NY Court of Appeals - language in real estate contract trumps right to CPLR statutory interest.

In its 2012 decision in J. D'Addario & Co. v. Embassy Industries, 20 N.Y.3d 113 (2012), the court held that a contract can also trump the parties' statutory right to interest under CPLR 5001(a).

In breach of contract actions, CPLR 5001 provides that statutory interest be awarded to the prevailing party from the breach until any verdict. This is commonly referred to as Stage I interest. In J. D'Addario, the parties to a real estate contract agreed that the "sole remedy" for the seller and the "sole obligation" of the purchaser in the event of the purchaser's default would be an award of the down payment, and that the seller had "no further rights" against the defaulting purchaser. The court held that this contractual language trumped the right to statutory interest in CPLR 5001(a). In sum, the seller was permitted to an award of the entire down payment ($650,000), but not Stage I interest ($227,406).