Key Takeaway
Court ruling clarifies that stipulating to liability doesn't trigger prejudgment interest accrual, potentially costing plaintiffs significant money in lengthy cases.
This article is part of our ongoing interest coverage, with 19 published articles analyzing interest issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
Understanding Prejudgment Interest When Liability is Stipulated
In personal injury litigation, defendants sometimes agree to stipulate to liability early in the case, essentially admitting fault while reserving the right to contest damages. While this might seem advantageous to plaintiffs by streamlining the legal process, a recent New York appellate court decision highlights a critical financial consideration that attorneys must understand.
The Second Department’s ruling in Mahoney v Brockbank addresses a fundamental question: does a stipulation to liability trigger the accrual of prejudgment interest under New York law? The answer has significant implications for case strategy, particularly in cases involving substantial damages and lengthy litigation timelines. Understanding how prejudgment interest calculations work becomes crucial when evaluating whether to accept liability stipulations.
Jason Tenenbaum’s Analysis:
Mahoney v Brockbank, 2016 NY Slip Op 05630 (2d Dept. 2016)
“In short, we conclude that a stipulation as to liability does not trigger the accrual of prejudgment interest under CPLR 5002. Moreover, because the parties did not provide for prejudgment interest in their stipulation, the Supreme Court properly determined that prejudgment interest was to be computed from the date of the jury verdict on the issue of damages.”
When I read this case, all I thought is a rear-end collision with serious injuries and a defendant stipulating to liability; the case takes 6 years to get to trial; and now, the plaintiff lost 54% interest on a case worth between $400,000-$800,000. Is that stipulating away to malpractice?
Key Takeaway
This ruling demonstrates that accepting a liability stipulation without addressing prejudgment interest can be financially devastating for plaintiffs. In cases with substantial damages and lengthy trial delays, the lost interest can represent hundreds of thousands of dollars—a consideration that must factor into any strategic decision about stipulations and settlement negotiations.
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Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Statutory Interest on No-Fault Insurance Claims
Under New York's no-fault regulations, insurers that fail to timely pay or deny a claim are subject to statutory interest penalties — currently two percent per month under 11 NYCRR 65-3.9. The accrual of interest, the calculation methodology, and the circumstances that toll or trigger interest obligations are frequently litigated issues in no-fault practice. These articles examine the regulatory framework governing interest on overdue no-fault claims and the case law that shapes how interest awards are calculated and enforced.
19 published articles in interest
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Dec 18, 2018Giant Oops from the Appellate Term
Appellate Term grants clarification motion on 9% interest rate in no-fault case despite CPLR 5004 allowing different rates when other statutes apply.
Dec 27, 2017Windfall interest
Court denies windfall interest to plaintiff who failed to prosecute no-fault insurance case for three years, demonstrating consequences of litigation delays.
Dec 7, 2015This one fell under the radar
Expert analysis of NY PIP interest tolling under 65-3.9(d). Learn how procedural delays can cost thousands in Long Island & NYC cases. Call 516-750-0595.
Jan 17, 2012Preliminary Conference is deemed a stipulation
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Nov 29, 2018Common Questions
Frequently Asked Questions
What statutory interest applies to overdue no-fault claims?
Under 11 NYCRR §65-3.9, overdue no-fault claims accrue interest at 2% per month from the date the claim became overdue. A claim is overdue if not paid or denied within 30 days of the insurer receiving proof of claim. This interest is a powerful incentive for prompt processing.
When does interest begin to accrue on a no-fault claim?
Interest begins on the 31st day after the insurer receives all requested verification (or the date verification was due if the insurer failed to request it timely). If the insurer fails to pay or deny within 30 days, 2% monthly interest accrues automatically until payment.
Can the insurer avoid paying interest on late no-fault claims?
Only if the insurer can demonstrate a valid excuse for the delay — such as a pending verification request that was timely issued. If the insurer caused the delay through untimely processing or late denials, interest is mandatory and cannot be waived.
Are stipulations binding in New York litigation?
Yes. Under CPLR 2104, a stipulation made in open court or in writing subscribed by the parties or their attorneys is binding and enforceable. Courts will enforce stipulations unless there is evidence of fraud, collusion, mistake, or overreaching.
Can a stipulation be set aside in New York?
A stipulation may be set aside under CPLR 2104 if there was fraud, mutual mistake, or if enforcement would be unconscionable. Courts also have inherent authority to relieve parties from stipulations in the interest of justice, though this power is exercised sparingly.
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About the Author
Jason Tenenbaum, Esq.
Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a interest matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.