Using its power of eminent domain, The New York City School Construction Authority, Petitioner, acquired the premises located at Block 2802, Lot 94, Queens County. The premises was owned by Claimants 72-24 Grand Realty Corp. After some wrangling, the parties settled their dispute as to the value of the property for $1,900,000.00, which claimants have received.

Claimants now move for an order directing petitioner to pay them interest on the $1,900,000.000 settlement at the rate of nine percent per annum from January 15, 2004 to April 19, 2006. Claimants contend that said interest is due because petitioner failed to pay for the property in a timely manner on January 15, 2005, as was agreed per the Stipulation of Settlement of November 12, 2003. [*2]

Thereafter, say claimants, a closing was scheduled for January 15, 2004, but petitioner declined to go forward unless deductions were made for City imposed liens for water charges. Petitioner, add claimants, sought to withhold double the amount of the liens.

In further support of their position, claimants assert that the stipulation does not provide for the payment of any lien. The liens were for water said to have ben used after the premises was taken, and in any event, amounted to $110,780,76, and not the $300,000.00 that petitioner wanted to deduct. Claimants conclude that the $1,900,000.00 was a net settlement devoid of all liens.

Petitioner, in its opposition, argues that it is not required to pay interest on the amount received by claimant once the funds to pay for the property taken in the condemnation were "made available" to claimants, who refused to accept payment, and, adds petitioner, claimants are not entitled to interest if more than ninety (90) days have passed since claimant "unreasonable" declined to transfer title.

Continuing, petitioner argues that claimant initially refused to accept the payment on January 14, 2006. Further, petitioner makes the following arguments: -

The liens were imposed by the City of New York and it (petitioner) was powerless to either discount or void the liens. -

Claimants waited too long to challenge the liens, the result being the expiration of the period in which they could do so. -

Claimants eventually paid the liens and any interest paid to them would be "a windfall" which would be rewarding them for waiting for three and a half years before accepting the award and a "back handed" attempt reimbursement of the monies they paid to the City for the liens. -

It is willing to settle the claim for $19,989.12 to cover the period of November 12, 2003 to January 14, 2004 at six percent per annum, plus an additional $2,484.38 which is the interest owed to claimants for the excess of $106,713.42, it held in escrow to pay the liens. -

Claimants sought adjournment to pay the lien and otherwise refused to close.

The focal point of this dispute is the November 12, 2003 Stipulation of Settlement as spelled out on the record. The essence of the agreement is that the parties

reached a settlement of the entire claim for all four lots for the principal for the total sum of $1,900,000.00; that is inclusive of interest. There are no Section 101 allowances. And the total sum of $1,900,000.00 is to be paid by January 15, 2004.

Claimants argue here that the settlement does not provide for the payment of any liens. And, on its face, they are correct. On the other hand, the settlement does not rule out the payment of liens by claimants, and, indeed, is silent on the issue.

The Stipulation of Settlement is, after all, a contract. And, the parties to a contract are bound by its terms. Here, the contract does not address the issue of the liens and therefore the issue of the payment of the liens is construed against claimants i.e. Since the issue is not addressed in the four corners of the document then it is not a part of the contract.

As to the question of who is responsible for the delays in closing, it is clear that petitioner caused the initial delay on January 15, 2004 when it informed claimants that it would withhold funds sufficient to cover the liens, a matter that apparently was not previously discussed by the parties. It is equally clear that claimants bear some responsibility for the delay by alternating saying that they would or would not pay the liens. Or by saying that they would litigate the issue, but delayed in doing so.

It is conceded that in the letters dated January 6, 2004, January 15, 2004 and August 3, 2004, petitioner stated that it would not close unless the liens and real estate taxes were paid either independently before closing, or, out of the settlement funds. It is also noted that in a January 7, 2004 letter, claimants stated that they would pay the liens and other items at the closing and emphasized that they did not want petitioner to double the amount withheld. On January 13, 2004, claimants agreed to an adjournment of the closing to a date to be set. Again, on May 18, 2004, claimants sought to close subject to the liens on the grounds that they were billed for water usage after the "taking." Petitioner refused this offer. In the end the City reviewed the water and other charges and determined that claimants owed less than initially indicated. Claimants paid the amount due.

Because each side contributed to the delay, it cannot be said with any degree of certainty which side was more culpable for the delays in closing.

Upon review, the court determines that under the circumstances, neither side acted unreasonably in attempting to protect their respective interest. It is therefore, the decision of this court to grant claimants' motion only to the extent that petitioner is directed to pay to claimants the interest due from November 12, 2003 to January 14, 2004 at the rate of six percent. Petitioner is also directed to pay claimants any interest that may have accrued on the sum due and owing since then. This payment is in addition to the interest accumulated on the excess funds ($106,713.42) it held in escrow. [*4]

Petitioner is directed to pay interest on that amount from the date it began holding those funds in escrow to the date of this decision or until the date the funds were forwarded to claimants which ever applies.

Dated: March 14, 2007

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J.S.C.