De Long Corp. v. Morrison-Knudsen Co., 14 N.Y.2d 346 (1964)
In cases of intentional tort resulting in property damage, a successful plaintiff is entitled to pre-verdict interest as a matter of right, calculated from the date the cause of action accrued, to ensure full indemnification.
Summary
De Long Corp. sued Morrison-Knudsen Co. for inducing breach of contract and unfair competition. The trial court awarded damages, including pre-verdict interest. The Court of Appeals affirmed, holding that in intentional tort cases causing property damage, pre-verdict interest is a matter of right, not discretion. This principle ensures the plaintiff is fully compensated for the defendant’s wrongful actions from the time the damage occurred. The court likened the case to other intentional torts like conversion and fraud, where pre-verdict interest is routinely granted to provide complete indemnification. The decision clarifies the availability of pre-verdict interest in intentional torts affecting property rights.
Facts
De Long Corp. brought an action against Morrison-Knudsen Co. alleging inducement of breach of contract and unfair competition.
The plaintiff sought damages for the harm caused by the defendant’s intentional interference with its contractual and business relations.
The specific facts underlying the breach of contract and unfair competition claims are not detailed in this decision, as the primary focus is on the availability of pre-verdict interest.
Procedural History
The trial court rendered a final judgment in favor of De Long Corp.
The trial court also issued non-final orders adding interest to the verdict and denying a new trial.
Morrison-Knudsen Co. appealed the final judgment and the non-final orders to the Appellate Division, which affirmed the lower court’s decisions.
The case then reached the New York Court of Appeals by leave from the Appellate Division.
Issue(s)
Whether, in an action for inducing breach of contract and unfair competition, the successful plaintiff is entitled to pre-verdict interest as a matter of right on the amount of recovery.
Holding
Yes, because in actions involving intentional torts resulting in property damage, the successful plaintiff is entitled to pre-verdict interest as a matter of right to ensure full indemnification for the defendant’s wrongful interference with the plaintiff’s property rights.
Court’s Reasoning
The court reasoned that pre-verdict interest is necessary to afford a plaintiff “full indemnification” for the defendant’s wrongful interference with property rights, citing Flamm v. Noble. The court drew an analogy to other intentional torts, such as conversion, fraud, and trespass, where pre-verdict interest is recoverable as a matter of right.
The court distinguished this case from actions involving negligent injury to property, where interest is discretionary. It emphasized that intentional torts warrant mandatory pre-verdict interest to provide complete compensation.
The court quoted the authors of Weinstein-Korn-Miller, N.Y. Civ. Prac., stating that CPLR 5001(a) “is phrased broadly and is designed to obliterate all distinctions that may turn on the form of the action * * *, the type of property involved, or the nature of the encroachment upon the plaintiff’s property interests.” This suggests a legislative intent to expand the right to interest in property damage actions, regardless of the specific cause of action.
The court found no basis to differentiate the case from other intentional torts causing property damage. The focus was on the nature of the tort (intentional) and the type of damages (property-related), rather than the specific cause of action (inducing breach of contract).