DECISION This court’s decision of April 13, 2018, after a non-jury trial, set the value of the charging lien pursuant to Judiciary Law §475 and of the money judgment sought in this proceeding in the amount of $3,412,693.21. This amount is due, plus interest, from former client William Koeppel to the petitioning law firms. Before the decree was entered, however, Koeppel declared bankruptcy. The parties informed the court that the decree which had been settled for signature regarding the 2018 decision need not be entered due the bankruptcy stay. Now, the parties have presented an order of the Bankruptcy Court lifting the stay, among other things, to permit the entry of this decree. Petitioners also request severance of certain remaining claims. The parties have provided submissions, including a one-page synopsis of the interest calculations as requested by the court, and this decision addresses issues raised by them, including the need to modify the 2018 decision in one respect. Contract interest is due pursuant to the retainer at 1 percent monthly or 12 percent annually on the fees due the firms from the date of breach, August 30, 2008, to the date of decision, April 13, 2018 (see CPLR 5001; NML Capital v. Republic of Argentina, 17 NY3d 250 [2011]). That time period, according to the parties’ synopsis, is 3,513 days, and 12 percent rate divided by 365 days when multiplied by the $3,412,693.21 due, results in a daily amount of interest of $1,121.98. This amount when multiplied by the 3,513 days, results in $3,941,515.74 in interest due from breach to the date of the post-trial decision. CPLR 5002 provides that interest shall further be recovered from the decision to the date of decree on the principal and interest accrued as of the date of the decision, i.e., interest is compounded as of the date of decision, pursuant to this statute. While in many cases, this time period is fairly brief, here, because of the bankruptcy stay, it was quite lengthy. The contractual 12 percent annual interest rate accrues on the principal amount of $3,412,693.21, together with the interest accrued thereon to the date of decision, $3,941,515.74, for a sum in the amount of $7,354,208.95. When the 12 percent rate is divided by 365 and this quotient further is multiplied by this total amount on which interest accrues, the daily amount of interest is $2,417.82. The number of days from April 13, 2018 to the date of the decree, October 14, 2020, is 915. The daily amount of $2,417.82 multiplied by the number of days of 915, results in the product of $2,212,305.30, which is the interest due from decision to decree. The court’s prior 2018 decision noted certain escrow payments by Koeppel could lower the amounts on which interest accrued. However, no party has demonstrated that the amounts paid by Koeppel into escrow were sufficient to pay down the interest that had accrued to the dates of these escrow payments; the operative retainer required that accrued interest be paid first (see Watts v. Encore Music Publications, 286 App Div 816, 817 (1st Dept 1955) (Breitel, J., dissenting in part), citing Shepard v. City of New York, 216 NY 251, 256 [1915]). In any event, the parties have also provided a March 22, 2019, “Stipulated Order” as agreed to by the parties in Koeppel’s Chapter 11 Bankruptcy proceeding (Bankr. Ct, SD NY, Case No. 18-22984-rdd, Robert D. Drain, J.). This order permitted certain monies Koeppel paid into escrow, amounting to $695,502.90, plus additional payments from Koeppel in the amount of $240,000, to be an offset or credit to interest due — that is a credit in the amount of $935,502.90 as of the date of the Stipulated Order. Consequently, the $2,212,305.30 in interest must be reduced by the $935,502.90 the petitioners have received, for a final amount of interest due from breach to decision of $1,276,802.40. The court’s 2018 decision is modified to the extent of determining that the amounts paid by Koeppel to escrow are a credit or offset to the interest due in the period from breach to decision. CPLR 5004 compounds this interest as of the date of the decree and the parties agree that statutory interest at the of rate of 9 percent annually runs on amounts from the date of the decree. To original amount due of $3,412,693.21, the amount of interest under CPLR 5001 or $3,941,515.74, and the amount of interest under CPLR 5002, or $1,276,802.40, must be added. This sum is $8,631,011.35, and petitioners shall have a charging lien and a money judgment against William Koeppel in this amount. Interest at 9 percent, divided by 365, and multiplied by $8,631,011.35, yields a daily interest amount of $2,128.19, accruing after the entry of the decree. It should be noted that certain other claims remain in the amended petition and those are severed and remain for resolution upon lifting of the Bankruptcy stay, the stipulation of the parties, or further order of the court. Decree signed. Dated: October 14, 2020
