Bison Capital Corporation v. ATP Oil & Gas Corporation, No. 1:2010cv00714 - Document 125 (S.D.N.Y. 2012)

Court Description: MEMORANDUM OPINION AND ORDER: Accordingly, the Court finds that prejudgment interest shall accrue beginning September 24,2004 for $350,000 of the judgment amount, and shall accrue beginning April 14, 2005 for $1,300,000 of the judgment amount. The judgment will be amended accordingly. (Signed by Judge Sidney H. Stein on 8/3/2012) (jfe)

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USDCSDNY DOCUMENT ELECfRONICALLY FILED UNlTED STATES DISTRlCT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------)( DOC#: ____~~___ DATE FILED: ~ / ~ J, 'Z- BISON CAPITAL CORPORATION, Plaintiff, 10 Civ. 714 (SHS) MEMORANDUM OPINION AND ORDER -againstATP OIL & GAS CORPORATION, Defendant. -----------------------------------------------------------------)( SIDNEY H. STEIN, U.S. District Judge. This breach of contract action was tried to this Court on January 18-21, 2011. The Court subsequently directed the entry ofjudgment "in favor of plaintiff and against defendant in the amount of $1,650,000, plus prejudgment interest pursuant to N.Y. C.P.L.R. 5001 ...." (Judgment dated March 21,2011, Dkt. No. 100; Findings of Facts and Conclusions of Law, No. 10 Civ. 714,2011 WL 8473007 (S.D.N.Y. Mar. 8,2011), aff'd, 2012 WL 1086233 (2d Cir. Apr. 3,2012).) The parties have now proposed different dates from which prejUdgment interest should accrue. For the reasons set forth below, the Court finds that prejudgment interest accrues beginning September 24, 2004 on $350,000 ofthe judgment amount, and accrues beginning April 14, 2005 on $1,300,000 of the judgment amount. N.V. c.P.L.R. § 5001 provides that "interest shall be recovered upon a sum awarded because of a breach of performance of a contract" and such interest "shall be computed from the earliest ascertainable date the cause of action existed." This provision "entitles a 'prevailing party' to prejudgment interest as a matter of right." Indu Craft v. Bank fjJf Baroda, 87 F.3d 614, ! 617 (2d Cir. 1996) (internal citations omitted). 1 The parties agree that prejudgment interest on the second capital transaction commences on September 24, 2004-the date of the breach-but ATP Oil contends it should stop accruing in November 2004, when ATP Oil offered $350,000 to Bison Capital. To terminate the running of t interest from the date of a tender to a person or entity in favor of whom judgment may be entered, the person or entity against whom the judgment may be taken is obligated to follow the specific procedure set forth in N.Y. c.P.L.R. § 3219. Boyce v. Soundview Tech. Group, Inc., No. I 03 Civ. 2159,2005 U.S. Dist. LEXIS 4lO0 (S.D.N.Y. Mar. 17,2005) ("r'Y' C.P.L.R. § 3219 is I an exclusive procedure that enables a party to avoid the payment of prej dgment interest only if it tenders a settlement offer with the court.") Specifically, a potential ju gment debtor must "deposit with the clerk of court for safekeeping an amount deemed by h m to be sufficient to satisfy the claim asserted." N.Y. C.P.L.R. § 3219. There is no question that ATP Oil did not follow that procedure in this case. No amount was deposited by ATP Oil with the Clerk of Court. In addition, even if ~e Court recognized a common law tender which could halt the accrual of interest, the sum m~st actually be physically tendered (i.e., actually produced) to the creditor and the tender must be tconditional. An offer to pay without actually tendering the sum due is inadequate. See Kochi arli v. Tenoso, No. 02 Civ. 4320, 2008 U.S. Dist. LEXIS 33892, at *5-9 (S.D.N.Y. 2008); Jam~iCa Sav. Bank v. Sutton, 42 A.D.2d 856,857 (2d Dep't 1973) ("A valid tender requires not only readiness and ability to perform, but actual production of the thing to be delivered ...."). There is no evidence in this record that ATP Oil actually tendered the sum to Bison Capital-rather ~han simply offering to pay it-or that the tender was unconditional. ATP Oil contends that prejUdgment interest on the third capital i ansaction should only accrue beginning on the date Bison Capital commenced this lawsuit-J uary 28, 2010-on the 2 ground that allowing interest to accrue before the filing of the litigation ould "reward" Bison Capital for "delaying" the filing of the complaint. (See Letter from Davi A. Walton to Hon. Sidney H. Stein dated June 15,2012 at 2-3.) Section 5001 of the N.Y. C.P.L.R. is pellucid that interest is to be computed from "the earliest ascertainable date the cause of action existed ...." In breach of contract cases, prejudgment interest "is awarded from the d~te of the breach ...." I Scott v. Harris Interactive, No. 10 Civ. 5005,2012 U.S. Dist. LEXIS 36839, at *54-55 (S.D.N.Y. I Mar. 19,2012); see also Valjean Mfg. v. Michael Werdiger, Inc., 05 civl 0939,2007 U.S. App. I ~eutsche Bank Trust Co. LEXIS 20475, at *3 (2d Cir. Aug. 27, 2007); Aristocrat Leisure Ltd. v. Am., 727 F. Supp. 2d 256,295-96 (S.D.N.Y. 2010) (collecting cases). ere, the Court found that A TP Oil breached the contract on September 24, 2004 and April 14, 20 5 for the second and third capital transactions, respectively. (See Findings of Fact and Concl sions of Law dated March 8, 2011 at 13-14.) In addition, the U.S. Court of Appeals for the Second Circuit ha rejected the argument that a judgment creditor should be estopped from recovering prejudgme t interest because the judgment creditor was responsible for delaying the action. See Spector . Mermelstein, 485 F .2d 474,482-483 (2d Cir. 1973). The panel in Spector emphasized that "[s ction] 5001 is mandatory and we have been referred to no case interpreting it to permit exercise 0 discretion." Id. at 482. The court explained that "[i]n post judgment situations the blame for de ay can usually be clearly fixed, e.g., where a judgment creditor refuses tendered sums or the jud ent debtor deposits such sums into court. However in prejudgment situations it would place an extremely difficult burden on the parties and on the court to allocate delay as between the and the court." Id. at 483. 3 aintiff, the defendant Accordingly, the Court finds that prejudgment interest shall accrue beginning September 24,2004 for $350,000 of the judgment amount, and shall accrue beginning April 14, 2005 for $1,300,000 of the judgment amount. The judgment will be amended acdordingly. Dated: New York, New York August 3, 2012 4

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