Court Opinion

ID: 9471819
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:41:51.815728+00
Date Added: 2024-06-11T17:42:35.673404
License: Public Domain

NEWMAN, Circuit Judge,
concurring:
Whether and in what circumstances a second judgment may enter that bears interest on the interest accrued on a first judgment is a matter less clear than the majority opinion suggests. To support such compounding of post-judgment interest, the majority relies upon our prior decision in Hellenic Lines Limited v. Gulf Oil Corp., 359 F.2d 403 (2d Cir.1966), and the Fifth Circuit’s decision in Dorey v. Dorey, 609 F.2d 1128 (5th Cir.1980), which read Hellenic as permitting compounding of post-judgment interest. Hellenic is not authority for permitting a party to achieve compounding of post-judgment interest by securing entry of a second judgment. The first judgment in that case, dated March 30, 1964, had awarded pre-judgment interest, i.e., interest on the amount of the claim to the date of judgment. 359 F.2d at 404. The first judgment properly bore interest on its total sum, i.e., the amount of the damages plus pre-judgment interest. In affirming the district court’s entry of the second judgment, our Court simply noted that the total sum of the first judgment had not been paid and “interest has been running on it.” Id. Examination of the briefs reveals that appellant complained only of the allowance of post-judgment interest on pre-judgment interest, and appellee asserted a claim only to this traditional type of compounding. No claim was made for compounding of post-judgment interest. Moreover, the records reveal that the new judgment, entered October 29, 1965, stated that the post-judgment interest was to run from March 30, 1964, the date of the first judgment. Thus, the new judgment simply renewed the plaintiff’s right to recover the sum of the original judgment plus interest on that judgment from its date until payment. Nothing in the Court’s opinion nor in the records of the case supports compounding of post-judgment interest, i.e., a second judgment entered for the sum of the first judgment plus interest accrued from the date of the first judgment to the second judgment, with interest running on the total of the second judgment.
Since 28 U.S.C. § 1961 (1964), as it was phrased at the date the United States secured its first judgment, permitted post-judgment interest at the rate provided by state law and was silent as to whether simple or compound interest was contemplated, it may be permissible to apply state law in determining whether the second judgment should include the interest accrued from the date of the first judgment or be limited to the principal sum of that judgment with a provision that interest runs on that sum until payment, calculated at the different rates applicable to the pertinent time periods. New York law appears to permit compounding of post-judgment interest in a second judgment, Yonkers Contracting Company, Inc. v. New York State Thruway Authority, 25 N.Y.2d 1, 302 N.Y.S.2d 521, 250 N.E.2d 27 (Ct.App.1969), modified 26 N.Y.2d 969, 311 N.Y.S.2d 14, *147259 N.E.2d 483 (Ct.App.1970); D’Angelo v. State of New York, 200 Misc. 657, 106 N.Y. S.2d 350 (Ct.C1.1951), though the matter is not free from doubt, see Cahn v. Cahn, 119 Misc.2d 150, 462 N.Y.S.2d 535 (N.Y.City Civ. Ct.1983) (renewal judgment does not include interest accrued from the date of the first judgment); Beneficial Discount Co. v. Spike, 91 Misc.2d 733, 398 N.Y.S.2d 651 (Sup.Ct.1977) (execution on judgment permitted for interest from judgment to payment, not compound interest for post-execution interest on interest from judgment to date of writ of execution). Moreover, the United States has an entirely legitimate reason for securing a second judgment in this case — to renew its judgment lien, which has expired pursuant to state law. That circumstance and the likely authority for compounding of post-judgment interest under state law persuades me to agree with the majority’s direction that the new judgment should include interest accrued from the date of the first judgment on the unpaid balance. I therefore concur in Judge Davis’s opinion.
However, it is important to recognize that by ordering such a result in this case we are not recognizing a general right to obtain compounding of post-judgment interest every time a plaintiff chooses to secure a second judgment. Caution in this area is especially warranted now that Congress has amended the interest-on-judgments statute in two significant respects: (1) the state law rate has been displaced in favor of the Treasury bill rate prevailing just prior to the date of the judgment, and (2) annual compounding is specified. See 28 U.S.C.A. § 1961(a), (b) (West Supp.1982). It remains to be determined in subsequent cases whether a judgment-creditor can gain either an increased interest rate or more than annual compounding by securing entry of a second judgment.