FACTUAL AND PROCEDURAL BACKGROUND

On September 1, 2000, plaintiff, then 45 years old, was impaled by a steel bar from his scrotum to L2 on his spinal cord resulting in paraplegia and other associated complications. The resulting Labor Law §240 case, Miraglia v. H & L Holding Corp., was tried before a jury in Supreme Court, Bronx County (the "Trial Court") bearing Index [*2]No. 25228/2000.

On February 10, 2004, the Trial Court Judge granted a directed verdict on the issue of liability in favor of plaintiff. On February 13, 2004, a verdict in favor of plaintiff was returned in the total sum of $86,735,134 ^[FN1]. After motion brought pursuant to CPLR §4404, the Trial Court Judge reduced certain aspects of the jury's verdict and entered judgment on May 4, 2005 (the "Judgment")

Defendant appealed from the Judgment and on January 9, 2007, the Appellate Division, First Department, modified the Judgment on the law by reducing "the award for future medical expenses to $8,056,222" and on the facts

"vacate[d] the award for future pain and suffering and order[ed] a new trial solely as to such damages and otherwise affirm, without costs unless plaintiff within thirty days of service of a copy of this Order with Notice of Entry stipulates to accept a reduced award for future pain and suffering in the amount of $5,000,000 and to entry of an amended Judgment in accordance therewith. Miraglia v. H & L Holding Corp., 36 AD3d 456, 828 NYS2d 329 (1st Dept., 2007), lv. app. denied, 10 NY3d 703, 883 NE2d 1010, 854 NYS2d 103 (2008)(emphasis added).

By stipulation dated January 9, 2007, plaintiff accepted the reduced award (the "Stipulation"), which Stipulation ^[FN2] set forth that "in all other respects, the jury's awards, as reflected in the underlying judgment, shall remain in full force and effect."

On October 29, 2007, following the Stipulation and in accordance with the decision of the Appellate Division, an amended judgment was entered in the office of the Bronx County Clerk (the "Amended Judgment") in the total sum of $24,131.351.75 ^[FN3] .

At the time of plaintiff's accident, the defendant in the underlying action, H & L Holding Corp. was insured under a policy of insurance issued by Essex Insurance Company ("Essex") in the amount of $1,000,000 (the "Policy").

Plaintiff commenced the instant action on March 26, 2008 pursuant to Insurance Law § 3420 to enforce a judgment obtained in the personal injury action ^[FN4]. Defendant [*3]answered the complaint and issue was joined.

In the instant action the amount Essex is obligated to pay under the Policy is in dispute. More specifically, the parties cannot agree as to the calculation of pre-judgment interest and post-judgment interest with respect to the Judgment and Amended Judgment and whether a letter sent by Essex stopped the running of post-Judgment interest as of March 10, 2008.

By letter dated February 15, 2008, plaintiff's counsel demanded Essex "pay to the plaintiff the full amount of their insurance coverage, One Million ($1,000,000.00) Dollars, plus interest" (Complaint at ¶22, emphasis added). Plaintiff claims that Essex "has refused to pay said amount" (Complaint at ¶22); Essex claims that by letter dated March 10, 2008, it "offered to pay the Plaintiff the part of the judgment that is within the applicable limit of insurance" (Answer at ¶12).

Plaintiff takes the position that pre-judgment interest ends with the entry of the Judgment on May 4, 2005 and begins the calculation of post-judgment interest from that date in the amount of the Judgment as modified by the Appellate Division.

Defendant takes the position that the pre-judgment interest ended with the entry of the Amended Judgment on October 29, 2007 and that the calculation of post-Judgment interest began with the entry of the Amended Judgment and ended with the tender of its Policy by way of the March 10, 2008 letter.

Both parties now move for summary judgment.

DISCUSSION

The issues raised in the instant motion are: (1) the proper calculation of pre-judgment interest; (2) the proper calculation of post-judgment interest; and (3) did post-judgment interest ceased to accrue upon Essex's tender of its Policy by way of its March 10, 2008 letter.

The Court will address each issue in the order it deems most logical.

I. Calculation of Interest

At the outset it is worth noting that "interest is not a penalty. Rather, it is simply the cost of having the use of another person's money for a specified period" and is "intended to indemnify successful plaintiffs for the nonpayment of what is due to them'..." Love v. State, 78 NY2d 540, 544, 583 NE2d 1296, 1298, 577 NYS2d 359, 361 (1991), quoting, Trimboli v. Scarpaci Funeral Home, 37 AD2d 386, 389, 326 NYS2d 227(2nd Dept., 1971) , and citing, Siegel, N.Y.Prac. § 411, at 623 (2d ed.). See also, Denio v. State, 7 NY3d 159, 851 NE2d 1153, 818 NYS2d 802 (2006).

The CPLR separately addresses three distinct periods for the computation of interest on a money claim: CPLR §5001 addresses interest on the claim itself until it is reduced to verdict or decision; CPLR §5002 addresses interest on the verdict or decision until judgment; and CPLR §5003 addresses interest on the judgment until the judgment is paid. Only the last two (2) categories, interest pursuant to CPLR §§ 5002 and 5003 are applicable on personal injury claims and the only statutes at issue [*4]herein ^[FN5], since interest, pursuant to CPLR §5001, providing for pre-verdict interest, is not applicable to personal injury claims which only accrue interest from verdict. See, CPLR §5001; Culpepper v. Allstate Ins. Co., 31 AD3d 490, 492, 818 NYS2d 544, 546 (2nd Dept., 2006); Gillespie v. Great Atlantic & Pac. Tea Co., 44 Misc 2d 670, 255 NYS2d 10 (NY Sup., 1964), affirmed, 26 AD2d 953, 276 NYS2d 372 (1966), modified on other grounds, 21 NY2d 823, 235 NE2d 911, 288 NYS2d 907 (1968).

CPLR § 5002 provides that "[i]nterest shall be recovered ...from the date the verdict was rendered ...to the date of entry of final judgment."

In Love v. State of New York, supra , the Court of Appeals held that, in a bifurcated personal injury action, a successful plaintiff is properly awarded prejudgment interest, not from the damages verdict, but from the date of the decision establishing liability. Id. See also, Van Nostrand v. Froehlich, 44 AD3d 54, 844 NYS2d 293 (2nd Dept., 2007); Eisenberg v. Rockland County, 19 AD3d 536, 796 NYS2d 532 (2nd Dept., 2005); Lifshits v. Variety Poly Bags, 18 AD3d 622, 795 NYS2d 657 (2nd Dept., 2005).

In the instant matter, the Trial Court Judge granted a directed verdict on the issue of liability on February 10, 2004. Accordingly, this Court holds that plaintiff is entitled to pre-judgment interest from February 10, 2004 through May 4, 2005 when the initial Judgment was entered and Essex is obligated to pay such pre-judgment interest on the portion of the Judgment/Amended Judgment awarded to plaintiff up to its Policy limit of $1,000,000.00, which is calculated as the sum of $110,466.14.

CPLR § 5003 provides that "[e]very money judgment shall bear interest from the date of its entry."

Defendant's position, i.e. that post-judgment interest should only be calculated from October 29, 2007, the date the Amended Judgment was entered, if adopted, would ignore the aspects of the Judgment left unmodified by the Appellate Court ^[FN6]. Such an outcome would deprive plaintiff of his right to be indemnified for the use of his money from the date of the judgment. See, Love v. State, supra .

Furthermore, contrary to the defendant's assertions, the Appellate Court did not vacate the Judgment. It conditioned vacating the award as to future pain and suffering unless plaintiff within thirty days of service of a copy of the Appellate Court's Order with Notice of Entry stipulated "to accept a reduced award for future pain and suffering in the amount of $5,000,000 and to entry of an amended Judgment in accordance therewith". [*5]Miraglia v. H & L Holding Corp., 36 AD3d 456, 828 NYS2d 329 (1st Dept., 2007), lv. app. denied, 10 NY3d 703, 883 NE2d 1010, 854 NYS2d 103 (2008). Plaintiff so stipulated, therefore the Judgment was never vacated.

Based on the foregoing this Court holds that the date post-judgment interest began to accrue was May 4, 2005, the date the Judgment was entered. See generally, Denio v. State, supra . See also, Pellegrino v. State, 133 Misc 2d 888, 508 NYS2d 847 (N.Y.Ct.Cl., 1986), affirmed, 139 AD2d 502, 526 NYS2d 799 (2nd Dept., 1988)[In event of appeal or amendment to a judgment, interest on the money judgment runs from date of entry of original judgment and continues until judgment is satisfied.] The Court will address the amounts against which Post-Judgment interest is calculated below.

II. How Post-Judgment Interest is Calculated

The parties agree that to determine the amount which Essex shall be liable for post-judgment interest depends on the language of its Policy.

The language to be examined is as follows:

SUPPLEMENTARY PAYMENTS- COVERAGES A AND B

We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: ...

6. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer.

7. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. (Policy at Page 6. Reference to "Paragraph 6" and/or "Paragraph 7" for the remainder of this Decision and Order shall refer to these paragraphs.)

It is well settled that the interpretation of unambiguous provisions of an insurance contract is a question of law for the court. Vigilant Ins. Co. v. Bear Stearns Companies, Inc., 10 NY3d 170, 884 NE2d 1044, 855 NYS2d 45 (2008). Whether or not a writing is ambiguous is a question of law to be resolved by the courts. W.W.W. Associates, Inc., v. Giancontieri, 77 NY2d 157, 162, 566 NE2d 639 (1990). "The test for determining whether contract language is ambiguous is whether the agreement on its face is reasonably susceptible of more than one interpretation' ". McCabe v. Witteveen, 34 AD3d 652, 654, 825 NYS2d 499, 501 (2nd Dept., 2006), quoting, Chimart Assoc. v. Paul, 66 NY2d 570, 573, 498 NYS2d 344, 489 NE2d 231(1986).

The "courts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies." State v. Home Indem. Co., 66 NY2d 669, 671, 486 NE2d 827, 829, 495 NYS2d 969, 970 (1985). Accordingly, a court "should not, under the guise of contract interpretation, imply a term which the parties themselves failed to insert' or otherwise rewrite the [*6]contract". Lui v. Park Ridge at Terryville Assn., 196 AD2d 579, 581, 601 NYS2d 496 (2nd Dept., 1993), quoting, Mitchell v. Mitchell, 82 AD2d 849, 440 NYS2d 54(2nd Dept., 1981). "If, however, the language in the insurance contract is ambiguous and susceptible of two reasonable interpretations, the parties may submit extrinsic evidence as an aid in construction, and the resolution of the ambiguity is for the trier of fact." State v. Home Indem. Co., 66 NY2d at 671, 486 NE2d at 829, 495 NYS2d at 971.

In the instant matter, the parties agree that Paragraph 6 obligates Essex to pay pre-judgment interest on its portion of the Judgment/Amended Judgment awarded up to its Policy limit of $1,000,000.00.

The parties do not agree on the interpretation of Paragraph 7. Plaintiff claims that Paragraph 7 obligates Essex to pay post-judgment interest on the amounts awarded in the Amended Judgment, broken down into two (2) distinct time periods, (1) on the sum of $18,097,112.15 (the principal amount which is contained in the Amended Judgment) from May 4, 2005 through October 29, 2007, and (2) from October 29, 2007 thereafter on the total Amended Judgment of $24,131,351.75. Conversely, defendant Essex contends that the same language only obligates it to pay post-judgment interest from October 29, 2007 through March 10, 2008, the date of its "unconditional tender" and further asserts that its obligation is limited to the principal amount of the Amended Judgment, $18,087,112.15, and does not include interest and costs.

Despite interpretations of Paragraph 7 offered by the parties that are wholly different, neither party here claims that Paragraph 7 is ambiguous. This Court agrees that Paragraph 7 is not ambiguous and, as discussed below, finds the plain language of Paragraph 7 requires Essex to pay post-judgment interest on the full amount of the Amended Judgment ^[FN7], from May 4, 2005 through March 10, 2008.

III. Determination of Amount Upon Which

Post-Judgment Interest Is To Be Calculated

The Court of Appeals has held that an "insurer is only liable for interest on that portion of the judgment it must pay up to the policy limits, unless the contract of insurance contains a more generous provision". Dingle v. Prudential Property and Cas. Ins. Co., 85 NY2d 657, 658, 651 NE2d 883, 883-884, 628 NYS2d 15, 15 - 16 (1995)^[FN8](emphasis supplied); see also, Fama v. Metropolitan Property & Casualty Ins. [*7]Co., 242 AD2d 663, 662 NYS2d 784 (2nd Dept., 1997).

In Dingle v. Prudential Property and Cas. Ins. Co., the Court of Appeals held that the insurer was only obligated to pay interest on the portion of the judgment up to its policy limits. The court found that the contract of insurance at issue, did not contain a more "generous" provision. The Dingle Court held that language which comported with the mandatory minimum language of Insurance Regulation 11 NYCRR 60-1.1 ^[FN9], and which the Court stated "substantially incorporates language which has long been embodied in contracts of insurance", would be given "the customary construction given to that standard contract clause". The Court held that such "standard contract clause" language limits the insurer's responsibility "to the payment of interest on the sum it is obligated to pay up to the policy limits". Dingle v. Prudential Property and Cas. Ins. Co., 85 NY2d at 661, 651 NE2d at 885, 628 NYS2d at 17, citing, Home Indem. Co. v. Corie, 206 Misc. 720, 134 NYS2d 443 (Sup. Ct. NY Cty, 1954), affd. without op., 286 A.D. 996, 144 NYS2d 712(1st Dept., 1955); Holubetz v. National Fire Ins. Co., 13 AD2d 228, 215 NYS2d 986 3rd Dept., 1961); Shnarch v. Empire Mut. Ins. Co., 144 AD2d 795, 535 NYS2d 180 3rd Dept., 1988); 71 N.Y.Jur.2d, Insurance, § 1778, at 161-162.

A comparison of the language employed by Essex in Paragraph 7 of its Policy to the language contained in Insurance Regulation 11 NYCRR 60-1.1, reveals that Paragraph 7 contains a more generous provision than that contained in the Insurance Regulation. To wit, 11 NYCRR 60-1.1 provides that with respect to automobile insurance policies, the insurer shall:

defend any suit, with the right to make such investigation, negotiation and settlement as it deems expedient; pay all premiums on attachment bonds and appeal bonds; pay all expenses incurred by the company, all costs taxed against the insured in any such suit, and all interest accruing after entry of judgment until the insurer has paid or tendered or deposited in court such part of such judgment as does not exceed the applicable policy limits; pay expenses incurred by the insured for first aid to others at the time of accident; and reimburse the insured for reasonable expenses other than loss of earnings, incurred at the company's request. The amounts so incurred under this subdivision, except settlement of claims and suits, shall be payable by the company in addition to the applicable policy limits. 11 NYCRR 60-1.1(b)(emphasis supplied).

While this emphasized language may mirror some of the language contained in Paragraph 7, the language utilized in Paragraph 7 goes further. It begins as follows: "All interest on the full amount of any judgment that accrues after entry of the [*8]judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance." But for this emphasized language, the language in Paragraph 7 is virtually identical to the "language which has long been embodied in contracts of insurance" which the Court of Appeals referred to as the "standard contract clause". Id. With the incorporation of the emphasized language, Essex has obligated itself to more.

In this respect, it should be noted here that the Court of Appeals stated in its decision that the insurer in Dingle, "agreed by contract provision to pay interest on the entire judgment from the date of the damages verdict to the date it tenders payment-an undertaking that is more generous than that required by 11 NYCRR 60-1.1(b)." Id. at fn 2. The exact words of the provision in the insurer's policy in Dingle was the following:

After the case is decided, we'll pay the amount which the court decides you or anyone else is responsible for, up to the maximum amount shown for this part on the Declarations Page. We'll pay all interest on the amount for which the court judges you or any other insured responsible that builds up between the time the court decides the amount and the time we pay the amount which we're obliged to pay. (As noted in the Appellate Brief for the Defendant-Respondent, 1995 WL 17051760)

Based on the foregoing, this Court holds that Essex is obligated to pay interest on the full amount of the Amended Judgment, including interest and costs, without regard to its Policy limit of $1,000,000.00, from May 4, 2005.

The final issue to be determined is when and if post-judgment interest has ceased to accrue and its final calculation.

IV. The March 10, 2008 Letter

To determine whether or not Essex continues to be liable for post-judgment interest, or whether such interest has already ceased to accrue, the language of Essex's Policy is again the proper starting point. The Policy, at Paragraph 7 provides that Essex will pay post-judgment interest that accumulates "after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance."

Essex takes the position that by its March 10, 2008 letter it unconditionally "offered to pay" and thus interest ceased to accrue on that date. Plaintiff takes the position that the March 10, 2008 was conditional and therefore interest continues to accrue to date. For the reasons set forth below, this Court holds that Essex did unconditionally offer to pay its Policy via its March 10, 2008 letter.

The March 10, 2008 letter reads as follows:

Essex Insurance Company hereby unconditionally tenders its one million dollars limits ($1,000,000.00) in payment of the final judgment entered in October. Essex Insurance Company is willing to pay the one million dollars immediately and unconditionally, and litigate at a later date the outstanding interest owed; or, alternatively, Essex Insurance Company is willing to pay the one million dollars immediately plus $927,349.13 in interest which has accrued to this date since the final Judgment was rendered in October 2007 with the understanding and agreement that such payment of $1,927,349.13 satisfies Essex Insurance Company's obligation to pay the Judgment [*9]obtained by Mr. Miraglia against H & L Holding Corp.

The $1,927,349.13 payment is calculated as follows:

Essex policy limits:$1,000,000.00

Interest on the policy limits:(2-13-04 to 10-29-07)$333,863.01

Post-judgment interest:(10-29-07 to 3-10-08)$593,486.12

Total:$1,927,349.13

Defendant argues that via the March 10, 2008 letter it "explicitly and unequivocally issued to Plaintiff a tender offer of its $1Million ($1,000,000.00) policy limits". Defendant claims that its language with regard to the interest "does not in any way affect (sic) the unconditional statement at the outset of the letter". Essex further contends that to be considered a "conditional" offer Essex would have had to request plaintiff relinquish a "legal right", "waiver of right to appeal" (citing, Cohen v. Transcontinental Ins. Co., 262 AD2d 189, 693 NYS2d 529 [1st Dept., 1999]) or fail to tender "the amount in dispute, not interest"(citing, Cardella v. Giancola, 297 AD2d 618, 747 NYS2d 31[2nd Dept., 2002]).

Plaintiff disagrees and argues that the March 10, 2008 letter was a conditional offer to pay. Plaintiff's argument is based on Essex's objection to paying interest on the entire Amended Judgment. Plaintiff claims that Essex's obligation to pay post-judgment interest on the Amended Judgment continues to accrue until Essex has paid the Amended Judgment, including all interest accrued up to the moment payment is actually made.

This Court holds that plaintiff's argument runs counter to the clear provisions of Paragraph 7 of the Policy that the obligation to pay interest ends when Essex offers to pay "the part of the judgment that is within the applicable limit of insurance". Such an interpretation of the Policy would fail to "give force and effect to all of its provisions." Pilsener Bottling Co., Inc. v. Sunset Park Indus. Associates, 201 AD2d 548, 549, 607 NYS2d 961, 962 (2nd Dept., 1994). See also, Muzak Corp. v. Hotel Taft Corp., 1 NY2d 42, 46, 150 NYS2d 171, 174, 133 NE2d 688, 690(1956)["The rules of construction of contracts require us to adopt an interpretation which gives meaning to every provision of a contract or, in the negative, no provision of a contract should be left without force and effect."]; Woodson v. American Transit Ins. Co., 281 AD2d 282, 722 NYS2d 138 (1st Dept., 2001)[Insurer's obligation to pay post-judgment interest on a judgment ceased when insurer paid the part of the judgment that is within the insurer's limit of insurance not when all the interest was paid.]

Contrary to plaintiff's argument, the Policy unambiguously provides that the obligation to pay post-judgment interest terminates once Essex has "offered to pay... the part of the judgment that is within the applicable limit of insurance". (See Paragraph 7.) The March 10, 2008 letter does exactly that ^[FN10]. [*10]

On account of the foregoing, post-judgment interest ceased to accrue on March 10, 2008.

Based on all the foregoing, plaintiff's motion for summary judgment is partially GRANTED, and partially DENIED ^[FN11]; the cross-motion for summary judgment, is partially GRANTED, to the extent that post-judgment interest ceased to accrue on March 10, 2008, but is otherwise DENIED in all respects.

To summarize,

(1) Pre-judgment interest accrued from verdict on February 10, 2004 through May 4, 2005, the date the initial Judgment was entered and Essex is obligated to pay such pre-judgment interest on the portion of the Judgment/Amended Judgment awarded to plaintiff up to its Policy limit of $1,000,000.00, said interest totals $110,466.14;

(2) Post-judgment interest began to accrue on May 4, 2005, the date the initial Judgment was entered;

(3) Post-judgment interest ceased to accrue on March 10, 2008, the date Essex sent its letter offering to pay $1,000,000 under the terms of its Policy; and

(4) Post-judgment interest in the amount of 9% per annum is calculated on the sum of $20,116,825.60 ^[FN12] from May 4, 2005 through March 10, 2008. The amount of post-judgment interest is $4,995,032.17. [*11]

To recap, plaintiff is awarded:

A.the sum of $1,000,000.00, plus

B.pre-judgment interest of $110,466.14, plus

C.post-judgment interest of $4,995,032.17, together with costs and disbursements.

Thus, plaintiff may submit a judgment to the office of the Orange County Clerk for entry, in the principal sum of $6,105,498.31, together with $1,210.00 in costs for a total of $6,106,708.31.

Any arguments raised in the motion papers, but not specifically addressed herein are denied.

The foregoing shall constitute the decision, order and judgment of the Court.

Dated: Goshen, New York

July 23, 2008

Hon. William J. Giacomo, J.S.C.

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