General Mills Operations, LLC v. Five Star Custom Foods, Ltd.
845 F. Supp. 2d 975
D. Minnesota2012Background
- General Mills sued Five Star for breach of contract after a 2008 recall of Five Star beef products.
- The court granted summary judgment finding Five Star breached and General Mills could recover damages and reasonable attorneys’ fees.
- The parties settled damages at $1,473,564 and attorneys’ fees up to that point at $150,000, but disputed prejudgment interest.
- Both sides agreed prejudgment interest is authorized under Minn. Stat. § 549.09, but contested accrual date and rate.
- The court held the May 27, 2008 letter constituted a written notice of claim triggering accrual of prejudgment interest.
- Because judgment entered after August 1, 2009, the 10% rate applies for prejudgment interest under the 2009 amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does prejudgment interest begin to accrue? | General Mills maintains accrual from May 27, 2008 written notice. | Five Star contends accrual depends on ascertainability of damages and more specific notice. | Accrual begins May 27, 2008 as a written notice of claim. |
| What rate applies to prejudgment interest? | 10% applies to judgments entered after August 1, 2009; applies retroactively to the judgment here. | Rate should split before/after Aug. 1, 2009 per Stafne decision. | Single 10% rate applies from May 27, 2008 to judgment entry. |
| Is the May 27, 2008 letter a written notice of claim under § 549.09? | Letter demanded payment and identified damages despite being an estimate. | Letter was too speculative and lacked documentation to trigger notice. | Letter constitutes a written notice of claim. |
Key Cases Cited
- Lienhard v. State, 431 N.W.2d 861 (Minn. 1988) (prejudgment interest available irrespective of ascertainability)
- Children’s Broad., Corp. v. Walt Disney Co., 357 F.3d 860 (8th Cir. 2004) (prejudgment interest under §549.09 in diversity case)
- Skifstrom v. City of Coon Rapids, 524 N.W.2d 294 (Minn. Ct. App. 1994) (prejudgment interest available for damages not yet incurred)
- Duxbury v. Spex Feeds, Inc., 681 N.W.2d 380 (Minn. Ct. App. 2004) (ascertainability concerns rejected for prejudgment interest)
- Myers v. Hearth Techs., Inc., 621 N.W.2d 787 (Minn. Ct. App. 2001) (prejudgment interest available irrespective of calculation ease)