LAW OFFICE OF DAVID A. ZELMAN, David A. Zelman, Esq., New York, New York, Attorney for Plaintiffs
NEW YORK CITY LAW DEPARTMENT Andrew P. Wenzel, Esq., New York, New York, Attorney for Defendants.
ROBERT W. SWEET, District Judge.
Plaintiffs Sophia Elliot ("Elliot") and I.E., an infant, (collectively, "Plaintiffs") have moved for an order awarding them interest on the settlement amounts that defendants City of New York, Police Officer FNU Figueroa, Police Officer Jane Doe and Police Officer John Doe (collectively, "Defendants") agreed to pay Plaintiffs pursuant to a stipulation of settlement and order of dismissal ("Stipulation of Settlement") filed on September 14, 2012. For the reasons discussed below, Plaintiffs' motion is granted.
Plaintiffs filed a complaint in October 2011 alleging federal and state law claims arising from an incident in which Plaintiffs allege they were falsely arrested.
The parties engaged in mediation, and eventually agreed to resolve the claims of both Plaintiffs. The Defendants agreed to pay a settlement to I.E. in the amount of $5, 000, and a settlement to Elliot in the amount of $9, 000 (collectively, the "Settlement Amounts") in full satisfaction of all of Plaintiffs' claims, including costs and attorneys' fees. A stipulation of settlement and order of dismissal (the "Settlement Agreement"), reflecting the terms agreed-upon by the parties, was executed by all parties and filed by the Court on September 14, 2012.
On December 18, 2012, counsel for the Plaintiffs submitted a letter to the Court stating that as of that date, neither of the Plaintiffs had received their settlements, and requesting that the Court add interest to the Settlement Amounts. The Court elected to treat the December 18, 2012 letter as a motion.
Subsequently both plaintiffs received their settlements; Elliot received her settlement check for $9, 000 on December 26, 2012, and I.E. received his settlement check for $5, 000 on January 17, 2013.
Plaintiffs' motion for an award of interest was heard and marked fully submitted on January 30, 2013.
C.P.L.R. § 5003-a Applies to The Settlement Agreement
C.P.L.R. § 5003-a(b) ("§5003-a") provides that "a municipality settling an action for damages must pay all sums due within ninety days after the settling plaintiff tenders a duly executed release and a stipulation discontinuing the action." Brown v. City of New York, No. 09 Civ. 1809 (RJD) (MDG), 2012 WL 628496, at *2 (E.D.N.Y. Jan. 30, 2012).
The Second Circuit has not yet ruled on the applicability of §5003-a to a settlement of federal claims, such as the Settlement Agreement at issue here. While there have been two opinions from Courts in this District declining to apply §5003-a to settlements of federal claims, in both instances the decision not to apply §5003-a was based upon a failure by the moving party to explain the rationale justifying application of that statute. See Nicaj v. City of New York, No. 07 Civ. 2382 (LBS), 2009 WL 513941, at *1 (S.D.N.Y. Feb. 26, 2009); Green v. City of New York, No. 97 Civ. 8191 (JSR) (KNF), 2000 U.S. Dist. LEXIS 11691 (S.D.N.Y. Aug. 16, 2000), adopted 97 Civ. 8191, Dkt. No. 48 (S.D.N.Y. Sept. 15, 2000), at *4 n. 1 In contrast, the plaintiffs here have advanced a substantive argument for application of §5003-a, echoing the rationale set forth in Brown v. City of New York, No. 09 Civ. 1809 (RJD) (MDG), 2012 WL 628496 (E.D.N.Y. Jan. 30, 2012).
In Brown, the court noted that although the Second Circuit "has not definitively ruled on whether, and to what extent, state-law principles apply to a federal court's interpretation of settlement agreements resolving federal claims... a number of district court cases examining this question have concluded that disputes over federal settlements, even those that resolve federal claims, are quintessentially. of contractual interpretation and performance and wholly governed by state law.'" Id. at *2 (quoting Bryant v. Emigrant Mortg. Co., Inc., No. 10 Civ. 0102 (RJD), 2011 WL 3876978, at *6 (E.D.N.Y. Aug. 31, 2011)) (collecting cases). Brown further noted that this position is in accord with the Supreme Court's opinion in Kokkenen v. Guardian Life Ins. Co. , 511 U.S. 375 (1994), holding that an action seeking to enforce a settlement agreement that had been so-ordered by a federal court is, in essence, "a claim for breach of contract, part of the consideration for which was dismissal of an earlier federal suit, " id. at 381, and that absent an agreement by the parties to the contrary, "enforcement of the settlement agreement is for state courts, unless there is some independent basis for federal jurisdiction." Id. at 382. Moreover, Brown noted that "the Second Circuit has suggested that even if federal common law applies to a case, ...