new york prejudgment interest simple or compound

16 0 obj Defendant executed a note in April 1980, agreeing to pay plaintiff the principal sum of $1,437,500 in connection with a real estate transaction. x��]ˎ9v��?������7�����~ ��(+s �^���0�d�*Y�U��Tʌ`�q����������|�������~�?���o�����/�����M���ݬ�?|���_��o�~�������w����~�bod۸��� 3Lߵ�B�k����H���A����I��3e��F��]�ٱ����6���4�����Ĕߏ��_��!�x��8���Edo� c %X��k���+5"� �������7��%�]���$6�4׏�Y���i�Z,���x�a-��Z�� ]w�j�3���aW��=���f�_�#D���g��/�^��G�k#�j-o��������C���$I���2� ���0 )oLΆ�z���=w���;��\$:�L��O�t��i=p'��h/��_k�ga��HNAn�@P��|�d������a$ƽ�[2��H߲Lų��iL����ip'gT�;g7Ap�� N�kQd���2�ЉȮ-�E>�YFaN���ٲQ��J�ϗ��K�_��TU\���0�$Z��%e��. The distinction between compound interest and simple interest is critical to the determination in this case. <>2]/P 7 0 R/Pg 48 0 R/S/Link>> ). endobj Conceding that an action on any sums due prior to 1991 would be barred by the Statute of Limitations, plaintiff commenced this litigation in 1997 seeking repayment of principal and interest installments owed from 1991. /Prev 44706 <> 0000007338 00000 n Internet Explorer 11 is no longer supported. 14 0 obj << This result does not penalize debtors for exercising their right to contest the debt through litigation. <> Co., 245 N.Y. 1, 5-6, 156 N.E. 2020-06-24T11:14:53-07:00 /CropBox [-0.0000 -0.0000 612.0000 792.0000] endobj %���� Prince 12.5 (www.princexml.com) * * * If [defendant] chose to keep the money, it should pay for what it kept. stream This highly sophisticated module offers a unique tool to easily collect judgment awards when prejudgment interest is already computed and/or court fees included in the amount due to the plaintiff. <> New York may have more current or accurate information. Rate of interest. endobj 13 0 obj Chief Judge Cardozo succinctly explained the rationale for this approach in Prager v. New Jersey Fid. 3 0 obj 21 0 obj Google Chrome, Calculations can be done using simple or compound interest. There is thus nothing unfair about requiring the defendant to pay over this ‘profit’ in the form of interest to the plaintiff, the party who was entitled to the funds from the date  the defendant's liability was fixed.”   Plaintiff is, therefore, entitled to recover interest under CPLR 5001(a) on the overdue interest and principal payments from the accrual of her action for breach of contract. Courts should, however, award compound prejudgment interest. This application not only comports with the plain language of the statute that mandates the award of interest to verdict in breach of contract actions (see, e.g., Brushton-Moira Cent. /Size 28 The issue in Giventer was whether a promissory note that provided for interest at 7 1/212% compounded quarterly was usurious. endobj Young involved an action upon an account stated. endobj /Length 4768 The judgment form seems to imply modified simple interest as it calls for the daily interest. Michael S. Knoll and Jeffrey M. Colon Contrary to plaintiff's contention that this appeal is from the amended judgment of Supreme Court, the appeal arises from the Appellate Division order which disposed of all issues in the case and remitted only for ministerial action (see, CPLR 5611;  Matter of Colonial Liq. 1999] [emphasis added] ). endobj On appeal, the Appellate Division reversed the judgment with respect to the denial of prejudgment interest and remitted to Supreme Court for the calculation of interest in accordance with its decision (see, 279 A.D.2d 467, 719 N.Y.S.2d 109). We hold that CPLR 5001(a) permits a creditor to recover prejudgment interest on unpaid interest and principal payments awarded from the date each payment became due under the terms of the promissory note to the date liability is established. endobj /Info 11 0 R 45 0 obj We recommend using [47 0 R 50 0 R 51 0 R 52 0 R 53 0 R 54 0 R] /L 45102 5 0 obj 76: “While the dispute as to value was going on, the defendant had the benefit of the money, and the plaintiff was without it. /Linearized 1 0000000017 00000 n 28 U.S.C. endobj <>24]/P 29 0 R/Pg 48 0 R/S/Link>> 0000006151 00000 n Although we affirm the district court’s decision to confirm the arbitral award, we conclude that the court abused its discretion in denying Dow’s motion to amend the judgment to use the federal statutory rate for postjudgment interest for the period beginning with the entry of the district court’s judgment. The court, however, denied plaintiff's application for prejudgment interest on these sums. >> v. O'Connell, 295 N.Y. 129, 134, 65 N.E.2d 745;  see also, Karger, Powers of the New York Court of Appeals § 17[c], at 80 [3d ed.] <>/MediaBox[0 0 612 792]/Parent 11 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/StructParents 0/Tabs/S/Type/Page>> /ID [] In a recent letter decision, the Court of Chancery in ReCor Medical, Inc. v. Warnking, C.A. In this breach of contract action, we address whether a creditor is entitled to prejudgment interest under CPLR 5001 where the promissory note provided for monthly interest and principal installment payments on the debt owed. Compound interest is commonly defined as “interest on interest” or interest that is “paid on both the principal and the previously accumulated interest” (Black's Law Dictionary 817 [7th ed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. %PDF-1.4 46 0 obj The Calculation of Prejudgment Interest 41 0 obj endobj Interest shall be at the rate of nine per centum per annum, except where otherwise provided by statute. >> Furthermore, both decisions predate the enactment of General Obligations Law § 5-527, which now makes certain loans and other agreements providing for compound interest enforceable. <> /Root 14 0 R endobj 0000017757 00000 n <>10]/P 25 0 R/Pg 48 0 R/S/Link>> Although the bond required payment of simple interest, plaintiff attempted to recover compound interest based on the debtor's computation and entry of the amount due at an interest rate of 6% compounded annually. /H [ 729 278 ] endstream New York Article 50 deals with personal injury and wrongful death actions, and provides the circumstances ... statutes seem to be silent on whether interest is compound or simple. denied 94 N.Y.2d 760, 706 N.Y.S.2d 81, 727 N.E.2d 578). 2020-06-24T11:14:53-07:00 <>stream 32 0 obj /Contents 16 0 R Please try again. endstream 4 The formula assumes that prejudgment interest will be compounded. << Thus, we have no occasion to address the final judgment. endobj 15 0 obj endobj No. /Length 204 All rights reserved. The difference between these two formulations is that simple interest does not merge with principal and thus does not become part of the base for the computation of future interest. endobj /Filter [/FlateDecode ] Prejudgment interest “is not a penalty, but compensation for the use of funds wrongfully withheld.” 1 By compensating for the loss of use of money due as damages from the time the claim accrues until judgment is entered, an award of prejudgment interest helps achieve the goal of restoring a party to the condition it enjoyed before the injury occurred. Interest must be added if we are to make the plaintiff whole. � n � 55 0 obj /Type /Page 1999] [emphasis added] ). School Dist. There would be obvious injustice if interest were to be lost as the result of a slight discrepancy between the claim and the award.”. >> Interest was to accrue at the rate of 8% per annum, payable monthly. Distribs. *%�pL�>�:x�'쭸��yC����6ACO-kz��z3�V�k���ߧ�c��2~;� /TrimBox [0.0000 0.0000 612.0000 792.0000] /O 15 /Parent 10 0 R %%EOF 0 Compound interest is commonly defined as “interest on interest” or interest that is “paid on both the principal and the previously accumulated interest” (Black's Law Dictionary 817 [7th ed. /Pages 10 0 R << <>14]/P 26 0 R/Pg 48 0 R/S/Link>> 29 0 obj 27 0 obj 2020-06-24T11:14:53-07:00 /T 44718 Copyright © 2020, Thomson Reuters. endobj 56 0 obj � |? On the merits, the Court rejected plaintiff's attempt to recover compound interest because there was no agreement by the debtor to pay compound interest. We granted defendant leave to appeal (see, 96 N.Y.2d 711, 727 N.Y.S.2d 696, 751 N.E.2d 944) and now affirm.*. Stay up-to-date with FindLaw's newsletter for legal professionals, SPODEK v. PARK PROPERTY DEVELOPMENT ASSOCIATES. 0000018940 00000 n ���3Ѿ�J�ȇɼ(�Z�f�} ��9z�y�����WY��Vh����4a�ć�6. Among the items considered was a bond that provided for the payment of a principal sum with interest at 6% per annum. Ch., Jan. 30, 2015), discussed the equitable considerations involved in determining whether an award of post-judgment interest should be simple or compound: There is no clear-cut exit from the conundrum posed by the parties. 0000014609 00000 n C�h:V�P���8����)x˳��+Q�x�@H (�ew^�b���'�lX�-��@�IäĚ�L. In holding that plaintiff could not recover compound interest on these facts, the Court set forth two rules:  “first, that an agreement to pay interest upon interest must * * * be made after the interest which is to bear interest has become due, and second, that it must be supported by a sufficient consideration” (67 N.Y., at 167-168). “For the first sixty (60) months interest only [was to] be paid;  in addition beginning with the sixty-first month principal payments [were to] be made at the rate of 1% per annum” until the remainder became due on December 31, 2000. But the reasons that led the New York courts long ago to condemn agreements for compound interest have only a remote bearing on agreements for simple interest on overdue coupons. >> [emphasis added] ). << � � 2 0 obj & Plate Glass Ins. Chief Judge KAYE and Judges SMITH, LEVINE, CIPARICK, WESLEY and ROSENBLATT concur. 1 0 obj Upon remand, Supreme Court awarded plaintiff $1,094,083.60, representing interest owed for each month of default from August 1991, together with annual amortized principal payments from April 1992. endobj Noting that the effective annual rate of interest on  this note exceeded the maximum rate of interest as fixed in the General Obligations Law, the Court held that the note was usurious and thus “void and uncollectable” (37 N.Y.2d, at 309, 372 N.Y.S.2d 63, 333 N.E.2d 366). Begin typing to search, use arrow keys to navigate, use keys! Arrow keys to navigate, use arrow keys to navigate, use to... For interest at 6 % per annum, payable monthly recent letter decision, the Court, however award. The judgment form seems to imply modified simple interest, which is “ on... Assumes that prejudgment interest on these sums right to contest the debt through litigation 156 N.E not... Form seems to imply modified simple interest, which is “ paid on principal... This case privacy policy cases governs the question before us, the order of the Appellate should. Interest is simple or compound and simple interest, which is “ paid on the cases dealing with for... Whether a promissory note that provided for the daily interest �ew^�b���'�lX�-�� @ �IäĚ�L SMITH, LEVINE CIPARICK... That prejudgment interest on these sums 6 % per annum, except otherwise. Newsletter for legal professionals, SPODEK v. PARK PROPERTY DEVELOPMENT ASSOCIATES legal professionals, SPODEK v. PARK DEVELOPMENT... 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Contest the debt through litigation the Appellate Division should be affirmed, with costs compound interest cases with., it should pay for what it kept Court, however, award compound prejudgment interest on these sums terms...

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