Ross v. Rothstein

Filing 304

MEMORANDUM AND ORDER re 298 MOTION for Voluntary Dismissal. SEE ORDER FOR DETAILS. Signed by District Judge Daniel D. Crabtree on 6/25/2015. (hs)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

STANTON E. ROSS,
Plaintiff/Counterclaim
Defendant,
Case No. 13-cv-2101-DDC-TJJ
v.
ADAM ROTHSTEIN,
Defendant/Counterclaimant.

MEMORANDUM AND ORDER
This matter comes before the Court on defendant’s Motion for Voluntary Dismissal of his
Remaining Counterclaims IV-VII, Determinations as to His Deficiency Award, Interest, and
Costs, and for Entry of Final Judgment (Doc. 298). For the following reasons, the Court grants
defendant’s motion but imposes certain conditions.
I. Factual and Procedural Background
The facts and procedural history of this case are well known to the parties, so the Court
will not recite them in great detail. See Doc. 297 at 2-4 (describing relevant facts). Broadly, this
dispute began after plaintiff defaulted on a $210,000 loan defendant had made to plaintiff. The
Court has entered two summary judgment orders in this case: one on September 9, 2013 (Doc.
55-1) and second on March 12, 2015 (Doc. 297). The upshot of these two orders is that
defendant has prevailed on all of plaintiff’s claims and on three of the seven counterclaims he
asserted. Defendant’s four other counterclaims are the only claims remaining in this lawsuit:
Count IV (Breach of Unconditional Guarantee); Count V (Breach of Covenant of Good Faith and

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Fair Dealing); Count VI (Unjust Enrichment); and Count VII (Fraud [In the Inducement],
Including Punitive Damages).
In this motion, defendant seeks an order under Federal Rule of Civil Procedure 41(a)(2)
dismissing these four unresolved counterclaims without prejudice. Because a Rule 41(a)(2)
dismissal would dispose of all of the remaining claims, defendant seeks additional relief related
to final judgment. Specifically, defendant asks the Court to: (1) direct the Clerk of the Court to
enter final judgment on all proceedings in this case, including defendant’s right to recover his
attorney’s fees, costs, and expenses; (2) determine the amount of the deficiency judgment
defendant is entitled to receive; (3) declare that defendant is entitled to post-judgment interest on
the deficiency judgment amount at a rate of 18%, compounded monthly; and (4) declare
defendant as the prevailing party for purposes of recovering costs under Rule 54(d). The Court
addresses these issues below.
II. Motion to Dismiss Defendant’s Remaining Counterclaims Without Prejudice
Defendant seeks an order under Rule 41(a)(2) dismissing without prejudice his four
remaining counterclaims, Counts IV-VII.
A. Legal Standard
Fed. R. Civ. P. 41(a)(2) permits a party to dismiss an action voluntarily “only by court
order, on terms that the court considers proper.” “The rule is designed primarily to prevent
voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative
conditions.” Brown v. Baeke, 413 F.3d 1121, 1123 (10th Cir. 2005) (internal citation omitted).
District courts normally should grant a Rule 41(a)(2) dismissal without prejudice “[a]bsent ‘legal
prejudice’ to the defendant.” Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997).

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“Prejudice does not arise simply because a second action has been or may be filed against
the defendant . . . .” Brown, 413 F.3d at 1124. Rather, prejudice is a function of other, practical
factors including: the opposing party’s effort and expense in preparing for trial; excessive delay
and lack of diligence on the part of the movant; insufficient explanation of the need for a
dismissal; and the present stage of the litigation. Id. “These factors are neither exhaustive nor
conclusive; the court should be sensitive to other considerations unique to the circumstances of
each case.” Id. “Each factor need not be resolved in favor of the moving party for dismissal to
be appropriate, nor need each factor be resolved in favor of the opposing party for denial of the
motion to be proper.” Ohlander, 114 F.3d at 1537.
When deciding whether to grant defendant’s motion to dismiss without prejudice, “the
district court should endeavor to insure substantial justice is accorded to both parties, and
therefore the court must consider the equities not only facing” plaintiff, but also those facing
defendant. Cnty. of Santa Fe, N.M. v. Pub. Serv. Co. of N.M., 311 F.3d 1031, 1048 (10th Cir.
2002) (internal quotation marks omitted). The “convenience of the court” is not an appropriate
consideration. Clark v. Tansy, 13 F.3d 1407, 1411 (10th Cir. 1993) (quotation omitted).
Rule 41(a)(2) permits a court to impose “terms and conditions as the court deems
proper.” Brown, 413 F.3d at 1123 (internal citation omitted). The conditions should keep the
parties in the same position in a subsequent lawsuit that they occupied before defendant filed his
motion to dismiss. Pyles v. Boeing Co., 109 F. App’x 291, 294 (10th Cir. 2004) (“Because the
magistrate judge carefully crafted the conditions of her order to maintain the position that the
parties had held before [the motion to dismiss], we hold that there has been no abuse of
discretion.”). When a court decides to impose conditions, it must give the party who filed the
motion to dismiss an opportunity to withdraw his request for dismissal. Hall v. Great S. Bank,

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No. 09-2600-CM, 2010 WL 4366110, at *1 (D. Kan. Oct. 28, 2010); 9 Charles Alan Wright et
al., Federal Practice and Procedure § 2366 (3d ed. 2013) (“If the conditions are too onerous, the
[defendant] need not accept the dismissal on those terms.”).
B. Discussion
Defendant asks the Court to dismiss his four remaining counterclaims without prejudice.
In response, plaintiff argues that the Court should dismiss the counterclaims without prejudice
only if the Court imposes certain conditions to cure any legal prejudice plaintiff might suffer
should defendant later revive the counterclaims. The Court first determines whether dismissal of
the counterclaims without prejudice is appropriate and then evaluates what conditions to impose.
1. Legal Prejudice Analysis
The Court should grant defendant’s motion to dismiss if it determines that plaintiff will
not suffer legal prejudice as a result. Ohlander, 114 F.3d at 1537. The Tenth Circuit has
identified four general factors to guide a district court’s decision when evaluating legal
prejudice: (1) insufficient explanation of the need for dismissal; (2) the opposing party’s effort
and expense in preparing for trial; (3) excessive delay and lack of diligence on the part of the
movant; and (4) the present state of the litigation. Brown, 413 F.3d at 1124. After considering
these factors, the Court has little trouble concluding that plaintiff will sustain no legal prejudice
from an order dismissing defendant’s remaining counterclaims without prejudice.
First, the Court considers defendant’s reason for seeking dismissal. Defendant asserts
that he has little to gain from continuing to pursue his remaining counterclaims because they
provide largely the same remedies as the counterclaims on which he has prevailed already. The
Court granted summary judgment for defendant on Counterclaim Counts I-III, which assert
contract-related claims for breach of promissory note, breach of forbearance agreement, and

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foreclosure of security interest. The remaining counterclaims, Counts IV-VII, also assert
contract-related claims for breach of guarantee, breach of covenant of good faith and fair dealing,
unjust enrichment, and fraud in the inducement. All four of these claims provide for
compensatory damages that duplicate those in Counts I-III. Indeed, defendant indicated in the
Pretrial Order that he did not intend to pursue Counterclaim Counts IV-VI for this very reason.
See Doc. 247 at 18-19. Only Count VII, a claim for fraud in the inducement, provides relief
unavailable under Counts I-III because it allows for punitive damages. Still, having prevailed on
Counts I-III, defendant has obtained most of the possible available relief on his counterclaims.
According to defendant, he “seeks a dismissal of his counterclaim Counts IV-VII without
prejudice only because of a desire to preserve the opportunity to refile and pursue one or more of
said counterclaims, if possible, in the event any [of plaintiff’s] affirmative claim[s] is somehow
reinstated in any subsequent proceedings, including a likely appeal initiated by [plaintiff].” Doc.
299 at 14. “In other words, [defendant] will not refile any such counterclaim(s) in the event the
dispositive rulings entered by this Court remain in place following any further proceedings in
this Court and/or any appeal.” Id. Thus, defendant has received the bulk of the relief to which
he is entitled and will revive his remaining counterclaims only if later proceedings disturb the
Court’s previous dispositive rulings. The Court concludes that this reason for seeking to dismiss
his four remaining counterclaims is reasonable, rational, and weighs in favor of granting
defendant’s motion to dismiss without prejudice.
Second, the Court considers the opposing party’s—here, plaintiff’s—effort and expense
in preparing for trial. Plaintiff argues that he has expended significant resources preparing for
trial, which weighs against granting defendant’s motion. Plaintiff notes that the parties have
finished discovery, he has filed a motion in limine (Doc. 261), and he has filed a motion for

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summary judgment on defendant’s fraud in the inducement counterclaim (Doc. 255). None of
these actions favor plaintiff’s position. The parties have completed discovery in this case, but
one can attribute almost none of that work to defendant’s four remaining counterclaims
specifically or exclusively. Plaintiff’s motion in limine sought to exclude all testimony of
defendant’s expert Brian Underwood. But Mr. Underwood sought to testify only on the question
whether defendant’s sale of the collateral in this case, 77,310 shares of Infinity Energy
Resources, Inc. (“Infinity”) common stock, was reasonable. It had nothing to do with
Rothstein’s remaining counterclaims. And while plaintiff’s motion for summary judgment
attacked one of defendant’s remaining counterclaims (the one asserting fraud in the inducement),
he filed it seven months after the Scheduling Order’s deadline for dispositive motions, and
plaintiff did not respond to defendant’s Statement of Additional Material Facts. See Doc. 283 at
40-45. The Court denied this halfhearted attempt at summary judgment in its entirety. Id. Thus,
plaintiff has produced no evidence showing that he expended significant time or effort preparing
these remaining counterclaims for trial, and this factor favors granting defendant’s motion to
dismiss without prejudice.
Third, the Court considers defendant’s diligence in filing his motion to dismiss. The
Court’s March 12, 2015 Order dismissed plaintiff’s lone remaining claim, leaving only
defendant’s four counterclaims alive in the case. Defendant filed this motion to dismiss on
March 31, 2015, only 19 days after the Court’s Order. A delay of 19 days is certainly
reasonable, so this factor favors granting defendant’s motion to dismiss without prejudice. See
AgJunction LLC v. Agrian Inc., No. 14-CV-2069-DDC-KGS, 2015 WL 416444, at *9 (D. Kan.
Jan. 30, 2015) (“The gap of about seven weeks between the day the Court denied plaintiff's
desired relief and the day plaintiff filed its motion to dismiss is not unreasonable.”).

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Finally, the Court considers the present stage of the litigation. This case is set for trial on
September 15, 2015. Defendant filed his motion to dismiss on March 31, 2015, just 19 days
after the Court dismissed plaintiff’s remaining claim. Thus, although trial is in sight, defendant
has not waited until the eve of trial to seek dismissal. This factor also favors granting
defendant’s motion to dismiss without prejudice.
Based on the foregoing factors, the Court concludes that plaintiff will not suffer legal
prejudice if it grants defendant’s motion to dismiss his four remaining counterclaims without
prejudice. The Court now evaluates what conditions to impose on this dismissal.
2. Conditions on Dismissal
Plaintiff argues that the Court should impose four conditions on any order dismissing
defendant’s remaining counterclaims. The first two concern defendant’s ability to refile the
counterclaims:
(1) In the event the Court determines to award attorneys’ fees to [defendant] and
otherwise declines to reduce the amount of such attorneys’ fees in the manner
suggested in ¶ 16 hereinabove, that the Court impose the condition that should
[defendant] file any future lawsuit against [plaintiff] asserting any of the four
claims which he now proposes to dismiss, that [defendant] will be liable to
[plaintiff] for the expenses, including reasonable attorneys’ fees, that
[plaintiff] would have avoided had the Court been permitted to adjudicate
each of those claims, in this case, on the merits; and
(2) [Defendant] shall consent to the reuse in any re-filed action against [plaintiff]
of any and all facts, testimony, documents, and materials resulted from any
discovery in this case.
Doc. 302 at 6.
Defendant responds that plaintiff’s first two conditions are unnecessary as drafted
because defendant “has made it clear he would not file a separate or second lawsuit, but would
only seek to reinstate one or more of his counterclaims in this case if, and only if, any of the
Court’s dispositive rulings in favor of [defendant] to date are reversed, whether on appeal, or in
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any further proceedings.” Doc. 303 at 16 (emphasis in original). But defendant agrees, as he
must, that any documents or rulings so far in this case will control if he reinstates his
counterclaims. To that end, defendant proposes the following conditions:
(1) [Defendant] may only seek to reinstate in this case one or more of his
counterclaim Counts IV-VII if, and only if, any of the Court’s prior
dispositive rulings are reversed, whether on appeal or in any further
proceedings in this Court (this condition is without prejudice to [defendant]
contesting the dischargeability of [plaintiff’s] debt to him on the basis of
fraud, or otherwise, under 11 U.S.C. § 523 in the event [plaintiff] files for
bankruptcy relief); and
(2) All pleadings, discovery, documents, materials, testimony, orders, rulings, and
any other substantive matters developed and occurring in the proceedings in
this case to date may be used and will be binding in any further proceedings in
this case following any reinstatement of any [defendant] counterclaim
pursuant to condition (1) above.
The Court imposes these conditions on defendant. However, defendant has indicated that
he will reinstate his counterclaims only in this lawsuit and only if further proceedings, whether in
this Court or on appeal, change the Court’s rulings thus far. Defendant’s first proposed condition
restricts his ability to reinstate the remaining counterclaims in this case, but it does not prevent
him from refiling them in another case (although defendant categorizes them as compulsory
counterclaims, so perhaps he is precluded from filing them in a separate action). To make things
abundantly clear, the Court imposes the following condition: defendant may seek to recover on
the claims asserted by Counterclaim Counts IV-VII only in this lawsuit and only if any of the
Court’s prior dispositive rulings in this case are reversed.
Plaintiff also seeks to impose two additional conditions which concern defendant’s ability
to recover attorney’s fees in this case. In the event defendant seeks attorney’s fees, which he has
indicated he will do, plaintiff asks for:

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(1) A dollar-for-dollar reduction in the amount of attorneys’ fees otherwise
recoverable by [defendant], equal to the amount of attorneys’ fees incurred by
[defendant] asserting and prosecuting these four counterclaims;
(2) A dollar-for-dollar reduction in the amount of attorneys’ fees otherwise
recoverable by [defendant], equal to the amount of attorneys’ fees incurred by
[defendant] in defending against these four counterclaims, or any of them.
Id.
The Court declines to impose these two conditions. As discussed above, the record
establishes that the parties spent little time litigating defendant’s four remaining counterclaims
specifically. Plaintiff points to his motion for summary judgment against defendant’s fraud in
the inducement claim, but plaintiff filed his motion seven months out of time, he failed to
respond to defendant’s statement of additional material facts, and the Court denied his motion in
its entirety. The Court will not reduce any fee award to defendant based on plaintiff’s failed
motion for summary judgment.
In summary, the Court grants defendant’s motion to dismiss his four remaining
counterclaims without prejudice but imposes the following three conditions on dismissal:
(1) Defendant may seek to recover on the claims asserted by Counterclaim
Counts IV-VII only in this lawsuit and only if any of the Court’s prior rulings
in this case are reversed.
(2) Defendant may only seek to reinstate in this case one or more of his
counterclaim Counts IV-VII if, and only if, any of the Court’s prior
dispositive rulings are reversed, whether on appeal or in any further
proceedings in this Court (this condition is without prejudice to [defendant]
contesting the dischargeability of plaintiff’s debt to him on the basis of fraud,
or otherwise, under 11 U.S.C. § 523 in the event plaintiff files for bankruptcy
relief); and
(3) All pleadings, discovery, documents, materials, testimony, orders, rulings, and
any other substantive matters developed and occurring in the proceedings in
this case to date may be used and will be binding in any further proceedings in
this case following any reinstatement of any defendant counterclaim pursuant
to condition (1) above.

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Defendant has agreed to the second and third conditions, but not the first, at least
explicitly. When a court decides to impose conditions, it must give the moving part an
opportunity to withdraw his request for dismissal. Hall, 2010 WL 4366110, at *1. As a result,
the Court will permit defendant to withdraw his motion by filing a statement with the Court by
Wednesday, July 15, 2015. If defendant has not withdrawn his motion by this deadline, the
Court will grant defendant’s motion to dismiss without prejudice, effective July 15, 2015, and
subject to the conditions recited above.
III. Other Relief Requested
Because the Court grants defendant’s motion to dismiss, there are no claims remaining in
this lawsuit. As a result, defendant asks the Court to ready this matter for final judgment by:
(1) directing the Clerk of the Court to enter final judgment on all proceedings in this case,
including defendant’s right to recover his attorney’s fees, costs, and expenses; (2) determining
the amount to which defendant is entitled as a deficiency judgment; (3) declaring that defendant
is entitled to post-judgment interest on the deficiency amount at a rate of 18%, compounded
monthly; and (4) declaring defendant to be the prevailing party for purposes of recovering costs
under Rule 54(d). The Court addresses each request below.
A. Final Judgment and Attorney’s Fees
Defendant seeks an order instructing the Clerk of the Court to enter final judgment on all
proceedings in this case, including his right to recover attorney’s fees. In its March 12, 2015
Order, the Court granted summary judgment for defendant on his right to recover attorney’s fees,
concluding that the (Superseding) Pledge Agreement between the parties requires plaintiff to pay
those expenses. Plaintiff does not object to the Court entering final judgment generally but

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argues, for the first time, that the Court must deny any request by defendant for attorney’s fees as
untimely.
Rule 54(d)(2)(B) requires a party to file a motion for attorney’s fees “no later than 14
days after the entry of judgment.” Plaintiff asserts that Judge Lungstrum entered judgment for
purposes of Rule 54(d)(2)(B) on September 9, 2013 when he granted defendant’s partial motion
for summary judgment and then issued a judgment “in the amount of $210,000, plus 18% default
interest compounding monthly beginning September 5, 2012.” Doc. 56 at 1. According to
plaintiff, this partial judgment in favor of defendant triggered Rule 54(d)(2)’s clock for filing a
motion for attorney’s fees. He argues that because the 14-day deadline has long since passed, the
Court must bar defendant’s claim for attorney’s fees as untimely filed.
Defendant responds in two ways. First, he argues that plaintiff has waived the argument
that defendant is out of time to submit his fee application. Defendant filed his motion seeking
summary judgment on his claim for attorney’s fees on July 17, 2014, over 10 months after Judge
Lungstrum entered partial judgment in defendant’s favor. See Doc. 252. On December 23,
2014, Judge James issued a Report and Recommendation recommending that the Court grant
summary judgment for defendant on his right to recover attorney’s fees. Doc. 283 at 38-40.
Plaintiff filed objections to Judge James’ Report and Recommendation, but on March 12, 2015,
the Court adopted it in its entirety. Doc. 297 at 2. Both in his opposition to defendant’s motion
for summary judgment and in his objections to Judge James’ Report and Recommendation,
plaintiff had the opportunity to argue that the Court’s September 9, 2013 Order was a judgment
that triggered Rule 54(d)(2)’s 14-day clock for filing a motion for attorney’s fees. Crucially,
plaintiff never did so. “Failure to raise an issue on summary judgment constitutes waiver of that
issue.” Asia Strategic Inv. Alliances, Ltd. v. Gen. Elec. Capital Servs., Inc., 166 F.3d 346, at *4

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(10th Cir. 1998) (unpublished opinion). Because plaintiff failed to argue at the summary
judgment stage that the Court’s September 2013 Order was a judgment for purposes of Rule
54(d)(2), he has waived the argument.
Second, defendant argues that the Court should deny plaintiff’s untimeliness argument on
the merits as well. The Court agrees. Rule 54(d)(2) requires a party to file a motion for
attorney’s fees “no later than 14 days after the entry of judgment.” Fed. R. Civ. P. 54(d)(2)(B)(i)
(emphasis added). Rule 54(a) defines “judgment” to mean “any order from which an appeal
lies.” “Normally, [the Tenth Circuit] wait[s] for a district court to resolve all the claims
presented in a case before entertaining any appeal.” CCPS Transp., LLC v. Sloan, No. 14-3200,
2015 WL 3389632, at *1 (10th Cir. May 27, 2015) (unpublished opinion). “Federal Rule of
Civil Procedure 54(b) provides an exception to this rule, permitting the district court to certify
for appeal that it has resolved one claim among many and that the claim in question deserves
immediate appellate attention.” Id. Rule 54(b) provides:
When an action presents more than one claim for relief—whether as a claim,
counterclaim, crossclaim, or third-party claim—or when multiple parties are
involved, the court may direct entry of a final judgment as to one or more, but
fewer than all, claims or parties only if the court expressly determines that there is
no just reason for delay. Otherwise, any order or other decision, however
designated, that adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any of the claims or parties
and may be revised at any time before the entry of a judgment adjudicating all the
claims and all the parties’ rights and liabilities.
Fed. R. Civ. P. 54(b).
Here, Judge Lungstrum’s September 9, 2013 Order did not dispose of all of the claims in
this lawsuit. But plaintiff argues that the September 11, 2013 entry of judgment was a final,
appealable judgment under Rule 54(b). A partial entry of judgment is final only if the presiding
judge “expressly determines that there is no just reason for delay.” Fed. R. Civ. P. 54(d). The

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Court rejects plaintiff’s argument because the record contains nothing to suggest that Judge
Lungstrum “expressly determine[d]” that his September 11, 2013 entry of judgment was a partial
final judgment. Id. Neither Judge Lungstrum’s order granting partial summary judgment nor his
entry of judgment contain any language that judgment was “final” or made under “Rule 54(b).”
He did not say that there was “no just reason for delay.” Thus, plaintiff has failed to identify any
facts suggesting that Judge Lungstrum intended his September 2013 orders to be final and
appealable. As a result, the Court rejects plaintiff’s argument that the September 11, 2013 entry
of judgment constitutes a final order which triggered Rule 54(d)(2)’s clock for filing a motion for
attorney’s fees. Defendant has 14 days from the entry of final judgment to file his motion for
attorney’s fees. And because there are no remaining claims in this lawsuit, the Court directs the
Clerk of the Court to enter final judgment in this case.
B. Amount of Defendant’s Deficiency Judgment
Defendant asks the Court to determine the amount of the deficiency judgment to which
he is entitled. The Court’s September 9, 2013 Order granted summary judgment for defendant
on three of his counterclaims and determined that he was entitled to judgment in the amount of
$210,000, plus 18% default interest compounding monthly beginning September 5, 2012. See
Doc. 55-1 at 23. Judge Lungstrum also concluded that defendant was entitled to 77,310 shares
of Infinity common stock, which plaintiff had pledged to defendant as collateral. Defendant
received possession of these shares from the Clerk of the Court on September 12, 2013. On
September 16, 2013, defendant sold the shares, which returned net proceeds of $221,361.91.
The Court has denied plaintiff’s claim for wrongful disposition of collateral, concluding that
defendant’s sale was commercially reasonable under Part 6 of Kansas UCC Article 9. See Doc.

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297 at 24-32. As a result, defendant has received $221,361.91 that will apply to the total amount
plaintiff owes him.
In Judge James’ December 23, 2014 Report and Recommendation, she recommended
that the Court set an evidentiary hearing to determine the amount of deficiency judgment to
which defendant is entitled. The Court need not schedule a hearing, however, because the
essential facts are before the Court and undisputed. In his memorandum in support of his motion
to dismiss, defendant takes these facts and calculates the deficiency amount he believes plaintiff
owes him. Significantly, plaintiff does not object or even respond to defendant’s calculations.
And having checked defendant’s math, the Court concludes that they are accurate.1
Judge Lungstrum entered judgment of $210,000 plus 18% compounding monthly. The
default interest that accrued between September 5, 2012, the date of default, and September 16,
2013, when defendant sold the shares, totaled $42,460.76. Thus, plaintiff owed defendant
$210,000 in principal and $42,460.76 in interest, for a total of $252,460.76 on the day he sold the
shares. Defendant earned $221,361.91 in the sale, leaving a deficit of $31,098.85 on September
16, 2013 upon which interest has continued to accrue. This Order will take effect on July 15,
2015, absent objection from defendant. Applying the 18% interest rate, compounded monthly, to
$31,098.85 through the effective date of this Order, plaintiff owes defendant a total of
$43,151.64.
C. Post-Judgment Interest
Defendant seeks an order that “the post-judgment interest rate to apply in this case is the
parties’ agreed-to 18% default rate, compounding monthly, and that it will apply to the total
monetary award determined by the Court, including the prejudgment component.” Doc. 299 at
1

Defendant makes one small typographical error. Defendant earned $221,361.91 from the sale of Infinity
stock, but he uses a figure of $221,361.99, a difference of $.08, to calculate plaintiff’s deficiency. The
Court bases its calculations on the correct amount.

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23. Plaintiff again neither disputes nor even responds to defendant’s argument. The Court
concludes that post-judgment interest will continue to accrue on the deficiency amount at a rate
of 18%, compound monthly.
Title 28 U.S.C. § 1961(a) provides that “[i]nterest shall be allowed on any money
judgment in a civil case recovered in a district court” at a rate based on one-year Treasury bills.
But this Court and others have held that parties can contract for a rate other than the rate set forth
in § 1961(a). See, e.g., Horizon Holdings, L.L.C. v. Genmar Holdings, Inc., 244 F. Supp. 2d
1250, 1275 (D. Kan. 2003), aff’d sub nom., O’Tool v. Genmar Holdings, Inc., 387 F.3d 1188
(10th Cir. 2004) (“The court, however, can discern no sound reason why Congress would have
intended that parties themselves could not agree to a different rate.”) (collecting cases). The
Court concludes that the parties here contracted for a post-judgment interest rate different than
that provided by § 1961(a). The Forbearance Agreement, which sets the default interest rate,
provides: “Interest on the principal balance of the Note shall begin to accrue and compound
monthly at the rate of eighteen percent (18%) per annum . . . and shall continue until full
payment of the principal balance is received by Lender.” Doc. 26-7 at 4 (emphasis added).
Thus, interest will continue to accrue post-judgment on the deficiency amount described in this
Order at a rate of 18%, compounded monthly, until plaintiff repays the principal amount in full.
D. Prevailing Party under Rule 54(d)
Finally, defendant asks that the Court declare him to be the prevailing party in this case
for purposes of recovering costs under Federal Rule of Civil Procedure 54(d). Under Rule
54(d)(1), “costs—other than attorney’s fees—should be allowed to the prevailing party.” No
doubt can exist who won this case. Defendant prevailed on all of plaintiff’s claims and on three
of his seven counterclaims. The Court has entered judgment in his favor in the amount of

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$210,000 plus 18% interest, compounded monthly. Thus, defendant is entitled to recover costs
as the prevailing party under Rule 54(d).
IT IS THEREFORE ORDERED BY THE COURT THAT defendant has until 11:59
p.m. on July 15, 2015 to file a statement indicating whether or not the terms of the voluntary
dismissal without prejudice are acceptable to him.
IT IS FURTHER ORDERED BY THE COURT THAT if defendant has not
withdrawn his motion by 11:59 p.m. on July 15, 2015, defendant’s motion to dismiss voluntarily
without prejudice his four remaining counterclaims (Doc. 298) is granted, effective July 15, 2015
and subject to the conditions recited herein.
IT IS FURTHER ORDERED BY THE COURT THAT if defendant has not
withdrawn his motion by 11:59 p.m. on July 15, 2015, the Clerk of the Court shall enter final
judgment in favor of defendant, including his right to recover attorney’s fees. Defendant shall be
the prevailing party for purposes of recovering costs.
IT IS FURTHER ORDERED BY THE COURT THAT the Clerk of the Court enter
judgment in defendant’s favor in the amount of $43,151.64, with post-judgment interest accruing
at a rate of 18% compounding monthly from the date the Clerk enters judgment until the
judgment is paid in full.
IT IS SO ORDERED.
Dated this 25th day of June, 2015, at Topeka, Kansas.
s/ Daniel D. Crabtree
Daniel D. Crabtree
United States District Judge

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