New York

The Court of Appeals granted leave to appeal in Grobman v. Chernoff last month.  The matter surrounds an interest rate issue within the context of a personal-injury action.

In 1996, the plaintiff was injured as a passenger in an automobile that the defendant Chernoff drove and the defendant Grobman owned.  A bifurcated trial was held.  In June 2000, the jury determined during the liability phase that the defendants were 100% liable.  During a subsequent trial on damages, the jury found that the plaintiff sustained a "serious injury" under Insurance Law sec. 5102(d).  It awarded the plaintiff damages for future medical expenses, but did not award anything for future pain and suffering.  

A judgment was subsequently entered on the verdict in the principal sum of $10,000 - $1,100 for past pain and suffering and $8,900 for future medical expenses.  On appeal, the Second Department reversed the judgment and concluded that the jury award was inconsistent.  The matter was remitted for a damages trial.

The parties agreed to submit the damages issue to an arbitrator for resolution.  A dispute arose as to whether the "serious injury" should be submitted to the arbitrator.  Ultimately, the Appellate Division, Second Department, on a second appeal, determined that the "serious injury" issue was a binding issue based on the jury's determination and could not be relitigated at arbitration.

The arbitration agreement, dated December 13, 2004, contained a section with a heading which read, "AT ISSUE: Damages," and it further indicated the parties' agreement to high/low parameters of $150,000 and $10,000.  The agreement was silent on the issue of whether any damages award included interest.

The arbitration went forward and the plaintiff was awarded $125,000 on April 9, 2008.  The award was silent on the issue of interest.

The plaintiff moved pursuant to CPLR article 75 to confirm the award and to enter judgment thereon.  The defendants submitted an affirmation of counsel in "partial opposition" to the motion.  The defendants' counsel stated that a check in the sum of $125,000 dated May 23, 2009 had been tendered to the plaintiff's attorney, who "implied" that the plaintiff was entitled to interest in the amount of $90,000.  The defendants' counsel argued that any attempt to seek a judgment in excess of $125,000 was improper.

By notice of cross motion, the defendants sought to preclude the plaintiff from recovering pre-arbitration award interest.  The plaintiff opposed the cross motion.  The plaintiff argued that the liability verdict in her favor was rendered on June 25, 2000 and if she was to be made whole in the context of the bifurcated procedure used in her case, interest on her damages award had to be computed from that date to the date of entry of the final judgment.

Relying on Love v. State of New York, the Second Department held that the the plaintiff should recover interest on her personal injury award from the date the defendants' liability was first fixed -- i.e., from June 25, 2000.  The Court also noted that Supreme Court correctly directed post-award interest to run up to the date of payment, rather than to the date of judgment.

New York Civil Law will keep you abreast of this matter as it winds its way through the Court of Appeals