To Appeal Or Not To Appeal: SJC Clarifies The Potential Catch-22

by Alessandra Wingerter

In H1 Lincoln, Inc. v. S. Washington St., LLC (H1 Lincoln, Inc. I), 495 Mass. 484 (2025), the Supreme Judicial Court (“SJC”) held as a matter of first impression that a judgment debtor’s payment in full of a judgment both satisfies the statutory requirement of interest and terminates the accrual of post-judgment interest, even if the judgment debtor continues to pursue its appellate rights. Going forward, this decision may markedly change the calculus for parties deciding whether to appeal, given Massachusetts’s statutory 12% post-judgment interest, which can factor prominently into such decisions. See generally Phillip A. O’Connell, Jr. & Tony K. Lu, The Interesting Implications of the Massachusetts Interest Statutes, 67.4 Bos. Bar. J. 6, 7 (Fall 2023).

Background

The underlying dispute in H1 Lincoln, Inc. concerned the lease of a commercial property. Plaintiff, H1 Lincoln, Inc. (“Lincoln”), a car dealership, entered into a commercial lease with the Defendants to lease two adjacent parcels in North Attleborough that Lincoln intended to develop and operate. After Lincoln claimed that the Defendants engaged in a “prolonged scheme of commercial extortion” to extract additional concessions, Lincoln brought claims of breach of contract, breach of implied covenant of good faith and fair dealing, and Chapter 93A violations. H1 Lincoln, Inc. v. S. Washington St., LLC (H1 Lincoln, Inc. II), 104 Mass. App. Ct. 256, 258 (2024).

The litigation included multiple trials, spanning over eight years. Ultimately, Lincoln prevailed, and judgment entered in its favor for just over $20 million, with post-judgment interest running at a per diem rate of $4,910.98. H1 Lincoln, Inc. I, 495 Mass. at 485. The judgment provided that “[s]hould the Defendants seek to reserve any rights or encumber any payment made in satisfaction of the judgment, such conditional payments shall not constitute full satisfaction of the judgment.” Id. at 485-86.

Subsequently, the Defendants paid the full monetary judgment noting that the “payment [was] made without waiver of any of the Defendants’ appellate rights.” Id. at 486. Thereafter, the Defendants appealed four post-judgment orders, which included a challenge to the accrual of post-judgment interest even after they paid the judgment in full. The Appeals Court affirmed the post-judgment orders, H1 Lincoln Inc. II, 104 Mass. App. Ct. at 263-67, and the Defendants sought further appellate review. The SJC granted review, limited to the post-judgment interest issue. H1 Lincoln Inc. I, 495 Mass. at 486.

The Decision

The question before the SJC was whether, under the Judgement and Execution Act, G.L. c. 235, § 8, payment of the entire judgment terminates the accrual of post-judgment interest or whether the exercise of appellate rights constitutes a condition on the payment and, therefore, requires the continuing accrual of interest. Answering that question, the SJC held that exercising appellate rights does not constitute a condition on full payment of the judgment and, therefore, the judgment was satisfied. H1 Lincoln, Inc. I, 495 Mass. at 490.

Prior to H1 Lincoln, Inc., the SJC had answered a slightly different question in Governo Law Firm LLC v. Bergeron, 487 Mass. 188 (2021). In Governo Law Firm LLC, the SJC held that post-judgment interest continues to accrue until the judgment is “fully” satisfied, and that conditional payments—including one contingent on a party waiving its appellate rights—do not constitute full satisfaction of a judgment. Id. at 201-202. There, the Defendants (who had generally lost, but stood to lose even more on appeal) offered to deposit the judgment with the court pursuant to Mass. R. Civ. P. 67 during the pendency of the appeal—but also offered to release the judgment payment immediately if the plaintiff did not appeal. Basing its ruling on Rule 67, which does not provide an escape hatch for post-judgment interest, the Court ruled that “until that judgment is satisfied, post-judgment interest will continue to accrue.” Id. at 202.

Although the underlying issues appear similar, the SJC refined the question in H1 Lincoln, Inc., not only substantively, but also distinguished it as to the standard of review. Below, in H1 Lincoln, Inc., the Appeals Court had reviewed the decision regarding the termination of the accrual of post judgment interest for abuse of discretion, relying on Commerce Ins. Co. v. Szafarowicz, 483 Mass. 247 (2019), as well as Governo Law Firm LLC. The SJC found significant that both Commerce Ins. Co. and Governo Law Firm LLC reviewed a ruling on a Rule 67 motion to deposit funds with the court. The SJC, however, noted that ruling on a motion to deposit funds “is materially different” from the question of law at hand here: whether a payment satisfied a judgment, thus terminating the accrual of post-judgment interest under G.L. c. 235, § 8. H1 Lincoln, Inc. I, 495 Mass. at 487. The SJC held that the Appeals Court’s conclusion that Lincoln’s payment in full of the judgment did not terminate the accrual of post-judgment interest was a legal conclusion subject to de novo review.

After addressing the standard of review, the SJC turned to the substantive question at hand: whether, under G.L. c. 235, § 8, payment of the entire judgment terminates the accrual of post-judgment interest or whether the exercise of appellate rights constitutes a condition on the payment and, therefore, requires the continuing accrual of interest. G.L. c. 235, § 8 states, “[e]very judgment for the payment of money shall bear interest from the day of its entry at the same rate per annum as provided for prejudgment interest in such award, report, verdict or finding.” Mass. R. Civ. P. 54(f) further specifies that judgments “shall bear interest up to the date of payment of said judgment.”

Because the language of G.L. c. 235, § 8 does not squarely address whether a payment in full by a judgment debtor who intends to appeal is a conditional payment, the SJC turned to its statutory purpose. The Court identified that the purpose of the statute is to “compensate the prevailing party ‘for loss of the use of money when damages are not paid on time’” and that it is not intended to discourage appeals. H1 Lincoln, Inc. I, 495 Mass. at 488. The SJC stressed that, “[t]he right to appeal is an important and necessary part of the litigation process designed to ensure that errors are corrected.” Id.

The SJC acknowledged the uncertainties this may present parties—that judgments may be paid before an appeal is taken, only to have it returned upon a successful appeal. Id. The SJC further acknowledged the new risk calculus a party must make if it believes it lost the battle but will eventually win the war. Id. at 488-89. A party that lost at trial will have to make the difficult decision to either: (1) pay now and avoid the accrual of post-judgment interest while an appeal is sought, but risk losing the money if the other party squanders it in the meantime, or (2) wait to pay, as interest accrues at 12%, knowing that if the appeal is lost, it must pay the additional 12% interest.

Ultimately, however, the SJC concluded that those concerns do not trump the basic fairness embedded in G.L. c. 235, § 8 to both parties that “when the judgment has been paid in full, additional interest should not be required; the plaintiff has the money in its possession consistent with the trial court’s judgment.”  Id., at 489.

Takeaways

The SJC’s reasoning—that post-judgment interest is not to discourage appeals—is clearly grounded in the interest of fairness and justice. Nonetheless, this decision leaves parties who lose at trial but wish to continue to press their position on appeal with two difficult options. On the one hand, a party that loses at trial but seeks an appeal may now pay the judgment in full and not have interest accrue at the high rate of 12% interest for an uncertain amount of time (often at least a year) as the case works its way through the appeals process. Although this may make an appeal more affordable for those parties who have the ability to pay the judgment, such a party also assumes a risk that the initially prevailing party may dissipate the funds before an appeal is won—hence, making a successful appeal futile. On the other hand, the similarly difficult option is for a judgment debtor to withhold judgment payment until the appeal is complete, recognizing that interest continues to accrue and will be owed if the appeal is lost.

As the SJC noted, “risk and uncertainty is necessary given the right of appeal.” Id. at 489. Going forward, the decision to pay a judgment payment immediately is one that parties will make after weighing all the risks that the SJC in H1 Lincoln, Inc. has now cast in even more stark terms.

Alessandra Wingerter is an associate at Fitch Law Partners LLP, where her practice includes real estate, land use, and environmental litigation.