Ark. Code Ann. § 16-65-114 (2020)

Research References

Ark. L. Notes.

Matthews, Interest Rate Provisions and the Negotiability of Commercial Paper, 1986 Ark. L. Notes 37.

Brill, A Primer on Judgment and Pre-Judgment Interest in Arkansas, 1989 Ark. L. Notes 1.

Ark. L. Rev.

Insurance — Insurer's Undertaking in Liability Policy for Interest on Judgment in Excess of Policy Limits, 14 Ark. L. Rev. 112.

Note, Compound Pre-Judgment Interest as an Element of Just Compensation: Wilson v. City of Fayetteville, 47 Ark. L. Rev. 937.

U. Ark. Little Rock L. Rev.

Annual Survey of Caselaw: Tort Law, 27 U. Ark. Little Rock L. Rev. 759.

Case Notes

Constitutionality.

This section is not violative of Ark. Const., Art. 2, §§ 8, 17. Read v. Mississippi County, 69 Ark. 365, 63 S.W. 807 (1901), aff'd, 188 U.S. 739, 23 S. Ct. 849, 47 L. Ed. 677 (1903).

This section does not violate the contract clause nor the due process clause of the federal Constitution.Missouri & Ark. Lumber & Mining Co. v. Greenwood Dist., 249 U.S. 170, 39 S. Ct. 202, 63 L. Ed. 538 (1919).

In General.

As a general rule, judgments bear interest. Taylor v. Corning Bank & Trust Co., 185 Ark. 691, 48 S.W.2d 1102 (1932).

All judgments should bear interest except those expressly excluded. Shofner v. Jones, 201 Ark. 540, 145 S.W.2d 350 (1940).

Ark. Const., Art. 19, § 13 has nothing to do with interest on a judgment amount. Gavin v. Gavin, 319 Ark. 270, 890 S.W.2d 592 (1995), overruled in part, Hartford Fire Ins. Co. v. Sauer, 358 Ark. 89, 186 S.W.3d 229 (2004).

In a home sale breach of contract action, reversal and remand for a damages trial mooted the issue as to whether the sellers were entitled to postjudgment interest pursuant to subsection (a) of this section. Heflin v. Brackelsberg, 2010 Ark. App. 261, 374 S.W.3d 755 (2010).

Construction.

The language of this section providing for an interest award of 10 percent on a judgment is mandatory barring discretionary reduction by the trial court. Rest Hills Memorial Park, Inc. v. Clayton Chapel Sewer Improv. Dist. No. 233, 6 Ark. App. 180, 639 S.W.2d 519 (1982).

Based on a review of the history and plain language of subsection (a) if this section and the emergency clause of Acts 1985, No. 782, § 3, the legislature intended the interest rate limitation in Ark. Const. art. 19, § 13 to apply to limit judgments in all cases, and Carroll Elec. Coop. Corp v. Carlton , 319 Ark. 555, 892 S.W.2d 496 (1995) and Gavin v. Gavin , 319 Ark. 270, 890 S.W.2d 592 (1995) are overruled to the extent they conflict with the rule; therefore, a 10 percent post-judgment interest award in a tort case was erroneous because it exceeded the 8.25 interest rate allowed in the particular case under Ark. Const. art. 19, § 13. Hartford Fire Ins. Co. v. Sauer, 358 Ark. 89, 186 S.W.3d 229 (2004).

Under this section, postjudgment interest on attorney's fees does not accrue until the date the trial court quantifies the amount of attorney's fees in dollars and cents. Daniel v. Ark. Dep't of Human Servs., 2017 Ark. 206, 520 S.W.3d 258 (2017).

Purpose.

The purpose of interest on judgments is to compensate the judgment creditor for the fact that he had not had the use of a certain sum of money that has been adjudged to be his. Equifax, Inc. v. Luster, 463 F. Supp. 352 (E.D. Ark. 1978), aff'd, Arkansas La. Gas Co. v. Luster, 604 F.2d 31 (8th Cir. 1979).

Costs.

In a condemnation action, costs awarded were to be treated as a judgment and the trust was entitled to postjudgment interest. City of Bryant v. Boone Trust, 2018 Ark. App. 547, 564 S.W.3d 550 (2018).

Discretion of Court.

In action for personal injuries where trial judge was unaware of his discretion in fixing rate of interest on judgment between ten percent and six percent and set the amount at six percent because he understood legal rate to be six percent in absence of contract for higher rate, the judgment on appeal was modified to provide an interest rate of ten percent. Dunn v. Brimer, 259 Ark. 855, 537 S.W.2d 164, 79 A.L.R.3d 958 (1976).

Where evidence in a condemnation action, showed that the trial judge did not actually exercise his discretion to override the mandatory language of this section providing for an interest award of 10 percent on any judgment, the land owners were entitled to an interest award of 6 percent from the date of the order of entry to the time of judgment, and at a rate of 10 percent from the date of the trial court's judgment until satisfaction. Rest Hills Memorial Park, Inc. v. Clayton Chapel Sewer Improv. Dist. No. 233, 6 Ark. App. 180, 639 S.W.2d 519 (1982).

Chancellor erred by simply imposing a rate of six percent instead of the rate prescribed by subsection (a) of this section. Chambers v. Manning, 315 Ark. 369, 868 S.W.2d 64 (1993).

Entire Amount.

Where judgment is rendered for the principal of a debt and interest, the entire judgment, including interest, will thereafter bear interest. Soudan Planting Co. v. Stevenson, 100 Ark. 384, 140 S.W. 271 (1911).

Entire Judgment.

In an action against a tort defendant's insurer, the judgment creditor of the tort judgment was entitled to interest on the entire judgment, even though it exceeded the policy limits. Southern Farm Bureau Cas. Ins. Co. v. Robinson, 236 Ark. 268, 365 S.W.2d 454 (1963); Southern Farm Bureau Cas. Ins. Co. v. Robinson, 238 Ark. 159, 379 S.W.2d 8 (1964).

Where execution on judgment against tortfeasor was returned unsatisfied and the judgment creditor then obtained judgment for a lesser amount against the defendant's insurer, he was entitled in addition thereto to interest on the original judgment. Southern Farm Bureau Cas. Ins. Co. v. Robinson, 238 Ark. 159, 379 S.W.2d 8 (1964).

Final Judgment.

The probate court did not err in refusing to award interest pursuant to an order entered in 1987 finding that appellants were entitled to a sum from an estate, where the 1987 order was entered by agreement, and the order made it clear that the “judgment” was not due and owing, but was subject to a determination “at some later date” that sufficient funds existed, “then and only then will the judgment be paid”; this order by its own terms was not a final determination of an amount payable from the estate. Estate of Otto v. Estate of Fair, 316 Ark. 674, 875 S.W.2d 487 (1994).

Miscellaneous Awards.

With regard to awards made in condemnation proceedings by the state highway commission, § 27-67-316 is the more specific provision and controls over this section. Arkansas State Hwy. Comm'n v. Scott, 264 Ark. 397, 571 S.W.2d 607 (1978).

Where the Public Service Commission ordered the telephone company to pay interest at the rate of ten percent per annum upon refunds that it ordered, the commission did not abuse its discretion in view of this section allowing interest at the rate of ten percent per annum on judgments in favor of creditors, unless the court rendering the judgment, in its discretion, reduces the rate. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).

In action by taxpayers against city challenging ordinance levying privilege tax against waterworks commission, award of post-judgment interest was correct; since judgments against municipalities are not excluded in this section, the judgment entered would bear interest until paid at the rate of ten percent per annum. City of Little Rock v. Cash, 277 Ark. 494, 644 S.W.2d 229 (1982), cert. denied, Cash v. Little Rock, 462 U.S. 1111, 103 S. Ct. 2464, 77 L. Ed. 2d 1341 (1983), overruled in part, T&T Chem. v. Priest, 351 Ark. 537, 95 S.W.3d 750 (2003).

Post-judgment interest was properly ordered to accrue not only on the jury award but also on the court's prejudgment interest award since the purpose of awarding interest would be frustrated if party were not compensated for the loss of use of all of his money, both before and after judgment. Hopper v. Denham, 281 Ark. 84, 661 S.W.2d 379 (1983).

Post-judgment award of interest at a rate of ten percent was not an abuse of discretion by the trial court where court considered economic conditions and the prevailing rate of interest in conformity with the purpose of awarding post-judgment interest, which is to compensate the judgment creditor for the loss of the use of money adjudged to be his. Hopper v. Denham, 281 Ark. 84, 661 S.W.2d 379 (1983).

Post-judgment interest rate of 6.25 percent on non-contract damages imposed by a trial court was proper as the 10 percent post-judgment interest that the prevailing party sought was not awardable if it exceeded the amount allowed by the Arkansas Constitution. Superior Fed. Bank v. Mackey, 84 Ark. App. 1, 129 S.W.3d 324 (2003).

Multiple Defendants.

Where the injured party plaintiff got a judgment in another state against the insured, which was unsatisfied, and plaintiff got another judgment in Arkansas against the insurer, the plaintiff is entitled to interest on the foreign judgment until it is reduced to an Arkansas judgment and interest on the Arkansas judgment from the date of its entry to the date of the trial as a matter of law. Southern Farm Bureau Cas. Ins. Co. v. Robinson, 236 Ark. 268, 365 S.W.2d 454 (1963).

Period of Interest.

Where judgment was rendered for plaintiff on its claim and for a lesser amount for defendant on its counterclaim, reversed on appeal from the counterclaim judgment and, on retrial, again rendered for the original amounts, plaintiff was entitled to interest only on the difference between the two judgments from the date of the original judgment. Ralston Purina Co. v. Parsons Feed & Farm Supply, Inc., 416 F.2d 207 (8th Cir. 1969).

Interest on a judgment ran until the amount of the judgment was paid either into court or directly to the parties entitled to receive payment. Equifax, Inc. v. Luster, 463 F. Supp. 352 (E.D. Ark. 1978), aff'd, Arkansas La. Gas Co. v. Luster, 604 F.2d 31 (8th Cir. 1979).

In a suit by subcontractors to recover from the general contractor for its alleged breach of two contracts, the subcontractors were entitled to 6 percent interest from the date of the filing of their complaints, even though they did not recover the sums sought, and to 10 percent interest following judgment. Advance Constr. Co. v. Dunn, 263 Ark. 232, 563 S.W.2d 888 (1978).

Both prejudgment and postjudgment interest should have been awarded upon a jury determination of damages. TB of Blytheville, Inc. v. Little Rock Sign & Emblem, Inc., 328 Ark. 688, 946 S.W.2d 930 (1997).

Judgment interest was calculated from the entry of the original judgment in which damages were found payable from a construction company to a homeowner, not from the date of entry of recalculated damages following an appeal. Glover v. Woodhaven Homes, Inc., 346 Ark. 397, 57 S.W.3d 211 (2001).

When a judgment has been appealed, and the appellate decision does not result in an actual reversal of the judgment, interest begins accruing from the date of the original judgment; thus, in an action for personal injuries resulting from an auto accident, where the trial court erred in severing an under-insured motorist carrier without requiring it to be bound by the verdict in the original trial, but neither the judgment in favor of the carrier's policy holder nor the award of damages were reversed, it was proper to award postjudgment interest from the date of judgment in the original trial. Southern Farm Bureau Cas. Ins. Co. v. Brinker, 350 Ark. 15, 84 S.W.3d 846 (2002).

Because the action involved a controversy over what the subcontractor did correctly and did not do correctly and the damages were hotly contested, the court refused to award prejudgment interest. Ray & Sons Masonry Contrs., Inc. v. United States Fid. & Guar. Co., 353 Ark. 201, 114 S.W.3d 189 (2003).

Probate Court Order.

Probate court's order of allowance of a claim against an estate was a judgment, and claimant is entitled to interest from date of allowance, though payment was delayed because there was no satisfactory market for assets of the estate. Shofner v. Jones, 201 Ark. 540, 145 S.W.2d 350 (1940).

Rate.

Where statutory rate of interest was increased to 10 percent before trial to recover amounts due under a contract, a 10 percent interest would apply to the judgment obtained by the contractor, even though the statutory rate of interest on judgments was only 6 percent when the contracts were made. Love v. H.F. Constr. Co., 261 Ark. 831, 552 S.W.2d 15 (1977).

Although the judgment debtor's appeal and consequent delay in satisfying the debt was not unreasonable, debtor knew interest would run, and the judgment creditor was deprived of its money during that time, interest at the rate of 10 percent is applicable. Equifax, Inc. v. Luster, 463 F. Supp. 352 (E.D. Ark. 1978), aff'd, Arkansas La. Gas Co. v. Luster, 604 F.2d 31 (8th Cir. 1979).

Judgment providing for interest per annum on the judgment lower than the statutory rate was invalid. Carroll Elec. Coop. Corp. v. Carlton, 319 Ark. 555, 892 S.W.2d 496 (1995), overruled in part on other grounds, Hartford Fire Ins. Co. v. Sauer, 358 Ark. 89, 186 S.W.3d 229 (2004).

Where judgment was rendered in favor of a car dealer in its action against a bank arising from the breach of a contract for recourse financing under subsection (a) of this section, the trial court erred by awarding post-judgment interest at a rate of six and one-quarter percent because there was no evidence in the record of what the Federal Reserve Discount Rate, which under Ark. Const. art. 19, § 13, was the baseline for determining whether the interest rate was unconstitutionally excessive, was at the time the contract was signed; hence, the judgment was reversed as to the interest rate and the case was remanded for determination of the proper interest rate based on the Federal Reserve Discount Rate at the time the contract at issue was executed. Bank of Am., N.A. v. C.D. Smith Motor Co., 353 Ark. 228, 106 S.W.3d 425 (2003).

Cited: International Harvester Co. v. Burks Motors, Inc., 252 Ark. 816, 481 S.W.2d 351 (1972); Sharum v. Dodson, 264 Ark. 57, 568 S.W.2d 503 (1978); Box v. Dudeck, 265 Ark. 165, 578 S.W.2d 567 (1979); Edwards v. Arkansas Power & Light Co., 683 F.2d 1149 (8th Cir. 1982); Crittenden County v. Williford, 283 Ark. 289, 675 S.W.2d 631 (1984); Tandy Corp. v. Bone, 283 Ark. 399, 678 S.W.2d 312 (1984); Watson v. Miears, 612 F. Supp. 1235 (W.D. Ark. 1984); City of Jacksonville v. Venhaus, 302 Ark. 204, 788 S.W.2d 478 (1990); Bank of Bearden v. Simpson, 305 Ark. 326, 808 S.W.2d 341 (1991); DC Xpress, L.L.C. v. Briggs, 2009 Ark. App. 651, 343 S.W.3d 603 (2009).