Alphabet Soup Assoc. v Genco Importing, Inc.

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Alphabet Soup Assoc. v Genco Importing, Inc. 2021 NY Slip Op 32643(U) December 10, 2021 Supreme Court, New York County Docket Number: Index No. 652617/2019 Judge: Lucy Billings Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 41 --------------------------- ----------x ALPHABET SOUP. ASSOCIATES, Index No. 652617/2019 Plaintiff DECISION AND ORDER -against- ( GENCO IMPORTING, INC., STEVEN VAN ZANDT, and MARK SUALL, Defendants -------------~----------------------- -x LUCY BILLINGS, J.S.C.: I. INTEREST ON THE RENT, LATE FEES. AND USE AND OCCUPANCY FEES The court grants plaintiff landlord's motion to amend the judgment awarded to plaintiff against defendant Van Zandt, as the guarantor of plaintiff's tenant Genco Importing, Inc., in the order dated September 10, 2021°,' to set forth accurately the period for which the court intended to award interest. §§ 2221(d) (2), 5019(a). C.P.L.R. The court awards $284,600.16 in rent, late fees, and use and occupancy fees, with interest at 9% per year from the appro~imate midpoint of the period for which that rent and those fees were due. The court's order (Kennedy, J.) dated March 11, 2020, granting plaintiff's motion for summary judgment on Van Zandt's liability,· did not set a date from which interest was to run, nor expressly incorporate the proceedings on the record on that date. That order did, however, decide plaintiff's motion "in accordance alphabetsoupl221 1 2 of 8 [* 2] I - INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 with the Court's oral decision held on the record of March 11, 2020." NYSCEF No. 26 at 1. In that oral decision the court determined that "interest will run from July 1st, 2018." NYSCEF - No. 55 at 12. Although plaintiff now insists that July 1, 2018, was the midpoint of the period for which rent was due~ the record demonstrates that this date was the' first default in payment of rent or fees for which plaintiff sought a judgment and that on M~rch 11, 2020, plaintiff asked "for an intermediate date between the first default and the date as of which I judgment." Id. at 10. [plaintiff] seek As the court and Van Zandt pointed out, "In the complaint you [plaintiff] indicate that the default started in July 2018." Id. at 5. See id. at 7. Referring to plaintiff's rent ledger in support of its motion, the court then asked plaintiff "so why is it that you are see-k_ing an amount from 2015 that isn't even addressed ?" "We're not seeking from 2015 . we just printed out the Plaintiff responded: whole ledger because that's the business record. 2016, 2017 . date alleged." . But 2015, the rent was being paid and 2018, up until the Id. at 5-6. Thus, in accordance with the court's decision on the record March 11, 2020, ~interest runs on the first default from July 1, 2018. See People v. Cummings, 31 N.Y.3d 204, 208 v. Evans, 94 N.Y.2d 499, 503-504 alphabetsoup1221 \ (2018); People (2000); Matter of Part 60 RMBS 2 3 of 8 [* 3] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 Put-Back Litig~, 195 A.D.3d 40, 47 (1st Dep't 2021); Asp~n , Spe6ialty ~ns. Co. v. RLI Ins. Co., Inc., 194 A.D.3d 206; 212 (1st Dep't 2021). Yet plaintiff sought, and the court awarded a judgment for rent, late fees, and use arid occupancy fees up to plaintiff's recovery of its rental premises August 11, 2021. Interest 'runs on each monthly default from the date of the default: the date plaint~ff ipcurred the expense. Thus, for example, interest o~ the final default runs from the ~ate payment was d~e August 1, 2021, not from July 1, 2018. As plaintiff acknowledges, "Interest shall.be computed from the earlies~ ascertainable ?ate the cause of action existed, except that interest upon damages .incurred shall be computed from the date incurred." \ . C.P.L.R. § 500l(b) (emphasis added). Interest is not computed, as plaintiff now seeks, from a date before the date plaint,tff incurred the expense. • Then, "wh~.r:-e such damages were incurr.ed at various times, interest shall be computed upon each item from the date it w~s incurred ~r upon all of the damages from a single reasonable intermediate date." Id. See Trumbull Egui ties. LLC v·. Mt. Hawley ! Ins. Co.; 191 A.D.3d 587, 587 (1st Dep't 2021). Thus,. when the court selects an intermediate date, the court accounts for interest on the first default from the date that expense was incurred, July 1, 2018, because the court awards interest on the last default from the intermediate date rather than from August alphabetsoup1221 3 4 of 8 [* 4] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 1, 2021. _Accounting for the tenant Genco Importing' s payment of rent and other charges during August through October 2018, the a·pproximate midpoint in the period for which rent was owed ) between July 1, 2018, and August 11, 2021, is March 6~ 2020. Therefore the court ~wards $284,600.16 in ~ent, late fees, and use ~nd occupancy fees, with interest at 9% per year from ~arch 6, 2020. II. INTEREST ON ATTORNEYS' FEES AND EXPENSES The court also grants plaintiff's motion to amend the judgment awarded to plaintiff against Van Zandt in the order dated September 10, 2021, to award prejudgment interest on the $160,370.26 in attor~eys' fees and expenses awarded, C.P.L.R. §§ 2221 (d) (2), 5019 (a), because these £ees and. expenses were part of plaintiff's damages for its breach of contract claim. 5b01(a). C.P.L;R.· § Although the court's order (Kennedy, J.) dist£nguished between the amounts due to plaintiff from Van Zandt "with respect fo the written guaranty" and "with respect to plaintiff's claim of reasonable attorneys' fees" and did not award prejudgment interest on t~e attorneys' fees, the court did grant plaintiff summary judgment "as to liability. on plaintiff's second cause of action.;' That cause of action for NYSCEF No. 26 at 1. breach of Van Zandt's guaranty encompassed plaintiff's claim for attorneys' fees. alphabetsoupl22 l 4 5 of 8 [* 5] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 • The court left the determination of "reasonable attorneys' fees" until after a further hearing. Ordinarily, when the court fees to be awarded, does not rule on the amount of attorneys' interest does not run until the court awards a judgment for the reasonable amount, as the cou~t did here in its order dated September 10, 2021. 546-552 W. 146th St. LLC v. Arfa, 117, 123 (1st Dep't 2012); Ficus Invs., N.gL, 71 A.D.3d 591, 592 Inc. v. (1st Dep't 2010). 99 A.D.3d Private Capital Nevertheless, C.P.L.R. § 5001 mandates an award of prejudgment interest to the prevailing party in actions for breach of a contract . • 'Addario & Co., (2012); Feuer v. Inc. v. Embassy Indus., Inc., 20 N.Y.3d 113, 117 Feuer, 178 A.D.3d 423, 415 (1st Dep't 2019); Mark Family Realty v. Sanko, 176 A.D.3d 481, 482 (1st Dep~t 2019); Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., A.D.3d 413, 414 (1st Dep't 2007). .J_._ Inc., 45 Where the attorneys' fees are recoverable based on breach of a contract, the date when interest begins to accrue is when the court finally determines thJ party seeking the fees to be the prevailing party. Freeman, 195 A.D.3d 560, 560-61 Ouadracci v. (1st Dep't 2021); 1199 Hous. Corp. v. Jimco Restoration Corp., 77 A.D.3d 502, 502-503 Dep't 2010). (1st While often the date when the court finally determines a party's entitlement to fees is toward the end of when the party has incurred them, here the court determined plaintiff to be the prevailing party on its breach of contract alphabetsoupl221 5 6 of 8 [* 6] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 ;;- RECEIVED NYSCEF: 12/13/2021 • claim March .11,· ·2020, but,' as plaintiff acknowledges, it incurred more fees after that-date than before. ,,Thus, again, not all interest on all the attorneys' fees and expenses awarded runs from that date;. "only 'calculation' should begin from that date." Tang~ri 43 ·A.D.3d 691, . the Solow Mgt. Corp. v. 691 (1st Dep't 2007). Since plaintiff incurre6 the fees and expenses at various times, through August 18, 2021, in~erest runs.from March 11, 2020, only Dn the attorneys' fees and expenses incurred·through March 11, 2020: $53,451.77. Plaintiff sought, and the court awarded a judgme~t for attorneys' fees th~ough August 20, 2021. Interest runs on· each increment of fees and expenses from the date plaintiff 'incurred the fees or expenses. Thus, for exar::npl~, interest on the·attorne~s' fees ·1ncurred August 20, 2021, runs from that date, not March 11, 2020. C.P.L.R. § 500l(b). Interest is not computed, as plaintiff seeks, from a date before the date plaintiff incurred the fees or expenses. Consequently, the court also may select a reasonable intermediate date from which interest is to run on the balance of the att6rneys' fees and expenses, $106,918.49, incurred between March 11, 2020, and August 20, 2021. 43 A.D.3d at 691. Solow Mat. Corp. v. Tanger, Since most of the attorneys' fees ~nd eipenses incurred after March 11, 2020, were between May 2 and August 20, 2021, a reasonable intermediate date is June 1, 2021. alphabetsoup1221 6 7 of 8 Therefore [* 7] INDEX NO. 652617/2019 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 12/13/2021 the court; awards·· $1·60 ;·370~ 2 6 in at_torneys' · fees and expenses, with_ intere~t at 9% .per year on $53,451.77 from March 11, 2020, and on $106,918.49 from June 1, 2021". III. CONCLUSION In sum, the court grants plaintiff's motion to amend.the orde~ dated September 10, 2021, granting a judgment to plaintiff against defendant ~an Zandt, to award a judgment for: (1) $284!600.16 in rent, late fees, and use and occupancy fees, with interest at 9%. per year from March 6, 2020, the approximate midpoint in the period for which rent was owed, and (2) $160,370.26 in attorneys' fees and expenses, with interest at 9% per year on $53,451.77 from Marc·h 11,. 2020, and on $106,918.49 from June 1, 2021, the approximate midpoint in the period after March 11, 2020, when the fees and expenses were incurred: C. P. L. R. §§ 2221 (d) ( 2) , 5019 (a) . The court denies plaintiff's motion to the extent ,that plaintiff seeks interest from an earlier date. DATED: December 10, 2021 LUCY BILLINGS, J.S.C. LUCY BLUNSS J.S.C alphabetsoup1221 7 8 of 8

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