Agreement To Negotiate Interest Waiver Does Not Require Adjustment Of Damages Where Good Faith Negotiation Did Not Lead To Agreement

Posted: May 8, 2026 / Written by: Ian Weiss, Samuel L. Butt, Thomas A. Kissane, Channing J. Turner / Categories Damages, Inquest

Agreement To Negotiate Interest Waiver Does Not Require Adjustment Of Damages Where Good Faith Negotiation Did Not Lead To Agreement

On March 29, 2026, Justice Andrea Masley entered judgment for lender after an inquest. The case is FCS Advisors, LLC v. Imagelink SPE, LLC, Index No. 653077/2023.

Following summary judgment on liability under CPLR 3213, the court conducted an inquest on damages, for purposes of which the parties agreed that the lender’s records were “presumptively correct” absent demonstrable error. Slip op., p. 3. Justice Masley granted judgment in the amount demonstrated from those records by plaintiff’s expert, Manuel Colon, and found that Colon properly found a narrower wavier of certain interest, as the wider waiver that defendants sought had only been agreed to as a subject of negotiation and had never been agreed to after plaintiff engaged in those negotiations in good faith:

The court found Colon’s testimony credible; he explained how plaintiff calculated its damages. . . . [and] explained that . . . default interest of 19% was waived from January 1, 2021 to January 1, 2022, during which waiver period, 15% applied. . . . Plaintiff did not waive default interest from the date of default of July 15, 2019, as defendants seek here. . . .

It is undisputed that the parties agreed to a waiver of the default interest rate for some period of time…. However, since the parties did not agree otherwise, the only issue is whether the parties engaged in good faith negotiations. The court finds that plaintiff engaged in good faith negotiations… There was no resolution. However, failure to arrive at an agreement following discussions or unsuccessful negotiations is not bad faith.

Slip op., pp. 3, 5-6.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning inquests or the calculation of damages.