United States of America et al v. Slurry Systems, Inc. et al
Filing
362
MEMORANDUM Opinion and Order Signed by the Honorable Arlander Keys on 12/11/2013. Mailed notice(tlp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA,
for the use and benefit of
PILECO, INC.,
)
)
)
)
Plaintiff,
)
)
v.
)
)
SLURRY SYSTEMS, INC. and
)
FIDELITY AND DEPOSIT
)
INSURANCE COMPANY OF
)
MARYLAND,
)
)
Defendants.
)
------------------------------)
SLURRY SYSTEMS, INC.,
)
)
Third Party Plaintiff )
)
v.
)
)
BAUER MASCHINEN GMBH,
)
)
Third Party Defendant.)
Case No. 09 C 7459
Magistrate Judge Arlander Keys
MEMORANDUM OPINION AND ORDER
In this lawsuit, Pileco, Inc. sued Slurry Systems, Inc.
(“SSI”) and its surety, Fidelity and Deposit Company of Maryland
(“F&D”), seeking to recover money allegedly owed on a contract
executed in connection with a reservoir project undertaken by
the Army Corps of Engineers in Willow Springs, Illinois.
In its
complaint, Pileco alleged two counts: a Miller Act claim seeking
payment on a performance bond issued by F&D in connection with
the project; and a breach of contract claim seeking monetary
damages in excess of $4 million from SSI.
SSI filed a
counterclaim alleging that, in connection with the reservoir
project, it subcontracted with Pileco and Bauer to provide
certain equipment necessary to the job, that the equipment never
worked properly, that Pileco and Bauer breached their agreement
with SSI, and that SSI paid Pileco all that it was due under the
contract.
SSI’s counterclaim included nine counts: (1) breach
of contract; (2) breach of express warranty; (3) breach of
implied warranty of merchantability; (4) breach of the implied
warranty of fitness for a particular purpose; (5) promissory
estoppel; (6) alternative breach of contract (Bauer); (7)
alternative breach of contract (Pileco and Bauer);
(8)alternative declaratory judgment; and (9) violation of the
Illinois Consumer Fraud and Deceptive Business Practices Act.
All are asserted against both Pileco and Bauer, except for count
6, which is asserted against Bauer alone.
After the Court denied the parties’ motions for summary
judgment, the case was set for trial.
The parties tried the
case, for the first time, in May of this year.
After eight days
of testimony and argument, the case went to the jury.
The jury
reached a verdict after deliberating for just four hours – not
long, given that the parties had together introduced more than 6
2
binders of exhibits and given that the instructions were 57
pages long.
respects.
The verdict was problematic in a number of
Most significantly, the jury awarded nothing in the
way of compensatory damages on SSI’s Consumer Fraud Act claim,
but awarded $20 million in punitive damages on that claim.
Additionally, the jury failed to consider (despite being
explicitly instructed to do so) what everyone agreed was a key
component of the parties’ contractual claims – namely, the
amount of the equitable adjustment due SSI on Pileco’s breach of
contract claim.
The jury found for Pileco on its breach of
contract claim and awarded $2,000,000, but left the equitable
adjustment line completely blank, and awarded just $1,000,000 to
Pileco on its Miller Act claim, when in theory the award under
the Miller Act should have been the same as the award on the
breach of contract claim.
The jury also found for SSI on its
breach of contract claims against Pileco and Bauer and awarded,
respectively, $600,000 and $3,400,000; found for SSI on its
breach of warranty claims and awarded SSI $200,000 from Pileco
and $800,000 from Bauer; and found for SSI on its Consumer Fraud
Act claim, as already discussed.
After discussing the problems with the verdict, the Court
and the parties met once again to attempt to resolve the
parties’ dispute.
That attempt was unsuccessful.
3
Accordingly,
the Court, finding that the first verdict could not stand, sua
sponte ordered a new trial.
The case was tried a second time in September.
the trial took nine days.
This time,
The jury was given fewer documents
and a much shorter, more concise set of instructions, and
returned a verdict at the end of its first day of deliberations.
The second jury found for Pileco on its breach of contract and
Miller Act claims, and awarded Pileco $2,230,381.35 from both
SSI and F&D (this award reflected an equitable adjustment of
$357,716.00).
The jury found for Pileco on SSI’s breach of
contract claim, for Pileco/Bauer on SSI’s warranty claim, and
for Bauer on SSI’s Consumer Fraud Act claim.
To state the
obvious, the second trial yielded a very different outcome from
the first.
In the Court’s view, this may be explained, in part,
by the fact that Pileco/Bauer tried a very different case the
second time around; they were much better prepared and much
better organized.
They clearly benefited tremendously from the
first jury’s confused and inconsistent verdict.
For its part,
SSI tried essentially the same case, though it did attempt to
streamline things a bit. That’s not a bad thing; in the Court’s
estimation, SSI tried a great case both times.
But, as all good
lawyers know, juries are unpredictable and trying a case to a
4
jury is risky; this case could be the poster child for juror
unpredictability.
The case is currently before the Court on post-trial
motions.
SSI filed a motion to amend the final judgment or, in
the alternative, for judgment as a matter of law or a new trial.
F&D filed a motion for judgment as a matter of law or, in the
alternative, for a new trial.
Pileco and Bauer, who dodged a
bullet with their “redo” and are understandably content with the
second verdict, filed a motion for taxation of costs; Pileco
also filed a motion seeking statutory interest.
The Court
considers each motion below.
A.
SSI’s Motion to Amend the Judgment
SSI has moved to amend the judgment or, in the alternative,
for judgment as a matter of law or for a new trial.
Federal
Rule of Civil Procedure 59, which addresses both motions to
alter and amend and motions for new trial, provides that, after
a jury trial, the Court “may, on motion, grant a new trial on
all or some of the issues —- and to any party -- . . . for any
reason for which a new trial has heretofore been granted in an
action at law in federal court . . . .”
59(a)(1)(A).
Fed. R. Civ. P.
Generally, a court may order a new trial only if
the jury’s verdict is “against the manifest weight of the
evidence,” or “if for other reasons the trial was not fair to
5
the moving party.” Willis v. Lepine, 687 F.3d 826, (7th Cir.
2012)(quoting Marcus & Millichap Inv. Servs. v. Sekulovski, 639
F.3d 301, 313 (7th Cir. 2011); Pickett v. Sheridan Health Care
Ctr., 610 F.3d 434, 440 (7th Cir. 2010)).
And, generally, the
Court may alter or amend a judgment under Rule 59(e) “when there
is newly discovered evidence or there has been a manifest error
of law or fact.” Harrington v. City of Chicago, 433 F.3d 542
(7th Cir. 2006)(citing Bordelon v. Chicago Sch. Reform Bd. of
Trs., 233 F.3d 524, 529 (7th Cir. 2000)).
“Once judgment has
been entered, there is a presumption that the case is finished,
and the burden is on the party who wants to upset that judgment
to show the court that there is good reason to set it aside.”
Young-Gibson v. Board of Education of the City of Chicago, No.
11 C 8982, 2013 WL 4598815 at *2 (N.D. Ill. Aug. 29,
2013)(quoting Hecker v. Deere & Co., 556 F.3d 575, 591 (7th Cir.
2009).
Federal Rule of Civil Procedure 50 addresses motions for
judgment as a matter of law and provides that, once certain
preliminaries are satisfied, the Court may enter judgment as a
matter of law if it “finds that a reasonable jury would not have
a legally sufficient evidentiary basis to find for the party on
that issue . . . .”
Fed. R. Civ. P. 50(a)(b).
When deciding a
motion for judgment as a matter of law that is filed after the
6
jury has returned its verdict, “a court’s review is ‘limited to
determining only whether any rational jury could have found for
[the prevailing party], examining all evidence in the record to
make that determination.’” Woods v. Von Maur, Inc., No. 09 C
7800, 2012 WL 2062400, at *4 (N.D. Ill. June 7, 2012)(quoting
Hicks v. Forest Pres. Dist. of Cook County, Ill., 677 F.3d 781,
2012 WL 1324084 at *3 (7th Cir. 2012) and citing Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).
And, importantly, the Court “may not ‘step in and substitute its
view of the contested evidence for the jury's.’” Woods, 2012 WL
2062400, at *4 (quoting Mathur v. Bd. of Trs., 207 F.3d 938, 941
(7th Cir. 2000)).
Motions like SSI’s are not lightly granted.
“A civil jury
trial involves the expenditure of substantial resources and
requires citizen jurors to spend significant time away from
their jobs and families; courts, not surprisingly, are
especially reluctant to throw out the judgment of jurors absent
overwhelming cause.”
Community First Credit Union v. United
States, No. 08-C-57, 2009 WL 2058476, at *1 (E.D. Wis. July 14,
2009).
Here, the people serving as jurors interrupted their
lives for a combined total of almost four weeks to focus on this
case.
SSI bears a tremendous burden in persuading the Court to
grant it the relief it seeks.
7
Initially, SSI argues that “[t]he law cannot be so fickle
or capricious” as to allow the second verdict to stand, in light
of the first; “such vagary” – the result of the “whims” of the
second jury – “mocks the justice system” according to SSI.
But,
other than the change in the outcome, SSI has not identified any
way in which the second trial was unfair.
And, ironically, in
its motion, SSI argues that the “[c]ourts should preserve a jury
verdict when possible.”
Brief, p. 7.
The Court ruled that it
was not possible to preserve the first verdict, and SSI has
given the Court no reason to reverse that ruling.
It is
possible to preserve the second verdict, however.
SSI argues that the swing in verdicts – from $3 million
(not counting the $20 million in punitives) in SSI’s favor on
the first, to almost the same in Pileco’s favor on the second,
can only be described as a travesty of justice. But SSI’s
“reversal of fortune” does not necessarily reflect a manifest
injustice as SSI contends; the outcome is simply a function of
the risk inherent with a jury.
Trying a case to a jury – as all
experienced lawyers know – is a risky proposition; indeed, that
risk is precisely why so many cases settle and so few actually
go to trial.
SSI’s attorneys – experienced trial lawyers – knew
the risk and certainly adequately conveyed that risk to their
client; and SSI opted to roll the dice rather than settle its
8
claims. Given the first verdict, the Court cannot say that was
an unreasonable decision.
sure thing.
win.
But the outcome was by no means a
At trial, someone has to lose and someone has to
Although SSI won the first time, it lost the second time.
And everyone knew that was possible, even if it may have seemed
improbable.
SSI argues that, after the original trial, the Court could
simply have stricken the consumer fraud act portion of the
verdict and entered judgment on the remainder of the claims.
To
be sure, the Court considered this, but opted not to do so for a
couple of reasons: first, taking this action would have
circumvented what the jury was trying to achieve with its
verdict; and, second, striking the Consumer Fraud Act claim
would not have fixed the problem with the jury’s findings (or
lack thereof) on the equitable adjustment.
To fix this
deficiency in the verdict, the Court would have had to make
findings on an issue that was (all parties agreed) properly
reserved for the jury.
Taking this action would have been even
more egregious if, as SSI argues, the jury actually did make
implicit findings concerning the equitable adjustment by taking
something off the breach of contract awards.
A Court should not
substitute its own judgment for that of the jury; nor should it
toss out a jury’s verdict simply because it disagrees with it.
9
E.g., Tart v. Illinois Power Co., 366 F.3d 461, 478-79 (7th Cir.
2004); Harbor Motor Co. v. Arnell Chevrolet-Geo, Inc., 265 F.3d
638, 644 (7th Cir. 2001)(citing Place v. Abbott Labs., 215 F.3d
803, 809 (7th Cir. 2000)).
SSI argues that the Court should enter judgment in its
favor on Pileco’s breach of contract claim, notwithstanding the
verdict, because Pileco did not introduce any evidence to show
that the cutter and related equipment were new, which it argues
was a requirement of the contract.
In fact, most of the
evidence that did come in showed that the equipment was not new;
the evidence concerning the B-Tronic system showed that the
cutter may have been operating since 2004, two years before it
arrived at SSI’s jobsite, and there was testimony that the
cutter’s wheels already reflected wear and tear when the cutter
arrived on the scene.
But the evidence also showed that the
word “new” was written into the contract after the fact by SSI,
and that it was added after SSI took possession of the
equipment.
Thus, by the time SSI signed the contract, it knew
what it was getting.
The jury was not required to believe SSI’s
argument that Pileco was contractually obligated to provide new
equipment.
The jury could reasonably have concluded that SSI
accepted the equipment – whether or not it was new, and that the
insertion of the word “new” into the contract, which was signed
10
well after the equipment arrived on site, changed nothing in
terms of Pileco’s obligations under the contract.
The Court
cannot say that no rational jury could have reached this
conclusion.
SSI also argues that allowing the verdict to stand results
in a windfall to Pileco because, under the verdict, Pileco gets
the full amount owed under the rental agreement, but still gets
to keep the proceeds from its post-contractual sale of the
cutter to Bencor.
But this seems to be exactly what the rental
agreement contemplated absent SSI’s exercise of the purchase
option.
The jury heard evidence concerning the agreement and
was permitted to take the agreement and addendum into the jury
room; it also heard evidence concerning SSI’s experience with
the cutter and SSI’s return of the cutter, and it heard evidence
demonstrating unequivocally that, regardless of what SSI
considered in terms of the retention of the cutter, it never
exercised the option to purchase the cutter.
SSI also argues that it is entitled to judgment on its
breach of warranty claim because no reasonable jury could have
found that the cutter performed as expected.
To be sure, there
was a plethora of evidence introduced concerning the
deficiencies in the cutter’s performance, including the numerous
drive unit failures and gear box failures.
11
But SSI conceded
that, ultimately, SSI was able to complete the work it undertook
for the Army Corps of Engineers for phase 2 of the McCook
Reservoir project.
From this, the jury could reasonably have
found that the cutter was, in fact, not unfit for the intended
purpose.
In response to SSI’s motion, Pileco argues that it would be
inappropriate for the Court to re-instate the first verdict
because SSI failed to prove the elements of its claims.
that is an overreach.
But
SSI introduced an abundance of evidence
that could easily have supported a jury verdict in its favor.
Because the first jury botched the verdict, Pileco and Bauer got
a second chance to try their case; they did a much better job
the second time around, and, although the verdict easily could
have gone the other way – the jury was persuaded.
SSI offered
plenty of evidence to support its claim – and if it had been in
the Court’s power to salvage the first verdict, it would have
done so.
The original verdict was not surprising, it just
couldn’t stand under the law because of the problems the Court
noted in ordering a retrial.
Just as it would have been
inappropriate for the Court to substitute its judgment for that
of the original jury, it is also inappropriate for the Court to
substitute its judgment for that of the second jury.
Unlike the
first verdict, this verdict can stand under the law – even if it
12
could just as easily have gone the other way.
The
inconsistencies and arbitrariness are not present this time
around.
And so the Court has no good reason to set it aside.
SSI cites American Casualty Company of Reading, PA v. B.
Cianciolo, Inc., 987 F.2d 1302 (7th Cir. 1993), to support its
argument that the Court can, and should, throw out the second
verdict and reinstate the original verdict, with modifications.
To be sure, on appeal, if the Seventh Circuit determines that
this Court’s reasons for ordering a mistrial were wrong – as was
the case in Cianciolo – it can take that path.
But that’s a
move for the Court of Appeals, not for this Court.
SSI’s motion
is denied.
B.
F&D’s Motion for Judgment as a Matter of Law
F&D has moved, under Rule 50, for judgment as a matter of
law on Pileco’s Miller Act claim.
Rule 50(a) provides that,
“[i]f a party has been fully heard on an issue during a jury
trial and the court finds that a reasonable jury would not have
a legally sufficient evidentiary basis to find for the party on
that issue, the court may: (A) resolve the issue against the
party; and (B) grant a motion for judgment as a matter of law
against the party on a claim or defense that under the
controlling law, can be maintained or defeated only with a
favorable finding on that issue.”
13
If the Court declines to
grant a party’s motion for judgment as a matter of law before
the case goes to the jury, the party may renew its motion after
the verdict is accepted and judgment is entered.
F&D made its
Rule 50(a) motion at the close of Pileco’s case in chief, and
has now renewed its motion, consistent with the provisions of
Rule 50(b).
Additionally, consistent with Rule 50(b), F&D (like
SSI) has included a request for a new trial under Rule 59.
F&D argues that it is entitled to judgment as a matter of
law because Pileco failed to prove that it furnished the cutter,
desander and related equipment; failed to prove that it
furnished the repairs and parts that are reflected in the Pileco
invoices totaling $632,897.35; and failed to prove that it
furnished the parts and services reflected in the KVT invoices.
F&D also argues that the Court erred when it denied summary
judgment on the Miller Act claim because the contract at issue
here was clearly a sales contract, not a lease.
Finally, F&D
argues that the Court erred when it sua sponte ordered a new
trial; in particular, F&D argues that there was no basis for the
Court to conclude, as it did, that the first jury’s punitive
damages award was “monstrously excessive” and that the first
jury failed to consider the equitable adjustment.
For the
reasons explained below, F&D’s motion for judgment as a matter
of law or, in the alternative, for a new trial, is denied.
14
“The Miller Act provides a private right of action to an
unpaid subcontractor on a federal project to collect on the bond
posted for the project.”
United States Department of the Navy
v. Norden Enterprises, No. 01 C 8968, 2004 WL 42318, at *4 (N.D.
Ill. Jan. 6, 2004).
Specifically, the Act states:
Every person that has furnished labor or material in
carrying out work provided for in a contract for which
a payment bond is furnished under section 3131 of this
title and that has not been paid in full within 90
days after the day on which the person did or
performed the last of the labor or furnished or
supplied the material for which the claim is made may
bring a civil action on the payment bond for the
amount unpaid at the time the civil action is brought
and may prosecute the action to final execution and
judgment for the amount due. 40 U.S.C. §3133(b)(1).
Thus, to win on its Miller Act claim, Pileco had to prove that
it “furnished labor or materials” and that it was not “paid in
full.”
F&D argues that Bauer, not Pileco, furnished the equipment
provided to SSI under the Rental Agreement; it argues that the
evidence was unequivocal on this point.
And the Court agrees:
the evidence clearly established that Bauer provided the cutter,
the desander and the related equipment, as well as all of the
spare parts.
In fact, the evidence showed that Pileco did
little or nothing with respect to the furnishing of equipment,
parts and services.
But F&D’s argument ignores the relationship
15
between Bauer and Pileco – a relationship that was established
in the evidence.
Although Bauer negotiated the contract with SSI and clearly
possessed all of the equipment, knowledge and experience SSI
wanted and needed, Bauer made Pileco, its newly-acquired whollyowned United States subsidiary, the contracting agent on the
deal.
Thus, although Bauer was really doing all the work and
pulling all the strings, technically, the subcontractor was
Pileco.
SSI was to pay Pileco rent under the agreement and
Pileco, not Bauer, was to provide all of the parts and services
required under the contract.
Thus, looking solely to the
contract, Pileco, not Bauer, was the subcontractor.
fact, Pileco, not Bauer, made the claim on the bond.
And, in
As Pileco
points out, had Bauer made the claim, F&D would surely have
attempted to deny the claim based on the fact that Bauer was not
a party to the contract.
The Court turns next to the question of whether Pileco
established that it was “unpaid.”
In his closing, counsel for
Pileco asked the jury to award damages in the amount of
$3,028,049.99.
Counsel explained that this amount included
$1,895,200.00 in unpaid rent on the cutter and $60,000 in unpaid
rent on the spare gearbox, as well as unpaid invoices for parts
and services -- $440,075.59 owed to Bauer and $632,897.35 owed
16
to Pileco.
The jury awarded Pileco $2,230,381.35 --
$2,588,097.35, less an equitable adjustment in the amount of
$357,716.00.
Although the jury did not include its
calculations, it is clear that the jury accepted Pileco’s
arguments concerning the equitable adjustment and calculated it
at the rate of $2,960.00 per day ($88,800 per month divided by
30 days), with 120.85 days of downtime.
It is also clear that
the jury accepted Pileco’s arguments on damages, as it awarded
Pileco the unpaid rent it requested and the unpaid invoices owed
to it; the jury did not award Pileco the amount of the KVT
invoices; those were owed to Bauer.
Thus, the jury clearly concluded that Pileco was “unpaid.”
And, although the Court, had this been a bench trial, may have
reached a different conclusion, it cannot say that the jury’s
decision is unsupported in the evidence.
Based upon the
evidence before it, the jury could reasonably have concluded
that Pileco was entitled to the unpaid rental payments and the
unpaid invoices for parts and services.
F&D also argues that the agreement between Pileco and SSI
was not a lease, but a purchase agreement, which would take it
outside the scope of the Miller Act.
But F&D made the same
argument on summary judgment, and the Court rejected it.
In its
summary judgment ruling, the Court held that “as a matter of
17
law, the agreement between Pileco and SSI was a lease agreement,
not an agreement for the purchase of capital equipment.
Thus,
the Court rejects F&D’s arguments about Pileco’s eligibility to
collect under the bond in the first instance.”
24.
Decision at p.
The Court did, however, agree with F&D that “Pileco is
limited in its [Miller Act] recovery to the provisions of the
contract; unless the contract requires SSI to pay for a
particular category of costs, those costs are not due under the
contract and they cannot be recovered under the bond.”
Decision
at pp. 24-25.
Pileco made a claim on the bond, though throughout these
proceedings Pileco has behaved as if it were Bauer’s agent,
seeking to recover not just what it was owed, but also what
Bauer was owed.
And that is consistent with the contract,
which, though negotiated by Bauer, was executed by Pileco.
And,
although F&D has repeatedly emphasized the fact that Bauer, not
Pileco, “furnished” the equipment, parts and services, as
Bauer’s agent and as the contracting party, Pileco has the right
to recover on the bond.
The jury’s verdict on this claim was
consistent with, and supported by, the evidence introduced at
the trial.
That evidence demonstrated that, although the
equipment, parts and services all came from Bauer, Pileco acted
18
as Bauer’s agent with respect to the contract with SSI.
Accordingly, F&D’s motion is denied.
C.
Pileco/Bauer’s Motion for Taxation of Costs
Pileco and Bauer have filed a motion seeking to recover
from SSI costs in the amount of $50,641.96.
The bulk of these
costs relate to depositions, though Pileco also seeks to recover
the $350 filing fee and the $2,747.50 it paid to its expert,
Craig Clarke.
First, many of these costs are not recoverable under the
statute.
28 U.S.C. §1920 provides that the following costs may
be taxed:
(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded
transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and
witnesses;
(4) Fees for exemplification and the costs of
making copies of any materials where the copies are
necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts,
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation services
under section 1828 of this title.
The statute would not allow Pileco to recover delivery fees or
fees for copies of transcripts at the rates identified; nor
19
would it allow Pileco to recover the fees it paid its own
expert.
And an analysis of which deposition transcripts and
which documents were actually necessary to this case would
eliminate many of the costs Pileco requests.
Second, the Court finds that, under the circumstances of
this case, it would be inappropriate to award even those costs
that would otherwise be recoverable under the statute.
Rule
54(d)(1) provides that “costs-other than attorney's fees-should
be allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1).
Despite the use of the word “should,” the decision to award
costs “is firmly within the district court’s discretion.”
Chamberlain Manufacturing Corp. v. Maremont Corp., No. 92-C0356, 1995 WL 769782, at *3 (N.D. Ill. Dec. 29, 1995)(citing
O.K. Sand & Gravel, Inc. v. Martin Marietta Technologies, Inc.,
36 F.3d 565, 571 (7th Cir. 1994)).
The Rule “provides a
presumption that the losing party will pay costs but grants the
court discretion to direct otherwise.” Rivera v. City of
Chicago, 469 F.3d 631, 634 (7th Cir. 2006).
See also Benuzzi v.
Board of Education of City of Chicago, No. 09 C 3510, 2010 WL
3038101, at *1 (N.D. Ill. July 30, 2010)(“There is a strong
presumption that prevailing parties are entitled to an award of
costs, as permitted by statute.”)(citing Beamon v. Marshall &
Ilsley Trust Co., 411 F.3d 854, 864 (7th Cir. 2005)).
20
Generally, costs are denied only when a prevailing party has
engaged in misconduct worthy of a penalty or when the losing
party is unable to pay.
Benuzzi, 2010 WL 3038101, at *1 (citing
Weeks v. Samsung Heavy Indus. Co., 126 F.3d 926, 945 (7th Cir.
1997)); Rivera, 469 F.3d at 634-35.
See also Mother & Father v.
Cassidy, 338 F.3d 704, 708 (7th Cir. 2003)(the Seventh Circuit
recognizes “only two situations in which the denial of costs
might be warranted: the first involves misconduct of the party
seeking costs, and the second involves a pragmatic exercise of
discretion to deny or reduce a costs order if the losing party
is indigent.”).
In the exercise of its discretion, the Court declines to
award costs.
The first trial of this case resulted in an award
against Pileco/Bauer that totaled almost $25 million.
Although
that verdict was untenable as expressed, had the jury taken
greater care in completing the verdict form, the Court would
have found that the evidence supported, to a large extent, that
award.
Fortunately for Pileco and Bauer, the jury’s attempt to
punish Bauer and reward SSI was inartfully done, and the case
had to be retried.
And, although the second jury was infinitely
more kind to Pileco/Bauer, the fact is that this was a close
case and could very easily have gone the other way.
Given the
circumstances of this case, and given the evidence adduced at
21
trial concerning the financial straits SSI, Fred Schmednecht and
Dana Wesolek are in partially because of their dealings with
Pileco and Bauer, the motion for taxation of costs is denied.
D.
Pileco’s Motion for Statutory Interest
Finally, Pileco filed a motion seeking an award of
statutory interest pursuant to 815 ILCS 205/2.
Pileco argues
that it is entitled to prejudgment interest on unpaid rent (for
both cutter and gearbox) and on unpaid invoices covering parts
and services, calculated at the statutory rate of 5% per annum
beginning thirty days after the end of each rental period
through the date of the judgment.
Pileco seeks a total of
$631,242.28.
Pileco contends that Illinois law “mandates prejudgment
interest, as a matter of right, when the creditor seeks payment
of a fixed sum on an instrument of writing.”
Motion, p. 4.
Accepting for the moment that this statute would even apply
here, given the history of this case, Pileco’s characterization
of these sums as “fixed” is misplaced -- the sums were not
“fixed” until the second jury reached its verdict and judgment
was entered -- as is the notion that SSI’s delay was “vexatious
and unreasonable.”
The original jury’s verdict shows how very
reasonable SSI was to withhold payment until these matters were
resolved. Pileco’s motion is denied.
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Conclusion
For the reasons set forth above, the Court denies SSI’s
motion to amend/correct the judgment [#339]; denies F&D’s motion
for judgment notwithstanding the verdict [#337]; denies Pileco’s
motion for assessment of statutory interest [#333]; and denies
Pileco and Bauer’s motion for taxation of costs [#335].
Date: December 11, 2013
E N T E R E D:
_____________________________
MAGISTRATE JUDGE ARLANDER KEYS
UNITED STATES DISTRICT COURT
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