
    CIRCUIT COURT OF LOUDOUN COUNTY
    Continental Casualty Co. v. Suburban Insurance Services, Inc., and Curtis G. Urbanski
    December 18, 1996
    Case No. (Law) 18220
   By Judge Carleton Penn

This case is before the Court for the entry of an order for default judgment in favor of the plaintiff. The Court granted default judgment on November 1, 1996. Counsel for Plaintiff submitted a proposed order to the Court. For the reasons stated hereinafter, the Court will not enter that proposed order.

The amount of judgment in the proposed order is $199,082.40. That amount is equal to sixty payments of $3,318.04, which would be the number and amount of payments made by the obligor in repaying the Note which is the basis of this lawsuit, if the course of repayment were to have followed the provisions of the Note signed by Mr. Urbanski on March 29, 1996. That amount represents the principal of the loan, $163,640.38, plus the interest which would have accrued on the balance of the loan over the sixty-month period. The proposed order also provides for “interest at the legal rate from the day of judgment.”

The Court will not enter an order which awards Plaintiff interest which has not yet been earned. Plaintiff has been awarded judgment based on the Promissory Installment Note. Paragraph 1 states that Suburban Insurance Services, the obligor, “promises to pay Continental Casualty Company the principal amount of [$163,640.38] with interest accrued from the date of this Promissory Installment Note at the rate of eight per cent per annum,”

In paragraph 4 of the Note, regarding default on the Note, it is stated that upon default, “the Company may, at its option, declare the entire unpaid balance of principal and interest of this Note immediately due and payable ....” The Court finds that the “entire unpaid balance of principal and interest” includes (1) the principal and (2) interest earned on the principal up until the date of judgment. It does not include interest which would have been earned over the course of sixty months. The Court will not allow the plaintiff to recover interest on the Note after the benefit of the principal is not afforded the defendants. After all, interest is the cost of borrowing money. The Court will especially not allow recovery of such unearned interest where the proposed order also provides for interest on the judgment at the legal rate from the date of judgment.

Accordingly, the Court finds that the amount due Plaintiff in this matter is $163,640.38 plus interest at 8% per annum from March 29, 1996, until November 1,1996. The Court also finds that Defendants are liable as well for interest on the judgment amount at the legal rate from November 1,1996, until the judgment is paid.  