Calculating the amount of prejudgment and post-judgment interest due in state court is a fairly mundane task. The same is true when calculating interest on a federal claim in federal court. What is not necessarily routine, however, is the calculation of interest on a state law diversity claim in federal court. In a diversity case under New York law, pre-verdict and prejudgment interest is calculated pursuant to the CPLR, which awards 9 percent interest, while post-judgment interest is calculated at the federal rate, which for the last few years has been 0.25 percent. Though this division appears relatively straightforward, the date of "judgment" is of paramount concern because the further in time the judgment can be extended, the more prejudgment interest a plaintiff can realize. At 9 percent, this can mount up quite rapidly. And while determining the "date of judgment" is sometimes non-controversial, there are instances when an appeals court modifies the judgment or reverses and remands, which in many instances will lead to a new (and later) date of judgment. This article will discuss the standard for calculating interest and explore some of the more unusual circumstances where ascertaining the date of judgment is not as simple as one might assume.
Prejudgment Interest
The purpose of prejudgment interest is simply to make the wronged party whole by compensating for the loss of use of money.1 It has two components: interest to the verdict and interest on the verdict (plus pre-verdict interest) to the date of entry of judgment. (CPLR 5001 & 5002.)2
