Townsend v. R.J. Reynolds Tobacco Co.

• Citation: 192 So.3d 1223
• Decision Date: 09 June 2016
• Docket Number: No. SC15–722.,SC15–722.
• Parties: Lyantie TOWNSEND, etc., Petitioner, v. R.J. REYNOLDS TOBACCO COMPANY, Respondent.
• Court: United States State Supreme Court of Florida

192 So.3d 1223

Lyantie TOWNSEND, etc., Petitioner,
v.
R.J. REYNOLDS TOBACCO COMPANY, Respondent.

No. SC15–722.

Supreme Court of Florida.

June 9, 2016.

192 So.3d 1224

Tracy Sue Carlin, Steven L. Brannock, and Celene Harrell Humphries of Brannock & Humphries, Tampa, FL; Gregory David Prysock and Katherine Michelle Massa of Morgan & Morgan, P.A., Jacksonville, FL; and Keith Randolph Mitnik of Morgan & Morgan, P.A., Orlando, FL, for Petitioner.

Charles Franklin Beall, Jr. and Thomas Larry Hill of Moore, Hill & Westmoreland, P.A., Pensacola, FL; and Gregory George Katsas and Charles Richard Allan Morse of Jones Day, Washington, DC, for Respondent.

Courtney Rebecca Brewer and John Stewart Mills of The Mills Firm, P.A., Tallahassee, FL, for Amicus Curiae Florida Justice Association.

LEWIS, J.

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, 160 So.3d 570 (Fla. 1st DCA 2015). In its decision, the district court certified a question of great public importance to this Court. See id. at 575. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

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 statutory 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 annual

192 So.3d 1225

adjustment on January 1 of each year. After a hearing as to whether the amended statutory provision applied, the trial court denied R.J. Reynolds' motion.

On appeal from the trial court's ruling, a divided panel of the First District reversed the trial court for two reasons. See Townsend, 160 So.3d at 573. First, the district court held that the 1998 addition of section 55.03(3), which remained in effect in 2010, did not abrogate the common law default rule. See id. at 575. Second, the district court held that the same version of the statute in effect at the time of the judgment did not create a vested right in one unchanging interest rate. See id. In dissent, however, Judge Swanson concluded that the plain meaning of the 2010 version of section 55.03(3), Florida Statutes, which was in effect at the time of the judgment, controlled. Id. at 576 (Swanson, J., dissenting in part and concurring in part). Judge Swanson rejected the notion that the common law default rule permitted the 2011 amendment to the statute to retroactively make the substantive change from a fixed rate of interest to an adjustable rate of interest. Ultimately, the First District certified the question to this Court as one of great public importance:

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., 171 So.3d 124 (Fla.2015). However, we believe the question is better articulated as:

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, 898 So.2d 61, 64 (Fla.2005).

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 the negative.

THE TWO STATUTES AT ISSUE

We begin our analysis by reviewing the two versions of section 55.03 at issue. Prior to 1998, section 55.03 only had two subsections, neither of which stated whether the interest rate was fixed or annually adjusted.¹ In 1998, effective October 1998,

192 So.3d 1226

the Legislature amended section 55.03, including the addition of two subsections. See Ch. 98–410, § 4, Laws of Fla. One of the new subsections was subsection 55.03(3), providing that “The interest rate established at the time a judgment is obtained shall remain the same until the judgment is paid.” See Ch. 98–410, § 4, Laws of Fla; § 55.03(3), Fla. Stat. (2008). With the exception of changes to section 55.03(1) in 2003 to replace “Comptroller” with “Chief Financial Officer,” the 2010 version of the statute reflects the 1998 statutory amendments. As a result, in April 2010, the time when Townsend obtained her original judgment and the time from which the amended judgment accrues interest, section 55.03 provided in full:

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 500 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, described in subsection (2), and entered

192 So.3d 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).

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