Over the summer, the Appellate Division, Second Department Van Nostrand v. Froehlich tackled a multi-faceted issue: Is the determination of a serious injury a liability or damages determination?  The issue arose because the Appellate Division was analyzing when prejudgment interest began to run — upon a finding a liability or a determination that the injured plaintiff met the serious injury threshold.

The Court split on the issue.  Justices H. Miller and Krausman held that a serious injury determination is a damages issue and, therefore, prejudgment interest pursuant to CPLR 5002 began to run when liability was established.  Justices Spolzino and Fischer held that even though a serious injury determination was a damages issue, the plaintiff’s entitlement to damages cannot be considered to be "fixed in law" until the plaintiff has satisfied the serious injury threshold established by the No-Fault Law.  As such, the Dissenting Justices reasoned that the prejudgment did not began to run until the serious injury determination.   The Dissenting Justices reasoned:  "Prejudgment interest pursuant to CPLR 5002 runs from the date on which ‘the plaintiff’s right to be compensated for the damages he or she sustained becomes fixed in law.’ "

This decision discussed the divergent analyses of all four Appellate Division Departments and should be read if your practice goes beyond the Second Department.

This issue appears ripe for the Court of Appeals to resolve the issue.  There is a conflict amongst the Appellate Division Departments.  New York Civil Law will keep you apprised of any developments.