Court Opinion

ID: 5777887
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:44:55.601198+00
Date Added: 2024-06-11T08:41:55.210670
License: Public Domain

Shapiro, J. (concurring in part and dissenting in part).
I concur in the affirmance of the judgment appealed from, but only as the judgment was originally entered; and I concur in the dismissal of part of the appeal from the order dated May 8, 1970. However, I dissent from so much of the order dated May 8,1970 as limits the plaintiff’s recovery of interest to 3% per annum from the time the cause of action arose to the time of the verdict.
This is an action to recover for work, labor and services in connection with repairs and alterations to the Nassau County Jail The learned Trial Justice ruled at Special Term that since Nassau County is a municipal corporation the right to interest is governed by subdivision 1 of section 3-a of the General Municipal Law. That statute provides that " the rate of interest to be paid by a municipal corporation upon any judgment or accrued claim * * * shall not exceed three per centum per annum.” Such a provision is constitutionally valid (Matter of City of New York [Bronx Riv. Parkway], 284 N. Y. 48; People ex rel. Emigrant Ind. Sav. Bank v. Sexton, 284 N. Y. 57).
When the plaintiff’s claim fructified into a verdict the plaintiff had an “ accrued claim ”, so that thereafter it was limited by the terms of this statute to 3% per annum on the verdict and on the judgment entered thereon. The plaintiff contends, however, that from the time its cause of action arose until the verdict it was entitled to interest at the rate of 6% per annum.
CPLR 5001, so far as here material, provides:
" (a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission * * *.
" (b) Date from which computed. Interest shall be computed from the earliest ascertainable date the cause of action existed ”.
OPLR 5002 provides: ‘' Interest shall be recovered upon the total sum awarded, including interest to verdict, report or decision, in any action, from the date the verdict was rendered or the report or decision was made to the date of entry of final judgment.”
*323The decisive question here, therefore, is whether when the defendant breached its contract with the plaintiff the latter then had an ‘ ‘ accrued claim ’ I have been unable to find any Court of Appeals case directly in point. In the Bronx Riv. Parkway case {supra), the holding of the court, so far as here relevant, was strictly limited to a determination that section 3-a was applicable to an award made in condemnation proceedings instituted by a municipal corporation. The court was most careful to indicate that it was not dealing with an obligation based upon voluntary acts of the parties ”, i.e., a contract, but with an obligation to pay which ‘' rests on statutory provisions and on the constitutional guaranty of property interests” (p. 54). There was no determination there that the limitation of interest provision was applicable to a cause of action per se, as distinguished from an “ accrued claim ”.
Similarly, Decker v. Dundee Cent. School Dist. (4 N Y 2d 462) is not in point. That was a personal injury negligence case in which interest had been allowed at the rate of 6% from the date of the verdict. In holding that the allowance of interest at that rate was error, the Court of Appeals said (p. 464): “We would therefore affirm were it not for an error in computing interest on the verdict at the rate of 6%. Under section 3-a of the General Municipal Law, 3% is the maximum rate of interest allowable on an accrued claim or judgment against a municipal corporation, which is defined to include a school district [emphasis in original].
“ The judgment appealed from should be modified by computing interest on the verdict at the rate of 3%, and, as so modified, affirmed”.
It is obvious that the plaintiff there was not entitled to any interest at all until he had a verdict. When he obtained his verdict he then had an accrued claim and perforce the statute was limited to interest at the rate of 3% per annum.
Agreeable to the determination of the majority are the holdings in Adler v. Board of Educ. of City of N. Y. (33 Misc 2d 789, affd. 18 A D 2d 1053 [First Dept.]) and Futia Co. v. Schenectady Municipal Housing Auth. (33 A D 2d 591 [Third Dept.]). In the Adler case the Special Term found " no merit to the plaintiffs ’ claim with respect to the alleged improper rate of interest’ ’ (p. 790) on the authority of the Emigrant Bank case (supra) and the Bronx Riv. Parkway case (supra), but, as I noted above, the Bronx Riv. Parkway case dealt with a condemnation award, and not with an obligation based upon voluntary acts of the parties. ’ ’ There would have been no need to point up that distinction if the Court of Appeals believed that section 3-a applied *324indiscriminately to all types of actions. The Emigrant Bank case, the other authority relied upon by Adler, after upholding the constitutionality of section 3-a, merely decided that it was not to be applied retroactively. Thus no support, may be found in either of the two cases relied upon by Adler for the conclusion there reached. If anything, a fair interpretation of the language used in Emigrant Bank is that there is a difference between ‘‘ a cause of action ’ ’ and an ‘ ‘ accrued claim ’ ’, for the Court of Appeals pointed out that the words “ accrued claim ” and “ judgment ”, as they appear in the statute, are in juxtaposition to each other (284 N. Y. 57, 62). Such juxtaposition warrants, I believe, the conclusion I have come to that subdivision 1 of section 3-a was never intended to apply to a mere amorphous claim or cause of action.
The Futia case (supra) dealt with section 157 of the Public Housing Law, the language of which is the same as that of subdivision 1 of section 3-a of the General Municipal Law. There, the Appellate Division, Third Department, said, ‘ ‘ While CPLE 5004 states that interest is to be at the legal rate, unless otherwise provided, section 157 so provides.” Just as did the court in the Adler case, the court in Futia accepted the “ otherwise provided ” clause as applying to causes of action or claims from their inception, without giving force or effect to the fact that the limiting provisions of both statutes applied from the time the claims became “ accrued” and the fact that.there was no inhibition in either statute to the awarding of interest at the legal rate from the time the claim or cause of action came into existence until it became an “ accrued claim.”
Edlux Constr. Corp. v. State of New York (252 App. Div. 373, affd. 277 N. Y. 635), Terry Contr. v. State of New York (51 Misc 2d 545) and D’Angelo v. State of New York (200 Misc. 657), cited by the majority in support of its conclusion, are completely inapposite since the first two dealt with the dates for filing of claims against the State and the D’Angelo case merely dealt with the right to recover interest in a contract action ‘ ‘ from the date of the breach of the contract ” (p. 667) in accordance with the provisions of section 480 of the Civil Practice Act. If applicable at all, the language in the Edlux and Terry cases points away from the view of the majority. In the Edlux case the Appellate Division, Third Department, said, ‘‘ ‘ The expression ‘‘ claim accrued ’ ’ is not identical with the expression ‘ ‘ cause of action accrued ” ’ ” (p. 374, quoting from Dufel v. State of New York, 198 App. Div. 97, 102); and in Terry the Court of Claims quoted the statement from Davison, Claims against the *325State of New York ([1954], p. 231) that “ A claim is not deemed accrued until the extent of the damages can be ascertained.”
In interpreting a statute, meaning and effect should be given to its every word (New York State Bridge Auth. v. Moore, 299 N. Y. 410, 416; Matter of Bailey [Bush Term. Co.], 265 App. Div. 758, affd. 291 N. Y. 534). If the Legislature had intended that interest on any “ claim ” against a governmental agency should be limited it could have so provided. That it did not do. We should therefore give full meaning to the statute as it is written.
If the defendant municipality in this case were suing the plaintiff for breach of contract and received a verdict, the plaintiff here, as defendant, would be compelled to pay the usual rate of interest referable to contracts ‘' from the earliest ascertainable date the cause of action existed” (CPLB 5001, subd. [b]), whereas the plaintiff here, though recovering a verdict against the defendant for breach of the very same contract, is limited, by the holding of the majority, to a recovery of half the rate of interest to which it would be liable if it itself had breached the contract. Such an unequal application of the law is constitutionally suspect and in any event is so basically unfair as not to be adopted unless the statute brooks of no other interpretation. I find no such compelling mandate in the “accrued claim” provision of the statute.
I conclude therefore that since interest ‘ ‘ upon a sum awarded because of a breach of performance of a contract ” (CPLB 5001, subd. [a]) is to be “ computed from the earliest ascertainable date the cause of action existed ” (CPLB 5001, subd. [b]) “ at the legal rate, except where otherwise prescribed by statute ’ ’ (CPLB 5004) and since the statute (General Municipal Law, § 3-a, subd. 1) does not otherwise provide with respect to a contract cause of action until it has ripened into an accrued claim or judgment, the plaintiff is entitled to interest on the amount found to be due it at the rate of 6% “ computed from the earliest ascertainable date the cause of action existed” (CPLB 5001, subd. [b]) to the time of the verdict.
I would therefore affirm the judgment as originally entered, dismiss so much of the appeal as is from the provision of the order that refused to set aside the verdict, and otherwise modify the order so as to deny in its entirety the defendant’s motion to amend the judgment with respect to the interest awarded.
Munder, Acting P. J., and Martuscello, J., concur with Latham, J.; Shapiro, J., concurs in part and dissents in part, with a separate opinion in which Benjamin, J., concurs.
Judgment, as corrected pursuant to the order dated May 8, 1970, affirmed.
*326Order affirmed to the extent that it directed the computation of interest in the judgment to be corrected.
Appeal from the provision in the order refusing to set aside the verdict dismissed.
No award of costs is made.