BRT Management LLC v. Malden Storage LLC et al

Filing 232

Chief Judge F. Dennis Saylor, IV: MEMORANDUM AND ORDER entered. The Court has awarded prejudgment interest as reflected in the final judgment. So Ordered.(McDonagh, Christina)

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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_____________________________________
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BRT MANAGEMENT LLC,
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Plaintiff/
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Counterclaim Defendant,
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v.
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MALDEN STORAGE, LLC and PLAIN )
AVENUE STORAGE, LLC,
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Defendants/
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Counterclaim Plaintiffs/
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Third-Party Plaintiffs,
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and
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BRIAN WALLACE,
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Third-Party Defendant.
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_____________________________________ )

Civil Action No.
17-10005-FDS

MEMORANDUM AND ORDER ON
CALCULATION OF PREJUDGMENT INTEREST
SAYLOR, C.J.
Pursuant to the Court’s entry of final judgment on February 14, 2022, the following
memorandum and order explains the Court’s calculation of prejudgment interest and the relevant
governing law.
“In a diversity action, state law controls a prevailing party’s entitlement to prejudgment
interest. . . . Conversely, federal law governs a party’s entitlement to postjudgment interest.”
John Hancock Life Ins. Co. v. Abbott Lab’ys, 863 F.3d 23, 49 (1st Cir. 2017). Here, New York
and Massachusetts state law control.
Under New York law, prejudgment interest is only recoverable in certain types of

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actions. N.Y. C.P.L.R. § 5001(a) provides that “[i]nterest shall be recovered upon a sum
awarded because of a breach of performance of a contract, or because of an act or omission
depriving or otherwise interfering with title to, or possession or enjoyment of, property . . . .”
Prejudgment interest “shall be computed from the earliest ascertainable date the cause of action
existed . . . .” Id. § 5001(b). The rate of interest is 9% per annum. Id. § 5004.
Here, Plain Avenue Storage prevailed on two claims. First, it was awarded damages
from BRT Management in the amount of $3,966,715.14 for breach of contract. Second, it was
awarded damages from BRT Management and Brian Wallace jointly and severally in the amount
of $185,000 for conversion and fraud. Under New York law, prejudgment interest is mandated
for both claims. See BPP Wealth, Inc. v. Weiser Cap. Mgmt., LLC, 623 F. App’x 7, 10-11 (2d
Cir. 2015) (summary order) (stating that “New York law mandates prejudgment interest at 9%
per annum as a matter of right on, inter alia, any recovery for an act or omission depriving or
otherwise interfering with title to, or possession or enjoyment of, property, which includes
conversion claims”) (internal citations and quotation marks omitted).
The earliest ascertainable date for the breach-of-contract claim is September 21, 2016, the
date that Plain Avenue Storage terminated the contract for cause because of breaches made by
BRT Management. (Trial Ex. 1108). The earliest ascertainable date for the fraud and
conversion claims is July 23, 2015, the date that BRT Management invoiced Plain Avenue
Storage for $185,000 purportedly earmarked for a steel deposit to Storage Structures. (Trial Ex.
1163). Accordingly, Plain Avenue Storage is entitled to prejudgment interest in the amounts of
$1,928,801.65 as to its claim for breach of contract and $109,388.22 as to its claims for
conversion and fraud.
Under Massachusetts law, prejudgment interest is mandated for certain contract and tort

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actions. Mass. Gen. Laws ch. 231, § 6C provides that “[i]n all actions based on contractual
obligations, . . . interest shall be added by the clerk of the court to the amount of damages, at the
contract rate, if established, or at the rate of twelve per cent per annum from the date of the
breach or demand.” Additionally, § 6B states that “[i]n any action . . . for personal injuries to the
plaintiff or for consequential damages, or for damage to property, there shall be added by the
clerk of court to the amount of damages interest thereon at the rate of twelve per cent per annum
from the date of commencement of the action . . . .”
Here, Malden Storage prevailed on three claims. First, it was awarded damages from
BRT Management in the amount of $2,913,525.63 for breach of contract. Second, it was
awarded damages from BRT Management and Brian Wallace jointly and severally in the amount
of $142,282 for conversion and fraud. Third, it was awarded damages from BRT Management
and Brian Wallace jointly and severally in the amount of $51,546.25 for tortious interference
with advantageous relations. Under Massachusetts law, prejudgment interest is mandated for all
three claims. See Shawmut Cmty. Bank, N.A. v. Zagami, 411 Mass. 807, 813 (1992) (holding
that § 6B prejudgment interest is available for fraud claims); Primarque Prod. Co., Inc. v.
Williams W. & Witts Prod. Co., 988 F.3d 26, 45 (1st Cir. 2021) (concluding that district court
committed legal error in holding that plaintiff was not entitled to prejudgment interest under
§ 6B for its tortious interference with business relations claim).
The date of breach or demand is January 23, 2017, the date that Malden Storage
terminated the contract for cause because of breaches made by BRT Management. (Trial Ex.
1317). The date of commencement of the action is March 7, 2017, the date that Malden Storage
filed its counterclaims and third-party claims. Accordingly, Malden Storage is entitled to
prejudgment interest in the amounts of $1,770,146.42 as to its claim for breach of contract;

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$84,433.65 as to its claims for conversion and fraud; and $30,588.82 as to its claim for tortious
interference with advantageous relations. However, to avoid duplication, it may not recover
damages totaling more than $2,913,525.63, plus the applicable prejudgment interest, as to its
claims for breach of contract and tortious interference with advantageous relations.
For the foregoing reasons, the Court has awarded prejudgment interest as reflected in the
final judgment.

So Ordered.

Dated: February 14, 2022

/s/ F. Dennis Saylor IV
F. Dennis Saylor IV
Chief Judge, United States District Court

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