In Becher v. Becher, a recent Nebraska Supreme Court opinion, the Court outlined the general rule for judgment interest and explained when courts may award judgment interest. 311 Neb. 1 (2022). In sum, courts hearing equitable claims—which are claims seeking something other than money damages—may award or withhold interest as the court deems reasonable and just, except where a party is entitled to interest “as a matter of right.” Id. at 16. This raises the question: when is interest recoverable “as a matter of right,” and at what rate?
Under Nebraska law, interest is generally recoverable “as a matter of right” in loan default and breach of contract claims.
Loan default claims : recoverable interest is usually outlined in the loan agreement. A party may contract to borrow or loan money at any rate of interest not exceeding 16% per year. Neb. Rev. Stat. § 45-101.03. This limitation does not apply to loans to a corporation, partnership, LLC, or trust (or to a person or entity guaranteeing a loan to the same), or loans in excess of $25,000 payable to a single creditor. A “fallback” interest rate of 6% per year applies where no interest rate is mentioned in the loan or contract. § 45-102.
Breach of contract claims : interest is divided into two categories: Pre-judgment interest and post-judgment interest.
Pre-judgment interest accrues from the time a party breaches the contract until the date judgment is entered. There are “three ways to recover pre-judgment interest, and none is preferred.” Pre-judgment interest may be recovered on (a) liquidated claims, (b) unliquidated claims, and (c) liquidated or unliquidated breach of contract or quasi-contract claims. Weyh v. Gottsch, 303 Neb. 280, 314 (2019).
Liquidated claims —where there is no dispute as to the amount owed—interest is recoverable at the post-judgment interest rate set forth in § 45-103 (explained below). § 45-103.02(2).
Unliquidated claim s—interest is recoverable if four conditions are met: (1) a written offer must be made and mailed to defendant to allow judgment on the terms stated in the offer; (2) the offer must be made no less than ten (10) days prior to trial; (3) a copy of the offer and return receipt must be filed with the clerk of court where the action is pending; and (4) the offer is not accepted prior to trial or within thirty (30) days of the date the offer was made, whichever occurs first. Neb. Rev. Stat. § 45-014. When all four conditions are met, pre-judgment interest may be recovered at the post-judgment interest rate outlined in § 45-103 (explained below).
Here’s the real kicker: Interest on liquidated or unliquidated breach of contract or quasi-contract claims is recoverable at a rate of 12% per year if the claim is (1) a claim on any instrument in writing (like a contract); (2) to settle an account from the date the balance is undisputed (when the breaching party agrees they owe the amount); (3) on unjust enrichment claims; or (4) on money owed and unreasonably withheld. § 45-014.
Post-judgment interest : Effective January 20, 2022, the statutory judgment interest rate in Nebraska is 2.223% per annum. As the name implies, post-judgment interest begins to accrue from the date judgment is entered and continues until the judgment amount, plus accrued interest, is paid in full. This rate is adjusted regularly by the Nebraska State Court Administrator to be “two percentage points above the bond investment yield” for 26-week United States Treasury Bills. § 45-103.
