In a recent decision, the Appellate Term, Second Department, issued a decision effectively rendering a settlement from 2001 for $2,705 to now be worth more than $1,000,000 with interest. The decision, while not addressing the usual Labor Law fact patterns and issues, addresses payment after settlement and the pitfalls surrounding a failure to pay on time. 

In Berenblit v Country Wide Ins. Co., 2025 NY Slip Op 50487[U] (App Term, 2d Dept, 2025), the Appellate Term, in effect, held that the plaintiff who had failed to enter a judgment after an in-court settlement for 16 years was entitled to statutory compound interest for the entire period from the date the settlement was entered into in court in December 2001 until such time as the judgment was entered and paid — a period of over 25 years. 

The plaintiff and defendant settled their case in open court in December 2001. Thereafter, the plaintiff made no demand for payment according to the terms of the settlement agreement and did not enter judgment seeking payment for approximately 16 years. Then, in February 2017, the plaintiff entered judgment using simple interest at a statutory rate of 2% per month. The plaintiff then moved to vacate the judgment as inadequate and sought a judgment with compound, not simple, interest. The lower court denied the motion, and the plaintiff appealed to the Appellate Term. 

The Appellate Term reversed the lower court's denial of the motion, vacated the judgment, and remitted the matter back to the lower court for the entry of a new judgment with compound interest, as the plaintiff sought. 

I am no math major, but my calculations suggest that a judgment for $2,705, with 2% compound interest from December 2001, compounding interest until the present time, would result in a judgment of approximately $1,030,000 (that does not include the $30 in costs also awarded by the Appellate Term). 

This case rests largely on the intricacies of New York No-Fault law, where older regulations provided specifically for compound interest. Yet, it serves as a reminder to all defendants in litigation. CPLR 5003 requires prompt payment after settlement. And as this case shows, defendants cannot necessarily rely on plaintiffs to make a demand for payment. Not only that, but plaintiffs' delays may not be sufficient to avoid the consequences of late payment. 

The takeaway: Move quickly to issue payments after settlement, otherwise it could be a ticking time bomb.