Opinion
2155/2003.
Decided on March 24, 2010.
William C. Thompson, Esq., Attorney for Plaintiff, Brooklyn, New York.
Howard Benjamin, Esq., Attorney for Defendant, New York, New York.
In this post judgment matrimonial action, defendant, Larisa Greenberg, moves, inter alia, for an order from this court directing that the accrual of interest on a distributive award ordered in favor of the plaintiff after trial, be "tolled" until either (1) the date when the plaintiff complies with the notice of entry requirement of the judgment of divorce, or (2) June 9, 2008, the date that the defendant filed notice of entry of the judgment of divorce. Plaintiff, Mark Zavelin, opposes the motion and requests that the interest began accruing as of the date the judgment of divorce was entered by the County Clerk, to wit, February 20, 2007.
Background
On February 8, 2007, Hon. Micahel A. Ambrosio signed a judgment of divorce dissolving the marriage between Mark Zavelin, plaintiff, and Larisa Greenberg, defendant. The judgment of divorce was "entered" in the Office of the County Clerk, Kings County on February 20, 2007. In the judgment of divorce, Judge Ambrosio ordered the plaintiff "to serve a copy of [the] Judgment with Notice of Entry upon defendant within thirty (30) days [of the decision], and file an Affidavit of Service with the Court Clerk." (Judgment of Divorce at 5). Plaintiff failed to do so. On June 9, 2008, defendant's then attorney served the judgment of divorce with notice of entry upon the plaintiff.
Justice Ambrosio no longer sits in Supreme Court. This matter was assigned to the undersigned by Order of the Administrative Judge.
As relevant to the case at bar, the judgment of divorce, which was predicated on a decision after trial dated February 8, 2007, grants the plaintiff a distributive award in the amount of $638,428.00, "plus statutory interest from the date of the entry of the divorce, to be paid by Defendant . . . in three equal yearly installments, the first to take place by June 30, 2006; the other two by June 30, 2007 and June 30, 2008, respectively." To date, defendant has not made any of the payments.
On June 25, 2009, defendant moved before this court to "toll" the running of the interest on the distributive award. Defendant argues that the plaintiff frustrated and delayed her ability to pay the judgment because he failed to enter and serve the judgment of divorce within thirty days thereof. Defendant avers that the doctrine of equitable estoppel may be utilized to stop the tolling of the interest either until such date as when plaintiff complies with the order or at least until the date that defendant served notice of the entry on the plaintiff, June 9, 2008.
Plaintiff argues that the interest rate begins to run from the date the judgment was entered. He asserts that "[t]he Judgment was marked ENTER' by Hon. Ambrosio when he signed the same on February 8, 2007. The Judgment was entered by the Office of the Kings County Clerk on February 20, 2007." Plaintiff, does not deny that the defendant served "Notice of Entry" on him, but contends "that fact is relevant to the issue of taking an appeal, not to the accrual of interest.". Plaintiff believes the interest rate in the case at bar begins to run February 20, 2007, the date that the judgment was entered in the Office of the Kings County Clerk.
Discussion
Defendant is asking the court to toll the interest rate until either such date as when the plaintiff complies with the notice requirement or until June 9, 2008, when the defendant served the notice of entry on the plaintiff. The gravamen of the issue is when does the interest rate begin to run on money judgments when the payment is to be made in installments when the plaintiff did not serve notice of entry within the ordered time period.
Pursuant to CPLR section 105 (q) "[a] money judgment' is a judgment, or any part thereof, for a sum of money or directing the payment of a sum of money." "CPLR 5003 provides that "[e]very money judgment shall bear interest from the date of its entry" ( see Pollock v Collipp, 138 AD2d 584; see also Felix v Herby Realty Corp., 287 AD2d 683)" ( Matra Bldg. Corp. v. Kucker , 19 AD3d 496 , 796 NYS2d 709 [2 Dept., 2005]). "[I]nterest is not a penalty. It is the cost of the use of money, and once it has been established that the defendant is in debt to the plaintiff, the defendant must be deemed to be holding the plaintiff's money as of that moment and hence obliged to pay interest as of that moment." (Siegel, NY Prac. § 418 (4th ed.); see Love v. State 78 NY2d 540, 577 NYS2d 3591991]).
Pursuant to CPLR section 5016 (a) "[a] judgment is entered when, after it has been signed by the clerk, it is filed by him." "Once the judgment is entered, the winner should serve on the loser a copy of the judgment with notice of entry; it is this service that starts the loser's appeal time. If the judgment contemplates enforcement, as it usually does when the plaintiff is the winner, it is entry that marks the moment that enforcement may be sought." (Siegel, NY Prac. § 418 (4th ed.); see CPLR § 5513 [a]). Plaintiff is correct that notice of entry serves to measure the time from which the time for appeal commences, not the obligation to pay. "In New York, a judgment cannot be enforced prior to entry: The granting of a judgment by a court is of no value to the judgment creditor until the judgment is "entered." Entry of the judgment is the first step towards enforcement of that judgment under the CPLR. "Entry" occurs when the clerk files the judgment after signing it." ( Musso v. Ostashko, 468 F.3d 99, 56 Collier Bankr.Cas.2d 1785).
It is well regarded that "[b]arring any inequitable or dilatory conduct on the part of the judgment creditor, a money judgment bears interest from the date of its entry and continues to accrue at the statutory rate until the judgment is satisfied ( see CPLR 5003; Matter of Matra Bldg. Corp. v Kucker , 19 AD3d 496; Greenberg v Greenberg, 269 AD2d 354, 355; Purpura v Purpura, 261 AD2d 595, 597)." ( Bankers Trust Co. of California, N.A. v. Branson , 40 AD3d 672 , 836 NYS2d 632 [2 Dept., 2007]). In rare cases, "Equitable considerations may result in an estoppel which can toll the accrual of interest ( see ERHAL Holding Corp. v. Rusin, 252 AD2d 473, 474, 675 NYS2d 138; Matter of Venables v. Painewebber, Inc., 205 AD2d 788, 613 NYS2d 441; Meiselman v. Allstate Ins. Co., 197 AD2d 561, 602 NYS2d 659)." ( Matra Bldg. Corp. v. Kucker , 19 AD3d 496 , supra). Estoppel would toll the accrual of interest if the entitled party was found guilty of dilatory conduct in collecting the sum owed ( Id.).
In the case at bar, this court finds that the judgment was entered on February 20, 2007, and as such, the requirements of "entry" in accordance with CPLR Section 5016 was satisfied on February 20, 2007, the same date when interest began to accrue under CPLR Section 5003. Plaintiff is entitled to statutory interest as of February 20, 2007.
Defendant urges the court to rule in equity and toll the accrual of interest because plaintiff failed to comply with the service of the notice of entry requirement of the judgment order. This failure by the plaintiff does not rise to the level of the dilatory conduct that would toll the accrual of interest. At all times after the entry of the judgment order, plaintiff had the right to collect the sum owed.
"There are many contexts in which a notice of entry is required to start a time period running, but none so critical as when it is relied on to start the running of the time to appeal under CPLR 5513." (Siegel, Practice Commentaries, McKinney's Cons. Laws of NY, CPLR C:5513:1.) CPLR section 5513 (a) governs the timing of the appeal process. "Once the judgment is entered, the winner should serve on the loser a copy of the judgment with notice of entry; it is this service that starts the loser's appeal time." (Siegel, NY Prac. § 418 (4th ed.); see CPLR section 5513 [a]). As long as the judgment is properly entered, the payment of the sum of money could still be enforced ( see Cox v. City Of Niagara Falls, 289 AD2d 978, 734 NYS2d 802 [4 Dept., 2001]; see also N.Y.Ct. Rules, § 202.48). Therefore, plaintiff's conduct was dilatory only in so far as it prevented the defendant from appealing the judgment. It did not prevent defendant from making the distributive award payments.
Conclusion
Defendant's motion to toll the accrual of the interest on the distributive payments is denied. The obligation to pay the debt is absolute and there is no basis for the interest to not accrue as of the date of the entry of the judgment. The interest began to accrue on February 20, 2007, the date that the judgment of divorce was signed and filed by the Office of the County Clerk. There is no basis for this court to equitably estop the accrual of interest until a later date because the plaintiff's conduct was not dilatory and did not prevent the defendant from making payments. The balance of the relief(s) requested and defenses proffered were withdrawn on the record at the time of oral argument.
The foregoing constitutes the order and decision of this court.