The following papers numbered 1-3 were read and considered by the Court on claimant's [*2]motion for an order directing the State to pay pre-judgment interest from the date of Mark Hayo's death until re-entry of judgment:

Notice of Motion to Confirm the State's Pre-judgment Interest Obligations, Affirmation of Scott J. Koplik, Esq. in Support of Motion to Confirm the State's Pre-judgment Interest Obligations Pursuant to CPLR 5002 with Exhibits 1

Affirmation of J. Gardner Ryan, Assistant Attorney General 2

Reply Affirmation of Scott J. Koplik, Esq. in Further Support of Motion to Confirm the State's Pre-judgment Interest Obligations 3

Filed Paper: Stipulated Order to Vacate and Reenter 50-B Judgment (filed February 29, 2024)

The instant claim was filed on March 27, 2012 by Mark Hayo (hereinafter Hayo) against the State of New York alleging that, as a result of the State's negligence, he sustained serious personal injuries when he was struck on the head by falling ice on the State's premises.

By Decision filed on March 10, 2016 (Hayo v State of New York, Ct Cl, Feb. 11, 2016, Scuccimarra, J., claim No. 121086), the State was found liable for 50% of Hayo's damages for its negligence in failing to address a known, dangerous ice condition. By Decision filed on January 29, 2020 (Hayo v State of New York, UID No. 2019-029-100 [Ct Cl, Mignano, J., Dec. 23, 2019]), claimant was awarded damages totaling $1,791,851.82, with interest from the February 11, 2016 liability decision. Unfortunately, Hayo died on May 19, 2021, before the judgment was entered. Citing CPLR 5002, Oshrie Zak, Esq., the Limited Administrator of Hayo's estate (the Administrator), moves for an order directing the State to pay pre-judgment interest from the date of Hayo's death until re-entry of judgment. For the reasons that follow, the motion is granted.

Hayo was injured in January 2011 when a piece of ice fell off the roof of a building at Bedford Hills Correctional Facility and struck him on his head. Hayo both worked at Bedford Hills and lived there in an employee residence. Following a trial on the issue of liability held before the Honorable Thomas H. Scuccimarra, the Court found that the State was "partially responsible for the failure to adequately address a known dangerous condition, resulting in [Hayo's] injury" (see Ex. B, p 9).^[FN1] The Court concluded that the State was "50% liable for any harm suffered by [Hayo] as a result of its negligent failure to adequately address [the] known, dangerous, ice condition" and directed that an "interlocutory judgment on the issue of liability" be entered (id. at 11).

Following proceedings not directly relevant here, a damages trial was held before the Honorable Stephen J. Mignano on April 23 through April 25, 2019. The Court found that Hayo was "entitled to damages in the total amount of $3,583,703.63, reduced by 50% pursuant to the prior liability decision, for a total amount of $1,791,851.82" (Hayo, UID No. 2019-029-100; Ex. A at p 18). The Court concluded that Hayo "sustained permanent spinal and traumatic brain injuries resulting from his being struck in the head by falling ice" (Ex. A at 12). The Court awarded Hayo damages for his past and future economic loss, for his past and future pain and suffering, and to reimburse his medical liens (see id. at 18). The Court further ordered that the [*3]State pay pre-judgment "interest from February 11, 2016, the date of the Court's decision establishing liability" (id. at 19). Because "the amount of future damages exceed[ed] $250,000, a structured judgment [was] required pursuant to CPLR 5041 (e)" (id.). The Court therefore directed the Clerk "to stay entry of judgment . . . until a hearing [was] held pursuant to CPLR [a]rticle 50-B" (id.).

The parties executed a stipulated order directing an article 50-B judgment, which was so-ordered by the Honorable Stephen J. Mignano on May 12, 2021 and filed on May 13, 2021 (Ex. H). In accordance with CPLR article 50-B, the parties agreed to the method by which (1) the State would pay the damages to Hayo (see id. at 2-7) and (2) pre-judgment and post-judgment interest would be calculated (see id. at 7). Pre-judgment interest was to "accrue from the signature date of the liability decision, February 11, 2016, to the date of entry of judgment at the rate of 9.00% per annum" in accordance with CPLR 5004 (id.; see also id. at 8-11). Post-judgment interest was to "be paid at the rate of 9% per annum from the date of entry of judgment to" (1) "the date the annuity to fund the aforementioned periodic payments is purchased" and (2) "the date all lump sum payments are paid" (id. at 11). Further, the stipulated order provided that upon Hayo's death, "any payments described as guaranteed" in certain paragraphs of the order, "shall be paid according to" CPLR 5045 (id. at 7). The Court directed the Clerk "to enter judgment as ordered" therein (id. at 13).

Unfortunately, Hayo died days later, on May 19, 2021, before the judgment was entered. The Clerk entered judgment in Hayo's favor on May 26, 2021 (see Ex. I). The judgment awarded pre-judgment interest at the rate of 9.00% "per annum from February 11, 2016, the date of the liability determination to May 26, 2021, the date of entry of judgment herein, to wit: the sum of $846,178.51" (id. at 4). The judgment directed the State to pay post-judgment interest in accordance with the agreed upon terms in the so-ordered stipulated order (see id. at 5).

The Administrator was appointed to represent Hayo's estate in this Claim on December 14, 2021. Following unsuccessful attempts to resolve outstanding issues, the Administrator filed a motion in July 2023 to (1) modify the May 2021 judgment pursuant to CPLR 5045; (2) substitute himself as the Claimant; and (3) amend the caption to reflect that substitution. The State cross-moved (1) to vacate the May 2021 stipulated order directing an article 50-B judgment and the May 2021 judgment; and (2) for an order directing a hearing under CPLR article 50-B or the submission of a stipulation consenting to a corrected judgment.

Ultimately, in December 2023, the parties agreed to resolve the motion and cross-motion via a Stipulated Order to Vacate and Reenter 50-B judgment. This Court so-ordered the stipulation on January 4, 2024 and it was filed on February 29, 2024 (see Stipulated Order; Ex. C). Therein, the parties resolved "all controverted issues presented in the [m]otion and [c]ross-[m]otion except whether [the State] is obligated to pay" and the Administrator "is entitled to receive interest from the period of . . . Hayo's death on May 19, 2021 to the date of judgment to be entered as set forth" in the stipulated order (id. at 3).

As relevant here, the parties agreed that the May 2021 judgment—and the underlying May 2021 so-ordered stipulated order—will be "vacated and pursuant to this stipulation a judgment shall be entered" (id.; see id. at 13). The parties further agreed that pre-judgment "interest shall be payable to" the Administrator "from the date of the liability verdict on February 11, 2016, to the date of . . . Hayo's death on May 19, 2021, at the rate of 9.00% per annum" (id. at [*4]7). Further, post-judgment interest "shall be payable to" the Administrator "from the date of re-entry of judgment as set forth herein to the date all payments are paid and the judgment is fully satisfied at the rate of 9.00% per annum" (id.; see id. at 12). As noted, the parties left unresolved whether pre-judgment "interest shall be payable" to the Administrator "for the period from . . . Hayo's death on May 19, 2021 to the date of re-entry of judgment" (id. at 8; see id. at 9-12).

Citing CPLR 5002, the Administrator now moves to confirm that the State's "prejudgment interest obligations include interest accrued from . . . Hayo's death on May 19, 2021 through reentry of judgment in this matter" (Notice of Motion, p 1). The Administrator argues that "Hayo's untimely death does not alter the indisputable fact that" the State has possessed "Hayo's money—and now his estate and family's money—since February 11, 2016" (Aff. in Supp, p 16, ¶ 44). The Administrator maintains that the estate is entitled to compensation for the State's "continued possession and use of [its] money" (id., ¶ 45).

In opposition, the State concedes that the May 2021 judgment "needed to be vacated" (Ryan Affirm., p 6, ¶ 11). The State contends, however, that it is "not obligated to pay statutory interest on the initial judgment over the period that the action was stayed pending substitution and the resettlement of the judgment" (id. at 7, ¶ 13). The State says that "however flawed" the May 2021 judgment was, it "was entered and by that entry any statutory entitlement to" pre-judgment interest pursuant to CPLR 5002 ended (id., ¶ 14). The State argues that it "should not [be] penalize[d] . . . for failing to do acts that it was prohibited at law from doing" (id. at 10, ¶ 19). The State "could not tender or pay the judgment, correct it, appeal it or deposit it solely because" Hayo "was dead and there was no one before the court appearing to act on his behalf" (id.). "Under these circumstances, the interest accruing on the initial judgment before the [Administrator's] appearance is a clear windfall" (id.). The State, therefore, requests a "resettled judgment that excludes the accrual of interest between the date of" Hayo's death "and the entry of the resettled judgment" (id.).

"A successful plaintiff's entitlement to interest on a civil damages award is, in general, governed by CPLR article 50" (Love v State of New York, 78 NY2d 540, 542 [1991]). "CPLR 5001, 5002 and 5003 set forth the interest requirements for three distinct periods: Interest prior to verdict (CPLR 5001), interest from verdict to judgment (CPLR 5002) and interest from judgment to payment (CPLR 5003)" (Rohring v City of Niagara Falls, 84 NY2d 60, 69 [1994]; see Pay v State of New York, 87 NY2d 1011, 1013 [1996]).

CPLR 5003, governing post-judgment interest, says that "[e]very money judgment shall bear interest from the date of its entry" (see Court of Claims Act § 20 [7] ["Interest shall be allowed on each judgment of the court of claims from the date thereof until payment is actually made," except in stated circumstances]). "[P]ostjudgment interest is awarded as a penalty for the delayed payment of a judgment" (ERHAL Holding Corp. v Rusin, 252 AD2d 473, 474 [2d Dept 1998]; see Pellegrino v State of New York, 133 Misc 2d 888, 889 [Ct Cl 1986], affd for reasons stated at Ct Cl 139 AD2d 502 [2d Dept 1988]). Thus, when "the delay was caused solely by the plaintiff, the defendants should not suffer the 'penalty' of paying interest pursuant to CPLR 5003" (ERHAL, 252 AD2d at 474). Of course, the judgment debtor can terminate post-judgment interest by making "an unconditional tender of payment to the creditor or deposit[ing] the amount with the court" (Pellegrino, 133 Misc 2d at 890).

In contrast, pre-judgment interest is governed by CPLR 5002, which provides that "[i]nterest 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." The pre-judgment interest authorized by CPLR 5002 "is intended to indemnify successful plaintiffs 'for the nonpayment of what is due to them' " (Love, 78 NY2d at 544, quoting Trimboli v Scarpaci Funeral Home, 37 AD2d 386, 389 [2d Dept 1971], affd 30 NY2d 687, 688 [1972]).

Typically, "application of [CPLR 5002] is straightforward," but certain scenarios have led to litigation (Love, 78 NY2d at 542). For instance, in Love, the question was:

"whether the claimant in [a] bifurcated personal injury action against the State was properly awarded prejudgment interest from the date of the decision establishing liability, rather than the date of the decision fixing damages, even though the State was not responsible for the extended delay in the assessment of damages"

(id. at 541). The Court of Appeals held that "in a bifurcated personal injury action prejudgment interest under CPLR 5002 should be calculated from the date of the liability determination irrespective of whose fault it may be that the assessment of the plaintiff's damages is delayed" (id. at 545; see Pay, 87 NY2d at 1013; see also Rohring, 84 NY2d at 68 [generally, "interest is calculated from the date liability is established, even though the damage verdict is handed down later"]; Gunnarson v State of New York, 70 NY2d 923, 924 [1987]). The Court rejected the notion "that responsibility for the delay should . . . be the controlling factor in deciding whether interest is to be computed from the date of the liability verdict or, instead, from the date of the verdict on damages" (Love, 78 NY2d at 544; see Gibbs v State Farm Fire & Cas. Co., 169 AD3d 1483, 1484-1485 [4th Dept 2019]). "Rather, what is dispositive on this point is when the plaintiff's right to be compensated for the damages [they] sustained becomes fixed in law" (Love, 78 NY2d at 544). This rule ensures that plaintiffs are "fully compensated for their losses in bifurcated trials" (id.) by permitting courts "to engage in the legal fiction that damages were known and became a fixed obligation at the moment liability was determined" (Rohring, 84 NY2d at 68).

The rationale underlying these principles informs disposition of the instant motion. In Love, the Court of Appeals made clear that, unlike post-judgment interest, pre-judgment "interest is not a penalty . . . and is not meant to punish defendants for delaying the final resolution of the litigation" (78 NY2d at 544). "Rather, it is simply the cost of having the use of another person's money for a specified period" (id.; see Grobman v Chernoff, 15 NY3d 525, 529 [2010]). The Court of Appeals explained that "the defendant, who has actually had the use of the money, has presumably used the money to its benefit and, consequently, has realized some profit, tangible or otherwise, from having it in hand during the pendency of the litigation" (Love, 78 NY2d at 545). "There is thus nothing unfair about requiring the defendant to pay over this 'profit' in the form of interest to the plaintiff, the party who was entitled to the funds from the date the defendant's liability was fixed" (id.). "Indeed, inasmuch as the defendant was not entitled to the use of the money from the moment that liability was established, a rule that would permit the defendant to retain the cost of using the money (i.e., interest) would provide the defendant with a windfall" (id.). The Court concluded that:

"[s]uch a result is unacceptable irrespective of which party causes the delay. Regardless of who is responsible, the fact remains that the plaintiff has been deprived of the use of money to which [they were] entitled from the moment that liability was determined. That is a loss for which the plaintiff should be compensated"

Despite this straightforward "rationale for awarding interest on damages" (Mahoney v Brockbank, 142 AD3d 200, 202 [2d Dept 2016], lv granted 29 NY3d 904 [2017]), "[t]here is a narrow line of cases recognizing the proposition that egregious or inequitable conduct by a plaintiff may warrant the forfeiture of" pre-judgment interest under CPLR 5002 (Hon. Mark C. Dillon, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5002:17; see Feldman v Brodsky, 12 AD2d 347, 350 [1st Dept 1961], affd with no opn 11 NY2d 692 [1962] ["The holder of the judgment may be estopped by equitable considerations, or by (their) own acts, from enforcing the interest which the statute gives (them)"]). Statutory interest awards are thus not "absolute" or "immune from the court's invocation of equitable powers based upon the public policy that underpins awards of interest" (Hon. Mark C. Dillon, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5002:17). Still, "[c]ircumstances where a plaintiff may forfeit interest represent, at best, a very slim reed" (id.; see Pollock v Collipp, 138 AD2d 584, 584-585 [2d Dept 1988]).

Typically, " '[t]he death of a party divests the court of jurisdiction and stays the proceedings until a proper substitution has been made pursuant to CPLR 1015 (a)' " (Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d 754, 756 [2d Dept 2023], quoting CitiMortgage, Inc. v Clement, 209 AD3d 971, 972 [2d Dept 2022]). "[A]ny determination rendered without such a substitution is generally deemed a nullity" (CitiMortgage, 209 AD3d at 972 [internal quotation marks omitted]; see Deutsche Bank Natl. Trust Co. v Smith, 191 AD3d 950, 951 [2d Dept 2021]). However, as the State points out, CPLR 5016 (d) authorizes entry of a judgment "in the names of the original parties" "if a party dies before entry of judgment and after a verdict [or] decision." "If the death occurs after the verdict or decision is rendered, the drawing of a judgment is considered to be a mere ministerial step and can go forward" (Hon. Mark C. Dillon, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5016:4).

CPLR 5016 (d) does not apply, however, when "the verdict [or] decision . . . is set aside." In this situation, "the parties revert to their pre-verdict or pre-decision status when a substitution for the deceased party would become necessary, and no later judgment may be entered using the name of the decedent" (Hon. Mark C. Dillon, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5016:4).

Here, the parties agreed to have the May 2021 so-ordered stipulation and the resulting May 2021 judgment vacated by their December 2023 stipulation, which was so-ordered by this Court on January 4, 2024 and filed on February 29, 2024 (see Stipulated Order, pp 3, 13). The parties have thus stipulated that there is no effective judgment in this case. Despite the vacatur of the May 2021 judgment, the State seeks to use that vacated judgment as an end point to its obligation to pay pre-judgment interest under CPLR 5002. No basis exists, however, to terminate pre-judgment interest in the absence of an effective judgment. In short, the Court rejects the State's argument that the vacated May 2021 judgment remains viable solely to [*5]terminate its interest obligations.

This dispute therefore concerns pre-judgment interest, not post-judgment interest as the State maintains. As a result, the parties' focus on who caused the delay is irrelevant. Pre-judgment interest is not a penalty for delay, but simply compensates successful claimants for the loss of use of money that is due to them. Here, Hayo "suffered injury for which" the State "has been found legally responsible" and his estate will not be made whole until the State has paid the damages award (Mahoney, 142 AD3d at 202). Contrary to the State's argument, it is "not being 'penalized' by the assessment of interest" for the period between Hayo's death and the ultimate re-entry of judgment in this case (Love, 78 NY2d at 545). Instead, this Court is directing the State to repay the Administrator "for the use of" Hayo's "money that . . . [the State] enjoyed during that period" (id.).

Moreover, the Administrator has not engaged in any egregious or inequitable conduct that warrants the forfeiture of pre-judgment interest. While the Administrator perhaps could have moved more expeditiously in this matter after his appointment, the record demonstrates that the State's conduct has caused similar delays. In any event, any delay caused by the Administrator does not rise to the level of the conduct that has justified forfeiture of pre-judgment interest (see e.g. Feldman, 12 AD2d at 350 [(I)nterest may be forfeited where the judgment creditor refuses to accept payment offered by the judgment debtor]).

Finally, Connor v State of New York does not require a forfeiture of pre-judgment interest from the date of Hayo's death (see 47 NYS2d 936 [Ct Cl 1944]). There, the claimants' attorney died following trial of the claim. At the time of the decision, "no attorney ha[d] been substituted" for the deceased attorney and no reason had "been advanced for the failure to make such substitution" (id. at 937). The Court did not terminate interest upon the death of the trial attorney. Instead, the Court suspended interest as of the date of the decision until a new attorney was substituted for the deceased attorney (see id. at 937-938).

Even if Connor (47 NYS2d) survives enactment of CPLR 5002 and the cases expounding on that statute, it is distinguishable.^[FN2] In Connor, the Court noted that the claimants appeared to be guilty of inexcusable laches by allowing their claim to languish without obtaining new counsel. Here, by contrast, the Administrator has appeared in this case and taken affirmative steps to finalize the litigation and re-enter judgment. Moreover, unlike Connor, the case herein does not concern future interest incurred and instead relates to the State's efforts to reduce pre-judgment interest incurred prior to the filing of the instant motion. Connor did not contemplate such a remedy.

In sum, the Administrator is entitled to pre-judgment interest from the date of Hayo's death until re-entry of judgment and, thus, the Administrator's motion is granted. Given the Court's determination, the Administrator's additional arguments in support of the motion are academic.

Based on the forgoing, it is hereby

ORDERED, that the motion (Motion No. M-100560) is GRANTED in accordance with this decision; and it is further

ORDERED, that the Clerk is directed to re-enter judgment accordingly.