In H1 Lincoln, Inc. v. South Washington St., LLC, et al., the plaintiff, after trial, was awarded $20 million. The defendants paid the full amount of the judgment but also appealed. The question before the SJC was whether defendants’ payment of the judgment terminated accrual of post-judgment interest. The SJC held that it did.
In reaching that conclusion, the SJC stated that, while the statutory language of the post-judgment interest statute (G.L. c. 235, § 8) did not directly resolve the question, the statutory purpose was informative. The Court explained that the “purpose of postjudgment interest is to compensate the prevailing party for the loss of the use of money when damages are not paid on time.” Postjudgment interest, however, is not “meant to punish or discourage appeals.” The Court stated that requiring accrual of post-judgment interest during an appeal, even after payment had been made in full, “would discourage judgment debtors who exercise their right to appeal from paying the entire judgment entered against them; they would have no incentive to do so. This cannot be what the Legislature intended in a statute designed to encourage prompt payment.”
This decision confirms that payment of a judgment in full is an option for defendants who want to stop the accrual of post-judgment interest, which can be significant for large judgments such as the one in H1 Lincoln.
