Electrolux Home Prod v. Whitesell Corp

Filing 1409

ORDER denying 1305 Motion to Strike the prejudgment interest calculations in the Karutz Report pertaining to Count VI. Signed by Chief Judge J. Randal Hall on 8/27/2020. (pts)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION

WHITESELL CORPORATION,

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Plaintiff,

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V.

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CV 103-050

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ELECTROLUX HOME PRODUCTS, INC.,
HUSQVARNA, A.B., and HUSQVARNA
OUTDOOR PRODUCTS, INC.,

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Defendants.

ORDER

Presently pending before the Court is Defendants' "Motion to
Strike Whitesell's Claims for Prejudgment Interest."
1305.)

(Doc. No.

Upon due consideration, the motion is DENIED as delineated

herein.

In brief summary of prior rulings in the case, the Court
previously determined that Plaintiff Whitesell Corporation could
not assert a claim for prejudgment interest under O.C.G.A. § 7-4-

16 on any claim for unliquidated damages.
2014, Doc. No. 577, at 14-16.)

asserted

in

Count

VI

of

the

(See Order of May 28,

Rather, such claim could only be

Second

Amended

Complaint

("SAC")

related to unpaid invoices, i.e., the only arguable liquidated

damages claim.^

(Id. at 15 (holding that the inclusion of an

interest claim under O.C.G.A. § 7-4-16 in any claim other than the
damages

claim

in

Count

VI

(Paragraph

199)

would

be

futile).)

Subsequent to the filing of the SAC, the Court also precluded a
claim of interest under O.C.G.A. § 13-6-13 on the unliquidated

damages claims.^

(Order of May 17, 2016, Doc. No. 818.)

The Court

determined that the inclusion of a claim for prejudgment interest
under O.C.G.A. § 13-6-13 was an impermissible new claim and, in

any event, would be futile because such claim may only be awarded
if the amount of damages is ascertainable at the time of the
contractual breach.

these rulings.
the

Court

(Id.)

On May 15, 2017, the Court reaffirmed

(Order of May 15, 2017, Doc. No. 896.)

denied

Plaintiff's

motion

for

Finally,

reconsideration

of its

preclusion of a claim for prejudgment interest under O.C.G.A. §
13-6-13.

(Order of Apr. 16, 2019, Doc. No. 1184.)

1 O.C.G.A. § 7-4-16 provides: ''The owner of a commercial account
may charge interest on that portion of a commercial account which
has been due and payable for 30 days or more at a rate not in
excess of 1^ percent per month calculated on the amount owed from
the date upon which it became due and payable until paid." This
statute is not applicable in the absence of a liquidated damages
claim. Typo-Repro Servs. Inc. v. Bishop 373 S.E.2d 758 (Ga. Ct.
App. 1988).
2
O.C.G.A. § 13-6-13 provides: "In all cases where an amount
ascertained would be the damages at the time of the breach, it may

be increased by the addition of legal interest from that time until
the recovery."
The legal rate of interest is 7% per annum.
O.C.G.A. § 7-4-2(a)(1)(A).
2

At present, Plaintiff has provided an expert report of Mr.
Peter J. Karutz, a forensic accountant, on the issue of damages.

The Karutz Report is dated April 12, 2019 and was updated on August
12, 2019.

The Karutz Report sans referenced Schedules appears in

the record of the case as Exhibit E to Defendants' motion to strike

certain opinions of Mr. Karutz.

report,

Mr.

Karutz

calculates

(Doc. No. 1314-13.)

prejudgment

Plaintiff's remaining claims for damages.

interest

In the

on

all

In light of the prior

rulings. Defendants ask the Court to strike these calculations
from the

Karutz

Report.

Defendants

also

now

seek to

strike

Plaintiff's claim for prejudgment interest in Count VI of the SAC
related to unpaid invoices.
Prejudgment Interest on Claims Other Than Count VI
(O.C.G.A. § 13-6-13)

Plaintiff defends its inclusion of prejudgment interest in

its expert's damages calculations as an exercise
economy.

of judicial

Plaintiff states that its prejudgment interest claims

should be submitted to the jury in case this Court reconsiders,
rescinds

or

modifies its

entitlement thereto.

prior

rulings

respecting

Plaintiff's

Presentation of the issue to a jury would

also eliminate the need for a retrial should the Eleventh Circuit

reverse this Court's rulings.

Upon consideration, the Court will not strike the damages

calculations respecting prejudgment interest for the unliquidated

damages claims as calculated in the Karutz Report.

The issue will

not be presented to a jury by way of evidence or argument, however.

Without necessarily concluding that Plaintiff s present motion is

""proper advocacy" (see Pl.'s Sur-Reply, Doc. No. 1373, 1 9), the
Court recognizes that there is ""no harm done" by the expert's
calculations (id. SI 10).

As suggested by Plaintiff, the Court

will therefore allow the calculations to remain, but simply not

put them to use.

(See id.)

prejudgment interest

under

That is to say, the calculations of

O.C.G.A. § 13-6-13 on

Plaintiffs

claims other than Count VI will be allowed to remain in the Karutz

Report.

If the Karutz Report is presented to a jury, it will be

redacted in accordance with this Order.

In this way. Defendants'

motion to strike the prejudgment interest calculations in the

Karutz Report pertaining to claims other than Count VI is DENIED.
Prejudgment Interest on Count VI

(O.C.G.A. § 7-4-16)

Count VI of Plaintiff's SAC, entitled ""Breach

of Contract

(Failure to Pay Invoices)," alleges that Defendants have refused

to pay ""valid and undisputed invoices" for parts Plaintiff supplied
to it.

(SAC, Doc. No. 578, 1 170.)

Therein, Plaintiff claims it

is entitled to 18% interest under O.C.G.A. § 7-4-16.

(Id. SI 179.)

Previously, the Court determined that Count VI is arguably
the only liquidated claim brought by Plaintiff.
2014, at 15.)

(Order of May 28,

Through its present motion to strike Plaintiff's

claims of prejudgment interest, Defendants argue that Count VI is

an

unliquidated

claim.

Thus,

Defendants

seek

to

strike

Mr.

Karutz's interest calculations related to Count VI.^

A claim for damages is liquidated if it is for "an amount

certain and fixed, either by the act and agreement of the parties
or by operation of law; a sum which cannot be changed by the

proof." Patton v. Turnage, 580 S.E.2d 604, 609 (Ga. Ct. App. 2003)
(quoted source omitted).

Defendants argue that Plaintiff's claims

on unpaid invoices do not fit this definition because the amount
Plaintiff has claimed through Count VI "has vacillated wildly."
(Defs.' Mot. to Strike, Doc. No. 1305, at 7.)

Defendants point

out that Whitesell sought a total dollar amount of over $4 million
in the SAC, but Mr. Karutz has now calculated the principal amount

due and owing as just over $2 million.

(Id.)

Defendants also

argue that there are bona fide disputes concerning the prices to
be applied for the parts invoiced.

For instance, in order to

determine the price per part of "new parts," a jury must determine

the

pricing

by

reference

to

the

most

similar

part

purchased by Defendants from Whitesell at the time.

that

was

(Id. at 8

(citing Supply Purchase Agreement, § 5.6).)

3 Mr. Karutz erroneously computed prejudgment interest on Count VI
damages at 7%.
Plaintiff represents that Mr. Karutz will update
his calculations at the 18% interest rate pursuant to O.C.G.A. §
7-4-16. (See PI.'s Resp. to Defs.' Mot. to Strike, Doc. No. 1339,
at 9 n.5.)
5

The Court has now considered a portion of Plaintiff's unpaid

invoice

claims

in

resolving

Defendant

Husqvarna's

motion

for

summary judgment as to certain of Plaintiff's accounts receivable

pricing discrepancy claims, which are part of Count VI.

Through

its Order of August 13, 2020, the Court determined that pricing on
many of the subject parts could be determined as a matter of law

by reference to the applicable pricing provisions in the parties'
agreements.

(Doc. No. 1408, at 7-17.)

In fact, for 22 of the 25

parts, the Court was able to readily determine the appropriate
price per part by application of the pricing provisions to the
undisputed evidence.
notwithstanding,

the

(See id.)
Court

Plaintiff's argument of waiver

concluded

that

Defendants

Plaintiff the fixed and certain amount of $6,429.06.

owed

(Id. at 15.)

As expressed by the Georgia Court of Appeals, a commercial account
is liquidated (and therefore subject to prejudgment interest) even
if the defendant unsuccessfully contests the amount due and even
if the ultimate amount awarded is less than that requested.

Elec.

Works CMA, Inc. v. Baldwin Tech. Fabrics, LLC, 703 S.E.2d 124, 126

(Ga. Ct. App. 2010) (quoted source omitted); see also Buck Creek
Indus. V. Crutchfield & Co., 210 S.E.2d 32, 33 (Ga. Ct. App. 1974)

(stating

that

one

party

cannot

by "means

of

an

unsuccessful

defense" render an amount due and owing on a commercial account

uncertain).

Accordingly, with

respect to the unpaid invoices

involving 22 of the 25 parts upon which the Court determined that
6

Defendant

Husqvarna

owes

Plaintiff

$6,429.06,

Plaintiff

is

entitled to prejudgment interest at a rate of 18% under O.C.G.A.
§ 7-4-16.^

Turning now to the other invoices involved in Count VI that
are unresolved, it appears that the pricing for the involved parts

may

be

hotly

disputed,

are

not

subject

to

application

of

straightforward payment terms in a contract, and involve a jury's
consideration

of extrinsic evidence.

Accordingly,

Plaintiff's

claims on the remaining unpaid invoices may be unliquidated.

The

Court, however, will defer this matter until trial.

Upon

the

foregoing.

Defendants'

motion

to

strike

the

prejudgment interest calculations in the Karutz Report pertaining
to Count VI (doc. no. 1305) is DENIED.

ORDER ENTERED at Augusta, Georgia, this

^y of August,

2020.

J. R?rWD^fe^ALL,9^Hl\:F iUDGE
UNITED STATES

DISTRICT COURT

;OUTHE^ DISTRICT OF GEORGIA

^ The Court can discern no genuine dispute of material fact as to
the amount of prejudgment interest owed on these invoices. Indeed,
the due date and the amount owed on each invoice should be readily
determinable.
7