JUDGMENT AND COMPOUND INTEREST

Until this case, I always thought that post-judgment interest was "simple" interest and not compound interest. Apparently, I was wrong. The court of appeals notes in passing "the trial court determined that the effective post-judgment interest rate is 10%, compounded annually. It is from this order that the current appeal arises." But, the court does not even address the propriety of the use of compound interest as opposed to simple interest.

The case itself emphasizes an important point -- the statute of limitations on the judgment does not commence until the judgment is final. If the court of appeals remands the case for further proceedings, then the judgment is not final.

See Orlando Residence LLC v. Nashville Lodging Company, et al.

A CHRISTMAS PRESENT FOR BORROWERS - NON-JUDICIAL FORECLOSURE AND AN ACCURATE PAYOFF

In this case, a homeowner's association exercised its right under its Master Deed and conducted a non-judicial foreclosure sale to collect amounts owed by the homeowner to the association. Although the property was worth in excess of $300,000, the association purchased the property for the amount owed -- $12,000. The owner sued and asked the court to set aside the foreclosure.

In Tennessee, however, as long as the foreclosure sale is properly noticed, then "shocking inadequacy of the foreclosure sale price" is not grounds to set aside the sale. But, if sloppy bookkeeping makes it impossible to determine the correct amount owed on the date of the foreclosure sale, then the court of appeals says it is property to set aside the sale.

This case is scary for lenders as it states that the amount must be accurate. Generally, it is difficult to enjoin a foreclosure sale. But, it the lender cannot on the day of the foreclosure sale, provide an accurate accounting of the amount owed, then this case says the foreclosure sale should be set aside. Look for more lawsuits over foreclosure sales.

See Brooks v. Rivertown on the Island HOA

A BASIC PRINCIPLE OF CONTRACT LAW

If you do not make the payments required under the contract, then you "breach" the contract.

The most interesting cases seem to always involve a trailer. In this case, brother dies leaving all of this property to his sister. This property includes the trailer at issue.

Previously, brother entered into an installment sales contract with seller whereby brother agreed to make monthly payments before the 4th day of the month. Brother did not. After brother's death, sister attempted to make a lump sum payment of $2,000 to seller. Seller refused and sister filed her lawsuit. During the interim period, sister did not make any of the required monthly payments. Wrong decision.

The holding: 1. Brother was in default at time of death. Pursuant to the contract, Brother's default resulted in the contract becoming a lease.

2. Even if Brother had not been in default, Sister's failure to make the required monthly payments (or even tender them to Seller) resulted in Sister losing any rights under the contract.

3. Sister's appeal was frivolous.

The Moral of this Story: Pay your monthly payments on time or forfeit your rights.

See Smith v. Hatfield