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Interest accrued on judgment during appeal

Virginia Lawyers Weekly//May 25, 2021

Interest accrued on judgment during appeal

Virginia Lawyers Weekly//May 25, 2021//

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Where plaintiff prevailed on her claim that she was a beneficiary of her ex-husband’s life insurance policy, interest is due on the policy proceeds while the matter was on appeal. However, the letter of credit defendants posted as security for the appeal will not be released to plaintiff.


Plaintiff Martin sought a declaratory judgment that she was entitled to 50% of Wood’s life insurance policy. Wood is her ex-husband.  During the divorce proceedings, he agreed to maintain an existing policy for her benefit. Despite this being incorporated into the divorce decree, Wood balked at making payments on the policy. He was twice found in contempt of court.

He finally listed Martin as a policy beneficiary. Three months later, he removed Martin from the policy, added his new wife, his brothers and a friend as beneficiaries and committed suicide. Martin found she had been dropped from the policy when she submitted a claim against the policy.

Martin sued for injunctive and declaratory relief. Judge Gardiner granted Martin summary judgment and awarded her “the full amount of life insurance with accrued interest in the amount of $761,709.53

The policy beneficiaries and Wood’s estate appealed and posted a letter of credit as security with the court clerk. The Virginia Supreme Court affirmed. The issue now before the court is post-appeal damages and release of the letter of credit.


Code § 8.01-682 provides that when a judgment is for the payment of money, damages are the interest that accrues from the notice of appeal until the appellate court issues its mandate. Martin argues she is entitled to interest from March 22, 2019, when the appeal notice was filed, until Nov. 12, 2020 when the supreme court entered its mandate.

Defendants disagree. Defendants argue that Martin obtained an in rem judgment, which is not the payment of money. They maintain that Martin obtained a declaration that she “had a greater interest in a portion of the life insurance proceeds.”

It is true that the Virginia Supreme Court noted more than once that the judgment was in rem. But defendants construe Judge Gardiner’s prior ruling too narrowly. The judgment “declared that the Plaintiff had the greater right to the interpleaded funds AND, in order to comply with that judgment, the Clerk of the Court must distribute those interpleaded funds to the Plaintiff. To say that the judgment was only an in rem judgment and not for the payment of money puts form over substance.”

Moreover, the disputed funds were Martin’s money. She was denied use of the money. It is unfair that 24 months after she prevailed on a summary judgment motion that she should be denied interest because of “the delay attendant to an appeal. This is exactly the result that § 8.01-682 is designed to prevent.”

Martin’s motion to award damages is granted.

Martin also seeks to have the letter of credit transferred to her. There is nothing in the statute or caselaw “that provides for release of the Letter of Credit to the prevailing party on appeal.” The motion for release of the letter of credit is denied.

Martin v. Wood, Case No. CL-2018-1306, April 28, 2021, Fairfax County Cir. Ct. (Smith). Thomas W. Repczynski, Yama A. Shanasab for the parties. VLW 021-8-070, 3 pp.

VLW 021-8-070

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