Tuesday, November 3, 2015

Calculating interest.

Practice point:  The Appellate Division modified the jury award to plaintiff, vacating the award of interest and remanding for interest to be calculated at the rate of 3%, not 9%, from the date of the liability verdict.

The Appellate Division explained that, although the judgment is against the City, and not the New York City Transit Authority, which is not a party to the action, the Transit Authority is the real party in interest, as it is bound to indemnify the City pursuant to a lease, and will ultimately pay the judgment. Therefore, the interest rate set forth in Public Authorities Law § 1212(6) applies to the judgment. Even though the City did not object to the interest rate when the judgment was proposed for settlement, the 3% interest rate is mandated by statute, and the error should be corrected.

Student note:  Pursuant to Public Authorities Law § 1212(6), the rate of interest on the judgment may be no more than 3% per year.

Case:  Soltero v. City of New York, NY Slip Op 07739 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue:  Contractual terms of duration.