Opinion
Julian & Pertz, P. C., Utica (Robert F. Julian, of counsel), for plaintiffs.
Dennis C. Vacco, Attorney-General, Buffalo (William D. Lonergan, of counsel), for Edward Regan, as Comptroller of the State of New York, and another, defendants.
Michael Colodner, New York City (John Eiseman and Stephen E. Gross, of counsel), for Matthew T. Crosson, defendant.
[672 N.Y.S.2d 625]L. PAUL KEHOE, Justice.
Plaintiffs are present and former County Court Judges serving in Monroe County. The Appellate Division, Fourth Department, has held that defendants' failure to pay plaintiffs a salary commensurate with the salaries received by County Court Judges in Albany County violated plaintiffs' rights to equal protection of the laws under the Federal and State Constitutions (Barr v. Crosson, 236 A.D.2d 875, 653 N.Y.S.2d 756 [4th Dept., 1997]). Plaintiffs were awarded back pay equal to the salary of Albany County Judges "beginning from either October 1, 1978 or the dates of their commencement of service as County Court Judges in Monroe County, whichever is later, with interest at the statutory rate (see, CPLR 5004)...."
Plaintiffs now seek an award of prejudgment interest on the amounts due from the dates of accrual of their various claims (see, CPLR 5001). Defendants oppose this request. The language used by the Fourth Department and cited above is the same language which that Court used in several other of the so-called "pay parity cases" (see, Henry v. Milonas, 229 A.D.2d 921, 923, 645 N.Y.S.2d 227 [4th Dept., 1996]; Burke v. Crosson, 213 A.D.2d 963, 965, 623 N.Y.S.2d 969 [4th Dept., 1995]; Barth v. Crosson, 199 A.D.2d 1050, 1051, 607 N.Y.S.2d 200 [4th Dept., 1993]). In Barth, the Appellate Division affirmed a lower court decision that awarded post-judgment interest only but there is no discussion in the decision which would indicate that the issue of prejudgment interest was considered. The Barth memorandum decision also decided Pomilio v. Crosson, 199 A.D.2d 1052, 608 N.Y.S.2d 912 (4th Dept., 1993) by reversing a decision in Supreme Court, Oneida County, which had found a rational basis for the salary discrepancy at issue in that case. In reversing Supreme Court and granting judgment to the Pomilio plaintiffs, the Appellate Division granted back pay "with interest at the statutory rate (see, CPLR 5004)...." Henry and Burke, like Pomilio, reversed Supreme Court decisions which had found a rational basis for the pay disparity at issue. In reversing the Supreme Court decisions in those cases, the Appellate Division granted summary judgment declaring that the salary disparity in issue violated plaintiffs' right to equal protection of the laws and granted judgment for back pay equal to the difference between their salary and the salary paid to judges in the comparator county "with interest at the statutory rate (see, CPLR 5004)...." While Pomilio, Henry, and Burke all grant plaintiffs judgment for back pay with interest, none of them specify whether the interest intended is post-decision interest or pre-decision interest. I find that plaintiffs are entitled to prejudgment interest for the reasons herein stated.
Initially, the language of the Appellate Division decision creates an inference that prejudgment interest was intended. No specification of post-decision interest is necessary because post-decision and post-judgment interest are mandatory by statute (see, CPLR §§ 5002, 5003). It is likely, therefore, that the Court in each of the Pomilio, Henry and Burke cases by specifying "with interest" intended that interest run from the dates that the payments came due. This Court's determination need not, however, rest upon that inference alone.
CPLR 5001 provides that "Interest shall be recovered upon a sum awarded because of a breach of performance of a contract ...." An award of interest is "...simply the cost of having the use of another person's money for a specified period. It is intended to indemnify successful plaintiffs for the nonpayment of what was due them, it is not meant to punish defendants..." (Love v. State of New York, 78 N.Y.2d 540, 544, 577 N.Y.S.2d 359, 583 N.E.2d 1296 [1991]; see also, Selinger v. Selinger, 232 A.D.2d 471, 648 N.Y.S.2d 470 [2nd Dept., 1996]). Courts have awarded prejudgment interest on amounts due for services rendered (Morse/Diesel, Inc. v. Trinity Industries, 875 F.Supp. 165 [1994]); for amounts due on an improperly withheld accounting (Aurnou v. Greenspan, 161 A.D.2d 438, 555 N.Y.S.2d 356 [1st Dept., 1990]); on money held by a law firm which was owed to a client (Yalango v. Popp, 232 A.D.2d 844, 648 N.Y.S.2d 763 [3rd Dept., 1996]); and on an amount awarded on a quantum meruit recovery of attorney fees (Ogletree, Deakins, Nash, Smoak & Stewart, [672 N.Y.S.2d 626] P.C. v. Albany Steel, Inc., --- A.D.2d ----, 663 N.Y.S.2d 313 [3rd Dept., 1997]).
The employee-employer relationship is contractual in nature. The relationship gives rise to mutual obligations to be performed by the employer and employee. Those obligations include the duty of the employee to provide his/her labor and the corresponding duty on the part of the employer to pay for that labor. The amount of the compensation may be fixed by written or oral express contract; by a contract implied by law giving rise to a claim in quantum meruit; or, as here, by operation of law. Plaintiffs' claims are for payment of the salaries they were entitled to receive for the labor they performed pursuant to their employment contract with defendant. Consequently, they are entitled to prejudgment interest under CPLR 5001.
In opposing plaintiffs' request for prejudgment interest, defendants cite two pay parity cases in which prejudgment interest was denied (Davis v. Rosenblatt, 159 A.D.2d 163, 173, 559 N.Y.S.2d 401 [3rd Dept., 1990]; Deutsch v. Crosson, 171 A.D.2d 837, 839, 567 N.Y.S.2d 773 [2nd Dept., 1991]). In denying prejudgment interest the Davis Court adopted the decision in Gordon v. Board of Education, 52 Misc.2d 175, 274 N.Y.S.2d 543 [Sup.Ct., Kings Co., 1966]. In reaching its decision to deny prejudgment interest the Deutsch Court simply cites the holding in Davis. Consequently, the Davis and Deutsch decisions both rely upon the rationale of Gordon. This Court notes that the holding in Gordon is contrary to the holding in Kohler v. Board of Education, 142 A.D.2d 676, 530 N.Y.S.2d 844 (2nd Dept., 1988) in which the Court awarded prejudgment interest on a fact pattern similar to that in Gordon. The Kohler decision on prejudgment interest has been followed in a number of cases (see, e.g., Marconi v. Board of Education, 215 A.D.2d 659, 627 N.Y.S.2d 714 [2nd Dept., 1995]; Della Vecchia v. Town of North Hempstead, 207 A.D.2d 483, 616 N.Y.S.2d 55 [2nd Dept., 1994]). Additionally, the Gordon rationale turns on the nature of the relief that Court found to be available in an Article 78 proceeding. In denying prejudgment interest the Gordon Court states "Petitioner had no cause of action for back pay independent of his Article 78 proceeding and could not maintain any action therefor until he had proved his right to reinstatement ...." (52 Misc.2d at 177, 274 N.Y.S.2d 543). Contrary to the holding in Gordon, the plaintiffs here do have a cause of action for back pay and they have prevailed on that cause of action. Here also, plaintiffs are being compensated for services performed as opposed to Gordon where the plaintiff was granted pay for a period of time during which he was suspended. It was successfully argued in Gordon that plaintiff's entitlement to back pay did not arise until he obtained judgment. Even if that argument were sound it would not apply here. Here, plaintiffs' rights to increased compensation arose not from the Appellate Division's decision but from the State and Federal Constitutions. This is not a situation where the Court has created an equitable resolution from a menu of optional remedies. Rather, the decision encompasses the Court's recognition and enforcement of plaintiffs' specific claims to equal compensation which have existed since the various pay periods for which they were paid less than the State and Federal Constitutions require.
Plaintiffs have been paid bi-weekly during the periods of employment at issue here. Their damages occurred on each of the various pay days on which they were underpaid. Calculation of interest on each bi-weekly underpayment would require 26 separate computations each year and would be unnecessarily burdensome. The Court has discretion to grant interest upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date (CPLR 5001[b]). The selection of a single intermediate date for prejudgment interest is not appropriate because of the wide variety of dates of service of plaintiffs. In order to fashion a reasonable procedure the Court holds that for purposes of calculation of interest the plaintiffs' claims arose at the end of each year during which they were underpaid. Interest on payments due for 1978 shall accrue from January 1, [672 N.Y.S.2d 627] 1979, and for each succeeding calendar year from January 1 of the following year.