Plaintiff Entitled to Prejudgment Interest on Funds Held in Escrow

On July 8, 2021, the First Department issued a decision in Park Union Condominium v. 910 Union St., LLC2021 NY Slip Op. 04278, holding that a plaintiff was entitled to prejudgment interest on funds held in escrow, explaining:

The court properly granted plaintiffs’ motion for interest. First, unlike the contract in J. D’Addario & Co., Inc. v Embassy Indus., Inc., the settlement agreement does not limit plaintiffs’ sole remedy to costs, attorneys’ fees, and disbursements. Second, Sponsor’s argument that prejudgment interest is unavailable because the money at issue was held in escrow, depriving Sponsor of its use, and rendering the imposition of interest an improper penalty, was squarely addressed and rejected by D’Addario. Third, Sponsor’s argument that the case at bar is an action of an equitable nature is unavailing. Plaintiffs commenced this action because Sponsor failed to pay the Settlement Amount by the deadlines specified in the settlement agreement, i.e., because it breached a contract. A cause of action seeking money damages for breach of contract is quintessentially an action at law.

(Internal quotations and citations omitted).

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