Jamison Electric, LLC v. Fidelity and Deposit Company of Maryland et al
Filing
91
MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that defendant's motion to alter or amend the judgment [#88] is granted in part. The award of prejudgment interest is reduced by $3520.13. An amended judgment accompanies this order. IT IS FURT HER ORDERED that plaintiff's motion for bill of costs [#87] is granted in part. The Clerk of Court shall tax the following costs in favor of Jamison Electric, LLC and against Hankins Construction Co.: Fees of the Clerk $97 Fees for transcripts necessarily obtained $3,251.70 TOTAL TAXABLE COSTS $3,348.70. Signed by District Judge Catherine D. Perry on April 13, 2015. (MCB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ST. LOUIS HOUSING AUTHORITY
ex rel. JAMISON ELECTRIC, LLC,
Plaintiff,
vs.
HANKINS CONSTRUCTION CO.,
and FIDELITY AND DEPOSIT CO.
OF MARYLAND,
Defendants.
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Case No. 4:12 CV 1746 CDP
MEMORANDUM AND ORDER
This action is before the court on defendant Hankins Construction’s motion
to alter or amend the judgment and on plaintiff Jamison Electric’s bill of costs.
Because Hankins has not demonstrated that there was a manifest error of fact or
law underlying my decision to award prejudgment interest, I will deny its motion
except that I will reduce the judgment by the amount of interest I awarded on the
Centrex-related sum.
Hankins also argues that Jamison should not have been awarded costs. As
discussed below, Jamison was properly identified as the prevailing party in
accordance with Fed. R. Civ. P. 54(d) and entitled to its taxable costs. However,
Hankins’ specific objections to costs not supported by the documentation are welltaken, and those costs will be deducted from the amount to be taxed, including the
full amount requested for private process server fees.
I.
Rule 59(e) Motion
Fed R. Civ. P. 59(e) permits litigants to move to alter or amend a judgment
within 28 days of entry of that judgment. A Rule 59(e) motion serves limited
functions, including – as applicable here – “correcting manifest errors of law or
fact.” Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills,
141 F.3d 1284, 1286 (8th Cir. 1998) (internal quotation marks omitted). The
district court has “broad discretion” when determining whether to grant such a
motion. Hagerman v. Yukon Energy Corp., 839 F.2d 407, 413 (8th Cir. 1988).
Here, Hankins timely filed its Rule 59(e) motion1 but has not demonstrated that the
decision to award prejudgment interest was based on a manifest error of fact or
law. However, Hankins has shown that it was error to award interest to Jamison on
the amount it was supposed to pay Centrex, its supplier. I will reduce the
prejudgment interest award accordingly.
a. It Was Proper to Rely on Mo. Rev. Stat. § 408.020 in Awarding
Prejudgment Interest
As Hankins points out, jurisdiction over this case arises from 28 U.S.C. §
1352, conveying original federal jurisdiction over actions brought to recover under
1
Hankins also cited Rule 60(b), governing motions for relief from judgment, as a basis for its
motion, but “any motion questioning the correctness of a judgment is functionally a Fed. R. Civ.
P. 59(e) motion, regardless of how the motion is styled.” Norman v. Ark. Dep’t of Educ., 79 F.3d
748, 750 (8th Cir. 1996).
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federally mandated bonds. Neither the fact nor the source of this court’s
jurisdiction is in dispute. However, Hankins argues that it was error to award
prejudgment interest at the rate set by Mo. Rev. Stat. § 408.020 because state law
only governs prejudgment interest in diversity-of-citizenship actions. See, e.g.,
California & Hawaiian Sugar Co. v. Kansas City Terminal Warehouse Co., Inc.,
788 F.2d 1331, 1333 (8th Cir. 1986) (prejudgment interest in diversity action is
determined by the law of the state in which the action arose). Hankins
characterizes this action, instead, as a federal-question case; in those cases, the
determination of whether to award prejudgment interest and at what rate is
entrusted to the district court’s discretion. Philipp v. ANR Freight Sys., Inc., 61
F.3d 669, 674-75 (8th Cir. 1995).
Hankins is correct that this is not a diversity action, and my citation of
California & Hawaiian was imprecise. Nonetheless, it would be similarly
misguided to rely on the federal-question cases Hankins cites, because those
disputes involved purely federal causes of action.2 A better alternative is to look to
cases brought under the Miller Act, 40 U.S.C. § 3131 et seq.
Under the Miller Act, most prime contractors constructing federal buildings
must furnish a payment bond for the protection of their subcontractors. Although a
2
E.E.O.C. v. Wooster Brush Co. Emps. Relief Ass’n, 727 F.2d 566 (6th Cir. 1984) (Title VII of
the Civil Rights Act of 1964), E.E.O.C. v. Rath Packing Co., 787 F.2d 318 (8th Cir. 1984)
(same); Philipp, 61 F.3d at 672 (Age Discrimination in Employment Act).
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suit to recover on the mandated payment bond looks similar to a state-law breach
of contract action, courts have uniformly found that the Miller Act creates a
separate and district federal cause of action. See, e.g., United States ex rel.
Lighting & Power Servs., Inc. v. Interface Const. Corp., 553 F.3d 1150, 1153 (8th
Cir. 2009). Because the Miller Act both requires a payment bond and creates a
substantive federal claim, federal jurisdiction over Miller Act cases arises under
both Sections 1331 and 1352. E.g., Richards Const. Co. v. Air Conditioning Co. of
Hawaii, 318 F.2d 410, 411 (9th Cir. 1963).
The Eighth Circuit has held in a Miller Act case that if there is no contract
provision setting the rate of prejudgment interest, “it is necessary to look to state
law to measure the extent of the [losing party’s] obligation” therefor. D&L Const.
Co. v. Triangle Elec. Supply Co., 332 F.2d 1009, 1013 (8th Cir. 1964); see also
United States ex rel. Yonker Const. Co. v. W. Contracting Corp., 935 F.2d 936, 941
(8th Cir. 1991) (collecting Miller Act cases where courts looked to state law for
prejudgment interest determination and holding that it was appropriate to do so “as
a matter of convenience and practicality”); United States ex rel. Canion v. Randall
& Blake, 817 F.2d 1188, 1193 (5th Cir. 1987) (in Miller Act case, Texas state law
applied to prejudgment interest determination); L&E Co. v. United States ex rel.
Kaiser Gypsum Co., 351 F.2d 880, 883 (9th Cir. 1965) (same for California state
law).
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In the instant action, even more than the Miller Act cases, the parties sought
to enforce state common-law rights. Whether or not this court was compelled to
apply Mo. Rev. Stat. § 408.020,3 it certainly was proper to look to that statute as a
guide. Therefore, I cannot conclude that it was a manifest error of fact or law to
award prejudgment interest to Jamison at a rate of 9% per annum.
b. Prejudgment Interest Award Should Not Have Included Centrex Sum
Hankins argues that the judgment awarded too much prejudgment interest
for three reasons. First, according to Hankins, the award of prejudgment interest
should have been offset by the extra work claims on which Hankins prevailed at
trial. I already reduced the interest award accordingly. See Doc. 80, p. 32-34,
calculating offset and citing Walton Gen. Contractors, Inc./Malco Steel, Inc. v.
Chicago Forming, Inc., 111 F.3d 1376, 1384 (8th Cir. 1997).
Second, Hankins argues that it should not have to pay prejudgment interest
on the $18.777.01 owed to Centrex, one of Jamison’s suppliers. Jamison breached
section 6(c) of its contract with Hankins by falsely certifying that it had paid
Centrex when it in fact it had not done so. Under Mo. Rev. Stat. § 408.020, the
time for prejudgment interest begins only when an amount becomes “due and
3
It is not quite right to say, as Hankins does, that state law on prejudgment interest governs only
in diversity cases. The right to prejudgment interest is a substantive one, and under the Erie
doctrine, federal courts exercising jurisdiction over any type of purely state law claim must apply
substantive state law. Emmenegger v. Bull Moose Tube Co., 324 F.3d 616, 624 & n.9 (8th Cir.
2003). Depending on how the parties’ claims are characterized, this court may in fact have been
obligated to apply Mo. Rev. Stat. § 408.020.
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payable.” Jamison’s breach prevented the Centrex sum from becoming due and
payable at the same time as the rest of the subcontract balance. As such, it was
error to include this amount in the prejudgment interest award, and I will reduce
the award by $3520.13.4
Third, Hankins argues that the broad language of the subcontract gave it the
right to withhold “any additional amounts needed to fully protect it from any loss
or expenses relating to Jamison’s breaches.” Essentially, this is an argument that it
should not be liable for prejudgment interest because it withheld the contract
balance in good faith. This argument has been consistently rejected by courts
applying Mo. Rev. Stat. § 408.020. See, e.g., Comens v. SSM St. Charles Clinic
Med. Grp., Inc., 335 S.W.3d 76, 82 (Mo. Ct. App. 2011) (“bona fide dispute” over
amount owed will not “preclude recovery of interest”); California & Hawaiian,
788 F.2d at 1334.5
c. It Was Not Error to Award Costs to Jamison
Finally, Hankins argues that because Jamison only achieved a partial victory
in this action, Hankins should not have to bear the taxable costs Jamison incurred.
The decision to award costs under Fed. R. Civ. P. 54(d) is committed to the “broad
4
This amount is calculated based on an annual interest rate of 9% for the period running from
the date the contract balance became due and payable, December 1, 2012, to the date of
judgment, December 31, 2014.
5
Even if Hankins could avoid paying prejudgment interest on funds it unilaterally decided were
necessary to protect itself from losses related to Jamison’s breaches, Hankins does not explain
what those losses might be other than the extra work claims and any liability it might have to
Centrex, which are already accounted for in the prejudgment interest award.
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discretion” of the district court. Little Rock Cardiology Clinic PA v. Baptist
Health, 591 F.3d 591, 601 (8th Cir. 2009); see also Concord Boat Corp. v.
Brunswick Corp., 309 F.3d 494, 498 (8th Cir. 2002) (“strong presumption” that a
prevailing party is entitled to recover its costs “in full measure”) (internal quotation
marks omitted).
Here, despite the fact that it recovered less than it sought, Jamison is the
prevailing party. See Firefighters’ Inst. for Racial Equal. ex rel. Anderson v. City
of St. Louis, 220 F.3d 898, 905 (8th Cir. 2000) (for purpose of Rule 54(d),
“prevailing party” is simply party “in whose favor judgment was entered”); see
also 10 Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND
PROCEDURE § 2667 (3d ed. 1998) (partially successful party may still be Rule 54(d)
“prevailing party” presumptively entitled to costs). Hankins does not (and could
not) argue that this court made a manifest error in awarding taxable costs to
Jamison, so I will decline alter or amend the cost award.6
II.
Bill of Costs
After judgment was entered, Jamison filed its bill of costs pursuant to 28
U.S.C. § 1920, and Hankins timely filed two objections. See L.R. 54-8.03(A).
First, Hankins objects to being billed for an apparent overpayment for the second
6
Analyzed under Rule 60(b), Hankins’ request to reconsider the award of costs fares no better.
It has not demonstrated exceptional circumstances that would justify relief from the judgment.
See Robinson v. Armontrout, 8 F.3d 6, 7 (8th Cir. 1993).
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volume of the transcript of Stephen Hankins’ deposition. (See Doc. 89, p. 16.)
The invoice supporting that cost shows that Jamison was billed $546.75 but – for
some reason – paid $645.15. Jamison has not demonstrated that the overage was
for “transcripts necessarily obtained for use in the case,” so I will deduct that
amount ($98.40) from the costs to be taxed.
Second, Hankins points out that one invoice for service of process is
apparently related to a different case and should not be billed to Hankins. (See
Doc. 89, p. 1.) In fact, in this circuit, fees charged by private process and subpoena
servers are not taxable costs at all; only Marshals’ fees are recoverable under
Section 1920. See Crues v. KFC Corp., 768 F.2d 230, 234 (8th Cir. 1985); see
also Exec. Air Taxi Corp. v. City of Bismarck, 2006 WL 3544386, at *2 (D.N.D.
Nov. 7, 2006) (noting that although the role of the federal marshal in civil lawsuits
has diminished since the Eighth Circuit’s decision in Crues, district courts remain
bound by that decision); Bunda v. Potter, 2006 WL 266513, at *3 (N.D. Iowa Jan.
31, 2006) (describing tension between Section 1920 and Fed. R. Civ. P. 4,
restricting availability of marshal service). Therefore, I will deduct altogether the
fees requested for private service of process and subpoenas ($315).
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to alter or amend the
judgment [#88] is granted in part. The award of prejudgment interest is reduced by
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$3520.13. An amended judgment accompanies this order.
IT IS FURTHER ORDERED that plaintiff’s motion for bill of costs [#87]
is granted in part. The Clerk of Court shall tax the following costs in favor of
Jamison Electric, LLC and against Hankins Construction Co.:
Fees of the Clerk
Fees for transcripts necessarily obtained
TOTAL TAXABLE COSTS
$97
$3,251.70
$3,348.70
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 13th day of April, 2015.
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