Summary
The Arkansas Supreme Court held that McCourt Manufacturing’s conditional tender of a check did not stop the accrual of postjudgment interest on Dave Rycroft’s commission judgment. The court explained that a tender must be unconditional and kept good, such as by depositing the funds into the court registry. The circuit court’s order requiring payment of additional postjudgment interest was affirmed.
Topics
Practice areas
Questions Presented
- Whether McCourt's conditional check tendered to Rycroft stopped the accrual of postjudgment interest on the judgment.
- Whether posting a supersedeas bond protected Rycroft from loss and thereby stopped postjudgment interest from accruing.
- Whether McCourt's argument concerning the supersedeas bond could be considered when it was not raised below and was first presented in a reply brief.
Holdings
- A tender conditioned on the creditor's acceptance of the payment as full and complete satisfaction of the judgment is invalid when the debtor has no right to impose that condition and therefore does not stop the accrual of postjudgment interest.
- Even a proper tender must be kept good or alive, including by depositing the funds into the court registry, in order to preserve its effect and stop the accrual of postjudgment interest.
- The court did not reach the argument that McCourt's supersedeas bond stopped postjudgment interest because McCourt did not raise the argument below and first presented it in its reply brief.
Key quotations
“It is well established that a tender must be without conditions to which the creditor can have a valid objection.”
“Because McCourt imposed a condition that it had “no right to couple with [its] tender,” see Fields, 65 Ark. at 401, 46 S.W. at 942, its tender was invalid and thus did not serve to stop the accrual of interest on the underlying judgment.”
“In addition, even assuming that McCourt’s check could have been considered a proper tender, it nonetheless should have been “kept good” if McCourt wished to stop the accrual of postjudgment interest.”
Factual background
McCourt hired Rycroft as a sales supervisor in March 2005 and terminated him in January 2006. Rycroft claimed that McCourt failed to pay commissions required by his employment agreement, and a jury awarded him $12,498.15 in commissions. After the appellate proceedings, McCourt sent Rycroft a check calculated through May 16, 2008, but conditioned the payment on acceptance as full and complete satisfaction of the judgment; Rycroft returned it because he intended to seek rehearing and review. McCourt did not deposit the funds into the court registry or make an unconditional tender.
Procedural history
Rycroft sued McCourt for unpaid employment commissions and the statutory wage penalty under Arkansas Code Annotated section 11-4-405. A jury awarded Rycroft the commissions and statutory penalty, and the circuit court entered judgment including interest. The Arkansas Court of Appeals affirmed the commission award but reversed the statutory penalty; the Arkansas Supreme Court later affirmed the commission award and reversed the penalty. On remand, the circuit court ruled that McCourt's conditional check did not stop postjudgment interest from accruing, and the Supreme Court affirmed.