Arkansas River Power Authority v. Babcock &Wilcox Power Generation Group, Inc.
ORDER on Post Trial Motions Nos. 302, 303, 324 by Judge Christine M. Arguello on 07/21/2017. (swest)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 14-cv-00638-CMA-NYW
ARKANSAS RIVER POWER AUTHORITY,
THE BABCOCK & WILCOX COMPANY,
f/k/a BABCOCK & WILCOX POWER GENERATION GROUP, INC.,
ORDER ON POST TRIAL MOTIONS ## 302, 303, 324
This matter is before the Court on three post trial motions, two filed by Defendant
The Babcock & Wilcox Company (“B&W”) — (1) Renewed Motion for Judgment as a
Matter of Law (Doc. # 303) and (2) Objection to Taxation of Costs (Doc. # 324) — and
one filed by Plaintiff Arkansas River Power Authority (“ARPA”) — Motion to Amend
Judgment for Pre- and Post-Judgment Interest (Doc. # 302). The Court addresses each
motion in turn.
In April 2005, ARPA and B&W entered into a contract pursuant to which B&W
was to provide to ARPA a coal-fired steam boiler for an electric generation project
owned by ARPA, known as the Lamar Repowering Project (the “LRP”). B&W delivered
the boiler in November 2007 but the boiler was unable to meet performance and
emissions standards in the contract. B&W implemented modifications in an attempt to
rectify the issues with the boiler, but none were successful. As a result of the boiler’s
deficiencies, ARPA claims to have incurred substantial financial loss.
In February 2014, ARPA initiated this suit, alleging, among other claims, that
B&W breached the parties’ contract by supplying a deficient boiler. The Court held a
nine-day jury trial on November 7–18, 2016. At the close of ARPA’s case, B&W moved
for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), which the
Court granted in part and denied in part. (Doc. # 300.)1
On November 21, 2016, the jury returned a verdict in favor of ARPA on its breach
of contract claim. (Doc. ## 279, 285.) The jury specifically found three separate
breaches: (1) B&W failed to engineer and deliver a boiler capable of meeting the blue
gas emissions guarantees in Section 40.9 of Exhibit A to the Contract (“First Breach”);
(2) B&W failed to prepare and implement a Corrective Action Plan fully addressing the
deficiencies with the boiler after receiving a Notice of Non-Achievement pursuant to
Section 29.2 of the Contract (“Second Breach”); and (3) B&W failed to meet the
auxiliary power guaranty of Section 40.12 of Exhibit A to the Contract (“Third Breach”).
(Doc. # 279 at 4.) The jury awarded Plaintiff $2.19 million for the First Breach, $1.0
million for the Second Breach, and $1.0 million for the Third Breach. Id.
On November 21, 2016, the Court entered final judgment in favor of ARPA and
against B&W (Doc. # 285), and on January 12, 2017, the Clerk of Court taxed B&W with
$56,080 in costs (Doc. # 315).
The Court granted B&W’s motion on ARPA’s Claim One (fraud in the inducement); Claim Two
(negligent misrepresentation), and Claim Three (fraudulent concealment). The Court also
dismissed ARPA’s claim for breach of contract based on its contention that B&W failed to
furnish a boiler that would meet the one point per megawatt hour limit on NOx emissions set
forth in the Federal Clean Air Act. The Court denied B&W’s motion on all other grounds.
B&W’S RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW
The Court first addresses B&W’s Renewed Rule 50 Motion for Judgment as a
Matter of Law, filed on December 19, 2016, and fully briefed by January 23, 2017.
Therein, B&W argues that it is entitled to judgment as a matter of law as to all three
bases on which the jury found that it breached the contract. B&W specifically contends
(1) ARPA failed to conduct contractually-required performance tests and is thereby
prohibited from attributing any breach of contract to B&W; (2) ARPA’s auxiliary power
guarantee claim fails as a matter of law because ARPA did not prove any recoverable
damages; and (3) the jury impermissibly awarded duplicative damages.
Under Rule 50(b), a party may make a renewed motion for judgment as a matter
of law within 28 days of the entry of judgment. See Fed. R. Civ. Proc. 50(b). In
evaluating a motion brought under Rule 50(b), the Court examines all the evidence
admitted at trial, construes that evidence and the inferences from it in the light most
favorable to the non-moving party, and refrains from making its own credibility
determinations, re-weighing the evidence, or substituting its conclusions for those of the
jury. See Tyler v. RE/MAX Mountain States, Inc., 232 F.3d 808, 812 (10th Cir. 2000);
see also Thunder Basin Coal Co. v. Sw. Pub. Serv. Co., 104 F.3d 1205, 1212 (10th Cir.
1997) (“The jury . . . has the exclusive function of appraising credibility, determining the
weight to be given to the testimony, drawing inferences from the facts established,
resolving conflicts in the evidence, and reaching ultimate conclusions of fact.”). Instead,
the Court has the very narrow task of determining only whether the jury verdict is
supported by substantial evidence when the record is viewed most favorably to the
prevailing party. Webco Indus., Inc. v. Thermatool Corp., 278 F.3d 1120, 1128 (10th
Cir. 2002). Substantial evidence is “something less than the weight of the evidence,
and is defined as such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if different conclusions also might be supported
by the evidence.” Id. Judgment as a matter of law is appropriate “only if the evidence
points but one way and is susceptible to no reasonable inferences which may support
the opposing party’s position.” Finley v. United States, 82 F.3d 966, 968 (10th Cir.
To preserve issues under Rule 50(b), a party must have moved for judgment as
a matter of law under Rule 50(a) at trial. United Int’l Holdings, Inc. v. Wharf (Holdings)
Ltd., 210 F.3d 1207, 1228 (10th Cir. 2000). Motions under Rule 50(a) must “specify the
judgment sought and the law and the facts on which the moving party is entitled to the
judgment.” Fed. R. Civ. P. 50(a)(2). A party may not circumvent Rule 50(a) by raising
for the first time in a post-trial motion issues not raised in an earlier motion for directed
verdict. United Int’l Holdings, 210 F.3d at 1228.
B&W first argues that ARPA’s failure to conduct performance tests on the boiler
precludes ARPA from now claiming that B&W breached the contract, thereby warranting
judgment as a matter of law on ARPA’s breach of contract claims. ARPA responds that
performance tests were not contractually required and, even if they were, B&W waived
its right to enforce that contractual obligation. The Court finds that, viewing the record in
the light most favorable to the prevailing party, substantial evidence supports ARPA’s
position and the jury’s verdict. See Webco Indus., Inc., 278 F.3d at 1128.
The parties’ contract provides, in pertinent part:
Performance tests, if required, shall be run by the Owner
within 60 days after the Owner shall have received notice
from the Seller that the equipment furnished is ready for
testing, it being understood that the Seller may require
The Equipment shall be considered as accepted if tests
show that the guarantees have been fulfilled, or if Owner
shall fall to have said Equipment tested within the 60 day
period referenced above or within 30 months from receipt of
the Equipment at the Site as defined in Paragraph 2.2.1 of
the General Condition of Purchase, whichever occurs first.
The results of these tests will establish the unit’s
performance of steam generation, stack emissions, etc. as
defined herein and will be used to determine compliance
with performance guarantees defined herein. The Supplier
may be present during these tests.
(Doc. # 303-2, p. 2.)
The plain language in the first paragraph does not state that “performance tests
are required”; rather, it says, quite clearly, “performance tests, if required” and contains
no subsequent language expressly stating that they were required in this instance.
Defendant’s reference to the final paragraph as definitive proof that performance tests
were required is unavailing. Any reasonable juror could read that paragraph, coupled
with the first one, and just as readily assume that the final paragraph applied only IF
performance tests were required. Although B&W presented testimony that performance
tests were required; ARPA presented contrary argument, and the jury merely weighed
these competing positions with its own contract interpretation in reaching its conclusion.
This Court will not re-weigh the evidence or substitute its conclusions for those of the
Moreover, even if the jury had concluded that performance tests were required,
the evidence also supports a jury finding that B&W waived its right to enforce this
contractual requirement. See Venderbeek v. VernonCorp., 25 P.3d 1242, 1248 (Colo.
App. 2000) (waiver is the intentional relinquishment of a known right).
Regarding waiver, the jury was instructed as follows:
In the event that you find that ARPA was obligated under the
contract to conduct performance testing, Plaintiff ARPA is
not legally responsible to Defendant B&W for substantially
performing its obligations under the contract if ARPA proves
that B&W waived those obligations. A waiver is proved if
you find all of the following:
B&W knew that ARPA was required to conduct
performance testing under the contract;
B&W knew that the failure of ARPA to perform this
contractual promise gave B&W the right to insist that
ARPA conduct performance testing before submitting
its Corrective Action Plan pursuant to section 29.2;
B&W intended to give up this right; and
B&W voluntarily gave up this right in a document
signed by B&W.
(Doc. # 282, p. 28.)
Section 29.2 of the Contract required B&W to submit a Corrective Action Plan
(CAP) to ARPA in the event that the boiler did not meet its performance guarantees. 2
Section 29.2 states, “In the event the specific Performance Guarantees are shown by the
performance tests not to have been achieved and such non-achievement is the result of
equipment deficiencies, the Seller shall, within ten (10) Business Days after the date of Owner’s
B&W argues that ARPA’s performance test obligation preceded and triggered B&W’s
CAP obligation. Nonetheless, ARPA presented evidence at trial that B&W knowingly
declined to enforce the performance test requirement. Specifically, ARPA presented
the following evidence of waiver:
A letter from ARPA’s General Manager to B&W detailing various issues with
the boiler and requesting B&W bring the boiler into compliance. The letter
concluded: “ARPA hereby submits this letter as its notice of non-achievement
pursuant to Section 29.2 of its contract with B&W and requests that B&W
submit a corrective action plan to bring the LRP into full compliance with its
permit and the performance guarantees of the contract.”
A responsive, signed letter from B&W to ARPA, wherein B&W acknowledged
boiler issues and stated, “As requested in your letter, B&W is working on a
corrective action plan and we hope to submit this plan within the next couple
of weeks once we have vetted some of the suggested solutions.”
Testimony from a B&W representative that, after receiving ARPA’s letter
regarding performance guarantee failures, B&W did not require ARPA to
submit the boiler to performance tests.
Testimony from a B&W representative that B&W designed and implemented
a CAP, notwithstanding ARPA’s failure to submit the boiler to performance
notice of non-achievement, submit to Owner a plan of corrective action specifying in reasonable
detail the actions Seller proposes to take to cause the Equipment to achieve the Performance
Guarantees, and the period of time in which it proposes to complete the corrective action
Corrective Action Plan.”
This evidence is sufficient to support a jury determination that B&W waived its
right to enforce any performance test obligation. Judgment as a matter of law on these
grounds is therefore unwarranted.
AUXILIARY POWER CLAIM
B&W next argues that the jury verdict on ARPA’s auxiliary power claim is
unsupported because ARPA failed to prove “any recoverable damages caused by
B&W” on that claim. (Doc. # 303, p. 8). The Court disagrees that ARPA failed to
present “any” evidence of recoverable damages. The Court instead finds that there was
substantial evidence in the record to support the jury’s verdict, including: 3
the Contract, Section 40.12, entitled Auxiliary Power Guarantee, which
guaranteed that the boiler’s average total power consumption would not
exceed 2340 KW;
email evidence and testimony by ARPA representatives reflecting that the
boiler’s average total power consumption greatly exceeded 2340 KW;
evidence that B&W knew about and may have considered this increase in
power consumption during early settlement negotiations; and
As relevant here, the jury was instructed as follows:
You may award damages to ARPA for loss, resulting in the ordinary course of
events, from B&W’s breach. You may determine this amount in any manner
which you find is reasonable. Unless special circumstances show that B&W
caused damages of a different amount, generally the measure of damages is the
difference, at the time and place of acceptance, between the value of the boiler
actually delivered by B&W and the value it would have had, had it been as
(Doc. # 282, p. 34.)
testimony by ARPA representatives that, as a result of the increased power
consumption, the value of the boiler as delivered to ARPA was greatly
diminished from the promised value.
(Doc. ## 312-19; 312-6, pp. 35–36; 312-20.)
Because this and other record evidence is sufficient to support the jury’s verdict
and damage award, the Court denies B&W’s request for judgment as a matter of law on
ARPA’s auxiliary power claim.
B&W also argues that the jury’s damage award on each of ARPA’s breach of
contract claims was impermissibly duplicative and requests that the Court vacate each
award as a matter of law. The Court denies B&W’s request for two reasons: (1) B&W
waived this issue at trial; and (2) the damages award was not duplicative.
First, the Court is not convinced that B&W preserved this contention in its oral
Rule 50(a) motion. During that motion, B&W mentioned damages related to breach of
contract in two short paragraphs, arguing:
Then, the last point about breach of contract is damages.
The contract bars all of the damages ARPA has claimed.
And it did not, in its trial brief, other than referring to the
damages it associates with the total loss of the LRP, it did
not refer to any other damages in its trial brief that it was
seeking in connection with the breach of contract claim.
It gave up last month any claims for operating costs as
damages, so any costs for operation of the SNCR or
operation with auxiliary power being in excess of a
guarantee. So although I am not quite certain what damages
ARPA might try and claim here, given that the original
damages’ claims were excluded, the contract is very clear
about what damages are excluded. And I have so far yet to
see one ARPA is requesting that is not specifically excluded
by the contract or not in excess of the 19.1 limit on the
(Doc. # 299, p 35–36.)
B&W did not once mention the possibility of duplicative damages being awarded.
B&W argues that they could not have raised this issue because “B&W had no way to
know at a Rule 50(a) stage that the jury would make the duplicative and unsupported
damages award that it did.” (Doc. # 322, p. 8.) Even if B&W could not have predicted
the jury’s ultimate award, B&W was put on notice that duplication might be an issue
when B&W specifically requested that the special interrogatory verdict form be modified
to set out separate questions identifying a separate award of damages for each of
ARPA’s breach of contract claims, rather than one lump sum for breach of contract
generally. ARPA’s counsel responded that separating the award by claim might create
an “overlap in damages,” and B&W disagreed, stating “question No 16 addresses the
possibility of duplicative damages.”4 (Doc. # 275-76.) In other words, B&W affirmatively
requested that the jury be permitted to parse damages in the manner to which it now
objects. The Court is inclined to consider this argument waived.
In any event, the damages award was not duplicative. As it was instructed to do,
the jury awarded damages based on the boiler’s value loss due to its inability to meet
emissions guarantees ($2.19 million) and its inability to meet auxiliary power guarantees
($1.0 million). These two awards do not overlap; they are for different boiler failures that
Question Number 16 stated, “ARPA is not allowed to be compensated more than once for the
same damages. Please indicate below whether your damage awards in Questions No. 2, 8,
and 13 above, are duplicate awards for the same damages and, if so, what amount9s0 is/are
duplicative.” (Doc. # 279, p. 5.) The Jurors indicated that they had not awarded duplicate
lowered the value of the boiler for different reasons. These awards also do not overlap
with the jury’s award of $1.0 million for B&W’s failure to prepare and implement a CAP
that addressed the boiler’s deficiencies. ARPA presented sufficient evidence at trial that
it suffered losses based on this failure that are not the same as the losses suffered from
the boiler’s failure to meet performance guarantees, including the costs to implement
and modify the plan numerous times. (Doc. # 312-6, p. 225–29; Doc. # 312-23.)
Accordingly, the Court denies B&W’s request for judgment as a matter of law on
grounds that the jury award was duplicative.
B&W’S OBJECTION TO TAXATION OF COSTS
B&W also requests that the Court review and overturn the Clerk of Court’s
taxation of Costs. The Court denies the request.
The Court reviews de novo the Clerk’s determination of costs. Farmer v. Arabian
Am. Oil Co., 379 U.S. 227, 233 (1964). (“On review of the clerk’s assessment, it was
[the district judge]’s responsibility to decide the cost question himself . . . .”).
Federal Rule of Civil Procedure 54(d)(1) provides that costs “should be allowed
to the prevailing party.” Fed. R. Civ. P. 54(d)(1). For purposes of Rule 54(d), a
prevailing party is a party in whose favor final judgment is rendered, regardless of the
amount of damages awarded. Barber v. T.D. Williamson, Inc., 254 F.3d 1223, 1234
(10th Cir. 2001); see also Shelton v. MRIGlobal, No. 11-cv-02891-PAB-MJW, 2013 WL
3381270 (D. Colo. July 8, 2013). The Court retains discretion to limit or deny otherwise
taxable costs to the prevailing party. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482
U.S. 437, 441–45 (1987). The Tenth Circuit has held that Rule 54(d) creates a
presumption that the prevailing party shall recover costs. Klein v. Grynberg, 44 F.3d
1497, 1506 (10th Cir. 1995). Accordingly, the burden is on the non-prevailing party to
overcome the presumption that costs will be awarded to the prevailing party. Rodriquez
v. Whiting Farms, Inc., 360 F.3d 1180, 1190 (10th Cir. 2004).
A district court denying costs to a prevailing party must “provide a valid reason”
for doing so. In re Williams Sec. Litigation—WCG Subclass, 558 F.3d 1144, 1147 (10th
Cir. 2009). “Circumstances in which a district court may properly deny costs to a
prevailing party include when (1) the prevailing party is ‘only partially successful,’ (2) the
prevailing party was ‘obstructive and acted in bad faith during the course of the
litigation,’ (3) damages are ‘only nominal,’ (4) the nonprevailing party is indigent, (5)
costs are ‘unreasonably high or unnecessary,’ or (6) the issues are ‘close and difficult.’”
Debord v. Mercy Health System of Kansas, Inc., 737 F.3d 642, 659–60 (10th Cir. 2013)
(quoting Cantrell v. Int’l Bhd. of Elec. Workers, AFL-CIO, Local 2021, 69 F.3d 456, 458
(10th Cir. 1995)).
1. Plaintiff was more than partially successful
B&W objects to the Clerk’s taxation of costs, in part, because it claims ARPA was
only partially successful. B&W argues that because ARPA recovered only 2.46 percent
of the damages it sought, the Court should deny ARPA’s costs entirely or limit them to
the same percentage. Plaintiff would then recover no more than $1,382.21.
It is within the Court’s discretion to refuse to award costs to a party which was
only partially successful. Howell Petroleum Corp. v. Samson Resources Co., 903 F.2d
778, 783 (10th Cir. 1990). “[I]n cases in which the prevailing party has been only
partially successful, some courts have chosen to apportion costs among the parties or
to reduce the size of the prevailing party’s award to reflect the partial success.” Barber,
254 F.3d at 1234–35.
“Although a district court may reduce a lodestar calculation on the grounds that a
prevailing party has achieved only partial success, when a lawsuit involves multiple
claims based on ‘a common core of facts or … related legal theories,’ it is inappropriate
for a district court to evaluate the individual claims as though they were discrete and
severable for the purpose of awarding attorney fees.” U.S. ex rel. Sun Const. Co., Inc.
v. Troix General Contractors, LLC, No. 07-cv-01355-LTB-MJW, 2011 WL 3648287, *3
(D. Colo. Aug. 18, 2011). Additionally, a plaintiff need not succeed on all or even most
of its claims to be awarded costs. See, e.g., Klein v. Grynberg, 44 F.3d 1497, 1506–07
(10th Cir. 1995) (concluding trial court abused discretion in denying costs where
plaintiffs were successful on major issues of case); Roberts v. Madigan, 921 F.2d 1047,
1058 (10th Cir. 1990); U.S. ex rel. Sun Const. Co., No. 07-cv-01355-LTB-MJW, 2011
WL 3648287, at *3 (concluding that a party was more than partially successful despite
failing to recover full amount of damages sought).
Although ARPA prevailed on only three of its fourteen claims against B&W, this is
not such a minute victory as to warrant the “severe penalty” of denying costs. See Marx
v. Gen. Revenue Corp., 668 F.3d 1174, 1182 (10th Cir. 2011) (“To deny a prevailing
party its costs is in the nature of a severe penalty, such that there must be some
apparent reason to penalize the prevailing party if costs are to be denied”). ARPA
succeeded on its breach of contract claims, overcame B&W’s counterclaims, and was
ultimately declared the prevailing party by the jury. (Docs. ## 279, 326.) The Court
refuses to find ARPA partially successful simply because it “did not recover the full
amount of damages initially sought.” U.S. ex rel. Sun Const. Co., 2011 WL 3648287, at
*3; see Klein, 44 F.3d at 1506–07 (concluding trial court abused discretion in denying
costs where plaintiffs were successful on major issues of case). Indeed, it would be
improper for the Court to penalize ARPA for bringing meritorious claims that ultimately
failed at trial, see Robinson v. City of Edmond, 160 F.3d 1275, 1283 (10th Cir. 1998),
and to reduce costs when ARPA’s claims stemmed from a common core of facts — the
parties’ contract to design, manufacture, and deliver a coal-fired boiler. (Docs. ## 80,
324); see U.S. ex rel. Sun Const. Co., 2011 WL 3648287, at *3.
2. ARPA was not obstructive nor did it act in bad faith during the course of
B&W further objects to taxation of costs because, it claims, ARPA was
obstructive and acted in bad faith during the course of litigation. (Doc. # 324 at 7–8.) In
support of this argument, B&W raises two discovery issues: (1) Plaintiff concealed the
prior expert report written by Richard Gendreau triggering a second deposition, and (2)
Plaintiff failed to produce documents it claimed were privileged but that were not. (Id.)
Although a district court may refuse to award damages to the prevailing party
where that party was obstructive and acted in bad faith in the course of the litigation, the
Court sees no reason to do so here. Debord, 737 F.3d at 659–60. Plaintiff’s actions
during discovery do not rise to the level of obstruction that would warrant refusing an
award of costs. Indeed, discovery disputes are common in cases wrought with this
much complexity and disagreement. Compare Dillon v. Twin Peaks Charter Academy,
No. 99-cv-CMA-BNB, 2009 WL 3698519 (D. Colo. Nov. 3, 2009) (finding defendant’s
change in argument after years of litigation was neither obstructive nor in bad faith); and
A.D. v. Deere & Co., 229 F.R.D. 189, (D. N.M. 2004) (finding defendant’s conduct did
not rise to level of egregiousness warranting denial of award of costs where alleged
obstructiveness and actions in bad faith were simply discovery disputes); with TK-7
Corp. v. Estate of Barbouti, 993 F.2d 722, 736 (10th Cir. 1993) (affirming district court
decision to not award costs where prevailing party attempted to circumvent a court
order — “an attempt which the court characterized as ‘both professional and
unconscionable”); and Sheets v. Yamaha Motors Corp., U.S.A., 891 F.2d 533, 539 (5th
Cir. 1990) (upholding district court’s decision not to award costs to prevailing party
where it was “forced to endure defendants’ repeated and abusive hardball tactics”
including unjustifiable refusal to produce documents, violating an order to compel,
repeatedly making false representations to the court, and more).
Accordingly, the Court denies B&W’s request that the Court overturn the Clerk’s
cost award and deny costs to ARPA.
ARPA’S RULE 59 (e) MOTION TO AMEND JUDGMENT TO AWARD
PREJUDGMENT AND POST JUDGMENT INTEREST
Finally, the Court addresses ARPA’s Rule 59(e) motion, wherein ARPA contends
that it is entitled to prejudgment and post judgment interest on each of its damage
awards. The Court agrees that ARPA is so entitled and grants ARPA’s request.
“Rule [59(e)] was adopted to make clear that the district court possesses the
power to rectify its own mistakes in the period immediately following the entry of
judgment.” White v. N.H. Dep't of Emp't Sec., 455 U.S. 445, 450 (1982) (internal
quotation marks omitted). The Court may amend the judgment in its discretion where
there has been an intervening change in the controlling law, new evidence that was
previously unavailable has come to light, or the Court sees a need to correct clear error
or prevent manifest injustice. Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th
ARPA contends that, under Colorado Revised Statute § 5-12-102, it is entitled to
prejudgment interest on each of its damage awards, commencing on the date when
each breach of contract occurred. In total, ARPA requests over $4 million in
B&W objects to this request, first arguing that ARPA waived any claim to
prejudgment interest pursuant to Section 20.1 in of the Contract, which provides,
20.1 CONSEQUENTIAL DAMAGE DISCLAIMER
Notwithstanding any other provisions of the Contract
Documents, neither [B&W] nor its subcontractors shall be
liable, whether arising out of contract, tort (including
negligence), strict liability, or any other cause of or form of
action whatsoever, for loss of anticipated profits, loss by
reason of plant or other facility shutdown, non-operation or
increased expense of operation, service interruption, cost of
purchased or replacement power, claims of ARPA’s
customers, subcontractors, vendors or suppliers, cost of
money, loss of use of capital or revenue, fines or penalties
assessed or levied against ARPA by any governmental
agency based on the operation, non-operation, or use of the
[Boiler] or for any special, incidental or consequential loss or
damage of any nature, whether similar or dissimilar to those
enumerated above, arising at any time or from any cause
(Doc. # 317-1, p. 1.)
B&W primarily argues that this section unambiguously precludes ARPA from
obtaining compensatory damages in the form of prejudgment interest. B&W specifically
highlights the following language as including prejudgment interest: “cost of money, loss
of use of capital or revenue.” (Id.) The Court does not read this language so broadly.
The Court instead reads it as disclaiming only consequential, not compensatory, losses.
Indeed, all of the other disclaimed damages in this paragraph reference consequential
damages, including the final catch-all sentence referencing any other “special,
incidental, or consequential loss.” See SOLIDFX, LLC v. Jeppesen Sanderson, Inc.,
841 F.3d 827, 839 (10th Cir. 2016) (“[D]irect damages flow directly from the breach of
the contract with the breaching party, while consequential lost profits flow from losses
beyond the scope of that contract.) And although B&W would have this Court ignore
the title of this section — “Consequential Damage Disclaimer” — the Court finds that it
is indicative of the parties’ understanding and contractual intent, even if not considered
part of the contract or binding in its application. See Hoang v. Assurance Co. of Am.,
149 P.3d 798, 801 (Colo. 2007) (“Courts are to give effect to the intent and reasonable
expectations of the parties and to enforce [a contract’s] plain language unless it is
Because prejudgment interest is a form of compensatory, not consequential
damages, Section 20.1 does not bar ARPA’s request. See Cook v. Rockwell Int’l Corp.,
564 F. Supp. 2d 1189, 1220 (D. Colo. 2008), rev’d on other grounds, 618 F.3d 1127
(10th Cir. 2010) (“Colorado courts have repeatedly held that prejudgment interest is an
element of compensatory damages. . . . The Tenth Circuit and other courts are in
accord with this view.”); see also, e.g., Seaward Const. Co. v. Bradley, 817 P.2d 971,
976 (Colo. 1991); Allstate Ins. Co. v. Starke, 797 P.2d 14, 19 (Colo. 1990); Webco
Indus., Inc. v. Thermatool Corp., 278 F.3d 1120, 1134 (10th Cir. 2002); Johnson v.
Cont’l Airlines Corp. 964 F.2d 1059, 1062 (10th Cir. 1992) (collecting cases).
2. Colorado Revised Statute § 5-12-102(1)
In diversity actions the federal court looks to state law to determine whether
prejudgment interest is allowed on its damages. Casto v. Arkansas–Louisiana Gas Co.,
562 F.2d 622, 625 (10th Cir. 1977). In Colorado, in cases other than in “actions brought
to recover damages for personal injuries,” a prevailing party may recover prejudgment
interest under § 5-12-102. The function of prejudgment interest awarded at a statutory
rate is to compensate for the time value of money without proof of the actual loss.
Goodyear Tire & Rubber Co., 193 P.3d at 827–28.
As pertinent here, § 5-12-102(1)(b) provides:
Interest shall be at the rate of eight percent per annum
compounded annually for all moneys or the value of all
property after they are wrongfully withheld or after they
become due to the date of payment or to the date judgment
is entered, whichever first occurs.
Whether the “withholder” recognizes a “gain or benefit” is irrelevant under this
section, and the prevailing party is not required to establish tortious conduct on the part
of the withholding party to recover prejudgment interest. Mesa Sand & Gravel Co. v.
Landfill, 776 P.2d 362, 364 (Colo. 1989). Indeed, prejudgment interest is recoverable
on a “mere breach of contract,” with the eight percent annual rate commencing “from
the time of the breach.” Id. at 365–65 (interest recoverable on a breach of contract
regardless of the prevailing party’s actions because the breach, in and of itself, makes
the nonprevailing party’s conduct “wrongful” in the sense contemplated by § 5-12-102);
Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d 821, 826 (Colo. 2008); see also
Vento v. Colorado Nat. Bank-Pueblo, 907 P.2d 642, 647–48 (Colo. App. 1995) (Plaintiff
“entitled to prejudgment interest from the date defendant breached its fiduciary duty,
thus causing the harm that ultimately occurred”); Smith v. Mehaffy, 30 P.3d 727, 732
(Colo. App. 2000) (“In breach of contract cases, non-breaching parties have been
permitted to recover prejudgment interest from the time of the breach [because t]he
theory is that the breach itself makes the conduct wrongful.”).
The jury in this case did not specify the date of B&W’s breach, nor was it asked
to do so. Citing Ripple Resort Media, Inc. v. Skyview Corp., No. 06-CV-01856-WDBBNB, 2009 WL 485172, at *2-3 (D. Colo. Feb. 29, 2009), B&W argues that because the
jury did not so specify and because ARPA’s request is unsupported by the evidence,
this Court should only award ARPA $1.00 in prejudgment interest. The Court
disagrees. “Difficulty in computation, as opposed to impossibility of determination, does
not weigh against an award of prejudgment interest.” Harris Grp., Inc. v. Robinson, 209
P.3d 1188, 1207–08 (Colo. App. 2009); S. Park Aggregates, Inc. v. NW. Nat’l Ins. Co.,
847 P.2d 218, 226 (Colo. App. 1992) (entitlement to prejudgment interest is a statutory
right); 1 Dan B. Dobbs, Dobbs Law of Remedies: Damages, Equity, Restitution § 3.6(1),
at 336 (2d ed. 1993) (“Prejudgment interest is allowable where the amount of damages
is definitely ascertainable by mathematical computation, or if the evidence furnishes
data that makes it possible to compute the amount . . . .”). Moreover, in Ripple, the
defendant failed to provide with “any” dates from which to calculate interest or evidence
to support the court’s date determination; here, ARPA has provided this Court with
breach dates and evidence from trial to support them.
The Court also rejects B&W’s arguments that the Court should award
prejudgment interest beginning on the date this lawsuit was filed, rather than the date of
B&W’s breach. In support of that request, B&W cites to legal authority that predates
the Colorado Supreme Court’s decision in Mesa Sand & Gravel Co., 776 P.2d at 364,
which clearly states that prejudgment interest should be calculated from the date of
breach, not the date of filing.
Accordingly, the Court next assesses the date of each breach. See Ireland v.
Dodson, 704 F. Supp. 2d 1128, 1147 (D. Kan. 2010) (“When prejudgment interest
should commence is a matter to be determined by the trial court in the exercise of
sound discretion, upon consideration of all the attendant facts and equities.”).
a. First Breach
The First Breach states “B&W failed to engineer and deliver a boiler capable of
meeting blue gas emissions guarantees in Section 40.9 of Exhibit A to the Contract.”
ARPA asserts that this breach occurred in November 2007, when B&W completed
delivery of the noncompliant boiler, which ultimately became the subject of this litigation.
(Doc. # 302-1.) B&W has not provided the Court with an alternate date for this breach.
After reviewing the evidence submitted at trial, the Court agrees with ARPA that the
breach occurred upon completion of the boiler delivery — a boiler that the jury found
never met the emissions guarantees in the contract. Although neither provides this
Court with a specific date, the parties agree that delivery took place in November 2007.
The Court, therefore, calculates prejudgment interest from the last possible day of that
month, November 30, 2007.
The Court therefore awards ARPA prejudgment interest on damages related to
the First Breach ($2.19 million), beginning on November 30, 2007 and ending on the
date of Final Judgment in this case — November 21, 2016.
b. Second Breach
The Second Breach states that B&W failed to prepare and implement a CAP fully
addressing the deficiencies with the boiler after receiving a Notice of Non-Achievement
pursuant to Section 29.2 of the Contract. 5 After receiving said notice from ARPA, B&W
designed a CAP, which it completed and implemented in June 2011. (Doc. # 80, p. 23;
84, p. 11.) Ultimately the jury found that this CAP did not adequately address the boiler
issues and that B&W thereby breached the contract. ARPA requests that this Court
calculate prejudgment interest on this breach beginning on August 9, 2011 — the date
when ARPA fired the boiler and realized that the CAP failed to address the boiler’s
contractual deficiencies. B&W does not provide this Court with a different breach date.
Having thoroughly considered the issue, the Court grants ARPA’s request. 6
The Court acknowledges B&W’s argument that it should not be punished for time spent
attempting to remedy the issues with the boiler, i.e. for delays due to modification attempts. But
nor should ARPA suffer for attempting to work with B&W to mitigate the damage and avoid
litigation. Ultimately, the jury determined that B&W’s attempts did not cure its breach; the Court
will not re-visit that issue. The Court is merely assessing prejudgment interest based on the jury
verdict before it.
The Court believes that the breach could actually be assessed sooner — as early as June
2011 when the CAP was first implemented — but nonetheless accepts ARPA’s request to use
the August 9, 2011, date.
The Court therefore awards ARPA prejudgment interest on damages related to
the Second Breach ($1.0 million), beginning on August 9, 2011, and ending on the date
of Judgment — November 21, 2016.
c. Third Breach
The Third Breach states, “B&W failed to meet the auxiliary power guarantee of
Section 40.12 of Exhibit A to the Contract.” ARPA asserts that this breach occurred on
April 4, 2005, when the parties’ executed the contract because B&W’s calculations of
power consumption, as provided for in the contract, were wrong as originally designed.
ARPA’s argument, however, focuses on the date of an alleged misrepresentation by
B&W, not the date of breach, as contemplated by the jury. The jury determined that the
breach occurred when B&W failed to meet a guarantee in the contract; it would defy
logic to state that B&W failed to satisfy a provision of the contract before B&W even had
an opportunity to perform on the contract. Based on the evidence presented at trial, the
Court instead views the Third Breach as similar to the First Breach — occurring when
B&W delivered the noncompliant boiler to ARPA.
Accordingly, the Court awards ARPA prejudgment interest on damages related to
the Third Breach ($1.0 million), beginning on November 30, 2007 and ending on the
date of Judgment — November 21, 2016.
POST JUDGMENT INTEREST
B&W does not oppose ARPA’s request for post judgment interest, and the Court
grants the request. Indeed, post judgment interest is required on any money judgment
in a civil case recovered in district court. 28 U.S.C. § 1961(a).
For the foregoing reasons, the Court ORDERS as follows:
1. Defendant B&W’s Renewed Motion for Judgment as a Matter of Law (Doc. #
303) is DENIED.
2. Defendant’s Objection to Taxation of Costs (Doc. # 324) is OVERRULED.
3. Plaintiff ARPA’s Motion to Amend Judgment for Pre- and Post-Judgment Interest
(Doc. # 302) is GRANTED.
4. The Clerk of Court is directed to award prejudgment interest, at a rate of 8
percent per annum, as follows:
a. commencing on November 30, 2007, and ending on November 21, 2016,
for the $2.19 million award (First Breach);
b. commencing on November 30, 2007, and ending on November 21, 2016,
for the $1.0 million award (Third Breach); and
c. commencing on August 9, 2011, and ending on November 21, 2016, for
the $1.0 million award (Second Breach).
5. Post judgment interest should be awarded at the prevailing federal rate,
beginning on November 21, 2016.
DATED: July 21, 2017
BY THE COURT:
CHRISTINE M. ARGUELLO
United States District Judge
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