As used in sections 45-101.02 to 45-101.04, 45-102, and 45-105, unless the context otherwise requires:

(1) Interest means the compensation agreed upon or allowed by law upon any loan or forbearance of money, goods, or things in action but does not include loan service costs;

(2) Loan service costs means reasonable and necessary costs and charges incurred in connection with the making, closing, disbursing, servicing, extending, transferring, or renewing of a loan, including but not limited to (a) prepayment charges, (b) delinquency charges, (c) premiums for hazard, private mortgage, disability, life, or title insurance, (d) fees for escrow, appraisal, abstracting, title examination, surveys, inspections, credit reports, and recording of documents, (e) origination fees, (f) interest on interest after default, and (g) costs and charges incurred for determining qualification for the loan proceeds and disbursement of the loan proceeds; and

(3) Discount points means any charges except actual loan service costs whether or not actually denominated as discount points paid to a lender which directly or indirectly affect the ability of the borrower to secure a loan. For the purpose of determining the rate of interest on any loan, discount points, if any, shall be amortized over the original term of the loan.

(1) Except as provided in section 45-101.04, any rate of interest which may be agreed upon, not exceeding sixteen percent per annum on the unpaid principal balance, shall be valid upon any loan or forbearance of money, goods, or things in action and may be taken yearly, for any shorter period, or in advance, if so expressly agreed.

(2) Such rate of interest so long as it does not violate sections 45-101.02 to 45-113 or any federal usury law may be charged on a variable rate basis, except that if the lender proposes to increase the interest rate during the term of a loan on consumer goods notice of such proposed increase shall be communicated in writing to the person or persons primarily obligated on such loan at least ten days prior to the proposed increase. Deposit of such notice in the United States mails, postage prepaid, shall be deemed communication for the purpose of this section.

Annotations

Notwithstanding limitations on interest rates imposed on state banks by Nebraska law, national bank in Nebraska can charge, with respect to credit card transactions, rates allowed by Nebraska law for "small loan companies". Fisher v. First Nat. Bank of Omaha, 548 F.2d 255 (8th Cir. 1977).

The limitation on the rate of interest provided in section 45-101.03 shall not apply to:

(1) Other rates of interest authorized for loans made by any licensee or permittee operating under a license or permit duly issued by the Department of Banking and Finance pursuant to the Credit Union Act, the Nebraska Installment Loan and Sales Act, subsection (4) of section 8-319, or sections 8-815 to 8-829;

(2) Loans made to any corporation, partnership, limited liability company, or trust;

(3) The guarantor or surety of any loan to a corporation, partnership, limited liability company, or trust;

(4) Loans made when the aggregate principal amount of the indebtedness is one hundred thousand dollars or more of the borrower to any one financial institution, licensee, or permittee;

(5) Loans insured, guaranteed, sponsored, or participated in, either in whole or part, by any agency, department, or program of the United States or state government;

(6) Loans or advances of money, repayable on demand, which are made solely upon securities, as defined in subdivision (14) of section 8-1101, pledged as collateral for such repayment and in which such loans or advances are used by the borrower only for the purchase of securities as so defined. It shall be lawful to contract for and receive any rate of interest on such transaction as the parties thereto may expressly agree;

(7) Interest charges made on open credit accounts by a person who sells goods or services on credit when the interest charges do not exceed one and one-third percent per month for any charges which remain unpaid for more than thirty days following rendition of the statement of account;

(8) A minimum charge of ten dollars per loan which may be charged by the lender in lieu of all interest charges;

(9) Loans described in subsection (4) of section 8-319 made by a state or federal savings and loan association at a rate not to exceed nineteen percent per annum;

(10) Loans made primarily for business or agricultural purposes or secured by real property when such loans are made (a) by a licensee, registrant, or permittee operating under a license, registration, or permit duly issued by the Department of Banking and Finance except for licensees operating under the Nebraska Installment Loan and Sales Act, (b) by any financial institution insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, or (c) by any insurance company organized under the laws of this state and subject to regulation by the Department of Insurance;

(11) Loans secured solely by real property when such loans are (a) made by licensees operating under the Nebraska Installment Loan and Sales Act and (b) made to finance or refinance the purchase of the property or construction on or improvements to the property, if the Department of Banking and Finance has the authority to examine such loans for compliance with sections 45-101.02 and 45-101.03. A licensee making a loan pursuant to this subdivision may obtain an interest in any fixtures attached to such real property and any insurance proceeds payable in connection with such real property or the loan;

(13) Interest charges made on any goods or services sold under an installment contract pursuant to the Nebraska Installment Loan and Sales Act. Subject to section 45-365, it shall be lawful to contract for and receive any rate of interest on such contract as the parties may expressly agree to in writing; or

(14) Fees which may be charged by a licensee for services pursuant to the Delayed Deposit Services Licensing Act.

Cross References

Credit Union Act, see section 21-1701.
Delayed Deposit Services Licensing Act, see section 45-901.
Nebraska Installment Loan and Sales Act, see section 45-334.

Annotations

A corporation may agree to pay any rate of interest by an agreement in writing which sets out the amount or rate charged. Such interest is not usurious. Classen v. Becton, Dickinson & Co., 214 Neb. 543, 334 N.W.2d 644 (1983).
The exemptions specified in subdivisions (2), (3), and (4) of this section exempt the specified transactions from the installment loan act, sections 8-435 et seq., as well as from the interest rate limitations of section 45-101.03. McCaul v. American Savings Co., 213 Neb. 841, 331 N.W.2d 795 (1983).

No lender, in connection with a mortgage loan, shall require the borrower or prospective borrower:

(1) To deposit in any escrow account which may be established in connection with such loan for the purpose of assuring payment of taxes, insurance premiums, or other charges with respect to the property, prior to or upon the date of settlement, an aggregate sum in excess of the total amount of such taxes, insurance premiums, and other charges which are attributable to the period beginning on the last date on which each such charge would have been paid under the normal lending practice of the lender if the selection of each such date constitutes prudent lending practice and ending on the due date of its first full installment payment under the mortgage plus a cushion that shall be no greater than one-sixth of the estimated total annual payments to be made from the escrow account for such taxes, insurance premiums, and other charges during the twelve-month period beginning on the date of settlement; or

(2) To deposit in any such escrow account in any month beginning after the date of settlement a sum for the purpose of assuring payment of taxes, insurance premiums, or other charges with respect to the property in excess of one-twelfth of the total annual escrow account payments which the lender reasonably anticipates paying from the escrow account for such taxes, insurance premiums, and other charges plus a cushion that shall be no greater than one-sixth of the estimated total annual payments to be made from the escrow account for such taxes, insurance premiums, and other charges, except that if the lender determines that a shortage exists or that there will be a deficiency on the due date the lender shall not be prohibited from requiring additional monthly deposits in such escrow account of pro rata portions of the shortage or deficiency corresponding to the number of months from the date of the lender's determination of such shortage or deficiency to the date upon which such taxes, insurance premiums, and other charges would be paid under the normal lending practice of the lender if the selection of each such date constitutes prudent lending practice.

It is not the intent of sections 45-101.05 to 45-101.07 to require that escrow accounts be required or established.

Any lender who violates any of the provisions of section 45-101.05 shall be guilty of a Class IV misdemeanor.

Interest upon the loan or forbearance of money, goods or things in action shall be at the rate of twelve percent per annum for the period commencing on March 19, 1980, through August 31, 1983, and at the rate of six percent per annum commencing on September 1, 1983, on the unpaid principal balance, unless a greater rate, not exceeding the rate of interest provided in section 45-101.03, be contracted for by the parties.

Annotations

1. Rate

2. Miscellaneous

3. Unconstitutional

1. Rate

This section is not the only section fixing maximum rate of interest. Lefferdink v. Schmutte, 149 Neb. 695, 32 N.W.2d 194 (1948).
Statutory rate of interest was not applicable in absence of contract. Moore v. Schank, 148 Neb. 228, 27 N.W.2d 165 (1947).
Where joint debtor has paid more than proportionate share of debt and seeks contribution, he is entitled to interest at legal rate and not at rate provided in original debt. Exchange Elevator Co. v. Marshall, 147 Neb. 48, 22 N.W.2d 403 (1946).
Guardian is surcharged with the legal rate of interest where an unauthorized loan is made by him. In re Guardianship of Morris, 145 Neb. 319, 16 N.W.2d 442 (1944).
In suit on fire insurance policy, where proof of loss was made June 1, 1933, when legal interest rate was seven percent, interest was allowed on judgment at seven percent and not six percent as provided by law at time judgment entered. Wheaton v. Aetna Life Ins. Co., 128 Neb. 583, 259 N.W. 753 (1935).
Note providing interest from date without specified rate bears interest at legal rate. Praest v. Quesner, 113 Neb. 485, 203 N.W. 549 (1925).
A judgment upon a note and mortgage draws interest at the same rate as contract. Rafert v. Federal Farm Mortgage Corporation, 152 F.2d 193 (8th Cir. 1945).

2. Miscellaneous

In order to receive prejudgment interest, a litigant must comply with section 45-103.02. Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993).
A devise under a will is neither a loan nor a forbearance. In re Estate of Peterson, 230 Neb. 744, 433 N.W.2d 500 (1988).
Potentially conflicting interests within a class are incompatible with the maintenance of a true class action and this aspect may be disposed of upon motion for summary judgment. Blankenship v. Omaha P. P. Dist., 195 Neb. 170, 237 N.W.2d 86 (1976).
Assignment of interest under insurance policy does not bear interest until death of insured and collection on policy. In re Estate of Dalbey, 143 Neb. 32, 8 N.W.2d 512 (1943).
A dealer in automobiles may in good faith sell a car on time for a price in excess of the cash price without tainting the transaction with usury, though the difference in prices may exceed lawful interest for a loan. American Loan Plan v. Frazell, 135 Neb. 718, 283 N.W. 836 (1939).
Proper method of computing interest on certificate of deposit in insolvent state bank is stated. State ex rel. Spillman v. Farmers State Bank, 113 Neb. 679, 204 N.W. 795 (1925).
In awarding damages for breach of contract, court could not allow interest on unliquidated claim at a rate exceeding six percent after statute reducing legal rate from seven to six percent became effective. Otoe County Nat. Bank v. Delany, 88 F.2d 238 (8th Cir. 1945).
Alleged error in calculating interest on allowance of attorney's fee is not reviewable in absence of motion, objection or exception, or assignment of error at trial. Metropolitan Life Ins. Co. v. Armstrong, 85 F.2d 187 (8th Cir. 1936).
Where the interest charged on delinquent taxes did not exceed the maximum lawful rate that could be charged by agreement, such charge was not a penalty but was interest allowable under the federal bankruptcy act. Horn v. Boone County, 44 F.2d 920 (8th Cir. 1930).
Federally chartered lending institution designed to serve particular, limited purpose and which was not engaged in banking was not bound by Nebraska usury law. Beatrice Production Credit Assn. v. Vieselmeyer, 376 F.Supp. 1391 (D. Neb. 1973).

3. Unconstitutional

Amendment to this section in 1963 Special Session by Legislative Bill 11 was unconstitutional as special legislation. State Securities Co. v. Ley, 177 Neb. 251, 128 N.W.2d 766 (1964).
Amendment to this section in 1963 Special Session by Legislative Bill 16 was unconstitutional as special legislation. Davis v. General Motors Acceptance Corp., 176 Neb. 865, 127 N.W.2d 907 (1964).

For decrees and judgments rendered before July 20, 2002, interest on decrees and judgments for the payment of money shall be fixed at a rate equal to one percentage point above the bond equivalent yield, as published by the Secretary of the Treasury of the United States, of the average accepted auction price for the last auction of fifty-two-week United States Treasury bills in effect on the date of entry of the judgment. For decrees and judgments rendered on and after July 20, 2002, interest on decrees and judgments for the payment of money shall be fixed at a rate equal to two percentage points above the bond investment yield, as published by the Secretary of the Treasury of the United States, of the average accepted auction price for the first auction of each annual quarter of the twenty-six-week United States Treasury bills in effect on the date of entry of the judgment. The State Court Administrator shall distribute notice of such rate and any changes to it to all Nebraska judges to be in effect two weeks after the date the auction price is published by the Secretary of the Treasury of the United States. This interest rate shall not apply to:

(2) An action founded upon an oral or written contract in which the parties have agreed to a rate of interest other than that specified in this section.

Cross References

For provisions for interest on judgments against the state, see section 25-21,211.

Annotations

1. Contract rate

2. Judgments and decrees generally

3. Installment judgment

4. Verdict

5. Miscellaneous

1. Contract rate

This section allows parties to contractually agree to a rate of prejudgment interest that will apply to an unliquidated claim. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).
Under security agreements providing for interest at highest legal rate, secured party was entitled to nine percent a year on amounts due from date of default and nine percent on part of judgment covering amounts due for repossession, repair, and cleaning of trucks from date judgment was entered. Cornett v. White Motor Corp., 190 Neb. 496, 209 N.W.2d 341 (1973).
Lawful interest, where rate is not fixed by statute, is subject of contract as limited by law, and is not allowable at a different rate by court of equity. Johnson v. Kindig, 127 Neb. 360, 255 N.W. 236 (1934).
Judgment on note held to draw same rate of interest as note from its date, if the rate is equal to or exceeds the legal rate and does not exceed the maximum lawful rate. Calloway v. Doty, 108 Neb. 319, 188 N.W. 104 (1922).
Judgments should draw interest at seven percent from date of rendition when founded upon contract providing for less rate. Portsmouth Savings Bank v. Yeiser, 81 Neb. 343, 116 N.W. 38 (1908).
Where contract provides for payment at legal rate until maturity and higher rate thereafter, judgment will draw higher rate. Conn. Mut. Life Ins. Co. v. Westerhoff, 58 Neb. 379, 78 N.W. 724, 79 N.W. 731 (1899).
Contract to pay ten percent instead of seven, as provided in contract, to gain extension of time, is valid, and interest is not payable till principal is due. Greenwood v. Fenton, 54 Neb. 573, 74 N.W. 843 (1898).
Where contract bears interest at six percent before maturity and ten thereafter, decree will draw ten. Havemeyer v. Paul, 45 Neb. 373, 63 N.W. 932 (1895).

2. Judgments and decrees generally

Judgment interest accrues on the judgment, even if that judgment is made up in part of interest already accrued. Heritage Bank v. Bruha, 283 Neb. 263, 812 N.W.2d 260 (2012).
It is not mandatory that interest be charged on a marital deferred property distribution. It is, however, within the discretionary power of a district court to award interest on deferred installments payable as part of a marital property distribution. When utilizing this discretionary power, a factor the district court or the Court of Appeals should take into consideration is the burden of the payor spouse. Priest v. Priest, 251 Neb. 76, 554 N.W.2d 792 (1996).
When a judgment is to be paid in installments, interest begins to accrue on each individual installment only from the date it becomes due and payable. Thiltges v. Thiltges, 247 Neb. 371, 527 N.W.2d 853 (1995).
Plaintiff was entitled to six percent interest on claim allowed against receiver until amendment increased it to eight percent from July 6, 1972. Colburn v. Ley, 191 Neb. 427, 215 N.W.2d 869 (1974).
Provision for interest on decrees and judgments relates to money immediately due and collectible where its nonpayment is a breach of duty. Patterson v. Spelts Lumber Co., 166 Neb. 692, 90 N.W.2d 283 (1958).
Order of court establishing trust fund in sum certain, entitled to priority of payment from assets of failed bank before claims of depositors and creditors are paid, bears interest at legal rate from date of decree until paid, and accrued interest is preferred claim over claims of depositors and creditors. State ex rel. Spillman v. First State Bank, 124 Neb. 786, 248 N.W. 383 (1933).
Where court in receivership proceeding allows depositor of insolvent bank preferred claim payable from guaranty fund, the order is a judgment and such judgment draws interest at legal rate until paid. Bliss v. Bryan, 123 Neb. 461, 243 N.W. 625 (1932).
In liquidation of insolvent bank, allowance of trust fund is decree in the nature of judgment for payment of money, and hereunder, bears interest at legal rate from date of judgment until paid. Hall v. Citizens State Bank, 122 Neb. 636, 241 N.W. 123 (1932).
Insolvent state bank is liable for interest at seven percent on deposit after allowance of claim. State ex rel. Spillman v. Nebraska State Bank of Harvard, 118 Neb. 660, 225 N.W. 778 (1929).
Judgments, when revived, draw interest at legal rate from date of rendition. McDonald v. Thomas Co., 89 Neb. 494, 131 N.W. 1021 (1911).
Decree in favor of heirs, against trustee of estate, draws interest at seven percent. Smullin v. Wharton, 86 Neb. 553, 125 N.W. 1112 (1910).
Interest on judgment should be computed from date of rendition. Tobler v. Union Stock Yards Co., 85 Neb. 413, 123 N.W. 461 (1909).
Decree in suit on creditor's bill, ordering defendant to pay money into court forthwith, draws interest, though not provided in decree. Stuart v. Burcham, 62 Neb. 84, 86 N.W. 898 (1901).
Decree foreclosing mortgage draws interest from date of rendition until paid. Stenger v. Carrig, 61 Neb. 753, 86 N.W. 475 (1901).
Judgments draw interest until paid. Trompen v. Hammond, 61 Neb. 446, 85 N.W. 436 (1901).
Deposit of money into court on decree of distribution; when to draw interest. Whitall v. Cressman, 18 Neb. 508, 26 N.W. 245 (1886).
Interest under this section shall accrue on decrees and judgments for the payment of money from the date of entry of judgment until satisfaction of judgment. Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624, 790 N.W.2d 462 (2010).

3. Installment judgment

Where a judgment is required to be paid in installments, interest begins to accrue on each individual installment from the date it becomes due and payable. Dryden v. Dryden, 205 Neb. 666, 289 N.W.2d 525 (1980).
Delinquent installments of child support bear interest at the legal rate from the date of delinquency. Ferry v. Ferry, 201 Neb. 595, 271 N.W.2d 450 (1978).
The trial court has the inherent power in adjusting the rights of the parties to provide that a money allowance to be paid in installments shall not draw interest until a certain date. Nickel v. Nickel, 201 Neb. 267, 267 N.W.2d 190 (1978).
Where judgment was rendered for specific amount against each of several defendants jointly and severally liable, and case continued for further decree in event any should fail to pay, interest on remaining amount begins from date of demand and refusal, not from original judgment. First Nat. Bank of Omaha v. Cooper, 91 Neb. 624, 136 N.W. 1023 (1912).
Section refers to judgments collectible at once. Installment judgments should draw interest from date of maturity of installment until paid. Dike v. Andrews, 80 Neb. 455, 114 N.W. 582 (1908).

4. Verdict

Interest is allowable on amount of verdict from date of rendition to entry of judgment thereon. Hilton v. State, 60 Neb. 421, 83 N.W. 354 (1900).
Interest on verdict in tort should be allowed up to rendition of judgment and become part thereof. Fremont, E. & M. V. R.R. Co. v. Root, 49 Neb. 900, 69 N.W. 397 (1896).

5. Miscellaneous

Where offsetting claims and counterclaims were tried separately, postjudgment interest did not begin to accrue until all claims were tried and reduced to a single judgment. VKGS v. Planet Bingo, 309 Neb. 950, 962 N.W.2d 909 (2021).
Based on the mandatory language contained herein, a court of equity does not have discretion to withhold interest on decrees or judgments for the payment of money. Welch v. Welch, 246 Neb. 435, 519 N.W.2d 262 (1994).
A court of equity has a reasonable discretion to allow or withhold interest as is reasonable and just, except in cases where it is recoverable as a matter of right. Kullbom v. Kullbom, 215 Neb. 148, 337 N.W.2d 731 (1983).
The provisions for interest in this section apply to sales conducted pursuant to statutory procedures relating to foreclosure sales. They do not apply as a matter of right to sales conducted under terms negotiated by the parties. In such situations, the court may exercise reasonable discretion in allocating interest between the parties. Bankers Union Life Ins. Co. v. Nebraska Corp., 211 Neb. 350, 318 N.W.2d 730 (1982).
Where usury is established, plaintiff is not entitled to interest on the judgment. Central Constr. Co. v. Blanchard, 180 Neb. 62, 141 N.W.2d 416 (1966).
Interest is not allowed on attorney's fee until claim is reduced to judgment. Metcalf v. Hartford Acc. & Ind. Co., 176 Neb. 468, 126 N.W.2d 471 (1964).
Representatives of estates should be surcharged with interest at legal rate when they have abused their trust. In re Estate of Wiley, 150 Neb. 898, 36 N.W.2d 483 (1949).
In action to rescind a contract, where certain money in hands of defendant is found to be an equitable trust fund in favor of plaintiff, plaintiff is entitled to interest thereon. Ericson v. Nebraska-Iowa Farm Investment Co., 134 Neb. 391, 278 N.W. 841 (1938).
Where payment is made upon judgment in excess of interest then due thereon, entire balance due on judgment bears interest as provided by law from date of such payment. Rawlings v. Anheuser-Busch Brewing Co., 69 Neb. 34, 94 N.W. 1001 (1903).
In all actions interest is recoverable for use or destruction of property when amount due plaintiff may be ascertained by reference to market values. Missouri, K. & T. Trust Co. v. Clark, 60 Neb. 406, 83 N.W. 202 (1900).
Note, providing for legal rate until maturity and higher legal rate thereafter, is not a penalty and not usurious. Crapo v. Hefner, 53 Neb. 251, 73 N.W. 702 (1898).
Where interest on note plus commission on loan taken together do not exceed legal rate for period, it is not usurious. Upton v. O'Donahue, 32 Neb. 565, 49 N.W. 267 (1891).
Unlike this section, which provides for postjudgment interest, section 45-104 allows for prejudgment interest. Farm & Garden Ctr. v. Kennedy, 26 Neb. App. 576, 921 N.W.2d 615 (2018).
In Frazier-Lemke proceedings, failure to file claim at time of application for extension does not prejudice holder of mortgage lien, and holder of lien is not required to offer proof of freedom from usury. Rafert v. Federal Farm Mortgage Corporation, 152 F.2d 193 (8th Cir. 1945).
In awarding damages for breach of contract, court could not allow interest on unliquidated claim at a rate exceeding six percent after statute reducing legal rate from seven to six percent became effective. Otoe County Nat. Bank v. Delany, 88 F.2d 238 (8th Cir. 1937).
Alleged error in calculating interest on allowance of attorney's fees is not reviewable in absence of motion, objection or exception, or assignment of error at trial. Metropolitan Life Ins. Co. v. Armstrong, 85 F.2d 187 (8th Cir. 1936).

Interest as provided in section 45-103 shall accrue on decrees and judgments for the payment of money from the date of entry of judgment until satisfaction of judgment.

Annotations

Judgment interest accrues on the judgment, even if that judgment is made up in part of interest already accrued. Heritage Bank v. Bruha, 283 Neb. 263, 812 N.W.2d 260 (2012).
This section allows parties to contractually agree to a rate of postjudgment interest and does not impose additional conditions for the recovery of such interest. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).
Interest accrues from the date the original judgment is due, regardless of whether an appeal is taken prior to that date. Gallner v. Gallner, 257 Neb. 158, 595 N.W.2d 904 (1999).
Based on the mandatory language contained herein, a court of equity does not have discretion to withhold interest on decrees or judgments for the payment of money. Welch v. Welch, 246 Neb. 435, 519 N.W.2d 262 (1994).
The court did not err in awarding postjudgment interest on the wife's fixed dollar amount share of her husband's profit-sharing plan from the date of entry of the decree, even though the qualified domestic relations order called for by the decree was not entered for over 2 years. Fry v. Fry, 18 Neb. App. 75, 775 N.W.2d 438 (2009).
When a judgment is modified upon appeal, interest runs on the full amount of the judgment as modified from the date the original judgment was rendered by the trial court. Ramaekers, McPherron & Skiles v. Ramaekers, 4 Neb. App. 733, 549 N.W.2d 662 (1996).

(1) Except as provided in section 45-103.04, interest as provided in section 45-103 shall accrue on the unpaid balance of unliquidated claims from the date of the plaintiff's first offer of settlement which is exceeded by the judgment until the entry of judgment if all of the following conditions are met:

(a) The offer is made in writing upon the defendant by certified mail, return receipt requested, to allow judgment to be taken in accordance with the terms and conditions stated in the offer;

(b) The offer is made not less than ten days prior to the commencement of the trial;

(c) A copy of the offer and proof of delivery to the defendant in the form of a receipt signed by the party or his or her attorney is filed with the clerk of the court in which the action is pending; and

(d) The offer is not accepted prior to trial or within thirty days of the date of the offer, whichever occurs first.

(2) Except as provided in section 45-103.04, interest as provided in section 45-104 shall accrue on the unpaid balance of liquidated claims from the date the cause of action arose until the entry of judgment.

Annotations

1. Liquidated claims

2. Unliquidated claims

3. Miscellaneous

1. Liquidated claims

Prejudgment interest is authorized when there is not a dispute as to the amount due on a claim or to the plaintiff's right to recover. Echo Group v. Tradesmen Internat., 312 Neb. 729, 980 N.W.2d 869 (2022).
Prejudgment interest is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to the plaintiff's right to recover and the amount of such recovery. This determination requires a two-pronged inquiry. There must be no dispute as to the amount due and to the plaintiff's right to recover. Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d 433 (2010).
Prejudgment interest may be awarded only as provided in subsection (2) of this section. Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d 433 (2010).
Prejudgment interest under this section is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to either the plaintiff's right to recover or the amount of such recovery. A two-pronged inquiry is required. There must be no dispute either as to the amount due or as to the plaintiff's right to recover, or both. Ferer v. Aaron Ferer & Sons, 272 Neb. 770, 725 N.W.2d 168 (2006).
Under this section, the proper date for prejudgment interest to begin accruing on a liquidated claim is the date in which the cause of action arose; it is important that a court awarding prejudgment interest disclose the precise date on which it determined the cause of action giving rise to an award of prejudgment interest arose. Blue Valley Co-op v. National Farmers Org., 257 Neb. 751, 600 N.W.2d 786 (1999).
A claim is liquidated when there is no reasonable controversy either as to the plaintiff's right to recover or as to the amount of such recovery. Cheloha v. Cheloha, 255 Neb. 32, 582 N.W.2d 291 (1998).
Recovery of prejudgment interest under this section is limited to claims that are liquidated. Mogensen Bros. Land & Cattle Co. v. Mogensen, 29 Neb. App. 56, 952 N.W.2d 688 (2020).
Prejudgment interest under subsection (2) of this section is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to either the plaintiff's right to recover or the amount of such recovery. Farm & Garden Ctr. v. Kennedy, 26 Neb. App. 576, 921 N.W.2d 615 (2018).

2. Unliquidated claims

Under subsection (1) of this section, where the claim is unliquidated and the plaintiff's offer of settlement is exceeded by the judgment, prejudgment interest accrues on the full amount of the judgment starting on the date of the plaintiff's first offer of settlement, which offer is exceeded by the judgment. Martensen v. Rejda Bros., 283 Neb. 279, 808 N.W.2d 855 (2012).
The interest rate referenced in this section does not apply when the parties have contractually agreed to the rate of interest that will apply to an unliquidated claim. This section prescribes the conditions for allowance of prejudgment interest on all causes of action, and the parties cannot contract out of the statutory conditions. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).
An offer to settle a claim pursuant to this section may be made either before or after the commencement of an action asserting the claim. This section does not differentiate between a judgment reached by agreement and one rendered following trial. Wortman By and Through Wortman v. Unger, 254 Neb. 544, 578 N.W.2d 413 (1998).
If there is a dispute as to either the amount due or the plaintiff's right to recover, the claim is generally considered to be unliquidated and prejudgment interest is not allowed. Farm & Garden Ctr. v. Kennedy, 26 Neb. App. 576, 921 N.W.2d 615 (2018).

3. Miscellaneous

This section and section 45-104 are alternate and independent sections authorizing the recovery of prejudgment interest. Weyh v. Gottsch, 303 Neb. 280, 929 N.W.2d 40 (2019).
This section provides the sole means for recovery of interest costs. Interest is not otherwise recoverable as a separate element of damages. R & D Properties v. Altech Constr. Co., 279 Neb. 74, 776 N.W.2d 493 (2009).
Prejudgment interest may be awarded only as provided in this section. IBP, Inc. v. Sands, 252 Neb. 573, 563 N.W.2d 353 (1997).
In order to be eligible to receive prejudgment interest in a cause of action accruing after January 1, 1987, a litigant must comply with the requirements of this section. Label Concepts v. Westendorf Plastics, 247 Neb. 560, 528 N.W.2d 335 (1995).
It was plain error for district court to award prejudgment interest where the requirements of this section were not complied with. Peterson v. Kellner, 245 Neb. 515, 513 N.W.2d 517 (1994).
In order to receive prejudgment interest, a litigant must comply with this section. Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993).
Prejudgment interest may be recovered only as provided under this section. Elson v. Pool, 235 Neb. 469, 455 N.W.2d 783 (1990).
Prejudgment interest is not allowed on rent which accrued on or after January 1, 1987, unless the provisions of this section are complied with. Knox v. Cook, 233 Neb. 387, 446 N.W.2d 1 (1989).

All payments made prior to trial by or on behalf of the defendant shall be subtracted from the judgment before interest as provided in subsection (1) of section 45-103.02 is added.

Interest as provided in section 45-103.02 shall not accrue prior to the date of entry of judgment for:

(2) Any action involving the state, a political subdivision of the state, or any employee of the state or any of its political subdivisions for any negligent or wrongful act or omission accruing within the scope of such employee's office or employment.

Annotations

This section does not limit a court's equitable powers to order a party to pay interest. Becher v. Becher, 311 Neb. 1, 970 N.W.2d 472 (2022).
Subsection (2) of this section prohibits prejudgment interest for (1) any action involving the state, (2) any action involving a political subdivision of the state, or (3) any action involving an employee of the state or political subdivision for any negligent or wrongful act or omission accruing within the scope of such employee's office or employment. Eikmeier v. City of Omaha, 280 Neb. 173, 783 N.W.2d 795 (2010).
Claims against political subdivisions which accrued on or after January 1, 1987, are not subject to prejudgment interest. Hammond v. City of Broken Bow, 239 Neb. 437, 476 N.W.2d 822 (1991).

Unless otherwise agreed, interest shall be allowed at the rate of twelve percent per annum on money due on any instrument in writing, or on settlement of the account from the day the balance shall be agreed upon, on money received to the use of another and retained without the owner's consent, express or implied, from the receipt thereof, and on money loaned or due and withheld by unreasonable delay of payment. Unless otherwise agreed or provided by law, each charge with respect to unsettled accounts between parties shall bear interest from the date of billing unless paid within thirty days from the date of billing.

Cross References

For other provisions for interest on claims of $4,000 or less, see section 25-1801.

Annotations

1. Scope of section

2. Instruments in writing

3. Accounts

4. Money retained

5. Money loaned or due

6. Date interest accrues

7. Contracted rate

8. Liquidated versus unliquidated

9. Miscellaneous

1. Scope of section

Section 45-103.02(1) and (2) and this section provide alternate and independent means of recovering prejudgment interest, each with different criteria for the recovery of prejudgment interest, and none makes the recovery of prejudgment interest contingent on proof of another. McGill Restoration v. Lion Place Condo. Assn., 309 Neb. 202, 959 N.W.2d 251 (2021).
Whether a claim is liquidated or unliquidated is immaterial with respect to a litigant's ability to recover prejudgment interest under this section. AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212 (2020).
Section 45-103.02 and this section are alternate and independent sections authorizing the recovery of prejudgment interest. Weyh v. Gottsch, 303 Neb. 280, 929 N.W.2d 40 (2019).
This section authorizes the recovery of prejudgment interest on four categories of contract-based claims without regard to whether the claim is liquidated or unliquidated. Weyh v. Gottsch, 303 Neb. 280, 929 N.W.2d 40 (2019).
This section only provides the interest rate on prejudgment interest in specific types of actions; it does not provide an alternative statute for recovery independent of section 45-103.02. Records v. Christensen, 246 Neb. 912, 524 N.W.2d 757 (1994).
In order to receive prejudgment interest, a litigant must comply with section 45-103.02. Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993).

2. Instruments in writing

A written construction contract entailing the parties' rights and obligations, including an obligation to make payment, is an instrument in writing on which money is due. BCL Properties v. Boyle, 314 Neb. 607, 992 N.W.2d 440 (2023).
Prejudgment interest can be recovered on a lease, although the statute's provisions may be superseded by terms set forth in the lease. AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212 (2020).
A will is an instrument in writing. Therefore, when interest is required to be paid on a pecuniary devise pursuant to section 30-24,102, the legal rate of interest called for is 12 percent per annum, as required by this section. In re Estate of Peterson, 230 Neb. 744, 433 N.W.2d 500 (1988).
Where the parties had "otherwise agreed" by a provision in their lease, this section was superseded. Prudential Ins. Co. v. Greco, 211 Neb. 342, 318 N.W.2d 724 (1982).
Where no interest rate is inserted in a form contract providing for interest and it appears from other matter typed into the form contract and parol evidence at trial that no interest payments were intended, this section does not require that interest be paid. Lovelace v. Stern, 207 Neb. 174, 297 N.W.2d 160 (1980).
Where under signed agreement defendant was to pay upon completion of subcontracts and date of completion was not proved, the account was not settled and interest was allowable from date of judgment only. Andrews Electric Co. v. Farm Automation, Inc., 188 Neb. 669, 198 N.W.2d 463 (1972).
Note providing interest from date, without specified rate, bears interest at legal rate. Praest v. Quesner, 113 Neb. 485, 203 N.W. 549 (1925).
In action on official bonds, interest runs from time, under terms of statute and bond, when funds should have been accounted for and turned over to successor. Thomssen v. County of Hall, 63 Neb. 777, 89 N.W. 389 (1902).
A written instrument whereby maker promises to pay a specified sum with interest at a specified rate per annum draws interest from date of instrument notwithstanding the instrument contains a condition that it shall not be due and payable until payee shall render an account of money received under bond. Jewett v. McGillicuddy, 55 Neb. 588, 75 N.W. 1099 (1898).
Demand certificates, in absence of agreement, draw interest at legal rate from demand, and, if no demand, then from commencement of suit. Morse v. Rice, 36 Neb. 212, 54 N.W. 308 (1893).
In action on executor's bond for money which he failed to pay, interest should be allowed at legal rate. Bell v. Arndt, 24 Neb. 261, 38 N.W. 750 (1888).
Due bills draw interest from date, unless there is some provision therein to the contrary. Estate of Bennett v. Taylor, 4 Neb. Unof. 800, 96 N.W. 669 (1903).
"[M]oney due on any instrument in writing" under this section includes written invoices and billing statements sent by a business to a customer for products and services sold, and unless otherwise agreed or provided by law, such unsettled accounts between the parties shall bear interest from the date of billing unless paid within 30 days from the date of billing. Farm & Garden Ctr. v. Kennedy, 26 Neb. App. 576, 921 N.W.2d 615 (2018).
Where written contract provides that purchase price of goods shall be paid by a certain date, seller is entitled to interest from date buyer was obligated to make payment. City of Hastings v. Nebraska-Kansas Nat. Gas Co., 226 F.2d 419 (8th Cir. 1955).

3. Accounts

When a bank or savings institution is found liable for unauthorized withdrawal of funds from depositor's account, the depositor is entitled to interest from the date of such withdrawals to date of judgment. Edquist v. Commercial Sav. & Loan Assn., 191 Neb. 618, 217 N.W.2d 82 (1974).
A cotenant who collects rents and profits from real estate is required to pay interest on each year's rent to the other cotenants. Fraser v. Temple, 173 Neb. 367, 113 N.W.2d 319 (1962).
Trial court properly added to verdict interest on unsettled account from six months after date of last item. Heusser v. McAtee, 151 Neb. 828, 39 N.W.2d 802 (1949).
In absence of contract, unsettled accounts do not draw interest until six months after the date of the last item. Moore v. Schank, 148 Neb. 228, 27 N.W.2d 165 (1947).
Where mechanics' lien is based on book account, interest commences six months after date of last item, in absence of other agreement. Walker v. Collins Constr. Co., 121 Neb. 157, 236 N.W. 334 (1931).
Unsettled accounts draw interest at legal rate beginning six months from date of last item, whether it be debit or credit, but greater rate may be agreed upon. Woodbury Granite Co. v. Miller, 102 Neb. 304, 167 N.W. 68 (1918); Lindell v. Deere, Wells & Co., 66 Neb. 87, 92 N.W. 164 (1902); Garneau v. Omaha Printing Co., 52 Neb. 383, 72 N.W. 360 (1897).
In partnership accounts, interest may be allowed on an advancement, but not on withdrawals until replacement is demanded. Clark v. Warden, 10 Neb. 87, 4 N.W. 413 (1880).
Interest on claim against receiver was properly allowed from date of contract which amounted to an account stated. Lupton v. Chase National Bank of New York, 89 F.Supp. 393 (D. Neb. 1950).

4. Money retained

As used in this section, “money received to the use of another” indicates that the money is received on behalf of another person, such as an agent receiving money on behalf of his principal. Brook Valley Ltd. Part. v. Mutual of Omaha Bank, 285 Neb. 157, 825 N.W.2d 779 (2013).
Where delay in payment of a specific legacy is caused by litigation which precluded speedy administration of estate, executor is not ordinarily chargeable with interest until a reasonable time has elapsed after difficulty has ceased. In re Kierstead's Estate, 128 Neb. 654, 259 N.W. 740 (1935).
Money sought to be reclaimed as a trust fund from receiver of insolvent state bank bears interest at legal rate, as it is money received to the use of another and retained without the owner's consent. Hall v. Citizens State Bank of Superior, 122 Neb. 636, 241 N.W. 123 (1932).
Agent chargeable with interest at legal rate from time money was wrongfully withheld from principal. Pearlman v. Snitzer, 112 Neb. 135, 198 N.W. 879 (1924).
Interest may be allowed at legal rate on money due and withheld by unreasonable delay of payment. Mullally v. Dingman, 62 Neb. 702, 87 N.W. 543 (1901).
A claim against an insolvent bank for specific money deposited and adjudicated to be a trust fund draws interest as money received to the use of another and retained without the owner's consent. Capital Nat. Bank v. Coldwater Nat. Bank, 49 Neb. 786, 69 N.W. 115 (1896), 59 A.S.R. 572 (1896).

5. Money loaned or due

Where stockholders of a corporation resisted payment of additional judgment rendered on account of failure of same stockholders to pay share of original judgment, they were liable for interest on money due and withheld by unreasonable delay. First Nat. Bank of Omaha v. Cooper, 91 Neb. 624, 136 N.W. 1023 (1912).
Allowance of interest on purchase money refunded is in discretion of court and cannot exceed legal rate. State Bank of Nebraska v. Green, 10 Neb. 130, 4 N.W. 942 (1880).
Where, by express agreement, the amount of merchandise sold during each month was, at the end of the month, due and payable, sales for each month would draw interest from time account fell due. Beck v. Devereaux, 9 Neb. 109, 2 N.W. 365 (1879).
Where amount due is liquidated, and there is evidence that makes it possible to compute with exactness the amount owed, the prevailing party is entitled to prejudgment interest. Kaus v. Bideaux, 709 F.2d 1221 (8th Cir. 1983).

6. Date interest accrues

Under this section, an agent is chargeable with interest at the legal rate from the time that the money is wrongfully withheld from the principal. Cheloha v. Cheloha, 255 Neb. 32, 582 N.W.2d 291 (1998).
Interest properly allowed from date checks and warrants involved were deposited in treasurer's bank account. City of Bellevue v. Western Surety Co., 184 Neb. 678, 171 N.W.2d 772 (1969).
On rescission of contract, party rescinding is liable for interest on money withheld from date of rescission. James v. Hogan, 154 Neb. 306, 47 N.W.2d 847 (1951).
A claim adjudicated to be trust funds payable from assets of insolvent state bank in preference to depositors' claims is in effect a judgment, which bears interest at legal rate from date rendered. State ex rel. Sorensen v. Plateau State Bank, 126 Neb. 407, 253 N.W. 433 (1934).
Generally, prejudgment interest accrues on the unpaid balance of liquidated claims arising from an instrument in writing from the date the cause of action arose until the entry of judgment. Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624, 790 N.W.2d 462 (2010).
In a suit where amounts of debts and set-offs were known, prejudgment interest should have run from a date six months after the last transaction affecting the account. Ford Motor Co. v. Auto Supply Co., Inc., 615 F.2d 757 (8th Cir. 1980).
Where amount claimed is a matter of reasonable controversy and is unliquidated, interest runs from date of judgment. Socony Mobil Oil Co. v. Klapal, 205 F.Supp. 388 (D. Neb. 1962).

7. Contracted rate

This section allows parties to contractually agree to a rate of prejudgment interest that will apply to a liquidated claim. Folgers Architects v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001).
Where the parties have contracted for a particular lawful rate of interest, a court should award the contract rate rather than the statutory rate. Lease Northwest v. Davis, 224 Neb. 617, 400 N.W.2d 220 (1987).
Amount due as interest prior to judgment by reason of agreement of the parties is not prejudgment interest as the term is used in this section. First Nat. Bank v. Bolzer, 221 Neb. 415, 377 N.W.2d 533 (1985).

8. Liquidated versus unliquidated

Prejudgment interest is allowed where the amount of the claim is liquidated; if reasonable controversy exists concerning the claimant's right to recover or the amount of such recovery, the claim is unliquidated, and prejudgment interest is not allowed. Knox v. Cook, 233 Neb. 387, 446 N.W.2d 1 (1989).
Prejudgment interest is allowable only when the amount of the claim is liquidated. Graff v. Burnett, 226 Neb. 710, 414 N.W.2d 271 (1987).
Prejudgment interest is properly disallowed where the claim is unliquidated. A claim is unliquidated when there exists a reasonable controversy as to plaintiff's right to recover and as to the amount of such a recovery, if any. Philip G. Johnson & Co. v. Salmen, 211 Neb. 123, 317 N.W.2d 900 (1982).
A claim is liquidated if the evidence furnishes data which if believed makes it possible to compute the amount with exactness without reliance on opinion or discretion and on a liquidated claim prejudgment interest is allowed as a matter of right. Abbott v. Abbott, 188 Neb. 61, 195 N.W.2d 204 (1972).

9. Miscellaneous

An award of prejudgment interest is authorized in an action to foreclose a construction lien. Echo Group v. Tradesmen Internat., 312 Neb. 729, 980 N.W.2d 869 (2022).
Compliance with Neb. Ct. R. Pldg. § 6-1108(a) is not determinative where entitlement to interest is based on statute and the adverse party had notice and an opportunity to be heard prior to judgment. McGill Restoration v. Lion Place Condo. Assn., 309 Neb. 202, 959 N.W.2d 251 (2021); AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212 (2020).
Applicant for attorney fees is not entitled to interest until fee is calculated and evaluated. State v. Ryan, 233 Neb. 151, 444 N.W.2d 656 (1989).
Holder of an agister's lien on cattle covered by security agreement is not protected as to amount of interest in excess of that permitted hereunder. Mousel v. Daringer, 190 Neb. 77, 206 N.W.2d 579 (1973).
Computation of interest by trial court was properly made. Western Pipe & Supply, Inc. v. Heart Mountain Oil Co., Inc., 179 Neb. 858, 140 N.W.2d 813 (1966).
This section has no application to situation where damages are allowed to be offset against cash payment due on completion of building contract. Jones v. Elliott, 172 Neb. 96, 108 N.W.2d 742 (1961).
In action based on quantum meruit, interest was not allowable until judgment. Umberger v. Sankey, 154 Neb. 881, 50 N.W.2d 346 (1951).
Provisions of United States Constitution do not forbid states to legislate on rates of interest. Klattenburg v. Qualsett, 114 Neb. 18, 205 N.W. 577 (1925).
Cities are liable for interest in default, same as other debtors. Murphy v. City of Omaha, 33 Neb. 402, 50 N.W. 265 (1891).
Section applies to barred claims revived by acknowledgment. Devereaux v. Henry, 16 Neb. 55, 19 N.W. 697 (1884).
Claims bear interest, as matter of law, without any contract therefor, and no express allegation of interest is required. Peterson v. Mannix, 2 Neb. Unof. 795, 90 N.W. 210 (1902).
Unlike section 45-103, which provides for postjudgment interest, this section allows for prejudgment interest. Farm & Garden Ctr. v. Kennedy, 26 Neb. App. 576, 921 N.W.2d 615 (2018).
This section provides the interest rate for prejudgment interest upon the happening of events outlined in this section. Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624, 790 N.W.2d 462 (2010).
Constructive trustee who usurps a corporate opportunity is not entitled to interest. I.P. Homeowners, Inc. v. Radtke, 5 Neb. App. 271, 558 N.W.2d 582 (1997).
The trial court was correct in denying prejudgment interest when the amount due and owing on plaintiff's claim depended upon the interpretation of several contract clauses. Omaha Paper Stock Co. v. Harbor Ins. Co., 596 F.2d 283 (8th Cir. 1979).
Excess judgment suit against insurer sounds in tort and no prejudgment interest is allowable. Lienemann v. State Farm Mut. Auto Fire & Cas. Co., 540 F.2d 333 (8th Cir. 1976).
Section cited in denying interest on items of drayage, etc., in corporate receiver's report. Brictson Mfg. Co. v. Close, 25 F.2d 794 (8th Cir. 1928).