Stryker Corporation et al v. National Union Fire Insurance Company of Pittsburg

Filing 1131

OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)

S t r y k e r Corporation et al v. National Union Fire Insurance Company of Pittsburg

D o c . 1131

U N I T E D STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF MICHIGAN S O U T H E R N DIVISION

S T R Y K E R CORPORATION and HOWMEDICA OSTEONICS CORP., P l a i n t if f s , F ile No. 4:01-CV-157 v. H O N . ROBERT HOLMES BELL X L INSURANCE AMERICA INC., formerly known as WINTERTHUR INTERNATIONAL AMERICA INSURANCE COMPANY, et al., D e f e n d a n ts . / OPINION T h is matter is before the Court on a motion filed by Plaintiffs Stryker Corporation (" S tryk e r" ) and Howmedica Osteonics Corporation, a subsidiary of Stryker, to amend or c o rre c t the amended final judgment pursuant to Rules 59(e) and 60(a) of the Federal Rules o f Civil Procedure. (Dkt. No. 1125.) I. T h i s diversity action arises out of an insurance coverage dispute. On October 7,

2 0 0 9 , the Court entered a final judgment awarding damages to Plaintiffs from Defendant XL Insu ran ce America Inc. ("XL"). (Dkt. No. 1094.) The judgment indicated that Plaintiffs are

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e n titled to prejudgment interest pursuant to Mich. Comp. Laws § 500.2006(4), running until th e "date of this judgment." (Id.) Defendant XL filed a notice of appeal on October 15, 2 0 0 9 . Plaintiffs subsequently filed a motion to amend the judgment to include a calculation o f prejudgment interest through October 7, 2009, under Mich. Comp. Laws § 500.2006(4), an d to include additional prejudgment interest under Mich. Comp. Laws § 600.6013(8). D e f en d a n t XL also filed a motion for relief from judgment, asserting that Plaintiff is not e n ti tle d to prejudgment interest under § 500.2006. The Court of Appeals for the Sixth C irc u it notified the parties that it was holding the appeal in abeyance pending resolution of th e se motions because Plaintiffs' post-judgment motion suspended the time for appeal under F ed . R. App. P. 4(a)(4). O n June 24, 2010, the Court granted Plaintiffs' motion in part, and Defendant's m o tio n in part. (Dkt. No. 1123.) The Court allowed additional prejudgment interest under § 600.6013(8), but determined that Plaintiff's proposed calculation of interest under § 500.2006(4) was not acceptable in light of the law raised by Defendant in its motion. (Dkt. N o . 1122.) Since Plaintiff's calculations were rejected, the Court entered an amended final ju d g m e n t that once again did not include a calculation of prejudgment interest. (Dkt. No. 1 1 2 4 , Am. Final J.) The amended final judgment states that prejudgment interest would a c cru e "until October 7, 2009, the date of the Court's original judgment." (Id. at 2.) O n July 22, 2010, Plaintiffs filed their motion to amend the judgment to include a c a lcu latio n of interest pursuant to Rule 60(a) of the Federal Rules of Civil Procedure. (Dkt.

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N o . 1125.) Plaintiffs include in their motion a revised calculation of prejudgment interest a c cu m u la te d through October 7, 2009, the date of the original judgment. However, Plaintiffs a ls o move under Fed. R. Civ. P. 59(e) to extend prejudgment interest beyond October 7, 2009 to the date of this final amended judgment. (Id.) The Sixth Circuit continues to hold the ap p ea l in abeyance because Plaintiffs' motion suspends the effectiveness of Defendant's n o tice of appeal. (Dkt. No. 1127.) See Fed. R. App. P. 4(a)(4). Jurisdiction remains with th e district court until the motion is resolved. See id. II. F e d . R. Civ. P. 60(a) allows a party to correct a "clerical mistake or a mistake arising f ro m oversight or omission whenever one is found in a judgment, order, or other part of the re c o rd ." Generally, a motion to add a specific calculation of interest pursuant to Rule 60(a) d o e s not "seek to alter or amend the judgment, but simply ask[s] the court to insert the o m itte d particulars of the prejudgment interest award." Pogor v. Makita U.S.A., Inc., 135 F .3 d 384, 388 (6th Cir. 1998). Plaintiffs have presented a new set of prejudgment interest calculations in accord with th i s Court's June 24, 2010, amended judgment, and Defendant does not object to these c a lc u la tio n s as such. (Dkt. No. 1130) Defendant concedes that Plaintiff's calculations of p rejud g m en t interest through October 7, 2009, the date of the original judgment, are c o n s i s te n t with this Court's prior rulings. (Dkt. No. 1130) Thus, there is no dispute c o n c ern in g Plaintiff's proposed calculation of interest through the date of the original final ju d g m e n t. 3

A t issue is Plaintiffs' separate motion to extend the calculation of prejudgment interest b e yo n d the original October 7, 2009 judgment to the date of the final amended judgment. P la in tif f brings this motion under Fed. R. Civ. P. 59(e), which permits motions to "alter or a m e n d " a judgment. Plaintiffs contend that prejudgment interest under § 500.2006 should ru n until the date of the final amended judgment to be entered by the Court. Defendant a rg u e s that prejudgment interest ceases and post-judgment interest begins from the date of th e original October 7, 2009, judgment. D e f e n d a n t argues that Plaintiff's 59(e) motion to extend prejudgment interest is u n tim e ly because it attempts to modify both the June 24, 2010, amended judgment and the C o u rt's original October 7, 2009, judgment. The Court agrees. A timely Rule 59(e) motion m u s t be filed "`not later than 10 days after entry of the judgment' it seeks to alter or amend." W in s to n Network, Inc. v. Ind. Harbor Belt R.R. Co., 944 F.2d 1351, 1362 (7th Cir. 1991) (q u o tin g Fed. R. Civ. P. 59(e)). When a Rule 59(e) motion is filed in the wake of an a m e n d e d judgment, "the motion must challenge the altered and not the original judgment." M c N a b o la v. Chi. Transit Auth., 10 F.3d 501, 521 (7th Cir. 1993). Although parties a g g rie v e d by the alteration of an original judgment in an amended judgment may respond w ith a successive 59(e) motion, Charles v. Daley, 799 F.2d 343, 348 (7th Cir. 1986), the m o t io n "must bear some relationship to the district court's alteration of the first judgment . . . ." McNabola, 10 F.3d at 521 (emphasis added). Otherwise, parties could "continually f ile new motions," making a "joke" of the 10 day time limitation and "preventing the ju d g m e n t from becoming final." Charles, 799 F.2d at 347. 4

W ith respect to the terminal date of prejudgment interest, the June 24, 2010, amended j u d g m e n t did not in any way alter the judgment. The October 7, 2009, original judgment g ra n te d prejudgment interest accruing to the date of "this judgment." (Dkt. No. 1094.) The J u n e 24, 2010, amended judgment reinforced that cut off date, stating, "Plaintiffs are entitled to prejudgment interest . . . running until October 7, 2009, the date of the Court's original ju d g m e n t." (Dkt. No. 1124.) Plaintiff's Rule 59(e) motion does not address an alteration of th e original judgment; it seeks to change a term of the judgment that was fixed nearly a year a g o on October 7, 2009. Because Plaintiffs' 59(e) motion is directed at the original October 7 , 2009 judgment and not at any alteration effectuated by the June 24, 2010, amended ju d g m e n t, the motion is untimely.1 E v e n if Plaintiffs' Rule 59(e) motion were timely, it would still fail on the merits. P la in tif f s rely entirely on Scotts Co. v. Central Garden & Pet Co., 403 F.3d 781, 792 (6th C ir. 2005), to support their motion. In Scotts, the Sixth Circuit considered a case in which th e district court entered judgment on a jury verdict on May 16, 2002. Id. at 793. The ju d g m e n t awarded $22.5 million to the plaintiff on its claims, and $12.075 million to the d e f e n d a n t on its counterclaims. Id. at 783. The district court later entered an amended

Plaintiffs might conceivably argue that they could not have anticipated that the C o u rt's June 24, 2010, amended judgment would refer back to the October 7, 2009, judgment d a t e , and that they therefore chose not to raise this issue in hopes that the Court might revise its prior ruling and extend prejudgment interest on its own initiative. However, this argument w o u ld be fatally undermined by the fact that, in their initial Rule 59(e) motion to amend the o rig in a l judgment, Plaintiffs themselves referred to the October 7, 2009, cut-off, and asked f o r prejudgment interest up to that date. (Dkt. No. 1099, 1-2; Id. Ex. A.) 5

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ju d g m e n t on September 30, 2002, which changed some language from the jury's verdict. T h e parties then moved for prejudgment interest on damages, and the plaintiff moved for a re d u c tio n in the defendant's damages. On September 22, 2003, the court entered a final a m e n d e d judgment that reduced the defendant's award and granted prejudgment interest to th e Plaintiff running through May 16, 2002, the date of its initial judgment. Id. at 787. T he Sixth Circuit reversed the district court on equitable grounds, holding that the date o f the final amended judgment was the appropriate terminal date for accrual of prejudgment in te re st in that case. The court reasoned that because the rate of prejudgment interest was s ig n if ic a n tly higher than the rate of post-judgment interest, stopping prejudgment interest on th e date of the earlier judgment granted an "unjustified benefit" to the defendant, the losing p a rty in the case. Id. at 793. A s in Scotts, the issue here is the correct terminal date for prejudgment interest. However, Scotts is distinguishable from the present case. The district court in the Scotts lit ig a tio n did not even award prejudgment interest, let alone specify a terminal date for in te re s t accrual, until it issued its final amended judgment on September 22, 2003. Id. at 783, 7 8 6 -8 8 . The original May 16, 2002, judgment made no mention whatsoever of prejudgment in te re st. It was also substantially modified by later amendment, including a $750,000 re d u c tio n in the defendant's counterclaim award, revised language concerning damages, and th e awarding of prejudgment interest to the Plaintiff. Id. at 783. In shifting the terminal date f o r prejudgment interest to September 22, 2003, the Sixth Circuit merely aligned the accrual o f prejudgment interest with the date that prejudgment interest was first awarded. 6

In the present case, October 7, 2009, has always been the clearly stated terminal date f o r prejudgment interest. The original judgment granted prejudgment interest and made the te rm in a l date explicit. (Dkt. No. 1094.) Furthermore, no substantive changes to the ju d g m e n t have been made; the matter remains before this Court merely to calculate the dollar a m o u n t of prejudgment interest already granted in the original judgment. In this, the present c a s e closely resembles Venture Industries Corp. v. Autoliv ASP, Inc., No. 99-75354, 2007 W L 3202821 (E.D. Mich. Oct. 30, 2007); aff'd., 283 F. App'x. 808, (Fed. Cir. 2008), decided b y Judge Avern Cohn, who was a member of the Scotts panel. Judge Cohn found that, where litig a tio n history and court language "clearly implies that the dividing line for pre and postju d g m e n t interest has always been contemplated to be [the date of the original judgment]," th a t date should stand. Id. at *6. T h e purpose of the Sixth Circuit's holding in Scotts was to avoid an inequitable re su lt. 403 F.3d at 793. Where equity does not support using the date of a final amended ju d g m e n t to calculate prejudgment interest, Scotts offers no iron rule. Venture, 2007 WL 3 2 0 2 8 2 1 , at *6. In the present case, equity favors the October 7, 2009, original judgment as th e appropriate date for calculating prejudgment interest. Both the original and amended ju d g m e n t s explicitly designate October 7, 2009, as the terminal date for prejudgment interest a c c ru a l. Plaintiffs had an opportunity to object to the language of the original opinion in th e ir initial Rule 59(e) motion, and failed to do so. In fact, in their motion to amend the ju d g m e n t, Plaintiffs explicitly agreed that October 7, 2009, was the settled cut-off date for p r e ju d g m e n t interest. (Dkt. No. 1099) ("All that remains to be done is calculate the interest 7

d u e under [M.C.L. § 500.2006] up to the date of the final judgment."). Allowing Plaintiffs to extend prejudgment interest at this late hour would reward Plaintiffs for failing to raise the m a tte r in their initial motion to amend the judgment. For the foregoing reasons, and e sp e c ia lly as Plaintiffs' Rule 59(e) motion is untimely, prejudgment interest should run th r o u g h October 7, 2009, consistent with this Court's prior rulings. A n order and amended judgment consistent with this opinion will be entered.

Dated: September 16, 2010

/s/ Robert Holmes Bell ROBERT HOLMES BELL UNITED STATES DISTRICT JUDGE

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