The opinion of the court was delivered by: POLLACK
MILTON POLLACK, Senior United States District Judge.
Feel The Heat, Inc. t/a Rock City v. Centurion Agency, Inc. 82 Civ. 4161(MP)
Plaintiff Feel The Heat moves for prejudgment interest, under New York's Civil Practice Law and Rules ("CPLR") § 5001, on a jury verdict of $100,000 rendered on October 29, 1985, after a trial solely on the issue of damages. For the reasons stated below, the motion will be granted.
Plaintiff Feel The Heat opened a discoteque on December 26, 1980, called Rock City, that featured "rock" music. Immediately prior to that time, at the same location, 157 Hudson Street, New York, New York, plaintiff had operated a discoteque, called Feel The Heat, featuring "disco" music. The discoteque was destroyed by vandals on March 1, 1981. On November 17, 1982, plaintiff filed a complaint against defendant Centurion Agency, Inc., an insurance broker, for failure to obtain "business interruption" insurance for the plaintiff's enterprise, allegedly after being instructed to do so. Although the complaint alleged several theories of recovery, including negligence, fraud, and breach of contract, it was clear from the evidence presented at trial that the thrust of the claim was based on a negligence theory.
Plaintiff recovered for the property damage occasioned by the vandalism under a separate property insurance policy. The discoteque, however, never reopened. Despite this fact, the complaint sought recovery for "business interruption" from March 1, 1981, until a reasonable date thereafter.
A jury trial was held on April 22, 1985, and the jury returned a $232,712.20 verdict in favor of plaintiff and against defendant. This Court ordered a remittitur of all but $50,000 of that amount or, in the alternative, a new trial solely on this issue of damages. Plaintiff did not agree to the remittitur and on October 28, 1985, a new trial on the damages issue was held. The second jury rendered a verdict of $100,000 in plaintiff's favor.
Although the plaintiff did request prejudgment interest from March 1, 1982,
in its complaint, it did not request a jury charge on the issue. Plaintiff now brings this motion pursuant to Rules 59(e) and 60, Federal Rules of Civil Procedure, to have this Court apply prejudgment interest to the jury verdict.
On the issue of prejudgment interest, federal courts look to the law of the forum state to supply the federal rule of decision. See 1A (Part 2) J. Moore, W. Taggart, A. Vestal & J. Wicker, Moore's Federal Practice P 0.310, at 3140 (2d ed. 1985). To determine whether plaintiff is entitled to prejudgment interest, therefore, this Court must look to New York law. Adams v. Lindblad Travel, Inc., 730 F.2d 89, 93 (2d Cir. 1984); Lee v. Joseph E. Seagram & Sons, Inc., 592 F.2d 39, 41 & n.2 (2d Cir. 1979).
Where the action is at law, New York CPLR § 5001(a) mandates the inclusion of prejudgment interest as a matter of right in property damage cases. Although prior to the effective date of this CPLR provision, New York courts held that prejudgment interest was not recoverable as a matter of right in negligent property damage actions and was therefore waived if not requested of the trier of fact, Purcell v. Long Island Daily Press Publishing Co., 9 N.Y.2d 255, 173 N.E.2d 865, 213 N.Y.S.2d 425 (1961); cf. De Long Corp. v. Morrison-Knudsen Co., 14 N.Y.2d 346, 200 N.E.2d 557, 251 N.Y.S.2d 657 (1964), CPLR § 5001(a) changed this common law rule. See Morris v. New York Central Railroad, 20 A.D.2d 753, 753, 247 N.Y.S.2d 293, 294 (4th Dep't 1964). Based on CPLR § 5001(a), the New York courts now apply prejudgment interest as a matter of right in actions involving negligent property damage as well. See e.g., Delulio v. 320-57 Corp., 99 A.D.2d 253, 254, 472 N.Y.S.2d 379, 381 (1st Dep't 1984); Quintel Corp. v. Citibank, N.A., 606 F. Supp. 898, 913 (S.D.N.Y. 1985).
In a case on all fours with this case, Dalrymple v. Ed Shults Chevrolet, Inc., 51 A.D.2d 884, 380 N.Y.S.2d 189 (4th Dep't 1976), aff'd, 41 N.Y.2d 957, 363 N.E.2d 587, 394 N.Y.S.2d 881 (1977), the court held that plaintiff was entitled to prejudgment interest in an action against a car salesman for his negligence in failing to obtain collision insurance on plaintiff's car after the salesman had promised to do so. The Court of Appeals affirmed, without opinion, on the basis of the Appellate Division Memorandum.
Plaintiff is, therefore, entitled to prejudgment interest on ...