7 F.4th 713
8th Cir.2021Background:
- CNI issued a workers’ compensation policy to AGL (annual premium $913,358); AGL financed part of the premium with IPFS under a premium finance agreement (PFA).
- Under the PFA, IPFS advanced $639,350.60 and was assigned AGL’s rights to any gross unearned premium if the policy was cancelled.
- CNI cancelled the policy after AGL defaulted; IPFS demanded the unearned premium, but CNI disputed the amount.
- District court granted summary judgment to IPFS, calculating unearned premium at $479,512.95, but initially denied prejudgment interest because IPFS first raised it in a reply brief.
- IPFS filed a Rule 59(e) motion for prejudgment interest; the district court granted it, applying Nebraska’s 12% rate for 272 days and awarding $42,880.80.
- CNI appealed challenging (1) the propriety of raising prejudgment interest via Rule 59(e) and (2) whether the claim was liquidated and the interest calculation; the Eighth Circuit affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a postjudgment Rule 59(e) motion may seek prejudgment interest when the issue was not raised earlier | Rule 59(e) is the proper vehicle; Osterneck treats prejudgment interest as part of full compensation | A party cannot raise prejudgment interest for the first time in Rule 59(e); such a request is untimely (relying on First State Bank, Great American) | 59(e) is a permissible vehicle; district court has discretion to grant such motions and did not abuse it |
| Whether the entire award ($479,512.95) was a liquidated claim subject to prejudgment interest and whether the interest calculation was correct | Amount is liquidated by agreed pro rata formula under the PFA; interest at 12% for 272 days yields $42,880.80 | Amount disputed; CNI contends a different calculable amount and seeks offsets tied to AGL’s separate indebtedness | Court held the amount was liquidated (readily computed by formula); offset argument was not a reasonable controversy; prejudgment interest award and calculation affirmed |
Key Cases Cited
- Osterneck v. Ernst & Whinney, 489 U.S. 169 (1989) (postjudgment motion for prejudgment interest is a Rule 59(e) motion)
- In re Redondo Constr. Corp., 678 F.3d 115 (1st Cir. 2012) (Rule 59(e) is an appropriate vehicle for prejudgment interest; such requests are an exception to ordinary forfeiture)
- First State Bank of Monticello v. Ohio Cas. Ins. Co., 555 F.3d 564 (7th Cir. 2009) (district court may deny Rule 59(e) prejudgment-interest requests as untimely)
- United States v. Great Am. Ins. Co. of N.Y., 738 F.3d 1320 (Fed. Cir. 2013) (Rule 59(e) cannot be used to raise arguments that should have been made earlier; district court discretion)
- Lincoln Benefit Life Co. v. Edwards, 243 F.3d 457 (8th Cir. 2001) (state law governs recovery of prejudgment interest in diversity cases)
- Pugh v. Great Plains Ins. Co., 474 N.W.2d 677 (Neb. 1991) (definition of liquidated claim: amount determinable without opinion or discretion)