Lead Opinion
This case is before the Court for review of the decision of the First District Court of Appeal in R.J. Reynolds Tobacco Co. v. Townsend,
BACKGROUND
After lengthy and protracted litigation, this case is here for a determination of whether R.J. Reynolds Tobacco Company (“R.J. Reynolds”), the Respondent, owes Lyantie Townsend, the Petitioner, $768,205.48 in disputed post-judgment interest. The dispute concerns whether the post-judgment interest rate was 6% or 4.75% for post-judgment interest accruing during the period after January 1, 2012, in light of an intervening stаtutory amendment to Florida’s post-judgment interest statute, section 55.03, Florida Statutes. R.J. Reynolds has otherwise satisfied the judgment and paid the undisputed portion of the interest. The facts are not in dispute.
The relevant facts began on April 21, 2010, when a final judgment was entered awarding Townsend $5,508,000 in compensatory damages and $40,800,000 in punitive damages. With regard to post-judgment interest, the judgment provided that the total sum of $46,308,000 “shall bear interest at 6% per annum from April 29, 2010 for which sum let execution issue.” In 2010, section 55.03(3), Florida Statutes, specifically provided that “[t]he interest rate established at the time a judgment is obtained shall remain the same until the judgment is paid.” § 55.03(3), Fla. Stat. (2010).
Next, in 2012, following an appeal by R.J. Reynolds and an election of remittitur by Townsend, an amended final judgment was entered awarding Townsend $5,508,000 in compensatory damages and $20,000,000 in punitive damages. The trial court ordered that the total sum of $25,508,000 would “bear interest as provided by law from April 29,2010.”
In 2014, R.J. Reynolds then filed a motion in the trial court to determine the rate of interest payable on the amended final judgment. R.J. Reynolds contended that a 2011 amendment to section 55.03(3), Florida Statutes, governed the accrual of interest on the judgment after the amended statute became effective on July 1, 2011. As we will detail below, the amendment to section 55.03(3) no longer provided that the interest rate would remain the same until the judgment was paid, but instead called for an interest rate subject to annu
On appeal from the trial court’s rúling, a divided panel of the First District reversed the trial court for two reasons. See Townsend,
DOES THE LANGUAGE OF SECTION 55.03(3), FLORIDA STATUTES (1998), PROVIDE THAT THE LEGISLATURE INTENDED TO ABANDON THE COMMON LAW RULE -THAT POST-JUDGMENT INTEREST RATES CHANGE ON EXISTING JUDGMENTS WHEN THE LEGISLATURE CHANGES THE RATES SUCH THAT THE 2011 AMENDMENTS TO SECTION 55.03, FLORIDA STATUTES DO NOT APPLY TO A JUDGMENT ENTERED PRIOR TO JULY 1, 2011?
Id. at 575. We accepted jurisdiction. See Townsend v. R.J. Reynolds Tobacco Co.,
DOES THE 2011 AMENDMENT TO SECTION 55.03(3), FLORIDA STATUTES, APPLY TO A JUDGMENT ENTERED BETWEEN OCTOBER 1998 AND JUNE 30, 2011? ■
This review follows.
ANALYSIS
As the facts are not in dispute, this matter turns on a pure question of law and statutory interpretation — which version of section 55.03(3), Florida Statutes, governs and applies to the judgment in this case. Therefore, our review is de novo. See Daniels v. Fla. Dep’t of Health,
Townsend contends that the 2010 version of section 55.03(3), which provided a fixed rate of interest in effect at the time a judgment is entered shall remain the same until the judgment is satisfied, controls because she obtained her judgment in 2010. We agree. In our view, the 2010 version of the statute created a vested right in a fixed rate of interest until the judgment was satisfied, and therefore, application of the current version of the statute would unconstitutionally abridge this vested right. Therefore, we quash the decision below and answer the rephrased certified question in thе negative.
THE TWO STATUTES AT ISSUE
We begin our analysis by reviewing the two versions of section 55.03 at issue. Pri- or to 1998, section 55.03 only had two subsections, neither of which stated whether the interest rate was fixed or annually adjusted.
55.03 Judgments; rate of interest, generally.—
(1)On December 1 of each year, the Chief Financial Officer shall -set the rate of interest ■ that shall, be payable on judgments or decrees for . the year beginning January 1 by averaging the discount rate of the Federal Reserve Bank of New York for the preceding year, then adding 600 basis points to the averaged federal discount rate. The Chief Financial Officer, shall.inform the clerk of the courts and chief judge for. each judicial circuit of the rate that has been established for the upcoming year. The interest rate established by the Chief Financial Officer shall take effect on January 1 of each following year. Judgments obtained on or after January 1, .1995, shall use the previous statutory rate for time periods before January 1, 1995, for which interest is. due and shall apply the rate set by the Chief Financial Officer for time periods.after January 1, 1995, for which interest is due, Nothing contained herein shall affect a rate of interest established by written contract or obligation.
(2) Any judgment for money damages or order for a judicial sale and any process- or writ directed to a sheriff for execution shall bear, on its face, the rate of interest that is payable on the judgment. The rate of interest stated, in the judgment accrues on the judgment until it is.paid.
(3) The interest rate established at the time a judgment,.is obtained. shall remain the■ same until the judgment is paid
(4) A sheriff shall not be required to docket and index or collect on any process, writ, judgment, or decree,, den scribed in subsection (2)⅛ and entered*1227 after the effective date of this act, unless such process, writ, judgment, or decree indicates the rate of interest. For purposes of this subsection, if the process, writ, judgment, or decree refers to the statutory rate of interest described in subsection (1), such reference shall be deemed to indicate the rate of interest.
§ 55.03, Fla. Stat. (2010) (emphasis added).
Next, effective July 1, 2011, an amended version of section 55.03 provided in full:
55.03 Judgments; rate of interest, generally.—
(1) On December 1, March 1, June 1, and September 1‘ of each year, the Chief Financial Officer shall set the rate of interest that shall be payable on judgments or decrees for the calendar quarter beginning January 1 and adjust the rate quarterly on April 1, July 1, and October 1 by averaging the discount rate of the Federal Reserve Bank of New York for the preceding 12 months, then adding 400 basis points to the averaged federal discount rate. The Chief Financial Officer shall inform the clerk of the courts and chief judge for each judicial circuit of the rate that has been established for the upcoming quarter. The interest rate established by the Chief Financial Officer shall take еffect on the first day of éach following calendar quarter. Judgments obtained on or after January 1,1995, shall use the previous statutory rate for time periods before January 1, 1995, for which interest is due and shall apply the rate set by the Chief. Financial Officer for time periods after January 1,1995, for which interest is due. 'Nothing contained herein shall affect a rate of interest established by written contract or obligation.
(2) Any judgment for money damages or order for a judicial sale and any process or writ directed to a sheriff for execution shall bear, on its fаce, the rate of interest that is payable on the judgment.- The rate of interest stated in the judgment, as adjusted in subsection (3), accrues -on the judgment until it is paid.
(3) The interest rate is established at the time a judgment is obtained aiid such interest rate shall be adjusted annually on ■January 1' of each year in accordance with the 'interest rate in effect on that date as set by the Chief Financial Officer until the judgment is paid, except for judgments1 entered by the clerk of the court pursuant to ss. 55.141, 61.14, 938.29, and 938.30, which shall not be adjusted annually.
(4) A sheriff shall not be required to docket and index or collect on any process, writ, judgment, or decree, described in subsection (2), and entered after the effective date of this act, unless such process, writ, judginent, or decree indicates the rate of interest. For purposes of this subsection, if the process, writ, judgment, or decree refers to the statutory rate of interest described in subsection (1), such reference shall be deemed to indicate the rate of intérest.
§ 55.03, Fla. Stat. (2011) (emphasis added); Ch.2011-169, §§ 1, 3, Laws of Fla, Thus, through the 201Í amendment to section 55.03(3), the Legislature changed post-judgment'interеst'ih Florida from a fixed rate of interest at the time the judgment was entered, which remained the same until paid, to one that would be adjusted annually to reflect the interest rate established by the Chief Financial Officer.
VESTED RIGHTS AND DUE PROCESS
To answer-the rephrased-certified question, we must determine whether the 2010 version of section. 55,03(3) created a vested right in a fixed interest rate for the life of the judgment. In Maronda Homes, Inc.
Article I, section 2, of the Florida Constitution guarantеes to all persons the right to acquire, possess, and protect property. Section 9 of article I provides that “[n]o person shall be deprived of life, liberty or property without due process of law.” These constitutional due process rights protect individuals from the retroactive application of a substantive law that adversely affects or destroys a vested right; imposes or creates a new obligation or duty in connection with a previous transaction or consideration; or imposes new penalties. Fоr the retroactive application of a law to be constitutionally permissible, the Legislature must express a clear intent that the law apply retroactively, and the law must be procedural or remedial in nature.
Remedial statutes operate to further a remedy or confirm rights that already exist, and a procedural law provides the means and methods for the application and enforcement of existing duties and rights. In contrast, a substantive law prescribes legal duties and rights and, once those rights and duties are vested, due process prevents the Legislature from retroactively abolishing or curtailing them.
When this Court interprets statutes, we give effect to the Legislature’s intent and are guided by rules of statutory interpretation. See Joshua v. City of Gainesville,
We can recall few statutes that are as clear and unambiguous as the 2010 version of section 55.03(3): “The interest rate established at the time a judgment is obtained shall remain the same until the judgment is paid.” § 55.03, Fla. Stat. (2010) (emphasis added). It is abundantly clear that the statute provides for an unchanging, fixed interest rate on a judg
Although it is not necessary to delvе into the legislative history of section 55.03(3), Florida Statutes (2010), because the language is clear and unambiguous, the legislative history nevertheless confirms our reading of the statute. A staff analysis of the enacting law for the' 2010 version of section 55.03(3) explained that the statute “freezes” the interest rate to avoid the burden of adjusting the interest rate on judgments year after year:
B. EFFECT OF PROPOSED CHANGES:
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4. Would Freeze the Applicable Rate of Interest — CS/HB 935 states that “The interest rate established at the time a judgment is obtained shall remain the same until the judgment is paid.” This provision would reduсe the administrative burdens faced by sheriffs, clerks of the circuit courts, and certain financial institutions. Currently, the rate of interest paid on judgments must be recalculated based upon annual adjustments by the comptroller.
Fla. H.R. Comm. on Civil Justice & Claims, HB 935 (1997) Staff Analysis (Mar. 28, 1997). This legislative history suggests that the Legislature aimed to reduce the work and costs that would ensue from adjusting countless judgments on a year-to-year basis by providing for an interest rate that would be the same until the judgment was paid.
As we have determined that the 2010 version of section 55.03(3) provides for an unchanging rate of interest for the lifе of a judgment, we now turn to whether the statute is procedural or substantive in nature. As we explained above, only a ¡substantive statute can create a vested right. See Maronda Homes,
We conclude that the 2010 version of section 55.03(3) is substantive in nature rather than procedural or remedial. As Judge Swanson noted in dissent below, the value of Townsend’s judgment would be reduced if the 2011 version of section 55.03 were to be retroactively applied. See Townsend,
Next, we turn to whether Townsend’s substantive right in a fixed rate' of interest actually vested. We conclude that it vested at the moment she obtained her judgment.
We need not look any further than the plain language of the statute to reach this conclusion. As discussed above, the language is clear that the judgment bears a fixed interest rate — one that remains the same — once the rate is established at the time the judgment is obtained. See § 55.03(3), Fla. Stat. (2010). On April 29, 2010, Townsend met the sole condition of obtaining a judgment. Although the final judgment was amended .in 2012, it was amended as a result of a remittitur and therefore relates back to the date the original judgment was obtained—April 29, 2010. See Smith v. Goodpasture,
R.J. Reynolds relies on Scott v. Williams,
R.J. Reynolds misapprehends the right at issue. The substantive right created by the 2010 version of section 55.03(3) is simply the right to a fixed rate of interest for the life of the judgment, not the right to interest оr to a particular rate of interest. Thus, whether or not interest has yet accrued is irrelevant to this right. It merely stands for the proposition that any and all interest will be calculated at the same rate. The only relevant consideration is whether Townsend obtained a judgment while the statute was in effect. As noted previously, she did.
Furthermore, Scott is entirely distinguishable. Scott concerned the constitutionality of a statute that changed the Florida Retirement System from a noncontributory pension plan to a contributory pension plan and eliminated an annual cost of living adjustment. See id. at 382. The сhanges applied only to benefits corresponding to future service — work performed after the effective date of the statute. See id. In Scott, we held that' the changes were constitütiohal despite a preservation of-rights'statute. See id. at 388. Unlike the beneficiaries in Scott whose future benefits depended on how much future work they performed, Townsend secured her right to a fixed rate of interest .solely by obtaining'a judgment. Thus, unlike the workers in Scott, Townsend has completely fulfilled her only obligation under the statute and can do no more. Scott is also distinguishable on the basis that the preservation of rights- statute сoncerned
Having determined that Townsend’s substantive right tó a fixed rate of interest on her judgment vested, we cannot constitutionally apply the 2011 version of section 55.03(3) to her judgment. To do so would offend Townsend’s right to due process. As a result, we answer the rephrased certified question in the negative.
ADDITIONAL CONCERNS
Although we need not reach further discussion, we briefly address two other concerns raised by the majority below and R.J. Reynolds. First, R.J. Reynolds urges that the statute cannot сreate a vested right to a fixed rate of interest because it would bind the hands of future Legislatures. The very passage of the 2011 amendment to section 55.03(3), however, belies this contention. Through that enactment, the Legislature exercised its right to change the policy on post-judgment interest by transitioning from a fixed rate of interest to an annually adjusted rate of interest. Any judgments obtained from the effective date of the 2011 amendments to section 55.03(3) are subject to the new statutory provisions of a variable interest rate established by the 2011 Legislature. Indeed, the fact that the statutory change does not retroactively reach those judgments obtained pursuant to the previous version of section 55.03(3) is in harmony with this State’s long-standing aversion to retroactive legislation. See Bates v. State,
Second, the majority below' held that the common law default rule cases control in this situation despite the plain language of 55.03(3). R.J. Reynolds urges us to approve that flawed reasoning. However, as disсussed above, there was no need to look beyond the plain meaning of the statute. Under Florida law, a statute supersedes a common law-rule when it is so repugnant to the common law rule that the two cannot coexist. See Thornber v. City of Ft. Walton Beach,
On the one hand, the common law default pule cases stand for the proposition that the post-judgment interest rate changes on judgments as the Legislature changes the' rates in the statutes. See Morley v. Lake Shore & M.S. Ry. Co.,
On the other hand, as discussed above, in 1998, the Legislature enacted section 55.03(3), which provided that “[t]he interest rate established at the time, a judgment is obtained shall remain the same until the judgment is paid.” § 55.03(3), Fla. Stat. (1998). This provision squarely rejected the common , law default rule’s position to the contrary. The subsequent 2011 amendments, returning to a variable rate of interest, further bolster our conclusion that the 1998 addition of section 55.03(3)
Despite the clear conflict between the 1998 version of section' 55.03(3) and the common law default rule, R.J. Reynolds nevertheless attempts to reconcile the two. Specifically, R.J. Reynolds urges us to read section 55.03(3) as also including some type of implicit languаge not present in the statute that the rate shall remain the same “unless and until — as here — the Legislature decided otherwise.” However, this we cannot do. See Hayes v. State,
Furthermore, the common law default rule cases involve a distinguishable post-judgment interest rate statutory framework. Not a single decision of the common law default rule cases from other jurisdictions concerns or involves a statute like the one in effect in Florida at the time Townsend obtained the judgment we consider here.
CONCLUSION
In conclusion, through its enactment of section 55.03(3) in 1998, the Legislature granted litigants obtaining a judgment a vested right to a fixed rate of interest that expressly fixed the rate of interest until the judgment was paid. As a result, subsequent enactments, including the 2011 amendments to section 55.03, cannot divest judgment holders of the right to a fixed rate of interest without offending due process, so long as those judgments were obtained while the 1998 version of-section 55.03(3) was in effect. Thus, for the foregoing reasons, we quash the decision below, answer the rephrased certified question in thе negative, and remand for further proceedings consistent with this opinion.
It is so ordered.
Notes
. In 1997, section 55.03 provided in'full: 55.03 Judgments; rate of interest, géner-
(1) On December 1 of each year beginning December 1, 1994, the Comptroller of the State of Florida shall set the rate of interest that shall be payable on judgments or decrees for the year beginning January 1 by averaging the discount rate of the Federal Resérve Bank of New York for the preceding year, then adding 500 basis points to the averaged federal discount rate. The Cоmptroller shall inform the clerk of the courts and chief judge for each judicial circuit of the rate that has been-established for the upcoming year.- The initial interest rate- established by the Comptroller shall take effect on January 1, 1995, and the interest rate established by the Comptroller in subsequent years shall take effect on January 1 of each following year. Judgments obtained on or after January 1, 1995, shall use the previous statutory rate for time periods before January 1, 1995, for which interest is due and shall apply the rate set by the Comptrollеr for time periods after January 1, 1995, for which interest is due. Nothing contained herein shall affect a rate of interest established by written contract or obligation,
(2) Any process,, writ, judgment, or decree which is directed to the sheriffs of the state to be dealt with as execution shall bear-, on the face of the process, writ, -judgment, or decree, the rate of interest which it shall accrue from the date of the judgment until payment.
§ 55.03, Fla. Stat. (1997).
. In a misplaced attempt to sway this Court in terms of majority and minority rules, RJ. Reynolds refers this Court to many cases from other jurisdictions applying the common law default rule to statutes which appear to be silent with regard to whether the interest rate on a judgment is fixed for the life of the judgment. See, e.g., Morley,
. Although R.J. Reynolds refers this Court to cases applying.the common law default rule in Arizona, North Dakota, and Utah, R.J, Reynolds failed to refer this Court to subsequent enactments in those states that provide for an unchanging rate of interest similar to the 2010 version of section 55.03(3), Florida Statutes. See, e.g., § 44-1201(B), Ariz.Rev. Stat. Ann. (2011) ("The judgment shall state the applicable interest rate and it shall not change after it is entered.”); § 28-20-34, N.D. Cent.Code Ann. (2005) ("Except as otherwise provided in this section, interest on all judgments entered in the courts of this state before January 1, 2006, must remain at the rate per annum which was' legally prescribed at the time the judgments were entered....”); § 15-1—4(3)(c), Utah Code Ann. (1999) ("The postjudgment interest rate in effect at the time of the judgment shall remain the interest rate for the duration of the judgment.”).
Dissenting Opinion
dissenting.
I would approve the decision of the First District Court of Appeal in R.J. Reynolds Tobacco Co. v. Townsend,
CANADY, J., concurs.