IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

November 7, 2011 Session

TENNESSEE RAND, INC. v. AUTOMATION INDUSTRIAL 

GROUP, LLC, ET AL.

Appeal from the Chancery Court for Hamilton County

No. 05-0203 W. Frank Brown, III, Chancellor

No. E2011-00280-COA-R3-CV-FILED-JANUARY 12, 2012

The first time this case was before us, see Tennessee Rand, Inc. v. Automation Industrial

Group, LLC, No. E2009-00116-COA-R3-CV, 2010 WL 3852317 (Tenn. Ct. App. E.S., filed

Sept. 29, 2010) (“Rand I”), we reversed that portion of the trial court’s judgment decreeing

that Automation Industrial Group, LLC (“Automation”) was not entitled to recover on its

counterclaim due to its fraud and we reinstated the trial court’s earlier judgment awarding

Automation $2,270,759.22 plus prejudgment interest of $256,705.19. The trial court had

entered its earlier judgment against Tennessee Rand, Inc. (“Rand”) on Automation’s

counterclaim, and then set it aside on Rand’s motion to alter or amend. Although the parties

had not addressed in the first appeal the prejudgment interest portion of the trial court’s

earlier judgment, we, without extended discussion, reinstated the prejudgment interest as

originally calculated by the trial court. What the parties did not put at issue or otherwise

stress in the first appeal was the fact that Rand had challenged, in its motion to alter or

amend, the accuracy of the trial court’s calculation of prejudgment interest. In that motion,

Rand had argued that the trial court had obviously miscalculated prejudgment interest. In

Rand I, we also reversed an award of discretionary costs to Rand because we concluded that

Automation was the new prevailing party. Upon remand following our decision in Rand I,

Rand asked the trial court to correct the miscalculation of prejudgment interest. Rand also

asked the court to start the accrual of post-judgment interest from the date of entry of the trial

court’s judgment on remand. Automation filed a motion for discretionary costs as the new

prevailing party. The trial court on remand determined that it had miscalculated prejudgment

interest but held that our opinion in Rand I prevented it from granting Rand any relief with

respect to the miscalculation as well as with respect to the other relief requested by Rand.

The trial court also denied Automation’s motion for discretionary costs, based, at least in

part, on Automation’s substantial windfall award of prejudgment interest due to the

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miscalculation. Rand now appeals the denial of its motions, and Automation challenges the

denial of its request for discretionary costs. Automation also asks us to determine an issue

pertaining to interest on the unpaid portion of the judgment entered on remand. We

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conclude that, in the interest of justice, we must take corrective action pursuant to Tenn. R.

App. P. 36 by granting Rand relief from the miscalculation of prejudgment interest. Since

the erroneous and inflated award of prejudgment interest was one of the reasons given by the

trial court for denying discretionary costs, we vacate that denial and remand for further

consideration of Automation’s request. We affirm that part of the judgment, as modified by

us, holding that Automation is entitled to post-judgment interest from the date of entry of the

original judgment in its favor. Rand obtained a stay of collection of Automation’s judgment

pending appeal upon posting a bond to cover interest accrued between the original judgment

date and the date of the judgment on remand. The amount set by the trial court to obtain a

stay did not include interest accrued on the unpaid portion of the judgment. We hold that

Automation is entitled to recover post-judgment interest accrued on the judgment.

Accordingly, the trial court’s judgment is vacated in part and modified in part. As vacated

and modified, the judgment is affirmed.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court

Vacated in Part; Modified in Part; and Affirmed in Part; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the Court, in which HERSCHEL P.

FRANKS, P.J., and D. MICHAEL SWINEY, J., joined.

Richard W. Bethea and Tom Greenholtz, Chattanooga, Tennessee, for the appellant,

Tennessee Rand, Inc.

Gary R. Patrick, R. Jonathan Guthrie, and McKinley S. Lundy, Jr., Chattanooga, Tennessee,

for the appellee, Automation Industrial Group, LLC.

OPINION

I.

The posture of this “complicated business divorce case” as it came to us in Rand I

was that the parties spent 25 days trying the case after which the trial court entered a

judgment in the amount of $2,270,759.22 plus prejudgment interest on August 29, 2008 (“the

August 2008 judgment”) in favor of Automation and against Rand. As a part of the same

Following the entry of the judgment on remand, Rand made a substantial payment on the judgment 1

to Automation.

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judgment, the court decreed that Rand was entitled to a judgment against Automation in the

amount of $662,818.80. On December 18, 2008, the trial court entered a new judgment (“the

December 2008 judgment”) – prompted by Rand’s motion to alter or amend – in which

judgment it reversed the August 2008 judgment entered in favor of Automation. The central

issue in Rand I was whether the trial court had erred in setting aside the earlier judgment in

favor of Automation. Other issues included whether the evidence preponderated in favor of

a larger judgment for Automation, the validity and amount of the judgment in favor of Rand,

and the award of discretionary costs to Rand. We held, in our opinion filed September 29,

2010 (“the September 2010 judgment”), that the trial court erred in setting aside the August

2008 judgment in favor of Automation, but that the evidence did not preponderate against

the amount awarded to Automation in that judgment. Therefore, we reinstated that part of the

judgment awarding Automation a recovery against Rand. Our exact language is as follows:

We believe the trial court chose a logical route through a

confusing situation. We hold that the evidence does not

preponderate against the finding that Rand owes Automation

$2,270,759.22.

Although neither party has asked us to deal with the trial court’s

award of prejudgment interest on Automation’s counterclaim,

we will address it briefly. The court calculated interest from the

date the claim was made. Its award is based on a rate of 5% on

[$552,853.79] and a rate of 1.25% on the remainder. The award

is certainly within the reasonable bounds of discretion.

Consistent with our handling of Automation’s claim, we

reinstate this award of prejudgment interest.

Rand I at 19-20 (footnote added).

The miscalculation in prejudgment interest made by the trial court in the August 2008

judgment is fairly obvious upon a close review of the trial court’s explanation of the

prejudgment interest award in that judgment:

With regard to [Automation’s] account receivable claim, the

court awards 5% interest on $552,853.79 from April 25, 2005,

until the entry of this judgment. Prejudgment interest for three

years, four months and four days is $184,890.46.

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The prejudgment interest, i.e., $184,890.46, on the $552,853.79 portion of the judgment, isthe only

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portion of the prejudgment interest award at issue in this case. The remainder of the prejudgment interest

is not now and never has been at issue.

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By using round numbers, it becomes clear that the trial court’s numeric calculation actually

almost doubled its intended award of prejudgment interest. A principal amount of $500,000

at a rate of 10% would yield $50,000 per year and $150,000 in three years. The lesser rate

of 5% – the rate the trial court said it was using – would yield only $75,000 for 3 years. Rand

has calculated the amount of prejudgment interest on the $552,853.79 portion of the

judgment, using exact figures, to be $92,571.87. While disagreeing with Rand’s position that

the trial court has the authority to correct this error, Automation does not challenge the

mathematical accuracy of Rand’s calculation.

It is important to remember that Rand, in its motion to alter or amend that resulted in

the December 2008 judgment, had specifically challenged the amount of prejudgment interest

on the $552,853.79 as an erroneous calculation. The December 2008 judgment of the trial

court had the effect of pretermitting any issue as to the amount of prejudgment interest on

the award in August 2008. This is because the judgment upon which the prejudgment

interest had been calculated was set aside in its entirety. Given that the issue was effectively

pretermitted by the trial court’s reversal, it was not argued on the merits before this Court in

Rand I. We simply adopted the trial court’s numbers in our opinion and, in doing so,

repeated the trial court’s simple and honest mathematical mistake.

The trial court’s ruling on remand was as follows:

[T]he Court notes that . . . Rand is correct that this Court

inadvertently miscalculated the amount of prejudgment interest

to be awarded on the portion of the judgment representing the

$552,853.79 in held invoices. The Court finds that this

mathematical error would reduce the award of prejudgment

interest [to $92,571.87]. Nevertheless, this Court does not have

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the authority to modify the judgment that the Tennessee Court

of Appeals affirmed as modified and reinstated.

(Footnote and emphasis added.)

We have used the preposition “to” instead of the word “by” used by the trial court to correct what 3

we believe was simply a misstatement. Rand’s assertion that the correct amount of prejudgment interest on

the $552,853.79 portion of the judgment is $92,571.87 is not challenged by Automation as to the amount. 

Thus, we believe the court intended to say that the prejudgment interest is reduced “by $92,318.59” which

represents the difference between $184,890.46 and $92,571.87. 

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As we have indicated, Rand asked the trial court to hold that post-judgment interest

on Automation’s judgment against Rand did not begin to run until the trial court entered an

order setting the exact amount of the judgment on remand. That judgment was entered on

January 28, 2011 (“the January 2011 judgment”). Rand specifically argued that postjudgment interest should not run from the date of the August 2008 judgment. The trial court

found as follows:

The Court finds that the amount of Automation’s judgment as

modified and reinstated by the Tennessee Court of Appeals as

of August 29, 2008 is $2,342,746.00 . . . . Rand is not entitled

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to any further adjustments to Automation’s judgment of

$2,342,746.00 as of August 29, 2008. The Court further finds

that Automation is entitled to post-judgment interest at the

statutory rate of ten percent (10%) on Automation’s judgment

against . . . Rand in the amount of $2,342,746.00 from August

29, 2008 to present. The court determines that the amount of

post-judgment interest on Automation’s judgment against . . .

Rand from August 29, 2008 through January 28, 2011 is

$566,163.61. The amount of Automation’s judgment . . . plus

post-judgment interest as of January 28, 2011 is $2,908,909.61.

(Footnote added.) As can be seen, the trial court “rolled” the post-judgment interest into the

judgment of January 28, 2011, making that judgment total $2,908,909.61.

Moving forward, we will be discussing four critical judgment dates. To assist the

reader, we restate those judgments and their significance:

August 2008 First judgment of the trial court awarding

Automation a judgment in excess of $2.5

million, including prejudgment interest.

December 2008 Trial court’s judgment reversing award to

Automation.

September 2010 Court of Appeals judgment.

January 2011 Trial court judgment on remand.

We are not sure how the trial court arrived at this figure, but since the amount is not challenged on 4

this appeal, we assume it is correct.

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As we have previously stated, Automation filed a motion for discretionary costs based

upon our determination in Rand I that Automation was the new prevailing party.

Automation sought court reporter charges of $17,971.85 and expert witness fees of $1,600

for a total of $19,571.85. Rand opposed the motion arguing that Automation lost as much

or more than it won and therefore its position as “prevailing party” was tenuous and entitled

to “little weight” on the subject of discretionary costs. Rand specifically challenged

$5,946.09 of the request as not being allowable under Tenn. R. Civ. P. 54.

The trial court denied in toto Automation’s request for discretionary costs. The denial

was based upon

equitable reasons, including the Court’s decision that the Court

cannot alter the amount of the (excessive per opinion)

prejudgment interest award to Automation.

Upon the entry of the January 2011 judgment, Rand appears to have paid Automation

the sum of $2,250,423.60. Rand arrived at this amount by subtracting from the January 2011

judgment (1) the challenged prejudgment interest, and (2) the post-judgment interest accrued

between the August 2008 judgment and the January 2011 judgment. Rand then filed a

motion to stay efforts by Automation to collect any part of the judgment that remained

unsatisfied. The trial court granted Rand’s motion and prohibited Automation from

attempting to “execute upon the January 28, 2011 judgment or otherwise issue post-judgment

discovery in aid of execution.” The court further ordered that

Rand may obtain a full stay of execution of the judgment

pending appeal upon payment into Court of $663,125.07 . . . ;

the Court calculates this amount as the sum of (1) $92,344.25

not already paid by . . . Rand on the January 28, 2011 judgment;

(2) an additional six-months of statutory interest on this unpaid

amount in the amount of $4,617.21; and (3) statutory interest

running from August 29, 2008 through January 28, 2011 in the

amount of $566,163.61. . . .

. . . Rand may alternatively obtain a full stay of execution of the

judgment pending appeal by obtaining an irrevocable letter of

credit, with Automation . . . as beneficiary . . . .

Rand supplied the letter of credit and thereby stayed collection of any unpaid portion of the

judgment. It is Rand’s position that payment of the unchallenged portion, i.e.,

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$2,250.423.60, of the principal amount of the January 2011 judgment, prevented the running

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of any additional interest. It is Automation’s position that any portion of the judgment that

remained unpaid as of January 28, 2011, whether it is principal, or interest, or some

combination of each, accrues interest from that date at the 10% statutory rate until the date

it is paid.

II.

Rand raises two issues on appeal which we repeat verbatim:

Whether, upon remand of this case . . ., the chancery court

possessed authority to correct an undisputed mathematical error

in the calculation of the judgment, or, alternatively, whether this

Court may act to correct an undisputed mathematical error in the

calculation of the judgment.

Whether, upon remand of this case . . . for further proceedings

to determine judgment, the chancery court improperly held that

post-judgment interest began running from a previous judgment

rather than upon entry of the final judgment.

Automation raises the following issues which we also have quoted verbatim:

Whether Automation is entitled to recover post-judgment

interest on all amounts of the trial court’s final post-remand

Judgment that Rand has not paid.

Whether the trial court erred by failing to award Automation its

discretionary costs after this Court determined that Automation

was the new prevailing party.

III.

With the exception of the trial court’s ruling on discretionary costs, all the issues

raised by the parties present questions of law. A trial court’s conclusions of law are reviewed

This figure comes from Rand. The true figure of the unchallenged portion appears to be 5

$2,250,427.41, i.e., the face amount of the judgment of $2,342,746 found by the trial court in the January

2011 judgment reduced by $92,318.59, which appears to be the amount of the prejudgment interest

miscalculation.

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de novo with no presumption of correctness. Vantage Technology, LLC v. Cross, 17 S.W.3d

637, 644 (Tenn. Ct. App. 1999).

By the express terms of Tenn. R. Civ. P. 54.04, discretionary costs are “allowable only

in the [trial] court’s discretion.” Therefore, we will not “alter a trial court’s ruling [on

discretionary costs] absent a clear abuse of discretion.” Trinity Industries v. McKinnon

Bridge Co., 77 S.W.3d 159, 180 (Tenn. Ct. App. 2001); see, Owens v. Owens, 241 S.W.3d

478, 497 (Tenn. Ct. App. 2007). Failure to follow the controlling legal standards to the

prejudice of one of the parties can constitute an abuse of discretion. See Overstreet v.

Shoney’s, Inc., 4 S.W.3d 694, 709 (Tenn. Ct. App. 1999).

IV.

A.

The most logical starting place is with the obvious miscalculation of prejudgment

interest. Noticeably absent from Automation’s brief is any affirmative statement that the trial

court’s initial calculation of prejudgment interest is correct or that Rand’s calculation is

mathematically incorrect. Thus, we are convinced that our opinion in Rand I reinstated an

award of prejudgment interest that was mistakenly overstated by $92,318.59. Instead of

challenging Rand’s calculation, Automation concentrates on convincing us that (1) our

opinion in Rand I settled the matter and left no room for the trial court to correct us and (2)

that judicial economy and finality should steer us away from any correction of the

miscalculated interest.

We do not need to spend much time on Rand’s argument that the trial court erred in

not correcting on remand the amount of prejudgment interest. Rand’s argument is based

primarily on language in the mandate remanding the case “for further proceedings and final

determination therein.” However, our September 2010 judgment expressly addressed the

matter of prejudgment interest, stating “[t]hat part of the [August] judgment of the trial court

awarding Automation judgment against Rand in the amount of $2,270,759.22 plus

prejudgment interest in the amount of $256,705.19 is reinstated and, as such, is affirmed.”

The $256,705.19 award included the $184,890.46 award that we reinstated on one particular

portion of the claim, i.e., $552,853.79. We regard to any proceedings on remand, we ordered

that they be “consistent with this opinion.” The mandate has no independent life of its own;

it is simply a form used by the clerk to transmit to another court the operative documents,

such as, in this case, our opinion and judgment. Tenn. R. App. P. 42. Therefore, the mandate

cannot operate to nullify the express language in our opinion and the September 2010

judgment. Further, it is axiomatic that “inferior courts must abide the orders, decrees and

precedents of higher courts.” Weston v. State, 60 S.W.3d 57, 59 (Tenn. 2001). Therefore,

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the trial court did not err in finding that the September 2010 judgment by us prevented it

from correcting the miscalculated interest.

The determination that the trial court did not err does not end the matter. Rand argues

that we can and should correct the erroneous calculation pursuant to Tenn. R. App. P. 36(a).

That rule provides that we “shall grant the relief on the law and facts to which the party is

entitled or the proceeding otherwise requires . . . including the giving of any judgment and

making of any order . . . .” Id. We have previously noted Automation’s argument that

concerns of finality and judicial economy should persuade us to deny relief. We are not

convinced. Rand raised the miscalculation issue in its motion to alter or amend the August

2008 judgment. The December 2008 judgment had the effect of pretermitting the calculation

issue. We cannot blame Rand for not throwing this issue into the mix in Rand I since the

judgment upon which the interest had been calculated had been reduced by the trial court to

zero. Thus, the issue was never heard on the merits until it was presented to the trial court

on remand. The trial court determined that it had indeed miscalculated the amount of

prejudgment interest but noted that it was without authority to correct the error. We are the

first court to hear the issue on the merits with the authority and ability to grant relief. We

hold that Rand is entitled to have the award of prejudgment interest on the $552,853.79

portion of the judgment reduced to $92,571.87. This represents a reduction in the

$184,890.46 award by $92,318.59. Accordingly, pursuant to Tenn. R. App. P. 36(a), we

modify the January 2011 judgment to reflect a reduction of $92,318.59.

B.

The next issue is whether the trial court erred in allowing post-judgment interest from

the date of entry of the August 2008 judgment. Rand argues that interest should not begin

to accrue on the judgment until the date of entry of the January 2011 judgment on remand,

or, alternatively, from the December 2008 judgment at the very earliest. We are dealing here

with the interplay of a statute and a court rule. Interest on judgments is allowed by Tenn.

Code Ann. § 47-14-122 (2001), which states:

Interest shall be computed on every judgment from the day on

which the jury or the court, sitting without a jury, returned the

verdict without regard to a motion for new trial.

Interest after an appeal is addressed by Tenn. R. App. P. 41, which states:

If a judgment for money in a civil case is affirmed or the appeal

is dismissed, whatever interest is allowed by law shall be

payable computed from the date of the verdict of the jury or the

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equivalent determination by the court in a non-jury case, which

date shall be set forth in the judgment entered in the trial court.

If a judgment is modified or reversed with a direction that a

judgment for money be entered in the trial court, the mandate

shall contain instructions with respect to allowance of interest.

We have addressed the issue of the accrual date of post-judgment interest in several cases,

including Inman v. Inman, 840 S.W.2d 927 (Tenn. Ct. App. 1992). Inman involved a

divorce that was modified on appeal by this Court and the Supreme Court, the ultimate result

of which was to award wife considerably more assets. On remand, she sought interest on the

judgment, as modified, from the date of entry of the trial court’s original judgment. We

stated:

The principal issues in this appeal are the effective date of an

appellate modification of a Trial Court judgment and the

jurisdiction of the Trial Court to enforce the judgment as

modified by the appellate courts. There is a dearth of published

authority on this subject. It is arguable that the effective date of

such a modification is the date of filing the appellate opinion, or

of the entry of the judgment of the appellate court, or of the

issuance of the mandate of the appellate court or of the entry of

the mandate upon the minutes of the Trial Court. This Court

does not subscribe to any of the foregoing, but adopts the

statement of the Louisiana Supreme Court in Swift & Co. v.

Leon Cahn & Co., 151 La. 837, 92 So. 355 (1922) as follows:

The judgment on appeal, when recorded in the

Appellate Court, stands in the place of the

judgment of the Trial Court, and the legal

situation is as if the judgment so recorded had

been originally rendered by the Trial Court.

Application of this principle to the present controversy produces

an orderly and just result.

Id. at 932.

Inman involved a modification on appeal increasing the original award, but Inman

v. Alexander, 871 S.W.2d 153 (Tenn. Ct. App. 1993), involved a modification decreasing

the amount of the trial court’s judgment by $50,000. Nevertheless the rule established in

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Inman of allowing interest from the date of the original judgment held true in Alexander as

well. Referring to the last sentence in Tenn. R. App. P. 41, the Alexander opinion stated:

This provision has been the source of some confusion in the

state and federal courts. But, in Inman v. Inman, 840 S.W.2d

927, 932 (Tenn. App. 1992), this court solved one part of the

puzzle by holding that Rule 41 did not affect the statutory

post-judgment interest provided in Tenn. Code Ann. §

47–14–121. Thus, when a judgment is rendered in the trial court

originally or by direction from the appellate courts, the statute

provides that the judgment shall automatically accrue interest

at the statutory rate unless the court specifies that “its action

requires that interest be computed other than as required by

statute.” Inman, 840 S.W.2d at 932.

The opinion remanding the case directed the entry of a judgment

in the lower court for $100,000 as of the date of the original

judgment and provided that pre-judgment interestshould be paid

from the date of the original breach to that time. In our opinion

nothing more was required to put into effect the accrual of

post-judgment interest from the date of the original judgment

until the judgment is finally paid.

Id. at 153-54 (emphasis added).

In Wade v. Wade, 897 S.W.2d 702 (Tenn. Ct. App. 1994), husband argued in a

divorce case that certain payments he had made to wife while the case was pending should

relieve him of paying interest on her alimony award. Id. at 720. We held that despite

modification of the award on appeal, wife was “entitled to interest at the statutory rate on the

assets awarded to her from the date of the original divorce decree”:

Furthermore, it is the rule in Tennessee that “when a judgment

is rendered in the trial court originally or by direction from the

appellate courts, the statute [Tenn. Code Ann. Sec. 47–14–121]

provides that the judgment shall automatically accrue interest at

the statutory rate unless the court specifies that ‘its action

requires that interest be computed other than as required by

statute.’ ” Inman v. Alexander, 871 S.W.2d 153, 154 (Tenn.

App. 1993). This court has further held that the “judgment on

appeal, when recorded in the Appellate Court, stands in the

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place of the judgment of the Trial Court, and the legal situation

is as if the judgment so recorded had been originally rendered

by the Trial Court.” Inman v. Inman, 840 S.W.2d 927, 932

(Tenn.App.1992). Therefore, Wife is entitled to the statutory

interest on the trial court’s judgment as modified by this

opinion.

Id. at *720 (emphasis added; brackets in original).

Rand pays lip service to the rule established in the above cases, but argues that a

different rule applies when the case is remanded for further proceedings. Rand relies on

Watson v. Watson, 309 S.W.3d 483 (Tenn. Ct. App. 2009) and Bunch v. Bunch, No.

03A01–9805–GS–00156, 1999 WL 172674 (Tenn. Ct. App. E.S., filed Mar. 24, 1999), for

this distinction. Watson discusses Bunch in the course of articulating a distinction from

Wade, Alexander and Inman:

The Bunch Court, however, distinguished the cases on which

the wife relied. It noted that, in those cases, “the appellate court

modified the lower court’s judgment, i.e., changed specific

monetary awards therein.” Bunch, 1999 WL 172674, at *4. In

Bunch, however, after determining that one of the marital assets

was undervalued, the appellate court had remanded the case to

allow the trial court to determine the proper distribution. Id.

Therefore, the Bunch Court held that “the date on which the

trial court entered judgment after reapportioning the parties’

marital assets upon remand . . . is the date upon which it

‘returned the verdict’ for purposes of [Tennessee Code

Annotated] § 47–14–122.” Id. at *5. Accordingly, the appellate

court held that the wife was entitled to interest from the date of

the judgment on remand, not the date of the original judgment.

Id.

In the present case, as in Bunch, this Court did not modify the

judgment of the trial court. Rather, it remanded the case to the

trial court for a reconsideration of the distribution of the marital

estate after determining that one of the marital assets was

undervalued. See Watson, 2005 WL 1882413, at *10. Because

this Court remanded the case to allow the trial court to make its

own decision regarding the distribution, the date of the judgment

on remand, not the date of the original divorce decree, is the

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date on which the trial court “returned the verdict” for the

purposes of Section 47–14–122. See Bunch, 1999 WL 172674,

at *5. Therefore, post-judgment interest on the additional

$13,000 awarded to Wife as her share of the marital estate began

to accrue from November 6, 2007, which was the date of the

judgment on remand. On remand, the trial court is directed to

award post-judgment interest on the additional $13,000 from

November 6, 2007, the date of the judgment on the previous

remand.

Id. at 502 (emphasis in Bunch).

We have no disagreement with the distinction articulated in Watson and Bunch. We

do, however, have a problem with expanding it to cover the present case. We note that

Rand’s restatement of the distinction, to include any case “remanded for further

proceedings,” is overly broad. In Inman, the case was “remanded to the [trial court] for

further proceedings not inconsistent with this opinion.” 840 S.W.2d at 930. As we have

shown above,Inman, allowed post-judgment interest from the date of the original judgment.

Watson and Bunch do not apply when the remand leaves nothing of substance to be done

by the trial court to determine the amount of the judgment. Our opinion left nothing of

substance to be done by the trial court with regard to the monetary award against Rand. We

reinstated the August 2008 judgment and then affirmed it. Our opinion and judgment stand

as if the August 2008 judgment had never been disturbed.

Rand argues, alternatively, that post-judgment interest should not begin to run any

earlier than the date of entry of the December 2008 judgment. Rand relies on Monday v.

Millsaps, 271 S.W.2d 857 (Tenn. 1954). Monday held that under a previous version of the

post-judgment interest statute, interest did not begin to run until “the date judgment was

entered after overruling the motion for a new trial.” Id. at 858. The “Monday rule” was a

judicial construction of the statute in effect at that time which stated: “Interest shall be

computed on every judgment from the day on which it was entered of record.” Capital

Airlines, Inc. v. Barger, 341 S.W.2d 579, 588 (Tenn. Ct. App. 1960) (quoting Tenn. Code

Ann § 47-1610 and explaining that Monday was a judicial construction of that statute). The

current version dates back to 1979 and expressly states that the computation shall be made

“without regard to a motion for a new trial.” Tenn. Code Ann. § 47-14-122. The change

in the statutory language has been noted by at least one legal scholar and described as having

“set aside” the holding of Monday. Sobieski, The Procedural Details of the Proposed

Tennessee Rules of Appellate Procedure, 46 Tenn. L. Rev. 1, 99 n.540 (1978). In the present

case, we see no reason to treat a motion to alter or amend any different than a motion for new

trial. Accordingly, we decline to follow the holding in Monday.

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Rand also argues that Automation is guilty of delay with respect to some portion of

the delay during the appellate process and therefore should lose the right to collect postjudgment interest for those periods. Rand blames Automation for an additional 45 days that

it requested to file its brief and for an unspecified number-of-days delay in having a useable

record filed with us. Rand relies on Staggs v. National Health Corporation, 924 S.W.2d 79

(Tenn. 1996), for the proposition that we can deduct the interest on these periods of delay to

prevent Automation from being unjustly enriched. Staggs recognized that “the legislature

did not intend for a party . . . to be unjustly enriched through the payment of post-judgment

interest.” Id at 81. However, the situation in Staggs is very different than the present case.

The plaintiff employee in Staggs was asking for interest on that part of a judgment that

ordered an employer in a worker’s compensation case to reimburse a third party health

insurer for medical benefits provided to the employee. Id. The Court did not allow it. We

are not aware of any cases that have applied Staggs outside the narrow realm of worker’s

compensation. We are not persuaded that we should let the quoted language from Staggs

lead us away from the well-recognized rule that the right to post-judgment interest is

controlled by statute and that the courts are not free to ignore that right. State v. Thompson,

197 S.W.3d 685, 693 (Tenn. 2006); Bedwell v. Bedwell, 774 S.W.2d 953, 956 (Tenn. Ct.

App. 1989). Moreover, Automation points out that Rand’s argument does not explain how

Automation has power over the court clerk and does not explain how the delay in filing the

record should be blamed on Automation for anything other than failing to make the clerk of

the trial court “work faster.” Rand fails to even contest Automation’s point in its lengthy

reply brief. We decline to suspend post-judgment interest for any alleged periods of delay

in Rand I.

Before moving to the calculation of post-judgment interest in this case, we must first

discuss the effect of our decision to eliminate $92,318.59 of the prejudgment interest

awarded to Automation. In the January 2011 judgment, the trial courtstated that “the amount

of Automation’s judgment as modified and reinstated by the . . . Court of Appeals as of

August 29, 2008 [was] $2,342,746.” That figure includes prejudgment interest that we have

now held was inflated by $92,318.59. Thus the new judgment figure is determined as

follows:

$2,342,746.00

<92,318.59>

$2,250,427.41

Because of this adjustment – and through no fault of the trial court – the post-judgment

interest figure calculated by the trial court, i.e., $566,163.61, is no longer correct. Using the

10% statutory per annum interest rate, the per diem interest on Automation’s modified

judgment is $616.56. There are 882 days from August 29, 2008, the effective date of that

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judgment, to January 28, 2011, the date of the January 2011 judgment of the trial court. This

means that the new post-judgment interest as of January 28, 2011, is $543,805.92 and we

modify the January 2011 judgment of the trial court to reflect this new figure for postjudgment interest for the relevant time period.

C.

We must now consider the issue of whether Automation is entitled to recoverstatutory

post-judgment interest on the accrued interest awarded in the January 2011 judgment, as

modified by us. We agree with Automation that Long v. Mattingly, 817 S.W.2d 325 (Tenn.

Ct. App. 1991) is directly on point and requires that Automation be allowed to recover

interest on the interest awarded in the January 2011 judgment, as we have modified it.

In order to provide some focus, we will reiterate our understanding of the pertinent

facts and respective arguments on this point. The January 2011 judgment determined the

exact dollar amount Rand owed to Automation, including prejudgment interest and postjudgment interest from August 29, 2008 to January 28, 2011. Rand paid Automation

$2,250,423.60 on January 28, 2011. The trial court held that Rand could secure a stay of

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execution by presenting Automation a letter of credit in the amount of $663,125.07, which

represented the unpaid portion of the judgment without regard to any interest that accrued

after January 28, 2011.

Rand argues that the trial court has ruled on the matter in its order allowing a stay of

execution and that it has acted well within its authority to apportion partial payments on a

judgment according to the equities of the case as allowed by Mason v. Smith, 79 Tenn. 67

(1883). We are not convinced that Mason helps Rand. One of the issues in Mason was how

to apply a payment made before the judgment was rendered. Id. at 74. Mason states

The money was realized, and paid into court before the trial of

the cause in the circuit court, and applied by the court after the

rendition of the judgment. Treated as a payment either upon the

debt or the judgment, there was no application of the payment

by any of the parties. The application must therefore be made

by the law. No objection is taken to the ruling of the circuit

judge that so much of the fund as was necessary should be

applied to the payment of the costs of the cause. The general

In its reply brief, Rand indicates, in one place, that it made a payment on the judgment in the amount 6

of $2,250,401.75. It also alludes to the figure of $2,250,423.60. We believe the latter figure is the correct

one because it is closer to the figure arrived at by us in Section III (B) of this opinion.

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rule in the application of payments by law is that a partial

payment shall first be applied to the discharge of interest due,

and the balance in discharge of principal: Jones v. Ward, 10

Yer., 161. Another rule on the subject adopted in this State is

that the law will apply a payment according to the intrinsic

justice and equity of the case: Bussey v. Gant, 10 Hum., 238.

Taking these two rules together, the money should be applied to

the interest by way of damages which is given by law upon the

amount of the justice’s judgment.

As we read Mason, the ultimate result was the application of the payments first to interest,

which amounted to damages by the surety, and then to principal. We should also note that

we are not entirely convinced that the trial court’s order allowing a stay of collection efforts

was meant to be its final say with regard to the amount owed on the judgment. If the trial

court had intended it as the final word, it is unlikely it would have given the parties, as it did,

the option of allowing them to ask for “reconsideration of this Order at any time should

circumstances warrant such reconsideration.” We acknowledge that, if the order staying

collection was not intended to determine the exact and final amount owed by Rand, we are

at risk of supplying an advisory opinion. To the extent our consideration of this issue could

be viewed as advisory, we have no doubt any guidance we furnish will be helpful on remand.

Automation argues that Mattingly is directly on point. Automation also argues that

we should adopt the “American Rule,” followed in the majority of jurisdictions of applying

any partial payment first to interest and then to principal. As we have agreed with

Automation on the first point, we will not reach the issue of adopting blanket rules from

outside this jurisdiction. Mattingly, like the present case, involved two appeals of the same

case. In the first trial and appeal, the husband and wife plaintiffs secured combined

judgments totaling $125,000 which were remitted, under protest, by the trial court to

$105,000 and then reduced by this court to $60,000. Id. at 326. While an application for

permission to appeal to the Supreme Court was pending, the defendants paid $60,000 into

court which was deposited into an interest bearing account. Id. at 327. Later, the Supreme

Court denied the application for permission to appeal and the trial court was called upon to

determine the exact amount the defendants owed after the plaintiffs were paid the $60,000

plus $292.80 in interest that the money had earned while on deposit with the clerk. Id. The

court entered judgments holding that the defendants owed exactly $11,378.60 in postjudgment interest on the plaintiffs’ unsatisfied judgments. Id. The defendants appealed and

the plaintiffs raised the issue of whether they were entitled to post-judgment interest from the

date the judgments were entered until the date they were paid in full. Id. at 328. This Court

stated:

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Plaintiffs’ third issue presents the thorny question of their right

to “interest on interest”, that is, interest upon the unpaid interest

which accumulated on the judgment from the jury verdict until

payment. As stated, the Trial Court rendered judgments for that

interest on November 29, 1990, and those judgments are the

subject of this appeal.

T.C.A. §§ 47–14–121 and 122 mandate interest on judgments.

There was a dispute as to the amount of interest which the Trial

Court resolved by judgment. Upon the rendition of that

judgement plaintiffs were entitled to their money and the

defendants were under a duty to pay it and to pay the statutory

interest charges from the date of entry of the judgment to the

date of payment.

Id. at 330.

The only distinction Rand offers is that there were “separate” judgments in Mattingly

for interest. We cannot see how that makes Mattingly different from the present case. The

important fact is that the January 2011 judgment in the present case determines the exact

amount of all interest owed to Automation as of the date of that judgment. Through no fault

of the trial court, that judgment is being modified by this opinion so that the amount will be

somewhat less. Nevertheless, it is a judgment holding Rand liable for interest accrued as of

that date. We follow Mattingly and hold that Automation is entitled to recover postjudgment interest at the statutory rate on the unpaid balance of the January judgment as

modified by this opinion. We cannot render an exact figure because we are not sure of the

exact amount of Rand’s earlier payment or when its next payment will be made.

D.

We conclude with the issue of whether the trial court erred in denying Automation an

award of discretionary costs. This puts us in the position of considering whether the trial

court abused its discretion when, in considering Automation’s request, it relied, in part, on

its inability to grant Rand relief from the miscalculated prejudgment interest. It is a strange

position because we have now held that the trial court was correct in not modifying the

prejudgment interest on remand, but we have, on our own order, removed the erroneous

prejudgment interest from the judgment. The result of this modification is that the trial court,

through no fault of its own, considered the equities of discretionary costs, including a factor

that is no longer in the case; i.e., a windfall of $92,318.59 excess interest to a party who was

asking for $19,571.85 in discretionary costs. The trial court denied Automation any recovery

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of discretionary costs for “equitable reasons, including” the erroneous and excessive

prejudgment interest. Automation argues that its discretionary costs should have been

allowed because Rand did not even challenge the necessity and reasonableness of most of

the charges. We reject this argument because we read Rand’s papers filed in opposition to

the motion to argue that the particulars of the case justify denying any recover whatsoever

and, alternatively, if some are awarded, some should also be denied.

Rand argues that the trial court should be affirmed because the court spoke in plural

terms of “reasons” and there are numerous equitable reasons, according to Rand, for denying

discretionary costs. The problem with this approach is that we are unable to discern whether

the trial court would have awarded some or all of the discretionary costs claimed by

Automation, had it not been troubled by the prejudgment interest windfall. We think the

best course in this situation is to vacate the order denying discretionary costs and remand the

case to the trial court for consideration anew of Automation’s motion for discretionary costs.

This approach will allow the court to articulate whether it has serious equitable concerns –

other than the former but now corrected miscalculation of prejudgment interest – that justify

denying Automation an award of all or part of its claimed discretionary costs. If the court

decides to award some or all of the costs claimed, it will have the opportunity to make

“individualized determinations regarding the reasonableness and necessity” of the claimed

expenses. Stalsworth v. Grummons, 36 S.W.3d 832, 835 (Tenn. Ct. App. 2000).

V.

The judgment of the trial court is modified in part, vacated in part and affirmed in

part. Even though the trial court was without authority to depart from our reinstatement of

the monetary award to Automation, along with the prejudgment interest, pursuant to Tenn.

R. App. P. 36(a) we order that Rand is entitled to have the award of prejudgment interest

reduced by $92,318.59. The January 2011 judgment is modified to reflect a principal amount

due of $2,250,427.41, including the corrected figure for prejudgment interest. That part of

the January judgment holding that post-judgment interest is to be calculated from the date

of entry of the August 2008 judgment is affirmed, but modified to reflect accrued interest of

$543,805.92 as of January 28, 2011. That part of the judgment denying Automation an

award of discretionary costs is vacated and the trial court is directed to consider the motion

anew. On remand, Automation shall be entitled to collect interest from January 28, 2011

until the date of payment on any part of the judgment, as modified, that remains unpaid.

Costs on appeal are taxed equally to the appellant, Tennessee Rand, Inc, and the appellee,

Automation Industrial Group, LLC. This case is remanded, pursuant to applicable law, for

a hearing on Automation’s motion for discretionary costs and for enforcement of the

judgment as changed by us.

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_______________________________

CHARLES D. SUSANO, JR., JUDGE

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