Posted by Nydia Streets of Streets Law in Florida Divorce
Is interest awarded in a Florida divorce when the court divides assets between the parties? Pre-judgment interest refers to interest that may accrue before a final judgment is entered awarding property to a person. This was an issue in the case Iarussi v. Iarrusi, 1D21-0708 (Fla. 1st DCA October 12, 2022).
In this divorce case, the parties disputed ownership of a corporation founded by the former husband. The former wife owned some shares of the company, but the former husband owned many more which had appreciated in value during the marriage. While both parties worked for the company during the marriage, once they separated, the former wife was “forced” out of the company. Each party had experts testify as to the value of the company. Ultimately, the court entered a final judgment which in part awarded the former wife an equalizing payment from the former husband of about $1.7 million and ordered pre-judgment interest dating back to the filing of the petition. The former husband appealed.
The appellate court reversed the award of interest, holding “The purpose of equitable distribution is to distribute marital assets equitably, and does not deal in prior loss, entitlement, or unjust enrichment. There is no statutory authority to add prejudgment interest to an equitable distribution. The separation of married persons inevitably causes temporary distance between people and their property. But marital property, which is all that we deal with when discussing an equitable distribution, is owned by both parties. [internal citation omitted]. Because they both jointly owned all of the marital assets subject to distribution, it necessarily follows that neither could have suffered a deprivation of property warranting prejudgment interest prior to entry of final judgment.”
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