Lindsay Grobman v. Rhonda Chernoff
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
----------------------------------------------------------------No. 197
Lindsay Grobman,
Respondent,
v.
Rhonda Chernoff, et al.,
Defendants,
Rhonda Globman, &c., et al.,
Appellants.
Dominic P. Zafonte, for appellants.
Alexander J. Wulwick, for respondent.
READ, J.:
In August 1996, plaintiff Lindsay Grobman was injured
in a car accident; at the time, she was traveling as a passenger
in car driven by defendant Adam J. Chernoff and owned by
defendant Rhonda Globman (a/k/a Rhoda Grobman).
A bifurcated
trial was held in plaintiff's ensuing lawsuit.
In June 2000, a
jury found defendants 100% at fault in the happening of the
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No. 197
The next month, a jury found that plaintiff had
suffered a serious injury; namely, "permanent consequential
limitation of use of a body organ or member" (see Insurance Law §
5102 [d]), and awarded her damages for future medical expenses,
but not for future pain and suffering.
Supreme Court entered
judgment for plaintiff in the amount of $10,000 in August 2001.
This sum included $1,100 for past pain and suffering and $8,900
for future medical expenses.
Plaintiff appealed.
The Appellate Division concluded
that the jury's "failure to award any damages for future pain and
suffering [could not] be reconciled with the finding of permanent
injury," and remitted the matter to Supreme Court for a new trial
on the issue of damages (Ajoudanpour v Grobman, 2 AD3d 373 [2d
Dept 2003]).
On remand, Supreme Court granted defendants' motion to
compel arbitration on all issues, including the threshold issue
as to whether plaintiff suffered serious injury.
Plaintiff
appealed again, and the Appellate Division reversed.
The court
concluded that the jury's determination that plaintiff had
sustained serious injury within the meaning of New York's nofault statute, which neither party challenged in the first
appeal, was a final and binding determination that could not be
relitigated in arbitration (Grobman v Chernoff, 35 AD3d 658, 659
[2d Dept 2006]).
The case then returned to arbitration solely on the
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The parties agreed to high/low parameters of
$150,000 and $10,000; that "any and all pending litigation
arising from this action shall be discontinued with prejudice
upon the determination of this matter"; and that damages were at
issue.
After a hearing, the arbitrator awarded plaintiff a "net
amount award" of $125,000.
The arbitrator's decision did not
mention interest.
Plaintiff subsequently moved and defendants cross moved
to confirm the arbitration award and enter judgment.
While these
motions were pending, defendants' insurance carrier tendered a
check for $125,000 as "full and final settlement."
Plaintiff
retained this check, but did not cash it.
In a decision in August 2008 disposing of the motions,
Supreme Court noted that the "principal issue" contested by the
parties was "whether plaintiff [was] entitled to interest on the
arbitration award computed from the date of the jury verdict in
her favor on the issue of liability," or, alternatively, "from
the date of the arbitration award."
The judge added that "[t]he
decision of the arbitrator does not allude to the subject and
neither side contends that the question was presented to the
arbitrator."
Supreme Court confirmed the award in the amount of
$125,000, "with interest . . . at the judgment rate from the date
of the award with credit to be given to defendants for the
payment tendered, computed from the date of receipt of the
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No. 197
The judge acknowledged that "[i]n general," where a
plaintiff has obtained a favorable jury verdict on liability,
"interest on a judgment ultimately entered in a motor vehicle
accident case begins to run from the date of . . . the jury's
verdict"; however, he added, the usual rule did not govern this
case "because the parties agreed to submit the entire dispute to
arbitration."
Plaintiff appealed to the Appellate Division for a
third time.
As relevant here, the court held that plaintiff was
entitled to interest on the damages award from the date the jury
found defendants liable, citing our decision in Love v State of
New York (78 NY2d 540 [1991]) (63 AD3d 786 [2d Dept 2009]).
We
granted defendants' motion for leave to appeal (13 NY3d 714), and
now affirm.
Defendants argue that the parties' arbitration
agreement includes a "broad arbitration clause," which empowered
the arbitrator to decide the entire controversy, including the
amount of any prejudgment interest.
While the parties in this
case were free to submit the issue of prejudgment interest to the
arbitrator, we do not read their arbitration agreement as having
done this.
As relevant, the agreement says merely "AT ISSUE:
Damages" and, as we pointed out in Love, damages and prejudgment
interest are not the same thing.
Damages compensate plaintiffs
in money for their losses, while prejudgment interest "is simply
the cost of having the use of another person's money for a
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No. 197
specified period" (Love, 78 NY2d at 544 [citing Siegel, NY Prac §
411, at 623 [2d ed]).
Further, as plaintiff observes, there was
"no necessity to negotiate whether plaintiff was entitled to
interest" as a part of the arbitration agreement because "she
already possessed that right as a matter of law as of the date of
her liability verdict."
Finally, there are no circumstances in
this case indicating that plaintiff gave up that right when she
agreed to arbitrate damages (cf. Rice v Valentine, 75 AD3d 631
[2d Dept 2010]).
Accordingly, the order of the Appellate Division should
be affirmed, with costs.
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Order affirmed, with costs. Opinion by Judge Read. Chief Judge
Lippman and Judges Ciparick, Graffeo, Smith, Pigott and Jones
concur.
Decided November 30, 2010
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