Opinion
05-21-2024
B KING CHICK LLC, Plaintiff–Appellant, v. ORGANIZATION FOR DEFENSE OF FOUR FREEDOMS FOR UKRAINE, INC., Defendant–Respondent, Esteban A. Kaczurak et al., Defendants.
Berger Fink LLP, Forest Hills (Eric Rosenberg of counsel), for appellant. Drobenko & Associates, P.C., Astoria (Walter Drobenko of counsel), for respondent.
Berger Fink LLP, Forest Hills (Eric Rosenberg of counsel), for appellant.
Drobenko & Associates, P.C., Astoria (Walter Drobenko of counsel), for respondent.
Manzanet–Daniels, J.P., Moulton, Mendez, Rosado, O’Neill Levy, JJ.
Order, Supreme Court, New York County (Francis A, Kahn, III, J.), entered on or about June 26, 2023, which insofar as appealed from, granted defendant Organization for Defense of Four Freedoms for Ukraine, Inc. (ODFFU)’s order to show cause seeking to preclude plaintiff from recovering compounded default interest, unanimously affirmed, without costs.
[1, 2] Supreme Court properly held that simple interest applies to the subject note because there is no express agreement for compound interest (R.F. Schiffmann Assoc., Inc. v. Baker & Daniels LLP, 147 A.D.3d 482, 483, 47 N.Y.S.3d 277 [1st Dept. 2017], lv denied 30 N.Y.3d 1040, 69 N.Y.S.3d 254, 91 N.E.3d 1233 [2017]). Plaintiff’s reliance on Paragraph 8 of the note providing for the acceleration of "Mortgage Debt," a term defined in Paragraph 4 to include principal and accrued interest, falls short of an express agreement for compounding because Paragraph 10 does not state that interest would accrue on that Mortgage Debt. Insofar as plaintiff attempts to imply from Paragraph 10 the accrual of interest on interest, based on the definition of Mortgage Debt as used in Paragraph 8 concerning acceleration, such is unavailing because compound interest may not be implied (Rourke v. Thomas Assoc., 216 A.D.2d 717, 718, 627 N.Y.S.2d 831 [3d Dept. 1995], lv dismissed 86 N.Y.2d 837, 634 N.Y.S.2d 445, 658 N.E.2d 223 [1995]). That the note may not expressly preclude compounding is insufficient to create the "express agreement" necessary to deviate from simple interest (R.F. Schiffmann, 147 A.D.3d at 483, 47 N.Y.S.3d 277). The vagueness of Paragraph 10 - providing that "interest shall accrue" without stating on what such interest would accrue - works against plaintiff.
[3] Plaintiff’s argument that Supreme Court violated the law of the case doctrine by purportedly reversing its April 27, 2023 order is unavailing as the Court did not directly address in that order whether simple or compound interest would apply.
[4] Plaintiff’s argument that interpreting the note to provide for simple interest renders parts of the Note superfluous is unavailing. That certain language could have been written differently does not render it superfluous. As for the language reducing default interest rate to the "maximum rate permissible," even assuming plaintiff does not need to rely upon such language, that does not render it meaningless to protect a careful lender against a usury defense.
[5, 6] This Court has no present opportunity to consider ODFFU’s usury argument as ODFFU did not appeal or cross-appeal. "Generally, an appellate court cannot grant affirmative relief to a non-appealing party unless it is necessary to do so in order to accord full relief to a party who has appealed" (Hecht v. City of New York, 60 N.Y.2d 57, 60, 467 N.Y.S.2d 187, 454 N.E.2d 527 [1983]; see also Schiano v. Marina, Inc., 103 A.D.3d 462, 464, 960 N.Y.S.2d 20 [1st Dept. 2013]).