T he H onor abl e St ef an R
. U nder hi l l of

t he U ni t ed St at es D i s t r i ct C our t f or t he D i s t r i ct of

C onne ct i cut , s i t t i ng * by des i gn at i on. 1 09- 2609- cv FC S A dvi s or s , I nc. v. Fai r Fi nan ce Com pan y, I nc. UN ITED STA

TES CO URT OF AP P EALS F OR TH E S ECO N D CI RCU IT Aug us t T erm, 200 9 (A rgue d: Fe bruar

y 22 , 20 10 Dec id ed: M ay 24 , 20 10)

Do cket No . 09 -2 609 -c v FCS A DVI S O RS , I NC ., Plainti ff-Coun ter-Defendant-Ap

pellee , v. F AI R F I NANC E C OMP A NY , I NC .,

De fendant -Co unt er -Cl aimant -A ppella nt . B ef or e: C AB R ANES and B.D. P AR KER , Circuit Jud ges , and U ND ERHI LL , District Judge
. * T he ques ti onpr es ent ed i s whe th er po s t- ju dgm ent

in te r es t s ho ul d b e cal cul ate d at th e f ede r al rate provided for under 28 U.S.C. § 1961(a) or at the rate provided for under New York lawwhere our jurisdiction is pr emised on the diversity of the citizenship of the parties and the contract giving rise to the action c ontains a choic e-of-law provision directing applic ation of New Y ork law. W e hold that the federal rate a pplies and that, a lthough parties may agree by contrac t to a different r ate, the c hoice-oflaw p r ov is io n at is s ue h er e is in s uf

fi cien t t o i ndicat e that

th e par ti es in te nd ed a dif

fe r ent r ate to app ly. T he j udgm ent

of th e Di s tr ict Cou r t i s af

fi rmed , inpar t (

ina s epar ate s um mar

y or der ), in s of ar as it entered summary judgment in favor of plaintiff, and vac ated, in pa rt, ins ofar as it calcula ted the rateT his su bse cti on pro vid es as foll ow s: 1 In ter e st sh a ll b e allow e d o n an y m o n e y j u d g m e n t i n a c ivil c a se re c o v e re d i n a d ist ric t co u rt. Execut i on t her ef

or m ay be l evi ed by t he m ar s hal , i n a ny c as e wher e, by t he l aw of t he St at e i n whi ch s uch co urti s hel d, ex ecut i on m ay be l evi ed f or i nt er es t on j udgm ent s r ecov er ed i n t he c our t s of t he S tate . S u c h i n ter e st sh a ll b e c a lcu late d fro m the d a te o f th e e n try o f th e j u d g m e n t, at a ra te e q u a l to t he w ee kly av era ge 1-ye ar c on st an t m atu ri t y T rea su ry y i eld , as pu bli she d by t he B oa rd of G ov ern ors of t he Feder al R es er ve Sy s t em , f or t he c al endar week pr ecedi ng [] t he dat e of t he j udgm ent . The D ire c to r o f th e A d m inistra ti v e O ffic e o f th e U n it e d S tate s C o u rts sh a ll d ist rib u te n o ti c e o f th a t ra te an d an y c ha ng es i n itt o a l l F ed era l j u d ge s. 2 8 U
. S
. C
. § 1 9 6 1 (a). 2 of po s t- ju dgm ent

in te r es t i n acc or dan ce wi thNew Yor k la w. G R EGORY E. GA L T ER I O (I r a N. Gl aub er , of counsel ), J af fe & As her , L LP , N ew Yo r k, N Y, for Appellan t Fair Finance Comp any, Inc. R O GE R E. B A R T ON (Ran dall L . Ras ey, of counsel ), Barton B arton & P lo tk inLLP, New

Yor k, N Y, for Appellee FCS Advisors, Inc. P ER C URI AM : T he ques ti onpr es ent ed i s whe th er po s t- ju dgm ent

in te r es t s ho ul d b e cal cul ate d at th e f ede r al rate provided for under 28 U.S.C. § 1961(a) or at the rate provided for under New York law w here our 1 jurisdiction is pr emised on the diversity of the citizenship of the parties and the contract giving rise to th e act io n co nt ain s a gen er al ch oi ce- of -l aw pr ov is io n r equ ir ing the ap pl

icat io n o f N ew Yo r k la

w. Defendant-appellant Fair Finance Company , Inc. (“FairFin” or “defendant”) appe als from a judgment of the United States District Court f or the Southern Dis trict of New York (Denny Chin, Judge ) entered on May 20, 20 09 and a mended on June 10, 20 09, granting summary judgment to plai ntiff FCS Advisors, I nc. d/b/a Brevet C apital A dvisors (“Br evet” or “pla intiff”) on plaintiff’s breach of
con tr act clai m. T he D is tr

ict Cou r t e nt er ed j udgm ent

agai ns t d ef

end ant inth e am ou nt

of $1, 716 ,24 8.4 3, whi ch i nclud ed p os t- ju dgm ent in te r es t c alculat ed at

a r ate of 9% per ann uminacco r dan ce wi thNew Yor k la w.Shor t l y be f or e t hi s ap pea l was ar gued, t he p ane l was i nf or m ed t hati nvol unt ar y ba nkr upt cy p r ocee di ng s ha d 2 b e e n c o m m e n c e d a g a in st d e fe n d a n t in th e N o r th e r n D istr ic t o f O h io
. S e eIn r eF air F inance C om

pa ny , N o. 10- 50494 ( B ank r . N
. D
. O hi o f

i l ed Feb. 8, 2010 )
. W e t her ef or e en t er ed an or der di s m i s s i ng t he a ppea l wi t hout pr ej udi ce t o be i ng r e in sta te d , u p o n a le tte r re q u e st f r o m e ith e r p a r ty , i n th e e v e n t th a t th e a u to m a tic b a n k r u p tc y sta y w a s lift e d in so fa r a s it a p p lie d to th is a p p e a l. S e eF C S A dvis or s , Inc. v. F air

F inance C om

pa ny, Inc. , N o . 0 9 -2 6 0 9 -c v (2d C ir. M a r. 10 , 2 0 1 0 ). O n Apri l 29, 2010 , we r eceived a l et t er f r om pl ai nt i ff’ s couns el s eeki ng r ei ns t at em ent ba s ed on a n Apri l 28, 2010 or der of

t he Bankr upt cy Court m odi f yi ng t he a ut om at i c s t ay “t o a l l ow t he Se cond C i r cui t C our t of A ppea l s t o en t er a d e c isio n ” in th is a p p e a l. S ee In r eF air F inance C om

pa ny , N o. 10 -50 49 4, D oc ke t E ntry N o. 12 8 (B an kr. N
. D
. O hio A pr. 28 , 20 10 )
. H av i ng rev i ew ed t ha t ord er a nd d eterm i ne d t ha t t he re is no furthe r ob st ac l e to ou r d i spo si t i on of t his m att er, w e re in sta te th e a p p e a l. 3 In a separate summary order entered today, we affirm the judgment of the Dis trict Court in sofa r a s itgra nte d su mma ry ju dgme nt t o p lain ti ff. In thi s per cur iam op inio n, we ad dr es s s ol ely whether the District Court err ed in applying NewYork lawrather than federal lawto determine the rate of post -judgment interest. We hol d that the federal rate of interest applies in diversity cases such as this one. Although the par ti es may

con tr actually agr ee t o a dif fe r ent r ate , thei r in te nt to do s o m us t b e cle ar

andun equ

ivo cal. We ho ldth at the c ho ice- of -l aw pr ov is io n i n thi s cas e do es no t d emo ns tr ate a cle ar andun equ

ivo cal intent to apply NewYork lawto the calc ulation of post- judgment interest. Accordingly , we va cate the ju dgme nt o f th e D ist ric t C ou rt o nly i nso fa r a s ita pp li ed the Ne w Y ork ra te , a nd we re ma nd the ca use to the Distr

ict Court for calcula tion of pos t-judgment interest in accordance with the federal rate provided for under 28 U.S.C. § 1 961(a). 2 BAC KGROUND T hi s app eal ar

is es fr omB r evet ’s laws ui t again s t F air Fi n f or br eachof con tr act . Rep r es ent ati

ves of Br evet a nd FairFin s igned aletter of intent (“LOI ”) on June 1, 2007, reflec ting their agreeme nt to
con s id er a tr ans act io n wh er eby

B r evet wouldpr ov

id e F air Fi n wi thup to $75 milli oninfi nan cing. Among other things, the LOI granted Brevet a “right of firs t refus al,” or option, to provide financi ng to FairFin on certain terms . If B revet exercised its option, FairFin was required to deal exc lusively wi th B r evet andwouldbe l

iab le f or a $1. 5 mill

io n “b r eak- up ” f

ee if it ent er ed i nt o an other

tr ans act io n i n l ieuT he ch oice -of-l aw pro visi on st ates i n it s en t i rety as foll ow s: 3 Ch o i c e o f

La w/Fo r um. Th i s Le t t e r s h a l l b e g o v e r n e d b y a n d c o n s t r ue d i n a c c o r da n c e wi t h t h e l a ws of t he St at e of

N ew Y or k. Each of

t he p ar t i es t o t hi s Let t er s ubm i t s t o t he j uri s di ct i on o f an y s t at e or fe d e ra l c o u rt sit ti n g i n the S tate o f N e w Y o rk , i n an y ac ti o n o r p ro c e e d ing ar isi n g o u t of o r re lating to t hi s Let t er an d agr ees t hatal l cl ai m s i n r es pectof t he a ct i on o r pr ocee di ng m ay be h ear d and det er m i ned i n a ny s uch co urt . Each of t he p ar t i es wai ves an y def ens e of i ncon veni ent f

or um t o t he m a inte n a n c e o f a n y ac ti o n o r p ro c e e d ing so b ro u g h t an d w a ive s a n y b o n d , su re ty, o r o th e r se c u rity t hatm i gh t be r equi r ed of an y ot her pa r t y wi t h r es pectt her et o. J
. A
. 41. A l t houg h t hi s opi ni on a dd r es s es onl y t he ques t i on o f pos t
- j udgm ent i nt er es t , t he f or eg oi ng f

act s ar e pr ovi ded 3 by way o f

b a ck g r ou nd. N ew Y ork l aw pro vid es that “[i]ntere st shall be at t he rate of n i ne pe r ce ntu m pe r an nu m , ex ce pt w he re 4 ot her w i s e pr ovi ded by s t at ut e. ” N
. Y. C
. P. L
. R
. § 5004
. 4 of the Br evet transaction. The LOI also containe d a choic e-of-law provision that required it to be gov ernedby, andcon s truedinacco r dan ce wi th , N ew Yo r k la w. Although Brevet exercised its option, 3 the Brevet-F airFin financing transaction w as never consummated. Following the transaction’s failure to close, Brevet brought the underlying suit claiming that FairFin had breac hed the exc lusivity pr ov is io ns of th e L OI andth at B r evet

was ent it ledto th e $1 .5 mill

io n b r eak- up fe e plus du e dilig enc e expenses it had incurred. The Distr ict Court agree d, and granted summary judgme nt in favor of B r evet . FCS Advisors, I

nc. v. Fair Fin. Co. , N o. 07 Ci v. 6 456 , 20 09 WL

140 386 9 (S.D .N .Y. M ay 19 , 200 9) . We af

fi r m the D is tr

ict Cou r t’ s or der

gr ant ing s um mar

y ju dgm ent

ina s epar ate s um mar

y or der entered today, for the reasons s tated therein. 3 Af te r th e Di s tr ict Cou r t e nt er ed j udgm ent

inth e am ou nt

of $1, 531 ,37 1.7 5 o n M ay 20 , 20 09, pl ain ti ff mo vedth at the j udgm ent be am end ed t o i nclud e pr e- andpo s t- ju dgm ent in te r es t. B y an o r der entered June 9, 2009, the Distr ict Court granted plaintiff’s motion and aw arded both pre- and postju dgm ent in te r es t at

a r ate of 9% per ann uminacco r dan ce wi thNew Yor k la w. FCS Advisors, I

nc. v. Fair Fin. Co. , 07 Civ. 645 6, 2 009 WL 1 616 518 (S .D .N .Y. J un e 9, 200 9) (r elyi ng o n N .Y. C.P .L .R. § 5004). Although it wa s undis puted that New Y ork law gove rned the rate of pre-j udgm ent in te r es t, id. , 4S ee n o te 1 , a nte . 5 5 defendant ha d argued that post -judgment interest s hould be ca lcula ted based on the federal rate pr ov id ed f or in28 U .S. C. § 1 961 (a)
. T he D is tr ict Cou r t dis agr eed , an d h eldth at “ [w] hile i t i s true . . . 5 that there is a split of author ity in [the Southern Distr

ict of New York] as to whether the federalor s tate rate applie s in a diversity action, whe re the contract contains a c hoice-of-law provision, courts award po s tj udgm ent

in te r es t b as ed o n the d es ign ate d l aw.” FCS Advisors , 2009 WL 1616518, a t *1 (citation
omit te d) . Acc or di ngl

y, the D is tr

ict Cou r t ap pl

iedth e New York r ate . DISCUSSI ON We co ns id er

her e wh ether

th e Di s tr ict Cou r t c orr ect

ly d et ermi nedth at the c ho ice- of -l aw provision in the LOI required the applic ation of New Y ork law to the ca lcula tion of pos t-judgment in te r es t. We r evi ew de novo the Distr ict Court’s determination of the proper r ate of post-judgment in te r es t, whi ch i s in fo r med by i nt erpr et ati onof

th e L OI
. See Westinghouse Credit Corp. v. D’Urso , 37 1 F. 3d96, 100 (2 d Ci r . 20 04) (h ol di ng that an aw ar d o f p os t- ju dgm ent in te r es t und er

28 U .S. C. § 1 961 is subject to de novo r evi ew) ; Oscar Gruss & Son, Inc. v. Holland er , 33 7 F .3d186 , 19 8 (

2dCir . 20 03) (“We
re vi ewthe di stri ctco urt ’s i nte rpre ta ti onof c on tra ct s de novo .”). In 2004, in Westinghouse Credit C orp. v. D’Urso , w e h el d th a t th e f ed er al p ost- ju dgme nt i nte re st
r ate pr ov id ed f or in28 U .S. C. § 1 961 app lie s indi ver s it y cas es . See 371 F. 3dat 1 02; accord Schipa ni v. McLeod , 541 F.3d 158, 16 4-65 (2d Cir. 2008) (noting that “[i]n a diversity case, state lawgoverns the
awar d o f p r eju dgm ent

in te r es t” bu t “ [i

]ncon tr as t, po s tj udgm ent

in te r es t i s gov ernedby f

ede r al
s tatut e”) ; Fo re

st Sal es Co rp. v. B edi

ng field , 881 F.2d 111, 11 2-13 (4th Cir. 1989) (explaining that, under Er ie Rail ro ad v . T o mpki ns , 30 4 U. S. 6 4 ( 193 8) , p os t- ju dgm ent in te r es t i s “be tt er

char act er izedas pr oce du r al”
a nd li sti ng the ci rc ui ts th a t have he ld tha t th e f ed er al ra te a pp li es i n d iv er sity a ct io ns). W e a lso expressed the view that pa rties are fr ee to agree to a different post- judgment interest rate by contract,6

pr ov id ed that th ey d o s o thr ough “ clea r , u nam biguo us andun equ ivo cal l ang

uag e.” D’Urso , 37 1 F .3dat 102 (i nt ernal

qu ot ati onmarks omit te d) . T he ques ti onher e is whe th er th e ch oi ce- of

-l aw pr ov is io n i n th e par ti es ’ L OI , see no te 2, ante , canbe d eem ed a c lear exp r es s io n o f i nt ent

to hav e New York la

w, rather than federal law , apply to the calc ulation of post- judgment interest. We hold tha t it cannot. As an initial ma tter, we note that in D’Urso we ap pl iedth e f ede r al r ate no tw

iths tan di ng the f

act that the contract giving

rise to the cla ims at iss ue there, much lik e the LOI here, contained a choice -oflaw p r ov is io n p r es cr

ib ing the ap pl

icat io n o f N ew Yo r k la

w. See 371 F. 3dat 1 02 (cit ing Westinghouse Credit C orp. v. D’Urso , 27 8 F .3d138 , 14 6 n .3 ( 2dCir . 20 02) (n ot

ing the c ho ice- of

-l aw pr ov is io n) ). Holding that the ex istence of a choic e-of-law provision, st anding a lone, demonstrates a “cle ar, unambiguous and unequivocal ” intent to devia te from the federal rate w ould therefore be contrary to our holding in D’Urso
. Se e i d. Moreover, in D’Urso

we ap pl iedth e f ede r al r ate ins pi te of

th e par ti es ’ ex

pli ci t agreeme nt to apply a 15.5% interest r ate to any arbitration awa rd “fr om the date pa yment wa s due to the date paym ent is mad e.” Id

. We r ejec te d the p ar ti es ’ agr eed -upo n r ate bec aus e the “ gen er al rul e un der New Yor k an d f

ede r al l aw is th at adeb t c r eat ed b y co ntr act mer ges with a j udgm ent

ent er ed o n that
con tr act .” Id

. ; accord Kotsopoulos v

. Asturia Shi

ppi ng Co. , 46 7 F .2d91, 95 (

2dCir . 19 72) (“ On ce a cl aimis reduced to judgment, the origina l claim is extinguished and merged into the judgment; and anew c laim, call ed a j udgm ent

deb t, ar is es .”) ; Soc’y o

f Lloyd’s v. Reinh art

, 40 2 F .3d982 , 10 04 ( 10th Ci r . 20 05) (“ [W] hen
a va lid and finaljudgment for the payment of money is rendered, the origina l claim is extinguished, and
a newcause of ac tion on the judgment is subs tituted for it. In s uch a c ase, the originalclai m loses its char act er andid ent it y andis mer

gedinth e ju dgm ent .” (

in te rnal qu ot ati onmarks omit te d) ). I n o th er words, although a rate of 15.5% might have applie d to the co ntr act debt , “[ t] he p ar ti es faile d t o s tat e that this r ate woul d apply to judgm ents rendered on that awa rd. New York lawtreats this langua ge therefore7

as app lying o nly t o the c on tr act deb t, andno t t o the j udgm ent in to whi ch that

deb t i s mer

ged .” D’Urso , 371 F.3d at 102 (empha sis added). If the parties intended to override the gene ral merger rule, and to specify an interest rate that applie s to judgm ent debts, we h eldth at they wer e r equ

ir ed t o “e xp r es s s uch in te nt th r ough c lear , u nam biguo us andun equ ivo cal l ang

uag e.” Id
. (internal quotation marks omitted). For the same reasons discus sed in D’Urso , the p ar ti es ’ ch oi ce- of -l aw pr ov is io n i n thi s cas e is insuff icient to demonstrate an intent to apply New Y ork law to the ca lcula tion of pos t-judgment in te r es t. At

mo s t, th e ch oi ce- of

-l aw pr ov is io n i n the L OI exp r es s es an i nt ent to hav e New York la

w apply to the inte rpretation of that contract andany c lai ms ar

is ing f r omit
. See no te 2, ante . Neither the choice -of- law provision nor any other part of the LOI indica te that New Y ork law or the New Y ork rate of interest would apply to judg men t debts r es ul ti ng f

r oma clai m b as ed o n that con tr act . Acc or di ngl

y, as in D’Urso , “N ew Yo r k la w tr eat s this [ch oi ce- of

-l aw] language as app lyi ng o nly t o the c on tr act [cl aim s ], andno t t o the j udgm ent in to whi ch [

th os e claim s ar e] m erged .” 3 71 F .3dat 1 02; cf
. Reinh art , 402 F.3d at 1004 (rely

ing on D’Urso

andho lding that

“agr eeing t o b e bo un d b y [afo r eign co un tr y’s law] does not amount to agreeing to a pa rticular post- judgment interest rate”). Accordingly , we hold tha t,
a bse nt “ cl ea r, u na mb iguo us a nd un equivo ca l” la ngua ge ex pre ssin g a n i nte nt t ha t apa rti cu la r in te re st rate apply to judgm ents or judgm ent debts, a ge neral choic e-of-law provision s uch as the one a t iss ue here does not alter the applica tion of the federal rate to the cal culation of post-judgment interest in diversity
ca ses. B ecau s e the D is tr

ict Cou r t c alculat ed p os t- ju dgm ent in te r es t i n acc or dan ce wi thNew Yor k la w bas ed s ol ely o n the c ho ice- of -l aw pr ov is io n i n the L OI , see no te 2, ante , we va cate so much of the ju dgm ent as im po s ed a c har

ge f or po s t- ju dgm ent

in te r es t, andwe r ema ndth e cau s e t o the D is tr ict Court for the ca lcula tion of pos t-judgment interest in accordance with the federal rate provide d for
un der 28 U .S. C. § 1 961 (a)
.8 CONCLUSI ON To su mma riz e, we ho ld a s follo ws: (1 ) I n dive r s it

y cas es s uchas this , p os t- ju dgm ent in te r es t s ho ul d o r di nar

ily be c alculat ed i n
acc ordance with the federal rate provided for under 28 U.S.C . § 1961(a ); (2) Although parties may agree to a different rate by contract, a bsent “clea r, unambiguous and unequivoca l” language expressing an intent that a particula r interest rate apply

to judgm ents

or judg men t debts, a ge neral choic e-of-law provision s uch as the one a t iss ue here does not alter the application of the federal rate to the ca lcula tion of pos t-judgment interest. Acco r di ngl

y, we VACAT E th e ju dgm ent of th e Di s tr ict Cou r t o nly in s of

ar as it app lie d N ew Yor k la w t o the c alculat

io n o f p os t- ju dgm ent

in te r es t, andwe REMA

ND th e cau s e t o the D is tr ict Court for the ca lcula tion of pos t-judgment interest in accordance with the federal rate provide d for under 28 U.S.C . § 1961(a

).