Prejudgment Interest Under Missouri Law
Judgments entered by Missouri state courts may include prejudgment interest under certain circumstances. Prejudgment interest is determined differently for tort and non-tort claims.
Prejudgment Interest on Non-Tort Claims
Missouri law provides that, in non-tort claims, prejudgment interest shall, unless the parties agreed to a different rate, accrue at the statutory rate of interest, which is currently 9% per annum, “for all moneys after they become due and payable”. In claims for breach of a written contract, prejudgment interest typically begins on the date of the breach or when payment was due under the contract. In cases of accounts, prejudgment interest is allowed after the moneys become due and demand for payment is made. The term “account” is broadly defined by the courts and can include an oral contract and equitable claims such as quantum meruit.
Because of the potential uncertainty as to whether demand is required for prejudgment interest, claimants should send written demand for payment promptly after payment becomes due, regardless of whether the claim arises under a written contract or otherwise. However, prejudgment interest is not allowed in non-tort claims if the parties disagree on the amount owed.
Prejudgment Interest on Tort Claims
Tort claimants must fulfill complex statutory requirements to qualify for prejudgment interest. For example, the claimant must make a demand for payment, or an offer of settlement, in a writing sent by certified mail return receipt requested to the other party and to the insurer of the other party, if any. The demand or offer must include an affidavit by the claimant describing the injuries suffered by the claimant and a computation of the damages sought by the claimant. The demand or offer must also include the documents that support the claim, if any.
In actions alleging wrongful death, personal injury, or bodily injury, the above demand or offer must include a list of the names and addresses of the medical providers who provided treatment to the claimant for the injuries claimed. The demand or offer must also include copies of available related medical bills and authorizations consenting to the other party and its insurer obtaining the medical records of the claimant. Finally, all tort related demands and offers must reference Missouri’s prejudgment interest statute and must state that the demand shall be left open for 90 days.
If these, and other, statutory requirements for tort actions are met, the judgment, if it is greater than the amount of the demand or offer, shall then include prejudgment interest equal to the intended Federal Funds Rate, as established by the Federal Reserve Board, plus 3%. Such prejudgment interest shall begin to accrue 90 days after the date of the certified mail return receipt or the date on which the demand was rejected without counteroffer, whichever is earlier. The judgment shall state the applicable rate of prejudgment interest.
This article is for general informational purposes only, and it is not intended as legal advice. Sewell Law provides professional legal services in the areas of real estate and business law, including litigation. Please contact Michael Sewell, MBA, JD at (314) 942-3232 or at michael@sewelllaw.net to discuss your legal matters.
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