By: Jonathan D. Ricottilli

Prior to its repeal in 1983, General Statutes § 52-349 had provided generally for the collection of “legal interest in the amount of the judgment from the time it was rendered.” Presently, General Statutes § 37-3b provides for post-judgment interest in connection with actions “to recover damages for injury to the person, or to real or personal property, caused by negligence.” Additionally, General Statutes § 37-3a serves as the source for post-judgment interest on claims to which General Statutes § 37-3b does not apply (i.e. interest awards in certain civil action not involving negligence).[1]

Most credit agreements contain terms that allow for interest to accrue on unpaid balances.  These interest rates are usually anywhere from single digits to the high-teens.  Until recently many Connecticut courts would alter the contractual interest rate when entering judgment against a defaulting client. Courts were doing so based on Conn. Gen. Stat. § 37-3a which provides that post-judgment interest is discretionary and is capped at 10%.  Many Connecticut courts read this to mean that 10% was the most interest they could order after judgment but that they could award interest at a lower rate or even no post-judgment interest as they saw fit. Therefore, the discretionary nature of an order for post-judgment interest has become a product of case law development and interpretation rather than statutory provision.

The Connecticut Supreme Court in Sikorsky Fin. Credit Union, Inc. v. Butts, clarified the circumstances and interest rate for creditors to receive post judgment interest. In Sikorsky, a lender sued its borrower to obtain a deficiency judgment after the loan collateral (automobile) was repossessed and liquidated leaving a balance due on the loan. The loan documents contained an interest rate of 9.14 percent and further stated that the lender “may charge interest at a rate not exceeding the highest lawful rate” until the deficiency is paid.[2]

The Sikorsky Court found that Connecticut law provides for two distinct types of interest by statute under §§ 37-1 and 37-3a. First, Connecticut General Statutes § 37-1 provides that the court, as part of a judgment enforcing a loan, must award post judgment interest at the rate of interest agreed upon by the parties, or eight percent if the parties did not specify the rate for post judgment interest. The court is only relieved of this obligation if the parties disclaimed post judgment interest. Second, Connecticut General Statutes § 37-3a provides the authority for the court to award discretionary interest up to ten percent as damages for the detention of money, when the duty to pay arises from an obligation other than a loan of money or when the parties to a loan have waived or disclaimed interest.[3]

In Hartford Steam Boiler Inspection and Insurance Co. v. Underwriters at Lloyds and Companies Collective, the Connecticut Supreme Court awarded post-judgment interest in a commercial dispute, holding that “post-judgment interest is intended to compensate the prevailing party for a delay in obtaining money that rightfully belongs to him.”[4] In DiLieto v. County Obstetrics and Gynecology Group, P.C., the Connecticut Supreme Court held that “in the context of § 37-3a, a wrongful detention of money, that is, a detention of money without the legal right to do so, is established merely by a favorable judgment on the underlying legal claim, so that the court has discretion to award interest on that judgment, without any additional showing of wrongfulness, upon a finding that such an award is fair and equitable.”[5]

In Cavolick v. Desimone, a Superior Court held that maximum statutory rate of 10% was appropriate for an award of post-judgment interest even though greater than the rate generated at the time by conservative investments because it was less than the interest charged on other sorts of debt such as credit cards and “an amount greater than that generated by conservative investments may well provide some incentive to pay a judgment.” The 10% interest rate expressed in General Statutes § 37-3a is, however, not a required rate but, rather, is the maximum rate of interest that a trial court, in its discretion, may award.[6] Finally, in Cadle Co. v. Steiner, a Superior Court held that an award of post-judgment interest is discretionary and denied an award of post-judgment interest where the plaintiff sought execution on property and repeatedly demanded more post-judgment interest than it was entitled to. The court also held that when a judgment is ordered paid in installments, with no provision for interest, post-judgment interest does not run prior to a default in the payments ordered.[7]

In conclusion, the determination of a reasonable port-judgment interest rate pursuant to General Statutes § 37-3a is not a mandatory rate that applies generally to all applications of post-judgment interest. Rather, the statute and case law application provide that the 10% interest rate provided in § 37-3a, is a cap on post-judgment interest for damages. Additionally, the order for application of post-judgment interest is in the discretion of the Court, and determined on a case by case basis that requires a factual analysis in order to determine a reasonable rate of interest to be applied in order to compensate the aggrieved party.

Disclaimer: this article is for educational purposes only and to give you a general understanding of the law, not to provide specific legal advice. No attorney-client relationship exists by reading this article. This article should not be used as a substitute for legal advice from a licensed professional attorney in your state.


[1] § 6.8.Interest, 12 Conn. Prac., Unfair Trade Practices § 6.8.

[2] Sikorsky Fin. Credit Union, Inc. v. Butts, 315 Conn. 433 (2015).

[3] Sikorsky Fin. Credit Union, Inc. v. Butts, 315 Conn. 433 (2015).

[4] Hartford Steam Boiler Inspection and Ins. Co. v. Underwriters At Lloyd’s and Companies Collective, 121 Conn. App. 31 (2010).

[5] DiLieto v. County Obstetrics and Gynecology Group, P.C., 310 Conn. 38 (2013).

[6] Cavolick v. Desimone, 39 Conn. L. Rptr. 781 (Conn. Super. Ct. 2005).

[7] Cadle Co. v. Steiner, 51 Conn. L. Rptr. 480 (Conn. Super. Ct. 2011).

Tags: Commercial Litigation, Joseph Pastore