Electrolux Home Prod v. Whitesell Corp

Filing 896

ORDER denying 880 Motion Entry of Order Reserving Ruling on Award of Pre-Judgment Interest; denying 886 Motion for Hearing. Signed by Chief Judge J. Randal Hall on 05/15/2017. (thb)

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IN THE UNITED STATES DISTRICT SOUTHERN DISTRICT OF COURT FOR THE GEORGIA AUGUSTA DIVISION WHITESELL CORPORATION, * Plaintiff, * * * ELECTROLUX HOME PRODUCTS, 103-050 * INC., HUSQVARNA, A.B., and HUSQVARNA OUTDOOR PRODUCTS, INC., CV * * * • Defendants. * ORDER Presently Corporation's reserving before the ("Whitesell") this interest on its Court's claims, Court motion ruling on is Plaintiff for an entry award of Whitesell of an prejudgment liquidated and unliquidated, after the evidence has been presented. order until Defendants argue that this Court has already ruled upon the issue. The matter has been fully briefed. The Court has allowed an interest claim under O.C.G.A. § 7-4-16 on Whitesell's only arguable liquidated damages claim: Count VI, the Failure to Pay Invoices. (See Order of May 28, 2014, Doc. No. 577, at 14-16 (overruling Defendants' objection to the inclusion of an interest claim in Paragraph 199 of the Second Amended Complaint).) With respect to the unliquidated damages the claims, however, Court has disallowed the inclusion of a claim of interest under both O.C.G.A. (see id.) and O.C.G.A. doc. no. 818) . § 7-4-16 § 13-6-13 (see Order of May 17, 2016, Whitesell does not take issue with the Court's ruling with respect to O.C.G.A. § 7-4-16; rather, its focus is on its claim for prejudgment interest under O.C.G.A. § 13-6- 13. Background On May 17, 2016, this Court disallowed Whitesell's claim for prejudgment interest under O.C.G.A. finding that it was a new claim. § 13-6-13 upon (Doc. No. 818, at 4.) a By way of further explanation, when Whitesell filed its motion to amend the complaint in January of 2014, the proposed Second Amended included Complaint attached thereto the word winterest" in the damage allegation of each substantive cause of action. (See Doc. No. hearing on March 27, amendment. 546, Ex. A.) The Court convened a 2014 to address Whitesell's proposed The only mention of "interest" during the hearing was Whitesell's reference to its claim for 18% interest on a commercial account under O.C.G.A. § 7-4-16 in relation to the count involving Defendants' alleged failure to pay invoices. (Tr. at 33-37, Doc. No. 567.) Then, after the hearing, Whitesell submitted its proposed Second Amended Complaint in compliance with the Court's rulings in the hearing. No. 568.) (See Doc. That submission of April 10, 2014 includes only a 2 claim for "18% interest as permitted by O.C.G.A. § 7-4-16," which is added to the damage allegation of each count. id.) No. (See Defendants objected to this claim of interest. 569.) (Doc. In response thereto, Whitesell points out that it had made a claim for interest in its proposed Second Amended Complaint (filed in January 2014), had noted the claim again in the hearing without objection from Defendants during the March 27th hearing, and had "cited the statute pursuant to which interest would be available" in the April 10th submission of its proposed Second Amended Complaint. 18.) As stated, Second Amended any reference to Complaint of April (Doc. No. 573, at interest in its proposed 10, 2014 cites only to In ruling upon Defendants' objections on O.C.G.A. § 7-4-16. May 28, 2014, this Court directed Whitesell to strike its claim of interest in all but Paragraph 199, which pertains to the only liquidated Nevertheless, when damages Whitesell claim. (Doc. filed its No. Second 577.) Amended Complaint in conformance with the Court's Order of May 28, 2014, the damages allegation in each cause of action includes the word "interest" where it did not appear in its April 10, 2014 submission. This (See PL's Second Am. Compl. , Doc. No. 578.) modification went unnoticed by Defendants until Whitesell filed a motion to the Court and "interlineate" the claim by adding the word "prejudgment" before the word "interest." (Doc. No. 801.) Once the issue was placed squarely before amend the it, the Court denied Whitesell's motion to complaint to include a claim for prejudgment interest under O.C.G.A. § 13-6-13 because it did not appear in Whitesell's constitute Complaint. April a new 10, claim 2014 7^ submission years after and the would First (Order of May 17, 2016, Doc. No. 818.) thus Amended The Court further concluded that the inclusion of a prejudgment interest claim would be futile in any event. Legal (See id.) Standard Whitesell seeks to have this Court "reserve ruling" on the issue of prejudgment interest. Order of May 17, denying Because the Court, in its 2016, has already ruled on this Whitesell's motion for leave to amend issue in the Second Amended Complaint to include a claim for prejudgment interest under O.C.G.A. § 13-6-13, the Court views Whitesell's current motion as a motion for reconsideration of that ruling. Reconsideration, however, is appropriate only if the movant demonstrates: (1) an intervening change of law; (2) the availability of new evidence; or clear error of (3) the need to correct a law or prevent manifest injustice. Center for Biological Diversity v. Hamilton, 1330, 1337 (N.D. E.g. , 385 F. Supp. 2d Ga. 2005) ; Estate of Pidcock v. Sunnvland America, Inc., 726 F. Supp. 1322, 1333 (S.D. Ga. 1989). In this case, Whitesell attempts to show that reconsideration is 4 necessary to correct a clear error of law or to prevent manifest injustice. Legal Analysis Before delving into the merits of Whitesell's reconsideration arguments, the Court notes that the motion is rather late. Whitesell only mentioned the possibility of filing a motion for reconsideration at a hearing on December 5, 2016, over 6 months after the Court's ruling in its Order of May 17, 2016. At that time counsel stated that he did a wterrible job in presenting the issue" to the Court and though he did not Order, "disagree with anything" in the Court's prior he believed there was case law that would allow the award of prejudgment interest on an unliquidated damages claim in the Court's discretion. (Tr. at 72, Doc. No. 875.) Counsel cited to Holloway v. State Farm Fire & Cas. Co., 537 S.E.2d 121 (Ga. App. 2000). (Id. at 73-74.) motion was not filed for another 2% months. Whitesell, as promised, The actual In the motion, cites Holloway for the proposition that the Court has discretion to award prejudgment interest on unliquidated damages claims. (Doc. No. 880.) argument, Whitesell sets forth no Aside from this other basis reconsideration of this Court's ruling of May 17, 2016.1 1 Whitesell's argument in brief was one paragraph. 5 for As a basis for reconsideration, unremarkable and does decision.2 pleading, the Holloway not warrant a reversal case of is this rather Court's Then, having the benefit of Defendants' responsive Whitesell filed a ten-page reply brief urging the Court's reconsideration, the merits of which will be addressed below. The Court is constrained to note here, however, that Whitesell's motion for reconsideration could be denied for the delay in filing and in presenting the issues to the Court. See Pattee v. (S.D. Ga. reply Ga. 2007) F. Supp. ("[T]he Court will view briefs] sandbagging.") Ports Auth. , 477 suspiciously [and] 2d 1272, xnew' 1275 arguments remain [in mindful of In fact, by its own admission, explicitly at the December hearing and implicitly in the sparsity of its initial motion, Whitesell could not find any basis for 2 The Holloway court was asked to review the trial court's denial of prejudgment interest on two loss claims (a theft claim and a water damage policy. 537 S.E.2d at 122-23. claim) under an insurance The trial court had determined that both claims were unliquidated, and therefore, in the exercise of discretion, denied the award of prejudgment interest. Id. at 123. The Georgia Court of Appeals reversed the trial court's ruling with respect to the theft claim upon concluding that the claim was for liquidated damages; thus, on the theft claim, the trial court was mandated to award prejudgment interest. Id. at 125. With respect to the water damage claim, however, the Court of Appeals affirmed that the claim was unliquidated and the trial court had discretion to deny an award of prejudgment interest. Id. In the case at bar, there is no dispute that this Court has discretion to award prejudgment interest on an unliquidated damages claim. (See Order of May 17, 2016, at 5 ("The award of prejudgment interest arising our of a breach of contract is within the discretion of the factfinder." (citation omitted)).) reversal of this Court's prior order, i.e., there was no argument of clear error or manifest injustice, until it filed its reply brief. Turning now to the reply brief, Whitesell argues that this Court overlooked the case of Alphamed, Med., Inc., 367 F.3d 1280 prejudgment interest unliquidated claims. (11th Cir. 2004), cannot be awarded Inc. v. B. Braun in finding that on Whitesell's Alphamed does not change this Court's analys is, however. Whitesell does not dispute that prejudgment interest under O.C.G.A. § 13-6-13 can only be awarded if the amount of damages breach. 1280. is ascertainable This was at the time certainly the case In that case, of the contractual in Alphamed, 367 F3d the district court directed the jury to award a sum certain upon the jury's determination that the defendant breached its agreement to purchase a contractually agreed upon quantity of ambulatory infusion pumps from the plaintiff, Alphamed. Id. at 1284. The district court arrived at the figure by multiplying the quantity and price terms of the pumps as set forth in the parties' contract. Id. also determined that Alphamed was The jury entitled to prejudgment interest in a special interrogatory. Upon the verdict, the district court awarded the sum certain in damages and awarded prejudgment interest on that amount at the statutory rate. Id. On appeal, the defendant complained that the district court did not permit the jury to calculate the prejudgment interest award. should have The Eleventh Circuit agreed that the jury calculated the amount but found the error to be harmless since the jury would have arrived at the same exact figure. Id. at 1287. In the Alphamed case, the parties apparently disputed whether Alphamed was capable of producing the pumps; a similar allegation has been raised against Whitesell in the case at bar. Also, Alphamed's the Alphamed district lost profits to arrive court had to calculate at a damages figure; a similar task may befall the finder of fact in the case at bar. Whitesell therefore argues that the case at bar is analogous to Alphamed, and because prejudgment interest was awarded to Alphamed under these circumstances, Whitesell too is entitled to prejudgment interest. Whitesell's view of its breach of contract claims is rather simplistic, and indeed one or two of their claims may be more straightforward than others. however. The factfinder in this One thing is certain, case will simply multiply a specific quantity of not be asked to specific parts by a specific price term (all of which were identified in a single contract) to ascertain an amount of damages that would be the same at the time of breach. Notably, here there is not a single contract with specific quantities and price terms. Indeed, this Court has already held that the original contract, the Strategic Partnership Agreement, did identify the scope of goods to be bought and sold. not And while the Settlement Memorandum and Consent Order may clarify the parties' obligations to each other in some respects, any award of damages will not be one that is ascertainable at the time of breach, particularly given the difficulties in this case of defining the scope of goods, the dates of full transition, and the pricing of the parts. (See, e.g., Hrg. Tr. Of April 27, Doc. No. 819, at 13 6 ("They put in the Whitesell pricing. asking us to do the damage computation information and only that information, based on By that it limits our damage theory as opposed to prices that they've paid to third parties . . . .»).) In short, the Alphamed case, which involved a single contract with a specific quantity of a single product and specific is pricing of that product, not sufficiently analogous to this case, which involves an invalidated supply contract, an indefinite scope of goods, and disputed pricing, to demonstrate clear error Court's prior analysis. warrant reversal of or manifest injustice in this That is, the Alphamed case does not this Court's determination that a prejudgment interest claim would be futile because damages could not be ascertained at the time of breach. Further, Whitesell undervalues a critical conclusion of the May 17, 2016 Order. Therein, the Court found that Whitesell had added a this finding "interest" by claim new claim. pointing in its Whitesell out prior that two it takes had attempts issue with included to amend an the complaint on December 20, 2007 and July 5, 2011 (doc. nos. 122 and 449) (doc. as well as no. 546). in its submission of Including an interest January 17, claim 2014 in proposed amended pleadings does not inject the claim into the case, however. March More importantly, the Court convened the hearing of 27, 2014, for the purpose of having a "good, Second Amended Complaint" with which to move forward. 3, Doc. No. 567.) clean (Tr. at It was the Court's expectation that the proposal submitted by Whitesell thereafter would be a complete statement of its case. Thus, Whitesell's expression of its claim for interest under only O.C.G.A. 10, 2014 submission is binding. be drawn from that submission § 7-4-16 in its April A reasonable conclusion can that Whitesell's mention of interest in any prior attempt to amend the complaint refers to O.C.G.A. § 7-4-16, not O.C.G.A. § 13-6-13, since the general term "interest" was taken out of the damage allegation in each count and replaced by specific reference to O.C.G.A. § 7-4-16. In short, Whitesell specified only one type of interest in its submission of April 10, 2014, which was to be its definitive statement of its case. Whitesell's inclusion of a prejudgment interest claim in the ultimate statement of its case - the filed and operative Second Amended Complaint - was erroneous 10 since it was not authorized by the Court, and, frankly, was probably not contemplated by Whitesell's counsel until after the Court struck any mention of interest except in Paragraph 199. The Court's irrelevant. conjecture on that point, however, is The relevant fact is that a prejudgment interest claim under O.C.G.A. § 13-6-13 was not submitted to the Court on for April 10, 2014 approval and therefore was later rejected by this Court in the exercise of sound discretion. Conclusion Having already disallowed prejudgment interest under Whitesell's O.C.G.A. § claim 13-6-13 on for its unliquidated damages claims, and finding no basis to reverse this ruling, Whitesell's reserving ruling3 oral argument motion for entry of an (doc. no. 880) is hereby DENIED. on the issue would not aid order Because the Court, Whitesell's motion for oral argument (doc. no. 886) is DENIED. ORDER ENTERED at Augusta, Georgia, this /O day of May, 2017. J. RftNBfAL HALL, CHIEF JUDGE UNITEp/STATES DISTRICT COURT JTHERN DISTRICT OF GEORGIA 3 The Court emphasizes that the motion has been construed as a motion for reconsideration, and Whitesell has not met its burden to show clear error of law or manifest injustice. 11

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