Carson Industries, Inc. v. American Technology Network, Corp.

Filing 152

ORDER GRANTING PLAINTIFF'S MOTION TO AMEND JUDGMENT TO ADD PREJUDGMENT INTEREST. Re: Dkt. No. 144 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 2/9/2016)

Download PDF
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 CARSON INDUSTRIES, INC., Plaintiff, United States District Court Northern District of California 11 v. 12 13 14 AMERICAN TECHNOLOGY NETWORK, CORP., Defendant. Case No. 14-cv-01769 NC ORDER GRANTING PLAINTIFF’S MOTION TO AMEND JUDGMENT TO ADD PREJUDGMENT INTEREST Re: Dkt. No. 144 15 16 I. INTRODUCTION In this contract dispute over payment for night vision goggle kits, plaintiff Carson 17 18 moves to amend the judgment to add prejudgment interest pursuant to Federal Rules of 19 Civil Procedure 59(e) and 60(b). Because the judgment amount was ascertainable and 20 therefore sufficiently certain under California Civil Code § 3287, the Court GRANTS 21 Carson’s motion to add prejudgment interest. 22 II. 23 STATEMENT This case is about the sale of night vision goggle kits between two parties, Carson 24 Industries Inc. and American Technology Network Corp. Carson sold night vision goggle 25 kits to ATN. Carson shipped 880 goggle kits to ATN in December 2010 and the kits 26 arrived on December 17, 2010. Dkt. No. 63-1 at 3, 4 (Exhibits 3 and 4; invoice and 27 purchase order with date stamp). 28 The Court granted partial summary judgment to Carson on its sale to ATN of 463 Case No. 14-cv-01769 NC 1 goggle kits and 10 lenses in the total amount of $280,795.35, “because ATN did not give 2 Carson notice of breach.” Dkt. No. 81, 9/25/2015 order. Subsequently, the Court granted 3 summary judgment in favor of Carson on ATN’s counterclaim asserting that ATN paid for 4 but did not receive 90 goggle kits in September 2010. Dkt. No. 103, 10/6/2015 order. 5 Finally, the Court granted summary judgment to Carson on the remainder of the 6 case, which was comprised of “Carson’s claim for the remaining $120,241.17, or for 7 ATN’s stated counterclaims that it is entitled to (1) $230,000 for its alleged repair costs for 8 920 goggle kits at $250 per unit and (2) $50,000 that ATN paid to Carson in February 9 2012.” Dkt. No. 142, 12/24/2015 order. 10 On December 24, 2015, the Court entered judgment in Carson’s favor for United States District Court Northern District of California 11 $401,036.52. Dkt. No. 143. 12 III. STANDARD OF REVIEW 13 Carson moves for amendment of the judgment under Federal Rules of Civil 14 Procedure 59(e) and 60(b). Rule 59(e) requires Carson to move for amendment within 28 15 days after entry of judgment. Rule 60(b) provides that “the court may relieve a party or its 16 legal representative from a final judgment, order, or proceeding for the following reasons: 17 (1) mistake, inadvertence, surprise, or excusable neglect.” Fed. R. Civ. P. 60(b). 18 Here, Carson discussed the topic of prejudgment interest with the Court during the 19 pretrial conference, but failed to put an argument for prejudgment interest in its motion for 20 summary judgment. Dkt. Nos. 116, 144 at 4. Under Rule 60(b)(1), Carson must show 21 mistake or excusable neglect in order for the Court to amend the judgment to include 22 prejudgment interest. As discussed below, the Court finds that Carson’s failure was 23 excusable neglect and grants Carson’s motion because the prejudgment figure was 24 ascertainable and proper under California state law. 25 IV. ANALYSIS 26 A. Certainty Under California Civil Code § 3287 27 In federal diversity actions, state law determines whether a party may recover 28 prejudgment interest. In re Exxon Valdez, 484 F.3d 1098, 1101 (9th Cir. 2007). California Case No. 14-cv-01769 NC 2 1 2 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 Civil Code § 3287 provides: (a) Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state. (b) Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed. Cal. Civ. Code § 3287. The test for determining certainty is whether the opposing party “actually know[s] 12 the amount owed or from reasonably available information could [] have computed that 13 amount. Only if one of those two conditions is met should the court award prejudgment 14 interest.” Chesapeake Indus., Inc. v. Togova Enters., Inc., 149 Cal. App. 3d 901, 907 15 (1983). “This requirement reflects a general belief that a defendant should not be required 16 to pay a penalty on a sum he could not ascertain prior to judgment.” Minor v. Christie’s 17 Inc., No. 08-cv-05445 WHA, 2010 WL 2891599, at *2 (N.D. Cal. July 22, 2010). 18 Here, ATN could ascertain the amount that Carson sought to recover prior to 19 judgment. Carson’s complaint alleged that “[o]n or about December 17, 2010, ATN 20 became indebted to Plaintiff in the sum of $404,987.02 for goods and services sold to 21 ATN, net of credits and/or partial payments.” Dkt. No. 2 at 3. Each of the Court’s 22 summary judgment orders and its order clarifying issues for trial set out the claims Carson 23 brought against ATN and the counterclaims ATN brought against Carson. See Dkt. Nos. 24 81, 111, 142. 25 ATN has disputed its liability throughout the case. In opposition to the present 26 motion, ATN claims that a grant of prejudgment interest would violate its due process 27 rights because it was not on sufficient notice of the judgment award. Dkt. No. 149. 28 However, “[a] defendant’s denial of liability does not make damages uncertain for Case No. 14-cv-01769 NC 3 1 purposes of Civil Code section 3287.” Cataphora Inc. v. Parker, 848 F. Supp. 2d 1064, 2 1072-75 (N.D. Cal. 2012). The question is whether ATN had notice of what penalties it 3 would endure if it lost at trial. Minor v. Christie’s Inc., 2010 WL 2891599, at *2. Because 4 ATN could ascertain this sum before judgment, prejudgment interest on the $401,036.52 5 judgment is sufficiently certain under § 3287. 6 7 B. Rate of Interest Under California Civil Code § 3289 Unless specified in the contract, the rate of interest is ten percent per annum from 8 the date of breach. Cal. Civ. Code § 3289. Given that the contract does not specify the 9 interest rate, the default rate applies. 10 C. Date of The Breach From Which Prejudgment Interest Ran United States District Court Northern District of California 11 Although the interest rate is statutorily applied, the Court must still ascertain the 12 date of the breach in order to calculate prejudgment interest. Here, the goggle kits were 13 delivered on December 17, 2010. See Dkt. No. 63-1 at 3 (Exhibits 3 and 4; invoices dated 14 December 17, 2010). The purchase order contains a box entitled “Payment Terms” with 15 the statement “net 10 days.” Id. at Exhibit 3. Under the terms of the contract, the breach 16 occurred when the 10 day term expired and the invoice remained unpaid. As such, Carson 17 is entitled to prejudgment interest at a rate of ten percent from the date of breach on 18 December 27, 2010, until the date of the judgment entered on December 24, 2015. 19 20 D. Calculating Prejudgment Interest In CMA CGM, S.A. v. Waterfront Container Leasing Co., Inc., No. 12-cv-05467 21 JSC, 2014 WL 4313026, at *8 (N.D. Cal. Aug. 29, 2014), Magistrate Judge Corley stated 22 that the “formula for calculating prejudgment interest is as follows: I = P x r x t.” Under 23 the formula: 24 25 26 27 P = the principle amount ($401,036.52) (see Dkt. No. 143, Final Judgment) r = the interest rate (10% under § 3289) t = the time from the breach (December 27, 2010, ten days after the December 17, 2010 delivery) to the final judgment (December 24, 2015) (Dkt. No. 143) = Four years, 11 months, and 27 days, or 4.99 years Therefore, the appropriate computation is: 401,036.52 x .10 x 4.99 = $200,117.22 in 28 Case No. 14-cv-01769 NC 4 1 2 3 prejudgment interest. The judgment is accordingly adjusted to include $200,117.22 in prejudgment interest for a total award of $601,153.74. 4 5 IT IS SO ORDERED. 6 7 Dated: February 9, 2016 8 _____________________________________ NATHANAEL M. COUSINS United States Magistrate Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 14-cv-01769 NC 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?