interest rate per annum to be applied to a judgment is determined based on the timeframe within which the trial court’s judgment awarding damages is entered….

Although [the executor] argues that the postjudgment interest rate should be modified after each six-month period that the judgment was owed, this is not how the General Assembly has chosen to calculate postjudgment interest rates. We hold that Tennessee Code Annotated § 47-14-121(a) requires a trial court to calculate postjudgment interest using only the statutory interest rate in effect when the judgment is entered. The applicable postjudgment 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. Based on our holding, we affirm the trial court’s judgment applying the 6.75% interest rate in calculating postjudgment interest during the entire time period following entry of the judgment awarding damages.

The Court affirmed the trial court’s judgment.

Coffey v. Coffee (Tennessee Court of Appeals, Eastern Section, April 11, 2022).

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