Posted by Nydia Streets of Streets Law in Florida Divorce

Sometimes, a party may be required to pay interest to another party in a Florida divorce case if a payment is overdue. The rate of interest depends on if the parties had a contract specifying the rate. How is the interest calculated? This was an issue in the case Langsetmo v. Metza, 4D21-717 (Fla. 4th DCA March 9, 2022).

The parties entered a post-nuptial agreement which required the former wife to pay the former husband $250,000 and $5,000 within seven days of the date of execution of the agreement in 2017. In 2018, the former husband filed a motion for contempt, alleging the the former wife failed to pay the full amount due and an outstanding balance of $25,000 remained after accounting for a series of payments made by the former wife in 2017. A general magistrate entered a report granting the former husband’s motion and awarding him interest from the date he filed his motion in 2018. The former husband filed exceptions to the report, arguing interest should have been calculated from the date the payment became due, and not the date he filed his motion. His exceptions were denied and he appealed.

The appellate court agreed with the former husband and noted “When no specific contractual provision provides the rate of interest to be assessed on a judgment, the statute governing the interest on judgments, section 55.03, Florida Statutes, sets the rate of interest. See § 687.01, Fla. Stat. (2021); Genser v. Reef Condo. Ass’n, 100 So. 3d 760, 762 (Fla. 4th DCA 2012) (‘Courts apply the statutory judgment interest rate from the date of loss or entitlement under section 55.03 for purposes of calculation of pre-judgment interest.’). ‘The general rule is that . . . the person to whom the debt is due is entitled to interest at the legal rate from the date the debt was due . . . .’ Keyes Co. v. Spencer, 16 So. 3d 213, 215 (Fla. 4th DCA 2009) (quoting Ray v. Travelers Ins. Co., 477 So. 2d 634, 636 (Fla. 5th DCA 1985)).”

The court held “In cases where the application of prejudgment interest involves a series of payments consisting of some past due, the amount of prejudgment interest is to be ‘accurately computed by: (1) determining when each progress payment would have become due if the contract had been performed as agreed; (2) calculating the interest on each progress payment from the date it would have become due; and (3) totaling the interest due on each progress payment.’ Kirkland, 678 So. 2d at 1306 (quoting Metropolitan Dade Cnty. v. Bouterse, Perez & Fabregas Architects Planners, Inc., 463 So. 2d 526, 527 (Fla. 3d DCA 1985)). Although Former Husband did not move for enforcement until February 2018, the money Former Wife owed him under the postnuptial agreement became due seven days after its execution. The interest owed to Former Husband under the statutory provision should have been calculated using the date of his loss because interest should be awarded from the date the payment was due.”

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