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Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 1 of 9

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

- --------- ------ ----------- ------ ----X

SOPHIA ELLIOT and I.E.,

Plaintiffs,

against-

CITY OF NEW YORK, et al.,

Defendants.

------------- ---x

A P PEA RAN C E S:

Atto

for Plaintiffs

LAW OFFICE OF DAVID A. ZELMAN

225 Broadway, 38th
oor

New York, New York 10007

By: David A. Zelman, Esq.


Att

for Defendants

NEW YORK CITY LAW DEPARTMENT

100 Church Street

New York, New York 10007

By: Andrew P. Wenzel, Esq.


11 Civ. 7291

OPINION

:: =

,I.
)

;

Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 2 of 9

Sweet, D.J.

Plaintiffs Sophia Elliot ("Elliot") and I.E., an

infant, (collectively, "Plaintiffs") have moved for an order

awarding them interest on the settlement amounts that defendants

City

New York, Police Of cer FNU Figueroa, Police

icer

Jane Doe and Police Of cer John Doe (collectively,

"Defendants") agreed to pay PIa

iffs pursuant to a stipulation

settlement and order of

smissal ("St

ation of

Settlement") filed on September 14, 2012. For the reasons

discussed below, Plaintiffs' motion is granted.

Prior Proceedings

Plaintiffs filed a complaint in October 2011 alleging

federal and state law c

arising from an incident in which

Plaintiffs allege they were falsely arrested.

The parties engaged in mediation, and eventually

agreed to resolve the claims of both Plaintiffs. The Defendants

agreed to pay a settlement to I.E. in the amount of $5,000, and

a settlement to Elliot in the amount of $9,000 (collectively,

"Settlement Amounts") in full satisfaction of all of

Plaintiffs' claims, including costs and attorneys'

s. A

1


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 3 of 9

stipulation of settlement and 0

of dismissal (the

"S

lement Agreement"), reflecting the terms agreed-upon by the

parties, was executed by all parties and filed by the Court on

September 14, 2012.

On December 18, 2012, counsel for the

intiffs

submitted a

tter to the Court stating that as of

date,

neither of the Plaintiffs had rece

their settlements, and

requesting that the Court add interest to the Settlement

Amounts. The Court elected to treat the December 18, 2012

letter as a motion.

Subsequently both plaintiffs received their

settlements; Elliot received

r settlement check for $9,000 on

December 26, 2012, and I.E. received his settlement check

r

$5,000 on January 17, 2013.

Plaintiffs' motion for an awa

of interest was heard

and marked fully submitted on January 30, 2013.

2


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 4 of 9

C.P.L.R. § S003-a Applies to The Settlement Agreement

C.P.L.R. § 5003-a(b)

("§5003-a") provides that "a

municipality settling an action for damages must pay all sums

due within ninety days after the settling plaintiff tenders a

duly executed release and a stipulation

scontinuing the

action." Brown v. Cit of New York No. 09 Civ. 1809 (RJD)

(M DG), 2012 WL 62 84 96, at * 2

( E . D . N . Y. Jan. 30 f 2012).

Second Circuit has not yet rul

on the

icability of §5003-a to a settlement of federal claims, such

as

Settlement Agreement at issue here. While there have

been two opinions from Courts

this

strict declining to

apply §5003-a to settlements of federal claims, in both

instances

decision not to apply §5003-a was based upon a

ilure by the moving party to explain the rationale justifying

application of that statute. See Nicaj v. City of New York, No.

07

. 2382 (LBS), 2009 WL 513941, at *1 (S.D.N.Y. Feb. 26,


2009); Green v. Ci

of New York, No. 97 Civ. 8191 (JSR)

(KNF),


2000 U.S. Dist. LEXIS 11691 (S.D.N.Y. Aug. 16, 2000), adopt

97


Civ. 8191, Dkt. No. 48 (S.D.N.Y. Sept. IS, 2000), at *4 n. 1.


In contrast, the plaintif

here have advanced a substantive


argument

r application of §5003-a, echoing the rationale set


3


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 5 of 9

rth in Brown v. Cit of New York No. 09 C

1809 (RJD)

(MDG), 2012 WL 628496 (E.D.N.Y. Jan. 30, 2012).

In Brown,

t

court noted that although

Second

Ci

t "has not

finit

ly rul

on whether, and to what

extent, state-law principles apply to a

ral court's

interpretation of settlement agreements resolving

ral

aims

. a number of

strict court cases examining this question

have concluded that

sputes over

ral settlements, even

t

that resolve federal claims, are 'quintessentially

of contractual interpretation and performance and wholly

governed by state law.'"

Id. at *2 (quoting

Mo
----~----~------

Inc., No. 10 Civ. 0102 (RJD), 2011 WL 3876978, at *6

(E.D.N.Y. Aug. 31, 2011)) (collecting cases) 1 Brown further

noted

this position is

accord with

Supreme Court's

opinion in Kokkenen v. Guardian

fe Ins. Co., 511 U.S. 375

- - - - - - -

(1994), holding that an action seeking to enforce a settlement

agreement that had been so-o

red by a federal court is, in

essence, "a claim for breach of contract, part of the

consideration for wh

was dismissal of an earlier federal

1

Even

Ni
----~

which as mentioned above declined to apply §5003-a
ence of an argued basis upon wh

to do so,

recognized
interpretation of a settlement agreement." 2009 WL 513941, at
*1.

"general principles of contract law govern .

4


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 6 of 9

suit,"

. at 381, and that absent an agreement by the parties

to the contrary, "enforcement of the settlement agreement is for

state courts, unless there is some independent basis for federal

jurisdiction."

. at 382. Moreover, Brown noted that "t

Second Circu

has suggested that even if fede

common law

applies to a case, New York law would ult

ely govern

questions regarding a settlement because 'fe

ral common law .

. generally adopts

relevant state law rule unless

re is a

signi cant conflict between the state rule and a federal

interest," 2012 WL 628496, at *3, and that it found "no federal

interest that is stifled by application of §5003 a."

rd.

Given the foregoing, it is evident that "whether state

law applies

to t

contractual nature of a settlement

agreement or whether it is adopted by fede

common law,

lS

clear that New York law governs plaintiffs' motion." Brown,

2012 WL 628496, at *3.

Plaintiffs Are Entitled To Interest and Attorneys' Fees

The prompt-payment provision of §5003-a is a default

rule, subject to modification only upon the express agreement of

the parties to the settlement agreement. See Cunha v. Shapiro,

837 N.Y.S.

160, 166 (N.Y. App. Div. 2007); N.Y. C.P.L.R. §

5


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 7 of 9

5003-a, 2007 Supp. Prac. Commentaries (noting that parties "can

provide, for example, that CPLR 5003-a shall not be

applicable"). The

lement Agreement here does not contain

any provision waiving application of §5003-a, so the statute's

prompt-payment provision applies to the Agreement.

Under §5003-a, the Defendants were requi

to pay all

sums due to Plaintiffs "within ninety days of tender" of the

Settlement Agreement, meaning that

this case payment was

required to have been made by December 17, 2012. 2

With respect to calculating when a plaintiff is deemed

to have been paid the settlement amount, "New York courts have

[]

Id that payment occurs upon mailing, not receipt, of the

settlement proceedings." Brown, 2012 WL 628496, at *5.

parties' submissions state that

aintiff Elliot received her

settlement check on December 26, 2012, and plaintiff I.E.

received his settlement check on January 17, 2013, but do not

Court was

ired to

, No. 10. Civ. 7854

2 Because plaintiff I.E. is an infant,
approve the terms of the settlement, e.g., Sanchez v. MTV
Networ
(TPG), 2012 WL 2094047, at *1
(S.D.N.Y. June 11, 2012), and thus the "tender" of
settlement agreement for
003-a purposes occurred on the date
that the fully executed and so-ordered Agreement was filed and
appeared on the case docket, which was on September 17, 2012.
The first weekday after the ninetieth day following that date is
December 17, 2012.

6


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 8 of 9

clari whether those checks were received by hand or by mail,

so the latter will be assumed. Accordingly, Defendants are

deemed to have made payment three business days prior to the

dates upon which

liot and I.E. received their settlement

ks, i.e., on December 20, 2012 and January 14, 2013,

respectively.

Since Defendants fai

to make payment to Plaintiffs

within the 90 days allotted by §5003-a,

aintiffs are entitled

to "judgment

for the amount set forth in the release

and interest on the amount set forth

the [Settlement

Agreement] from the date that the [Settlement Agreement] was

tendered. a C.P.L.R. § 5003-a(e). Applying the statutory

interest rate of 9% mandat

by New York law, see N.Y. C.P.L.R.

§ 5004, the interest due to

intiff Elliot is $208.60, and the

interest due to plaintiff I.E. is $146.71.

7


Case 1:11-cv-07291-RWS Document 15 Filed 07/10/13 Page 9 of 9

Conclusion

For the reasons set forth above, PI

iffs' motion lS

granted.

Submit judgment on notice.

It is so ordered.

New York, NY

July 1 ' 2013

ROBERTW:SWEET

U.S.D.J.

8