Image: Courtesy of LendingMemo.com
Although many people don't know this, New York's laws provide that the prevailing party in a case can often have interest added on to their award.
And that amount is certainly better than the prevailing interest rate you can get at the banks, because the statutory rate is 9%.
Naturally, this leads to an interesting, and perhaps important, question: From what time does interest start to run?
The answer to this question is ... it depends on the type of case that is involved.
To that end, CPLR 5001(a) provides that
"[I]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract…except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion."
But what about when you don't have a written agreement, and your award was based on quasi-contract (i.e., a contract that was implied in law)?
A New York trial court recently answered this question as follows:
"[I]t is well settled that where a plaintiff sought only money damages on the theory of quantum meruit, as compensation for the work performed," the claim is legal, not equitable. TY Elec. Corp. v. Delmonte, 101 AD3d 1626 (4th Dept 2012), citing Hudson View II Assocs. v. Gooden, 222 AD2d 163, 167 (1st Dept 1996).
"Consequently, an award of pre-decision or pre-verdict interest pursuant to CPLR 5001 on a damages award on a cause of action to recover damages in quantum meruit is mandatory, as it would be on a damages award on a cause of action to recover damages for breach of contract." Tesser v. Allboro Equip. Co., 73 AD3d 1023, 1027 (2d Dept 2010), citing Brent v. Keesler, 32 AD2d 804 (2d Dept 1969); see also Leroy Callender, P.C. v. Fieldman, 252 AD2d 468 (1st Dept 1998) (same)."