Opinion
August 13, 1998
Appeal from the Supreme Court, Bronx County (Howard Silver, J.).
We agree with the trial court to the extent that the statutorily applicable rate of prejudgment interest on the instant condemnation award may be as high as 9% pursuant to McKinney's Unconsolidated Laws of N Y § 2501 (Matter of Metropolitan Transp. Auth. v. Capolino Design Renovation, 123 A.D.2d 696, 700, lv denied 69 N.Y.2d 610 [applying the 9% rate set forth in McKinney's Uncons Laws of N Y § 2501 to a prejudgment condemnation award]), since that section applies to accrued claims as well as judgments (compare, Public Authorities Law § 1276 Pub. Auth. [5]; see also, McGale v. Metropolitan Transp. Auth., 76 A.D.2d 38, 47, lv denied 52 N.Y.2d 862 [4% rate set forth in Public Authorities Law § 1276 Pub. Auth. (5) applies only to judgments]). However, since prejudgment interest is constitutionally required on condemnation awards, and since its determination is essentially a judicial, and not a legislative, function, the statutorily applicable rate of interest is only presumptively valid (see, Adventurers Whitestone Corp. v. City of New York, 65 N.Y.2d 83, 87-88, appeal dismissed 474 U.S. 935). The matter should, therefore, be remanded for a hearing to determine whether the maximum applicable statutory prejudgment interest rate of 9% is, under the circumstances of the instant case, reasonable. Upon remand, Metropolitan Transportation Authority, as the party challenging the reasonableness of the 9% statutory rate, bears the burden of proving that it is unreasonably high, and that a lower rate of interest would be constitutionally sufficient (see, supra; Matter of New York State Urban Dev. Corp. [42nd St. Dev. Project], 176 Misc.2d 772 [Sup Ct, N Y County, Parness, J.]).
Post judgment interest upon a condemnation award, on the other hand, is a matter of legislative grace (see, Matter of Rochester Carting Co. v. Levitt, 36 N.Y.2d 264, 267-268), and therefore should be fixed in accordance with Public Authorities Law § 1276 Pub. Auth. (5) (see, McGale v. Metropolitan Transp. Auth., supra). While that statute sets 4% per annum as a ceiling that shall not be exceeded (see, Rodriguez v. New York City Hous. Auth., 91 N.Y.2d 76), we find the 4% rate to be reasonable in this case.
We have considered petitioner's remaining contention and find it to be without merit.
Concur — Lerner, P. J., Ellerin, Rubin, Tom and Andrias, JJ.