Posted by Nydia Streets of Streets Law in Florida Divorce

When a former spouse fails to pay an equalizing payment ordered or agreed-upon as part of equitable distribution, interest may be added to the principal amount owed. Does this interest accrue from the date of the judgment or the date the payment is due? What is the percentage rate of the interest to be paid? These were issues in the case Robertson v. Robertson, 4D22-1769 (Fla. 4th DCA August 2, 2023).

The parties’ marital settlement agreement entered in 2004 provided that the former husband would pay the former wife $300,000 by January 1, 2017. The agreement further stated “Said payment shall not bear or accrue interest.” The former husband did not pay by the deadline and the former wife sought to reduce the amount owed to a money judgment. The court entered a final money judgment in the former wife’s favor, ordering that 5.97% annual interest be paid on the principal from January 1, 2017 through the date of the final judgment. It also ruled that post-judgment interest would accrue on the unpaid amount past the date of the final judgment “at a rate determined by the state’s Chief Financial Officer.”

The former husband appealed, arguing it was error to award any prejudgment interest and that in any event the rate of 5.97% was improper because it exceeded the rate determined by the state’s Chief Financial Officer. The appellate court disagreed that interest could not be awarded. It held “Applying de novo review, we agree with the former wife’s argument. As the former wife argues, the MSA’s paragraph 4C’s sentence—’Said payment shall not bear or accrue interest’—is silent as to what time period that sentence applies. Faced with that silence, the circuit court properly interpreted the MSA’s paragraph 4C as: (1) prohibiting interest accrual on the lump sum amount during the thirteen-year period between the MSA’s 2004 entry and the lump sum amount’s January 1, 2017 due date; and (2) permitting prejudgment interest accrual on the lump sum amount from its January 1, 2017 due date until the May 31, 2022 final money judgment’s entry date.” The former wife conceded that the 5.97% interest was error and therefore the case was remanded with instruction to correct the interest rate to that set by the state’s Chief Financial Officer.

Schedule your meeting with a Miami divorce attorney to understand your rights and remedies.