Defendant's Appeal In Personal Injury Action Does Not Delay Its Article 50-B Obligation To Pay Periodic Installments Of Future Damages Award
December, 2002
The Appellate Division - Second Department in Scannapieco v. City of New York, 749 N.Y.S.2d 36, has recently taken a cue from the First¹ and Fourth² Departments and held that, under CPLR Article 50-B, where defendant has purchased an annuity contract to pay a future damages award in a personal injury action through periodic installments, “annuity payments are to commence from the date of the verdict, and that where there is a significant delay between the date of the verdict and the entry of judgment, a trial court is authorized to direct an accelerated lump sum payment of annuity benefits for future damages for the period from the date of verdict until the entry of judgment.”
Facts
In Scannapieco, plaintiff, an injured steamfitter, sued the City of New York for personal injuries. The trial court entered the jury’s verdict for plaintiff on liability in April, 1997, and its verdict on damages in May, 1997. The jury’s damages verdict included, inter alia, a $2.57 million award for future damages. In July, 1998, the trial court entered a structured judgment pursuant to CPLR Article 50-B ordering defendant to purchase an annuity contract for the payment of future damages in excess of $250,000 (the “1998 judgment”). Defendant appealed the 1998 judgment, and in December, 1999, the Second Department issued its decision ordering a new trial on damages unless plaintiff agreed to reduce the verdict, including a reduction of the future damages award from $2.57 million to $1.3 million. By a January, 2000 stipulation, plaintiff consented to the reduced amounts. Thereafter, defendant purchased an annuity contract to pay plaintiff the future damages in excess of $250,000 pursuant to Article 50-B. The annuity provided that payments were to commence on March 1, 2000; the annuity did not provide for any payments from April, 1997 through March, 2000.
Plaintiff then moved that defendant be ordered to make immediate payment of all “past due” annuity payments from April, 1997- - the time the jury rendered its liability verdict. Plaintiff claimed that under Article 50-B³ , the period of time used to calculate the present value of the annuity was the time determined by the jury in rendering its verdict. In response, defendant argued that neither the 1998 judgment nor Articles 50-B authorized an advance lump sum annuity payment as requested by plaintiff. Defendant also contended that CPLR 5519(a) stayed the enforcement of the 1998 judgment regarding the annuity payments when defendant filed its notice of appeal.
Analysis
The Second Department affirmed the Supreme Court’s grant of plaintiff’s motion and ordered that the “immediate lump sum payment of annuity benefits which accrued from the date of verdict until entry of the amended judgment” be paid to plaintiff. The court explained:
CPLR 5041(e) [Article 50-B] unambiguously states that ‘the period of time over which such periodic payments shall be made . . . shall be the period of years determined by the trier of fact.’ In the case at bar, when the jury rendered its liability verdict on April 25, 1997, it had no knowledge that the case would be delayed due to the appeals taken by the City and that an amended judgment would be subsequently entered in March 2000. Thus, the Supreme Court correctly held that the jury did not intend for the annuity payments to the plaintiff Scannapieco to commence after the determination of the 1999 appeal or in March 2000, but rather intended that such payments commence from the date of its verdict.
Although the City’s filing of a notice of appeal stayed enforcement of the amended judgment, i.e. payment of past due and periodic annuity installments (see CPLR 5519(a)(1)), the City was obligated to make past due payments, as well as periodic annuity installments from April 1997, once the automatic stay was lifted.
The Second Department firmly rejected defendant’s argument that plaintiff would be sufficiently compensated for the delay in receiving the annuity benefits if he were awarded the statutory interest (9%) in a lump sum on the future damages commencing from the date of the verdict. The court reasoned that, because monthly periodic installment payments from an annuity “constitute principal and not interest,” an award of statutory interest was insufficient to compensate plaintiff for the post-verdict delay in payments.
Learning Point:
Evaluating and maneuvering through the post-trial and appellate process is comprised of much more than motion and brief-writing. As Scannapieco illustrates, the true financial liability of a defendant/judgment-debtor must be assessed in light of recent cases when evaluating a case on appeal. Such intricate financial matters and the evolving case law in this area present situations ripe for handling by experienced CM appellate attorneys. •
¹ See Williams v. Bright, 230 A.D.2d 548; Bermeo v. Atakent, 276 A.D.2d 361
² See Young v. Tops Mkts., Inc., 283 A.D.2d 923; Adamy v. Ziriakus, 254 A.D.2d 747
³ CPLR 5041 (e).
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