Arden Besunder, P.C. v. Harwood
Attorneys and Parties
Brief Summary
Attorney-client fee dispute over account stated and breach of contract; proper specification and calculation of prejudgment interest.
After a nonjury trial, the Supreme Court (Nassau County) found for the plaintiff on account stated and breach of contract, awarding $95,698.99 in fees plus prejudgment interest; defendants had previously been held to have waived opposition to liability.
Only the prejudgment interest award amount was vacated; the judgment was modified to delete the $40,335.29 prejudgment interest and remitted for recalculation.
Under CPLR 5001 [statute allowing prejudgment interest in breach of contract actions], CPLR 5001(b) [interest computed from the earliest ascertainable date the cause of action existed; damages incurred at various times may accrue from each item’s date or a single reasonable intermediate date], and CPLR 5001(c) [the date from which interest is to be computed must be specified in the verdict, report, or decision], the trial court was required to specify the accrual date; because neither the decision nor judgment specified it, remittal was required.
Background
In August 2016, Adam S. Harwood retained Arden Besunder, P.C. for probate and trust matters through September 2017. In July 2017, Harwood’s wife, Linda Salamon, objected to invoices for January–June 2017. Following discussions with defendants’ counsel, the plaintiff proposed accepting $70,000 to satisfy fees through July 31, 2017, conditioned on defendants’ compliance; otherwise $139,673.46 would be due. Defendants sent $70,000 in August 2017, placed by plaintiff in escrow pending execution of a written agreement reflecting those terms and providing for continued representation with weekly invoices going forward and work stoppage upon two weeks’ nonpayment. Salamon made handwritten changes and both defendants signed, but the plaintiff never signed. Plaintiff sent August 2017 invoices that went unanswered. Plaintiff sued in March 2018 for account stated and breach of contract.
Lower Court Decision
By order dated February 28, 2020, the court held defendants waived the right to oppose liability. After a nonjury trial, the court awarded plaintiff $95,698.99 in fees plus prejudgment interest and entered judgment including $40,335.29 as prejudgment interest.
Appellate Division Reversal
The Appellate Division affirmed the fee award, finding the record supported entitlement to $95,698.99, but modified the judgment by deleting the prejudgment interest amount and remitted to specify the accrual date under CPLR 5001(c) and to recalculate interest consistent with CPLR 5001(b). All other arguments were unpreserved or without merit.
Legal Significance
Reaffirms that in breach of contract/account stated fee disputes, prejudgment interest is mandatory but must be computed from a properly identified accrual date. Courts must specify the date from which interest runs per CPLR 5001(c), applying CPLR 5001(b) to select the earliest ascertainable date, per-item dates, or a reasonable intermediate date when damages accrue over time.
When awarding prejudgment interest, trial courts must state the interest accrual date; failure to do so will result in modification and remittal for recalculation even if the underlying fee award is affirmed.