On November 1, 2022, the First Department issued a decision in 37-10 114th St. ML Funding LLC v. Ai Yun Chen, 2022 NY Slip Op. 06077, holding that prejudgment interest on a claim enforcing a guaranty should have been awarded at the rate set by the guaranty, explaining:
Plaintiff should have been awarded interest at the contractual “Default Rate,” which is defined as the lesser of “(i) the maximum rate permitted by applicable law, or (ii) ten percent (10%) above the Interest Rate, compounded monthly.” The guaranty’s default interest rate is not subject to the statutory maximum permissible interest rate (25%) because of the amount of the loan. The guaranty default rate is therefore less than the maximum rate permitted by applicable law and should have been applied to the pre-judgment amount due.
(Internal citations omitted).