How is Judgment Interest Calculated in Michigan?
Michigan has specific rules regarding the calculation of damages in civil cases to ensure that Plaintiffs are adequately compensated. Under MCL 600.6013(8), you are entitled to receive interest on a money judgment recovered in a civil action at 6-month intervals from the date of filing at a rate of interest equal to 1% plus the average interest rate paid at auctions of 5-year United States treasury notes during the 6 months immediately preceding July 1 and January 1, compounded annually. Interest under this subsection is calculated on the entire amount of the money judgment, including attorney fees and other costs. The inclusion of attorney fees in the calculation is particularly beneficial to a prevailing plaintiff. A table of historical interest rates can be found below.
The basic rule outlined above may be modified in instances where the complaint is based on a written instrument that identifies an interest rate to be used in the calculation of damages. Under MCL 600.6013(5)-(7), complaints filed on or after July 1, 2002 that are based on a written instrument with a specified interest rate, the interest is calculated from the date of filing the complaint to the date of satisfaction of the judgment at the rate specified in the instrument if the rate was legal at the time the instrument was executed. In the case of complaints filed on or after January 1, 1987 but before July 1, 2002 that are based on a written instrument, the interest is calculated from the date of filing the complaint to the date of satisfaction of the judgment at the rate of 12% per year compounded annually, unless the instrument has a higher rate of interest. In that case, interest shall be calculated at the rate specified in the instrument if the rate was legal at the time the instrument was executed. However in both of these instances the rate may not exceed 13% per year compounded annually after the date judgment is entered.
These rules apply only to complaints filed on or after January 1, 1987. The interest rates for money judgments filed before that date are governed by MCL 600.6013 (2)-(4). In all of these situations the date of filing is central to the calculation. It is important to note that interest does not accrue on future damages from the date of filing the complaint to the date of entry of the judgment and the amount of allowable interest may be different in settlement and medical malpractice scenarios under MCL 600.6013(1) and MCL 600.6013 (9)-(13).
If you have questions about a judgment, contact the attorneys at Garmo & Kiste, PLC. We have handled hundreds of cases in Metro-Detroit, granting us an extensive knowledge of the courts in this area. For more information about traffic law or to retain Garmo & Kiste, PLC call us at (248) 398-7100 for a free consultation or contact us with a private message.