Sovereign Bank v. Remi Capital Inc., No. 21-2289 (3d Cir. 2022)Annotate this Case
In 2007, Sovereign extended a $15 million line of credit to REMI to fund residential mortgage loans. Kaiser guaranteed REMI’s obligations. Sovereign and Kaiser agreed that any judgment entered against Kaiser would bear interest at the Prime Rate plus six percent per annum, not at the statutory rate of interest after judgment. REMI defaulted. Sovereign sued REMI and Kaiser. The parties resolved the case by agreement, which the district court entered as a $1,560,430.24 consent judgment in 2010. The Judgment was silent about any applicable interest rate.
In 2017, Kaiser moved to declare that judgment had been satisfied. The district court denied the motion, ordering that the applicable interest rate is the federal statutory post-judgment interest rate, fixed by the Federal Reserve Bank, at 0.26%; and that REMI may serve discovery to determine the status of payments made toward the Consent Judgment. The court reasoned that no clear, unambiguous, and unequivocal language in the Consent Judgment demonstrated an intent to depart from the rate of interest provided by 28 U.S.C. 1961. The Third Circuit affirmed. It is incumbent on the parties to detail, with precision and with clarity, the bargain they have struck. The failure to do so in a consent judgment precludes a district court from enforcing an otherwise-silent provision one party asks it to enforce.