Mascia and Biscone Victorious in Case of First Impression regarding Pre-Judgment Interest under CPLR 5002 at the Appellate Division, Second Department

Henry Mascia and Merril Biscone, members of the Firm’s Litigation & Appeals Practice Group, obtained a significant victory in a bifurcated personal injury case involving pre-judgment interest. In Mahoney v Brockbank, the Appellate Division, Second Department held that pre-judgment interest under 5002 begins to accrue at the time of the damages verdict, not at the time of the stipulation on liability, because a stipulation does not qualify as a “verdict, report or decision” for purposes of CPLR 5002.

In Mahoney, the plaintiff commenced this action to recover damages arising from a motor vehicle accident.  In a written stipulation, the defendant conceded liability, and the parties agreed that the matter would proceed only with respect to the issue of damages.  The stipulation did not contain any provision regarding prejudgment interest.  Approximately 2 ½ years later, a jury awarded the plaintiff $375,000 in damages, and the parties agreed to add $14,819.49 for medical expenses to the award.

Each party submitted a proposed judgment.  Plaintiff’s proposed judgment calculated pre-judgment interest from the date of the stipulation; defendant’s proposed judgment calculated pre-judgment interest from the date of the verdict on damages, resulting in a difference of $90,000.  Supreme Court accepted defendant’s proposed judgment, and the Appellate Division affirmed.

The Court explained that CPLR 5002 provides for pre-judgment interest from the date of the “verdict report or decision” until the final judgment.  The Court recognized that the Court of Appeals has held that in a bifurcated trial, prejudgment interest runs from the “verdict, report or decision” on liability, not from the “verdict, report or decision” on damages because plaintiff’s right to recover damages became fixed at law on the date liability was determined. The Court explained however, that “stipulations are conceptually different from verdicts, reports and decisions,” and “the Legislature’s omission of stipulations from CPLR 5002” was therefore “significant.” Accordingly, the Court held that in a bifurcated personal injury action, pre-judgment interest under 5002 begins to accrue at the time of the damages verdict, not at the time of the stipulation on liability.