Opinion ID: 2598610
Heading Depth: 3
Heading Rank: 2

Heading: Statutory Rate of Interest

Text: Idaho Code § 28-22-104 provides: When there is no express contract in writing fixing a different rate of interest, interest is allowed at the rate of twelve cents (12¢) on the hundred by the year on: 1. Money due by express contract. 2. Money after the same becomes due. Montgomery argues that the district court erred in finding that the parties' agreements did not fix a different rate of interest than the statutory rate of 12%. The district court initially found that Montgomery had not properly preserved his objection on the rate of interest at trial or in his briefing. However, the district court went on to substantively rule that I.C. § 28-22-104 applied to the Closing Date Holdback. The district court awarded prejudgment interest on the Closing Date Holdback offsetting the amount accrued in the escrow account. The parties' written agreement does not contain a stated interest rate. Nor do any of the provisions of the agreement fix an interest rate applicable to the Closing Date Holdback. The only reference to interest relates to the initial $100,000 holdback and it states that the funds will be placed in an interest-bearing account. Another reference to an investment dealing with the initial holdback amount provides that if the parties are unable to determine where the funds should be invested that the holdback will be invested in United States Treasury Bills. None of these references appear to establish an interest rate to be used other than the statutory rate. Where the parties fail to specify the interest rate that applies by agreement, then the statutory rate of interest will apply. Therefore, the statutory rate of I.C. § 28-22-104 applies in this case. This Court holds that the district court did not err in awarding prejudgment interest pursuant to I.C. § 28-22-104 and offsetting the amount by the funds accrued in the interest-bearing escrow account.