Travelers Property Casualty Company of America v. Jet Midwest Technik

Filing 151

ORDER entered by Judge Ortrie D. Smith. Plaintiff's motion for prejudgment and postjudgment interest is granted, Doc. 140 . The Clerk of Court is directed to enter a final judgment awarding Plaintiff $416,714.00 from Defendant, with pre judgment interest at a rate of nine percent per annum from March 27, 2014, to accrue until the date of entry of the final judgment, and postjudgment interest at the legal rate pursuant to 28 U.S.C. § 1961 to accrue from the date of the final judgment. Signed on 6/7/19 by District Judge Ortrie D. Smith. (Matthes Mitra, Renea)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
ST. JOSEPH DIVISION

TRAVELERS PROPERTY CASUALTY )
COMPANY OF AMERICA,
)
)
Plaintiff,
)
)
vs.
)
)
JET MIDWEST TECHNIK, INC.,
)
)
Defendant.
)

Case No. 16-06084-CV-SJ-ODS

ORDER (1) GRANTING PLAINTIFF’S MOTION FOR AWARD OF STATUTORY
PREJUDGMENT AND POSTJUDGMENT INTEREST, AND (2) AWARDING
PLAINTIFF PREJUDGMENT AND POSTJUDGMENT INTEREST
On February 6, 2019, the jury returned a verdict in favor of Plaintiff in the amount
of $416,714.00. Doc. #140. On February 12, 2019, Plaintiff filed a motion for award of
statutory prejudgment and postjudgment interest. Doc. #141. For the reasons stated
below, Plaintiff’s motion is granted.

I.

PREJUDGMENT INTEREST

Plaintiff argues it is entitled to prejudgment interest at nine percent per annum
from the premium due date, March 27, 2014. Docs. #141, 142. State law governs the
issue of prejudgment interest in diversity actions. See Reliance Ins. Co. v. Chitwood,
433 F.3d 660, 665-66 (8th Cir. 2006). “Creditors shall be allowed to receive interest at
the rate of nine percent per annum, when no other rate is agreed upon, for all moneys
after they become due and payable, on written contracts…after they become due and
demand of payment is made….” Mo. Rev. Stat. § 408.020.1 Section 408.020 applies to
insurance policies. Schultz v. Queen Ins. Co., 399 S.W.2d 230, 236 (Mo. Ct. App.
1965). “Interest has traditionally been used to compensate for the use or loss of use of
money to which a person is entitled.” Travelers Prop. Cas. Ins. Co. of Am. v. Nat’l

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The parties cite and rely on Missouri law. The Court will do the same.

Union Ins. Co. of Pittsburgh, 735 F.3d 993, 1004-05 (8th Cir. 2013) (quoting Catron v.
Columbia Mut. Ins. Co., 723 S.W.2d 5, 7 (Mo. banc 1987)). Missouri courts award
prejudgment interest if three elements are satisfied: (1) the expenses must be due and
payable; (2) the claim must be liquidated or the amount of the claim must be reasonably
ascertainable; and (3) the obligee must make a demand on the obligor for the amount
due. Barkley, Inc. v. Gabriel Bros., Inc., 829 F.3d 1030, 1039 (8th Cir. 2016) (quoting
Jablonski v. Barton Mut. Ins. Co., 291 S.W.3d 345, 350 (Mo. Ct. App. 2010)).

A. Due and Payable
Prejudgment interest can only be awarded on “moneys after they become due
and payable.” Mo. Rev. Stat. § 408.020. Defendant argues no moneys were “due”
under the terms of the insurance policy until resolution of the parties’ disputes regarding
interpretation and application of the residual market rules. Defendant claims it had the
right to dispute Plaintiff’s bill and had no obligation to pay disputed amounts.
“On a breach of a contract claim, interest ordinarily runs from the date of the
breach or the time when payment was due under the contract.” Travelers Commercial
Cas. Co. v. Vac-It-All Servs., Inc., 451 S.W.3d 301, 313 (Mo. Ct. App. 2014) (citation
omitted). Here, the jury found Defendant breached the insurance contract by failing to
pay the additional premium. The parties agree Plaintiff demanded the additional
premium following the final audit by way of Plaintiff’s March 7, 2014 invoice, which
demanded Defendant pay the additional premium by March 27, 2014. Doc. #141-1.
Therefore, the additional premium became due and payable on March 27, 2014.

B. Liquidated or Reasonably Ascertainable
For an award of prejudgment interest, there must be a liquidated claim or the
amount of the claim must be reasonably ascertainable. McKinney v. State Farm Mut.
Ins., 123 S.W.3d 242, 250 (Mo. Ct. App. 2003). “A liquidated claim is one which is fixed
and determined or readily ascertainable by computation or a recognized standard.” Id.
(quoting Schnucks Carrollton Corp. v. Bridgeton Health & Fitness, Inc., 884 S.W.2d 733,
740 (Mo. Ct. App. 1994)). The denial of prejudgment interest for unliquidated claims “is
based, generally, on the idea that where the person liable does not know the amount he
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owes he should not be considered in default because of failure to pay.” Fohn v. Title
Ins. Corp. of St. Louis, 529 S.W.2d 1, 5 (Mo. banc 1975). Missouri courts have held
damages are not liquidated when the method used to calculate damages was genuinely
disputed. See Fohn, 529 S.W.2d at 4, 5; see also Ritter Landscaping, Inc. v. Meeks,
950 S.W.2d 495, 497 (Mo. Ct. App. 1997). Missouri courts have also found damages to
be unliquidated where the resolution of a claim or defense is necessary before damages
can be calculated. See Children Int’l v. Ammon Painting Co., 215 S.W.3d 194, 205 (Mo.
Ct. App. 2006).
But Missouri courts have granted prejudgment interest, despite a dispute over
the measure of damages, where the alternative measures offered by the defendant
were not supported by evidence at trial. McNeil v. City of Kan. City, 459 S.W.3d 509,
517 (Mo. Ct. App. 2015) (affirming the decision to grant prejudgment interest when the
amount of damages was disputed but the parties agreed on the proper method for
calculating damages); Comens v. SSM St. Charles Clinic Med. Grp., Inc., 335 S.W.3d
76, 81-82 (Mo. Ct. App. 2011) (affirming the decision to grant prejudgment interest
because the defendant’s suggested alternative measures to calculate damages were
not supported by evidence); Watters v. Travel Guard Int’l, 136 S.W.3d 100, 104-05, 111
(Mo. Ct. App. 2004) (finding prejudgment interest was properly granted where the
parties disputed liability but the amount of damages was “readily determinable and
ascertainable by simple computation”).
Defendant argues the claim was unliquidated because it disputed Plaintiff’s claim
and method of calculating the premium. According to Defendant, resolution of multiple
issues regarding Missouri law as well as interpretation and application of the residual
market rules was necessary before liability or damages could be ascertained.
Defendant claims that through the time of trial, it did not know the amount it owed, if
anything. Plaintiff opposes this argument, claiming its March 7, 2014 invoice provided
the exact amount Defendant owed.
“The mere fact that a party denies liability or defends a claim against [it], or even
the existence of a bona fide dispute as to the amount of the indebtedness, does not
preclude recovery of interest.” Comens, 335 S.W.3d at 82 (citations omitted). “To hold
otherwise would allow the opposing party to accrue pecuniary benefit unfairly by the
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simple expedient of producing conflicting estimates of value.” Id. (citations omitted).
Further, “[a]n exact calculation of damages need not be presented in order for the claim
to be considered liquidated.” Macheca Transp. Co. v. Philadelphia Indem. Ins. Co., 737
F.3d 1188, 1197 (8th Cir. 2013) (quoting Comens, 335 S.W.3d at 82). “Damages may
still be ascertainable, even in the face of a dispute over monetary value or the parties’
experts compute different estimates of the loss.” Id. (quoting Comens, 335 S.W.3d at
82).
Here, Defendant did not provide evidence supporting a different calculation of the
loss. At trial, both parties agreed the proper measure of damages was the number of
payroll dollars multiplied by the applicable rate, which is determined by the
corresponding classification code. From March 2014 through the jury’s verdict in
February 2019, Plaintiff consistently maintained how much additional premium
Defendant owed, and the evidence presented at trial supported Plaintiff’s calculation.
Under the circumstances, the amount of premium Defendant owed was readily
ascertainable by recognized standards, and therefore, Plaintiff has satisfied the second
element for an award of prejudgment interest. See Jablonski, 291 S.W.3d at 350-51.

C. Demand for Payment
Defendant argues Plaintiff’s March 7, 2014 invoice was not a demand for
payment because Defendant advised Plaintiff of its right to dispute the invoice, and
therefore, it was not obligated to pay the disputed amount. Defendant further contends
the jury determined Plaintiff’s March 7, 2014 invoice at trial was incorrect and did not
reflect the final premium. Finally, Defendant maintains Plaintiff’s March 7, 2014 invoice
left doubt as to when and how much payment was due. Plaintiff argues the amount of
premium Defendant owed was consistent. And Defendant’s additional $65,000
payment after it received the March 7, 2014 invoice evidences the March 7, 2014
invoice was a demand for payment.
“The demand for payment need not be in any certain form, but it must be definite
as to amount and time.” Ogg v. Mediacom, LLC, 382 S.W.3d 108, 119 (Mo. Ct. App.
2012) (quoting Rois v. H.C. Sharp Co., 203 S.W.3d 761, 767 (Mo. Ct. App. 2009)).
Here, the March 7, 2014 invoice informed Defendant the “amount is due and payable
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upon receipt of this invoice.” Doc. #141-1. Further, the invoice stated: “Payment must
be received by March 27, 2014.” Id. Therefore, the March 7, 2014 invoice was definite
as to amount and time Defendant’s payment was due.
It is not relevant the jury awarded less than the amount Plaintiff sought. “That the
ultimate award was less than the amount requested does not preclude an award of
prejudgment interest on the ascertained damages.” Vac-It-All Services, 451 S.W.3d at
313 (citing Watters, 136 S.W.3d at 111). Therefore, Plaintiff’s March 7, 2014 invoice is
a demand for payment under Missouri law.

D. Equitable Principles of Fairness and Justice
Defendant argues if the Court finds prejudgment interest should be awarded, the
amount should be substantially curtailed pursuant to equitable principles of fairness and
justice. “As a general rule, an award of prejudgment interest in a case where § 408.020
is applicable is not a matter of court discretion; it is compelled.” Emmenegger v. Bull
Moose Tube Co., 324 F.3d 616, 624 (8th Cir. 2003) (citation and internal quotations
omitted). “Equitable principles of fairness and justice may not be considered when
awarding prejudgment interest on a liquidated demand.” Id. (quoting Huffstutter v. Mich.
Mut. Ins. Co., 778 S.W.2d 391, 395 (Mo. Ct. App. 1989)).
Defendant argues prejudgment interest should not begin to run until July 31,
2018, when the Eighth Circuit reversed this Court’s dismissal of Plaintiff’s lawsuit for
lack of subject matter jurisdiction. According to Defendant, prior to that time, “there
plainly was a dispute and uncertainty as to the method used to calculate damages;
specifically, whether the Review Board’s ruling was binding on Travelers.” Doc. #143,
at 7. In the alternative, Defendant argues prejudgment interest should not begin to run
until July 7, 2016, when Plaintiff filed its Complaint.
Section 408.020 does not allow for equitable adjustments but mandates
prejudgment interest at the fixed rate of nine percent from the time payment is due.
Under the statute, prejudgment interest in actions for breach of contract accrues “from
the date of the breach or the time when payment was due under the contract, not from
the time when suit for breach of that contract was filed.” Emmenegger, 324 F.3d at 62425 (citations omitted). To do as Defendant suggests – ordering no prejudgment interest
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for more than two or four years after premium payment was due –-would frustrate the
key purpose of prejudgment interest under Missouri law: “to compensate for the failure
to pay a liquidated amount when due.” Prof’l Ins. Managers, Inc. v. RCA Mut. Ins. Co.,
884 S.W.2d 332, 338 (Mo. Ct. App. 1994). Defendant has had the benefit of monies
belonging to Plaintiff since 2014, and Plaintiff is entitled to compensation for its loss of
use of those funds.
Plaintiff made a fixed demand for payment, money was due, and the amount was
liquidated or reasonably ascertainable. Accordingly, Plaintiff’s motion for prejudgment
interest is granted. Plaintiff is entitled to prejudgment interest at a rate of nine percent,
running from March 27, 2014, and ending on the date the final judgment is entered in
this matter.

II.

POSTJUDGMENT INTEREST

Plaintiff requests the Court’s final judgment specifically provide for postjudgment interest
in accordance with 28 U.S.C. § 1961(a). Defendant did not respond to Plaintiff’s
request for postjudgment interest. See Doc. #143. Federal law governs the issue of
postjudgment interest. Travelers Prop. Cas., 735 F.3d at 1007. “Interest shall be
allowed on any money judgment in a civil case recovered in a district court.” 28 U.S.C.
§ 1961(a). The statute calculates postjudgment interest “from the date of the entry of
the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury
yield, as published by the Board of Governors of the Federal Reserve System, for the
calendar week preceding . . . the date of the judgment.” Id. Accordingly, Plaintiff’s
motion for postjudgment interest is granted. Plaintiff is entitled to postjudgment interest
at the legal rate set by 28 U.S.C § 1961 to accrue from the date the final judgment is
entered by this Court.

III.

CONCLUSION

For the foregoing reasons, Plaintiff’s motion for prejudgment and postjudgment
interest is granted. The Clerk of Court is directed to enter a final judgment awarding
Plaintiff $416,714.00 from Defendant, with prejudgment interest at a rate of nine percent
per annum from March 27, 2014, to accrue until the date of entry of the final judgment,
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and postjudgment interest at the legal rate pursuant to 28 U.S.C. § 1961 to accrue from
the date of the final judgment.
IT IS SO ORDERED.
DATE: June 7, 2019

/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT

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