Opinion
92-1380.
Decided July 20, 2006.
KOWALCZYK, TOLLES DEERY, LLP, Andrew S. Kowalczyk, Jr., Esq., of counsel, Utica, NY, for plaintiff Barr.
SAUNDERS, KAHLER, AMOROSO LOCKE, L.L.P., James S. Rizzo, Esq., of counsel, Utica, NY and D.J. J.A. CIRANDO John A. Cirando, Esq., of counsel, Syracuse, NY, for defendants Carbone.
This matter has a long history with this Court dating back to 1990, and including numerous motions and appeals. The relevant background is as follows:
This action is based on a Lease Agreement between plaintiff Brian Barr and defendants Country Motors and the individual Country Motor defendants, who later assigned their rights and obligations in this Lease Agreement to defendants Carbone. On September 12, 2002 plaintiff Barr moved for summary judgment on the issue of damages arising from the Lease Agreement. Oral argument was held on November 21, 2002, and on March 10, 2003 this Court issued a written Decision awarding summary judgment in favor of plaintiff Barr and against defendants Country Motors for rent, along with damages which flowed from the breach of the Lease, namely, taxes, utilities, insurance premiums and other miscellaneous expenses, all totaling $761,100.15 plus interest from March 26, 2003; and this Court also awarded defendants Country Motors judgment-over against defendants Carbone in the same amount by way of indemnification. This Court signed an Order accordingly on June 9, 2003, which Order was entered on June 12, 2003.
On June 13, 2003, one day after entry of this Court's Order, defendants Carbone paid plaintiff Barr the sum of $768,554.53 in full satisfaction of the judgment plus interest, awarded by this Court. Cross-appeals were filed, and on February 4, 2005 the Fourth Department modified this Court's Decision and Order, by vacating the award of damages for taxes, utilities, insurance premiums and miscellaneous costs. All parties moved for leave to appeal to the Court of Appeals, and by Order dated April 29, 2005 the Fourth Department denied all cross-motions for leave to appeal. Plaintiff Barr then moved to amend its complaint nunc pro tunc to include a demand for taxes, utilities, insurance premiums and miscellaneous costs flowing from the breach, and on July 21, 2005, this Court denied that motion. On January 17, 2006 the Court of Appeals denied the motions of plaintiff Barr and defendants Carbone seeking leave to appeal from the Fourth Department's February 4, 2005 Decision.
The parties then exchanged a series of letters, disagreeing on the amount of money that plaintiff Barr was required to refund to defendants Carbone in order to comply with the Fourth Department's Decision. Specifically, it was agreed that on June 13, 2003 defendants Carbone overpaid plaintiff Barr the amount of $275,318.55, which amount was comprised of taxes, utilities, insurance premiums and miscellaneous costs in the amount of $142,703.34 and interest in the amount of $132,615.21 up to June 13, 2003 [the date that Carbone paid Barr pursuant to this Court's Decision and Order]. However, plaintiff Barr took the position that it only owed Carbone interest on the principal amount of $142,703.34, whereas defendants Carbone believed they were owed interest on the entire amount of $275,318.55 which they had paid to Barr. After exchanging several more letters, the parties agreed that plaintiff Barr would pay defendants Carbone the sum of $323,735.10, representing reimbursement based on Barr's calculations, so as to stop the running of interest on this larger amount, and both parties reserved their rights to have this Court settle the amount of interest due to Carbone. The balance in controversy as of April 20, 2006 is $22,314.89, for which defendants Carbone seek payment from plaintiff Barr.
Defendants Carbone now bring this motion seeking to settle the amount of interest which is due them from plaintiff Barr. Defendants Carbone assert that they are entitled to interest on the entire amount of the overpayment, because the Fourth Department determined that they should not have paid principal or interest for taxes, utilities, insurance premiums or miscellaneous costs, and because the Fourth Department gave them judgment for the full amount of $275,318.55 which included the principal amount and interest they actually paid Barr on June 13, 2003. Plaintiff Barr opposes this motion asserting defendants Carbone are seeking compounded interest which is not favored by the courts in the absence of an express agreement or statutory authority, and that the parties never stipulated to the amount that Barr would have to return to Carbone in the event Carbone was successful on its appeal.
The Court has again reviewed the submissions of the parties and listened very carefully to oral argument of counsel at Motion Term, finding this Court's colloquy with counsel to be very helpful and informative. After due deliberation, this Court finds Carbone's position to be cogent and credible. Contrary to Barr's position, the Court finds that there is no compounding of interest in requiring plaintiff Barr to pay defendants Carbone statutory interest on the entire amount of principal and interest in the amount of $275,318.55 which Carbone paid to Barr on June 13, 2003. This is not a situation where plaintiff Barr is being asked to pay interest twice, or to pay interest on interest which Barr has already paid. Rather, the facts herein present a situation where Carbone is asking Barr to pay simple interest on a sum of money [which happens to include interest] previously paid by Carbone to Barr, which money Barr has enjoyed the use and benefit of since June 13, 2003.
On the uncontested facts before this Court, following entry of this Court's Decision and Order on June 12, 2003, defendants Carbone immediately paid the entire amount of principal and interest to plaintiff Barr on June 13, 2003 so as to meet the obligation imposed by this Court and stop the running of interest during any appeal. The parties then engaged in appellate practice, and plaintiff Barr engaged in additional motion practice following the appeal. During this nearly three (3) year period, Barr had the use and benefit of Carbone's money, and Carbone was without the use of their own money, including principal and interest, from June 13, 2003 until April 20, 2006. Moreover, despite the February 4, 2005 directive of the Fourth Department, plaintiff Barr did not make any repayments whatsoever to Carbone until 14-months later. "If [plaintiff Barr] chose to keep the money, it should pay for what it kept" ( Spodek v. Park Property Development Associates, 96 NY2d 577, 581 [11-15-01]). Consistent with the long-standing recognition of awarding interest to make an aggrieved party whole, as recited by the Court of Appeals in Spodek v. Park Property Development Associates ( id.), this Court finds that defendants Carbone were entitled to receive simple, statutory interest on the entire amount of $275,318.55 which they overpaid to plaintiff Barr [pursuant to this Court's Decision and Order], until such time as the entire amount is repaid by Barr.
For the reasons stated, the motion of defendants Carbone is granted, and plaintiff Barr is directed to pay Carbone the balance due of $22,314.89 with statutory interest from April 20, 2006 until paid in full. This constitutes the Decision of the Court and defendants Carbone are awarded $100 costs on this motion.
Counsel for Carbone is directed to submit an Order for signature with this original Decision appended thereto, after sending a copy to counsel for Barr for approval as to form.