884 F. Supp. 2d 57
S.D.N.Y.2012Background
- This breach of contract action was tried January 18–21, 2011.
- Judgment entered March 21, 2011 in favor of plaintiff for $1,650,000 plus prejudgment interest under CPLR 5001.
- Parties proposed different accrual dates for prejudgment interest.
- Court held interest accrues on $350,000 from September 24, 2004 and on $1,300,000 from April 14, 2005.
- ATP Oil did not tender funds under CPLR 3219 and no unconditional tender occurred.
- Court rejected plaintiff’s claim to start accrual when the lawsuit was filed for the third capital transaction; interest begins at earliest breach dates.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What are the correct prejudgment interest accrual dates? | N.Y. CPLR 5001 from earliest ascertainable date. | Proposed later start dates; tender issues under CPLR 3219. | Accrual begins Sept. 24, 2004 for $350,000 and Apr. 14, 2005 for $1,300,000. |
| Does CPLR 3219 tender procedure halt interest accrual? | Tender not applicable to block accrual. | A tender could stop accrual if properly deposited. | No tender deposit; CPLR 3219 not satisfied; accrual not halted. |
| Should accrual for the third capital transaction start at suit filing date? | Interest would start when the action was filed. | Interest should align with breach dates. | Interest starts from breach dates for the two specified amounts; not from filing date. |
| What is the controlling rule for prejudgment interest in breach cases? | Interest computed from earliest ascertainable date of the cause of action. | N/A beyond tender argument. | Statutory rule: interest from earliest ascertainable date; breaches on 9/24/2004 and 4/14/2005 apply. |
Key Cases Cited
- Indu Craft v. Bank of Baroda, 87 F.3d 614 (2d Cir. 1996) (prejudgment interest as a matter of right under CPLR 5001)
- Spector v. Mermelstein, 485 F.2d 474 (2d Cir. 1973) (mandatory nature of CPLR 5001; delay allocation not required)
- Scott v. Harris Interactive, 851 F. Supp. 2d 631 (S.D.N.Y. 2012) (breach-date accrual for prejudgment interest)
- Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Am., 727 F. Supp. 2d 256 (S.D.N.Y. 2010) (supports accrual from breach dates in breach actions)
- Jamaica Sav. Bank v. Sutton, 42 A.D.2d 856 (2d Dep’t 1973) (valid tender requires actual production of sum; not mere offer)