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Perella Weinberg Partners LP v. Specialized Loan Servicing LLC

Supreme Court of New York, New York County

July 11, 2013

PERELLA WEINBERG PARTNERS LP, Plaintiff,
v.
SPECIALIZED LOAN SERVICING LLC, Defendant. No. 600033/2010.

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

Reitler Kailas & Rosenblatt LLC, for plaintiff.

Miller & Wrubel P.C., for defendant.

SHIRLEY WERNER KORNREICH, J.

After a five-day jury trial on May 23, 2013, the jury awarded plaintiff, Perella Weinberg Partners LP (Perella), $287,517 on its cause of action for quantum meruit. After verdict, the parties disputed whether Perella is entitled to pre-judgment interest on a quasi-contract claim. The parties were directed to submit letter briefs and corresponding proposed judgments, which constitute the record for this decision. Defendant Specialized Loan Servicing LLC's (SLS) submission was filed on May 31, 2013 (N.Y.SCEF Doc. Nos. 137-139). Perella's submission was filed on June 4, 2013 (N.Y.SCEF Doc. Nos. 140-142). For the reasons that follow, the court holds that Perella is entitled to pre-judgment interest on its quantum meruit verdict.

Pursuant to CPLR 5001(a), " [i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract ... except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion." SLS argues that quantum meruit, an equitable claim, is not subject to pre-judgment interest. However, it is well settled that where a " plaintiff sought only money damages on the theory of quantum meruit, as compensation for the work performed," the claim is legal, not equitable. TY Elec. Corp. v. Delmonte, 101 A.D.3d 1626 (4th Dept 2012), citing Hudson View II Assocs. v. Gooden, 222 A.D.2d 163, 167 (1st Dept 1996).[1] Consequently, " an award of pre-decision or pre-verdict interest pursuant to CPLR 5001 on a damages award on a cause of action to recover damages in quantum meruit is mandatory, as it would be on a damages award on a cause of action to recover damages for breach of contract." Tesser v. Allboro Equip. Co., 73 A.D.3d 1023, 1027 (2d Dept 2010), citing Brent v. Keesler, 32 A.D.2d 804 (2d Dept 1969); see also Leroy Callender, P.C. v. Fieldman, 252 A.D.2d 468 (1st Dept 1998) (same).

Nonetheless, SLS cites to a Third Department case holding that pre-judgment interest is discretionary on a quantum meruit claim. See Precision Foundations v. Ives, 4 A.D.3d 589, 593 (3d Dept 2004). However, as the United States Court of Appeals for the Second Circuit observed, Precision Foundations is an aberration because it not only deviates from well settled law in the other three Appellate Divisions, it also contradicts the Third Department's own established precedent. See Stillman v. InService America, Inc., 455 Fed.Appx. 48, 51-52 (2d Cir2012) (comparing Precision Foundations with Ogletree, Deakins, Nash, Smoak & Stewart P.C. v. Albany Steel Inc., 243 A.D.2d 877, 879 (3d Dept 1997) (holding interest on quantum meruit claim is mandatory)). Regardless, this court is bound to follow First Department precedent, which holds otherwise. See Leroy Callender, supra; Ash & Miller v. Freedman, 114 A.D.2d 823 (1st Dept 1985) (same); see also Stillman, 455 Fed.Appx. at 51 (noting that " the New York Court of Appeals would likely agree with the reasoned analysis set forth in cases holding that pre-judgment interest on quantum meruit claims is mandatory" ). Thus, pre-judgment interest is awarded to Perella.

As for the issue of the accrual date of the interest, " [p]ursuant to CPLR 5001(b), [i]nterest shall be computed from the earliest ascertainable date the cause of action existed,' which, in the case of a cause of action to recover damages in quantum meruit, is when the plaintiff demanded payment." Tesser, 73 A.D.3d at 1027, citing Atlas Refrigeration-Air Conditioning, Inc. v. Lo Pinto, 33 A.D.3d 639, 640 (2d Dept 2006). Contrary to SLS's argument, it is reversible error to calculate interest from the date this action was commenced. See Ogletree, 243 A.D.2d at 880. Indeed, common sense dictates that interest should be computed from the same date that breach-of-contract interest would run. Hence, as it is undisputed that Perella first demanded payment from SLS in an invoice on November 10, 2008, interest shall run from that date. Accordingly, it is

ORDERED that, pursuant to the jury's May 23, 2013 verdict, the Clerk is directed to enter the attached judgement in favor of plaintiff Perella Weinberg Partners LP and against defendant Specialized Loan Servicing LLC in the amount of $287,517, with pre-judgment interest of 9% from November 10, 2008 to the date judgment is entered.


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