PACKGEN v. BERRY PLASTICS CORPORATION et al
Filing
207
ORDER ON PLAINTIFF'S AMENDED MOTION TO ALTER OR AMEND THE JUDGMENT TO INCLUDE INTEREST - granting in part and denying in part 206 Motion to Alter or Amend the Judgment to Include Interest. By JUDGE NANCY TORRESEN. (mnw)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
PACKGEN,
Plaintiff,
v.
Docket No. 2:12-cv-80-NT
BERRY PLASTICS CORPORATION,
and COVALENCE SPECIALTY
COATINGS, LLC,
Defendants.
ORDER ON PLAINTIFF’S AMENDED MOTION TO ALTER OR AMEND
THE JUDGMENT TO INCLUDE INTEREST
Before me is the Plaintiff’s Amended Motion to Alter or Amend the
Judgment to Include Interest (“Am. Mot. to Amend”) (ECF No. 206). For the
reasons stated below, the motion is GRANTED IN PART and DENIED IN PART.
BACKGROUND
After a jury returned a verdict in favor of the Plaintiff (“Packgen”) on
November 13, 2015, judgment was entered against the Defendants (“Berry”) in the
amount of $7,206,646.30, plus interest as allowed by law. (ECF No. 183). On
November 19, 2015, Packgen filed a Rule 59(e) motion to amend the judgment to
include prejudgment interest from the date of the filing of the Complaint—December
9, 2011—through the entry of judgment on November 13, 2015. Pl.’s Mot. to Alter or
Amend the J. to Include Interest (ECF No. 185). Packgen also sought to amend the
judgment to include postjudgment interest. Berry did not object to Packgen’s motion.
Before I ruled on Packgen’s motion, Packgen filed a motion for leave to
amend its initial motion to alter or amend the judgment, seeking to change the date
prejudgment interest began to accrue to the date Berry received Packgen’s Notice of
Claim. Pl.’s Motion for Leave to File Am. Motion to Alter or Amend the J. to Include
Interest. (ECF No. 196). Although Berry objected to the substance of the Amended
Motion to Amend itself, I granted Packgen’s motion because Berry did not object to
Packgen’s request for leave to file the Amended Motion to Amend. March 3, 2016
Order (ECF No. 205).
I.
Prejudgment Interest Under Maine Law
“In a diversity action . . . state law must be applied in determining whether
and how much pre-judgment interest should be awarded.” Saint–Gobain Indus.
Ceramics Inc. v. Wellons, Inc., 246 F.3d 64, 69 n. 1 (1st Cir. 2001) (citation and
internal quotation marks omitted). Under Maine law, prejudgment interest is
available pursuant to statute. See 14 M.R.S.A. § 1602-B(1)-(3). The purpose of
prejudgment interest is twofold: “first, it compensates an injured party for the
inability to use money rightfully belonging to that party between the date [of accrual]
and the date judgment is entered, and second, it encourages the defendant to conclude
a pretrial settlement of clearly meritorious suits.” Guiggey v. Great N. Paper, Inc.,
704 A.2d 375, 377 (Me. 1997) (internal quotation marks and citations omitted).
A prevailing party is entitled to prejudgment interest “as a matter of right,”
Brown v. Habrle, 1 A.3d 401, 404 (Me. 2010), and Maine law has a presumption in
favor of such awards, Kaplan v. First Hartford Corp., 671 F. Supp. 2d 187, 194 (D.
Me. 2009). However, the court has discretion to fully or partially waive prejudgment
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interest on petition of the nonprevailing party if good cause exists. See 14 M.R.S.A.
§ 1602-B(5); see also Dinan v. Alpha Networks, Inc., 764 F.3d 64, 72 (1st Cir. 2014).
Importantly, prejudgment interest can accrue on two dates. 14 M.R.S.A. §
1602-B(5). Prejudgment interest may accrue when a “notice of claim setting forth
under oath the cause of action” is “served personally or by registered or certified mail
upon the defendant until the date on which an order of judgment is entered.” Id.
(emphasis added). Or, “[i]f a notice of claim has not been given to the defendant,”
prejudgment interest may accrue on the date the complaint is filed. Id.
A. Plain Meaning of 14 M.R.S.A. § 1602-B
Here, Packgen’s former attorney sent an unsworn Notice of Claim to Berry
by certified mail on May 29, 2008. Ex. A to Jan. 5, 2016 Decl. of Daniel J. Mitchell 5
(the “Notice of Claim”) (ECF No. 196-3). Berry received the Notice of Claim on June
5, 2008. Ex. B to Jan. 5, 2016 Decl. of Daniel J. Mitchell 7 (ECF No. 196-3). More than
three years later, Packgen filed suit against Berry on December 9, 2011. See
Complaint (ECF No. 2-2). The parties vigorously dispute whether the unsworn Notice
of Claim was sufficient to trigger the accrual of prejudgment interest. The dispute is
far from inconsequential, as millions of dollars are at stake depending on when
interest began to accrue.1
Packgen acknowledges that the Notice of Claim was unsworn. Nonetheless,
it contends that the Notice of Claim was still sufficient to trigger the accrual of
I am not aware—and the parties have not cited—any Law Court decision addressing
the specific issue. Thus, I use my best judgment and attempt to predict how the Law Court would rule
if confronted with the question.
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prejudgment interest at the time of its receipt because it put Berry on notice of its
claims and Berry did not suffer any prejudice from the lack of a jurat. Am. Mot. to
Amend 4. Packgen’s argument is unpersuasive. The “interpretation of a statute is
controlled by the statute’s plain meaning, unless that plain meaning leads to ‘absurd
results.’ ” Guiggey v. Great N. Paper, Inc., 704 A.2d 375, 377 (Me. 1997). Here, the
plain meaning of the statute unambiguously requires that “the notice of claim set[]
forth under oath the cause of action.” 14 M.R.S.A. § 1602-B(5). The Plaintiff’s failure
to comply with the statute’s oath requirement dooms its argument.2 See Sewall v.
Spinney Creek Oyster Co., 421 A.2d 36, 39 (Me. 1980) (“[W]hen a statute requires an
oath courts generally hold . . . that ‘the oath provision in a statute is more than a
mere technicality.’ ”) (quoting Paradis v. Webber Hospital, 409 A.2d 672, 675 (Me.
1979)).
Relying on Frame v. Millinocket Reg’l Hosp., 82 A.3d 137, 143 (Me. 2013),
Packgen contends that “the verification and service of a notice of claim are details
that should be regarded ‘as directory and not mandatory if the failure to strictly
comply with the notice requirements did not prejudice the opposing party.’ ” Am. Mot.
to Amend 4 (quoting Frame, 82 A.3d at 143). But while the Law Court has “shown
some flexibility in interpreting statutory notice requirements, [it] ha[s] usually done
so in the context of construing a notice provision that affects a statute of limitations.
Citing the Maine Rules of Professional Conduct, Packgen contends that the Notice of
Claim was sufficient because the attorney who signed it was under ethical obligations to refrain from
making knowingly false statements or engaging in conduct involving dishonesty. Am. Mot. to Amend
6. Accepting this argument would essentially read the words “under oath” out of this statute (and
perhaps others), as any notice of claim signed by an attorney would suffice. I decline to do so.
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Specific notice requirements are otherwise applied as they are written.”3 Ford Motor
Co. v. Darling’s, 86 A.3d 35, 46 n.9 (Me. 2014) (internal citations omitted). Moreover,
“in areas of law that are uniquely statutory, in the absence of an express legislative
command or a clear indication of legislative intention, [the Law Court] leave[s] the
parties where the Legislature left them.” Sunshine v. Brett, 106 A.3d 1123, 1129 (Me.
2014) (citation and internal quotation marks omitted). The notice provision at issue
does not affect a statute of limitations. As written, the specific notice requirements of
the statute demand a notice of claim be made under oath in order to trigger the
accrual of prejudgment interest.
In addition, “the details of a notice of claim” are treated “as directory and
not mandatory if the failure to strictly comply with the notice requirements did not
prejudice the opposing party.” Frame, 82 A.3d at 143 (emphasis added). Thus, even if
the notice provision were directory, I would still have to address the issue of whether
Berry has been prejudiced by Packgen’s failure to comply with § 1602-B(5)’s notice
requirements. Berry contends that it has been “aware of the lack of a sworn notice of
claim throughout the litigation” and that this impacted how it evaluated the case for
Moreover, I am not convinced that the Law Court’s decision in Paradis v. Webber
Hospital, 409 A.2d 672 (Me. 1979), which requires strict compliance with the Maine Health Security
Act’s (the “MHSA”) notice provision, does not control here. In Paradis, the Law Court dismissed a
claim because the plaintiff failed to file a written notice of claim under oath as required in order to toll
the statute of limitations. Id. at 676 The court reasoned that an “oath provision in a statute is more
than a mere technicality. Its function is both to make clear the significance of filing the document itself
and to provide a basis for a perjury action upon proof of falsification.” Id. at 675. Frame distinguished—
but did not overrule—Paradis. The Frame court stated that “the reason why our decision in Paradis
does not control here, is the addition of mandatory, judicially sponsored prelitigation screening” for
MHSA cases that was not in place at the time Paradis was decided. Frame, 82 A.2d at 145. These
changes undercut the policy considerations that drove the court’s decision in Paradis. See id. at 146.
But the changes to the MHSA are of no import here. And without any guidance from the Law Court
regarding § 1602-B(5)’s notice requirements, I will apply the statute as written.
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settlement purposes. Defs.’ Resp. to Pl.’s Mot. for Leave to File Am. Mot. (“Defs.’
Resp.”) (ECF No. 200). And Packgen informed Berry at a mediation held before trial
that it “would not negotiate the amount of a potential settlement on the basis that
prejudgment began accruing upon receipt” of the unsworn Notice of Claim. Feb. 8,
2016 Decl. of Kurt E. Olafsen ¶ 5 (ECF No. 204-1). If Packgen had strictly complied
with § 1602-B(5), it is reasonable to assume that Berry would have approached the
case differently for settlement purposes given the potential for additional exposure to
millions of dollars in prejudgment interest on any judgment awarded at trial in
Packgen’s favor.4 Thus, I find that Berry has been prejudiced by Packgen’s failure to
strictly comply with the statute.
B. Good Cause for Partial Waiver
Alternatively, even if I accepted Packgen’s argument regarding the validity of
the unsworn Notice of Claim, I would still partially waive prejudgment interest from
the filing of the Notice of Claim in 2008 to the filing of the Complaint in 2011. The
parties do not dispute that I have the discretion to fully or partially waive
Alternatively, Packgen seeks leave to amend its Notice of Claim “to include an oath to
the effect that the statements in [it] were true and accurate” and for this oath to relate back to its
original Notice of Claim. Amended Motion 6. As Packgen points out, if “a statute . . . requires an oath,
courts have shown a high degree of consistency in accepting later verification as reaching back to an
earlier, unverified filing.” Edelman v. Lynchburg Coll., 535 U.S. 106, 116 (2002) (footnote omitted).
But like most cases applying the relation back doctrine, the filing at issue in Edelman (like Frame)
implicated the statute of limitations. Where the statute of limitations is not implicated, the relation
back doctrine generally does not apply. See, e.g., Fed. R. Civ. P. 15(c) advisory committee notes (stating
that the relation back doctrine “is intimately connected with the policy of the statute of limitations”);
Farber v. Wards Co., 825 F.2d 684, 689 (2d Cir. 1987) (“Rule 15(c) governs the ‘relation back’ of
amended pleadings only for the purpose of the statute of limitations, which is simply not implicated
in this case.”); 6A Charles Alan Wright, et al., Federal Practice & Procedure § 1496 (3d ed.) (“Although
Rule 15(c) applies to all pleading amendments that satisfy its requirements, the doctrine of relation
back is of importance primarily in the context of amendments with leave of court under Rule 15(a)
when the statute of limitations is implicated.”). Accordingly, I will not grant Packgen leave to amend
its unsworn Notice of Claim.
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prejudgment interest if good cause exists. See 14 M.R.S.A. § 1602-B(5) (“On petition
of the nonprevailing party and on a showing of good cause, the trial court may order
that interest awarded by this section be fully or partially waived.”). However, given
Maine law’s presumption in favor of prejudgment interest, the parties dispute
whether good cause exists to waive it.
Berry argues that good cause exists for a partial waiver of prejudgment interest
because Packgen “could not have earned 6.42% interest in the marketplace during
the years 2009-2015,” most of Packgen’s damages represent millions of dollars in
future lost profits calculated on a ten year timeframe from 2008 to 2018, and Packgen
waited approximately three years after filing its unsworn Notice of Claim to file suit.
Changing course on the importance of plain meaning, Packgen contends that
the language of § 1602-B forecloses Berry’s argument “that a waiver can be based on
the lapse of time between service of a notice of claim and initiating the lawsuit.” Pl.’s
Reply (ECF No. 204). However, delay is a relevant consideration under the statute.
See 14 M.R.S. § 1602–B(5) (prejudgment interest is suspended “[i]f the prevailing
party at any time requests and obtains a continuance for a period in excess of 30 days
. . . for the duration of the continuance.”). I find that good cause exists for a partial
waiver of prejudgment interest based on Packgen’s three-year delay in bringing suit,
the parties positions’ regarding the unworn Notice of Claim during the course of
settlement negotiations, and the size of the judgment.
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II.
Postjudgment Interest
Federal law governs postjudgment interest. Vazquez-Filippetti v. Cooperativa de
Seguros Multiples de P. R., 723 F.3d 24, 28 (1st Cir. 2013). A prevailing party is
entitled to “postjudgment interest ‘from the date of the entry of the judgment’ at the
rate fixed in the statute.” Id. (quoting 28 U.S.C. § 1961(a)). Under 28 U.S.C. § 1961(a),
postjudgment interest is based on the Treasury yield for the calendar week preceding
the entry of judgment, computed daily to the date of payment and compounded
annually. 28 U.S.C. § 1961(b). Here, Packgen is entitled to postjudgment interest
from the date of judgment—November 13, 2015.
CONCLUSION
For the reasons stated above, the Court DENIES IN PART and GRANTS IN
PART the Plaintiff’s Amended Motion to Alter or Amend the Judgment to Include
Interest (ECF No. 206). The judgment is amended to award Plaintiff Packgen
prejudgment interest running from December 9, 2011 to November 13, 2015, and
postjudgment interest from the date of judgment—November 13, 2015.5
SO ORDERED.
/s/ Nancy Torresen
United States Chief District Judge
Dated this 7th day of March, 2016.
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I leave it to the parties to resolve the applicable interest rates.
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