Foresco Co. v. Oh
337 F. Supp. 3d 304
| S.D. Ill. | 2018Background
- Foresco, a medium-density fiberboard supplier, sued Albert Oh (guarantor) for breach of an alleged guaranty; jury returned a verdict for Foresco and the Court entered judgment on June 5, 2018.
- Twenty-one days after judgment, Foresco moved under Fed. R. Civ. P. 59(e) to amend the judgment to add prejudgment interest of $355,401.87 (9% per annum under NY CPLR §5004) and to seek postjudgment interest under 28 U.S.C. §1961 at 2.2275%.
- Oh opposed the prejudgment-interest request, arguing (1) accrual date was a jury issue and (2) Foresco waived the issue by not moving for a new trial under Rule 59(a)(1) within the jury-time limits.
- The Court analyzed procedural vehicle and substantive entitlement: Rule 59(e) is an appropriate vehicle for postjudgment requests for discretionary prejudgment interest; New York law awards prejudgment interest as of right for contract damages (CPLR §5001).
- Foresco limited its requested prejudgment interest to start from the filing of the action, so the Court found no unresolved accrual-date issue affecting the calculation; Foresco’s Rule 59(e) motion was timely under the 28-day deadline.
- The Court granted the motion, amending the June 5 judgment to add $355,401.87 prejudgment interest (simple 9% from April 13, 2015 to June 5, 2018) and postjudgment interest at 2.2275% until satisfaction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper procedural vehicle to request prejudgment interest after judgment | Motion to amend under Rule 59(e) is appropriate | Such requests implicate jury findings and thus required a motion for new trial (Rule 59(a)(1)); otherwise waived | Rule 59(e) is proper; postjudgment motion for prejudgment interest is a Rule 59(e) motion and Foresco’s motion was timely |
| Whether prejudgment interest is recoverable on contract damages | Prejudgment interest is mandatory under NY law for breach of contract (CPLR §5001) | Denied recovery absent jury determination of accrual date | Under New York law, prejudgment interest is recoverable as of right for contract damages; award appropriate here |
| Whether adding prejudgment interest after a jury verdict violates the Seventh Amendment | Court can, as a matter of law, add prejudgment interest post-verdict | Interest and accrual date are jury issues; court lacks authority post-verdict | Court may determine prejudgment interest post-verdict when entitlement is legal; no Seventh Amendment violation |
| Timeliness & accrual-date calculation | Motion filed within 28 days; Foresco requested interest from filing date so accrual-date issue irrelevant | Because jury did not decide accrual date, there is no governing law to calculate interest | Motion timely (Rule 59(e)); Foresco limited start date, so calculation was feasible and awarded |
Key Cases Cited
- Osterneck v. Ernst & Whinney, 489 U.S. 169 (postjudgment motion for prejudgment interest is a Rule 59(e) motion)
- J.A. McDonald, Inc. v. Waste Sys. Int'l Moretown Landfill, Inc., 247 F. Supp. 2d 542 (D. Vt. 2002) (court in diversity may add prejudgment interest without violating Seventh Amendment)
- Reyes-Mata v. IBP, Inc., 299 F.3d 504 (5th Cir. 2002) (adding prejudgment interest post-verdict does not violate jury-trial rights)
- Security Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 314 F. Supp. 2d 201 (S.D.N.Y. 2003) (district court has discretion whether to award prejudgment interest)
- Jones v. UNUM Life Ins. Co., 223 F.3d 130 (2d Cir. 2000) (factors district courts consider when awarding discretionary prejudgment interest under federal law)
- Schwimmer v. Allstate Ins. Co., 176 F.3d 648 (2d Cir. 1999) (state law governs prejudgment interest in diversity cases)
- Paddington Partners v. Bouchard, 34 F.3d 1132 (2d Cir. 1994) (under New York law, prejudgment interest is recovered for breach of contract)
- Frigitemp Corp. v. [unknown caption], 781 F.2d 324 (2d Cir. 1986) (distinguishing clerical/Rule 60(a) corrections from Rule 59(e) motions for interest adjustments)
- Stanford Square, L.L.C. v. Nomura Asset Capital Corp., 232 F. Supp. 2d 289 (S.D.N.Y. 2002) (amending judgment under Rule 59(e) to add prejudgment interest)