Arizona Court of Appeals: Higher Interest Rate on Judgments Against the State Applies

In Glazer v. State, 1 CA-CV 16-0416, 2017 WL 2125720 (Ariz. App. May 16, 2017), the court held that the lower interest rate applicable to judgments against the State during an appeal does not apply to any portion of a judgment that is not being paid out of the State’s Risk Management Revolving Fund, including portions paid by an insurer.  In this case, the plaintiffs secured a $7.8 million judgment against the State.  Because the State paid only $7 million of that judgment and its insurer paid the remaining $800,000, the lower interest rate afforded by A.R.S. § 41-622(F) applied only to the $7 million and the higher statutory rate prescribed by A.R.S. § 44-1201(B) applied to the remaining $800,000.  The court further held that the § 41-622(F) interest rate applied to the $7 million even though it was initially (and erroneously) paid out of the State’s Construction Insurance Fund because the State subsequently reimbursed that Fund from the Risk Management Fund.