Hetronic International Inc v. Hetronic Germany GMBH et al

Filing 463

ORDER. The court accepts plf's proposed final judgment, with the additional language as described in this order. The final judgment shall issue forthwith. Signed by Honorable Stephen P. Friot on 5/29/2020. (llg)

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IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
HETRONIC INTERNATIONAL,
INC.,
Plaintiff,
-vsHETRONIC GERMANY GmbH,
HYDRONIC-STEUERSYSTEME
GmbH, ABI HOLDING GmbH,
ABITRON GERMANY GmbH,
ABITRON AUSTRIA GmbH, and
ALBERT FUCHS,
Defendants.

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Case No. CIV-14-650-F

ORDER
On March 2, 2020, after an eleven-day trial, the jury returned a verdict in favor
of plaintiff and against defendants on all of plaintiff’s claims under the Lanham Act,
15 U.S.C. § 1051, et seq., and Oklahoma law and awarded plaintiff damages. The
jury specifically awarded plaintiff actual damages of $5,360,832 on its state law tort
claims. These damages were for fees incurred by plaintiff in the Rempe litigation1
through September 30, 2017.
Subsequent to trial, plaintiff moved for entry of a permanent injunction. After
review of the parties’ briefs and consideration of the parties’ oral arguments, the
court entered an order granting permanent injunctive relief in favor of plaintiff and
against defendants on April 22, 2020. That same day, the parties were directed to
collaborate on the agreed form of a Rule 54 final judgment. If the parties were
unable to agree on the form of a final judgment, they were to file their respective
1

Hetronic International, Inc. v. Torsten Rempe, et al., Case No. CIV-14-787-F.

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proposed forms of judgment, accompanied by supporting memoranda, by May 21,
2020.
The parties were unable to reach an agreement on a Rule 54 final judgment.
On May 18, 2020, plaintiff submitted its own proposed final judgment and brief in
support. Doc. no. 454. Defendants filed a notice on May 21, 2020, advising the
court that they would not be submitting a proposed final judgment. Doc. no. 460.
Defendants represented that they could “not agree on any form of Rule 54 Judgment
because it is Defendants’ position that the Court exceeded its subject matter
jurisdiction.”

Id.

Defendants advised that they stood on their objections to

plaintiff’s proposed judgment as noted in plaintiff’s brief and further stated that
plaintiff was not entitled to prejudgment interest under 23 O.S. 2011 § 6 “because
the sum awarded was not liquidated until the moment the jury entered the actual
damage number of the verdict.” Id.
The court has considered plaintiff’s brief and defendant’s objections with
respect to plaintiff’s proposed final judgment. Having done so, the court accepts
plaintiff’s proposed final judgment. The court rejects defendants’ position that the
court has exceeded its subject matter jurisdiction or that it has no subject matter
jurisdiction over defendants’ foreign activities. In addition, the court concludes that
plaintiff is entitled to prejudgment interest under 23 O.S. 2011 § 6 and that plaintiff
“shall” recover its “taxable” costs as provided by law.
As stated below, the court will include additional language in the final
judgment. The court concludes that the final judgment should include language to
the effect that plaintiff is entitled to judgment on the counterclaims of defendants,
Hetronic Germany, GmbH and Hydronic-Steuersysteme GmbH, for breach of
contract for failure to give technical assistance, intentional interference with
business relations, business slander and rescission. The court also concludes that the

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introductory paragraph to the final judgment should include language regarding the
disposition of defendants’ counterclaims.
Subject Matter Jurisdiction
Defendants object to the entry of any final judgment by the court and
specifically object to plaintiff’s proposed final judgment to the extent it states that
the court “shall maintain jurisdiction over the . . . subject matter of this civil action
for the purpose of interpreting and enforcing this Final Judgment.” Doc. no. 454-1,
¶ 9; doc. no. 454-2, ECF p. 2. Defendants posit that the court has “exceeded its
subject matter jurisdiction” and “has [no] subject matter jurisdiction over
Defendants’ foreign activities.” Doc. no. 454-2, ECF p. 2.
At the outset, this court finds it has subject matter jurisdiction over this action
pursuant to 15 U.S.C.§ 1121, 28 U.S.C. § 1331, 28 U.S.C. § 1338 and 28 U.S.C.
§ 1332(a)(2).
Defendants, at the summary judgment stage and in opposition to the entry of
a permanent injunction, challenged the extraterritorial application of the Lanham Act
to their foreign sales. While defendants argued that the extraterritorial application
of the Lanham Act relates to the court’s subject matter jurisdiction, this court found
that the issue “goes to the merits” of plaintiff’s Lanham Act claims and not the
court’s subject matter jurisdiction. Doc. no. 311, ECF p. 8, doc. no. 435, ECF p. 3.
Defendants have not cited any authority that causes the court to reconsider its ruling.
The court rejects defendants’ position that it has no subject matter jurisdiction to
enter a final judgment relating to plaintiff’s Lanham Act claims or that it has no
authority to maintain jurisdiction over the subject matter of this action for the
purpose of interpreting and enforcing the final judgment.

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Prejudgment Interest
Next, defendants object to plaintiff’s entitlement to prejudgment interest
under 23 O.S. § 6 with respect to the state law tort claims. Defendants argue that
§ 6 does not apply “because Defendants were not debtors for the underlying
obligation.” Doc. no. 454-2, ECF p. 2. They also contend that plaintiff is not entitled
to prejudgment interest “because the sum awarded was not liquidated until the
moment the jury entered the actual damage number on the verdict form.” Doc. no.
460.
As previously stated, the damages awarded for the state law tort claims were
plaintiff’s fees in the Rempe litigation, incurred through September 30, 2017. Under
Oklahoma law, “where the wrongful acts of the defendant have involved the plaintiff
in litigation with others, or have placed [it] in such relation with others as to make it
necessary for [it] to incur attorneys’ fees to protect [its] interests, attorney fees [are]
recoverable [] as one of the elements of damages flowing from the original wrongful
act of the defendant.” See, Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 11 P.3d
162, 181 (Okla. 2000) (citing Griffin v. Bredouw, 420 P.2d 546, 547 (Okla. 1966));
see also, Hetronic International, Inc. v. Rempe, 697 Fed. Appx. 589, 590 (10th Cir.
2017) (“Where the natural and proximate consequence of a wrongful act has been to
involve plaintiff in litigation with others, there may, as a general rule, be a recovery
in damages against the author of such act of the reasonable expenses incurred in such
litigation, together with compensation for attorney’s fees.”) (quoting Security State
Bank of Comanche v. W.R. Johnston & Co., 228 P.2d 169, 173 (Okla. 1951)).
The court rejects defendants’ argument that § 6 does not apply to plaintiff’s
tort claims because defendants were not debtors on the underlying obligation, i.e.
the fees in the Rempe litigation. Section 6 provides:
Any person who is entitled to recover damages certain, or
capable of being made certain by calculation, and the right
to recover is vested in him upon a particular day, is entitled
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also to recover interest thereon from that day, except
during such time as the debtor is prevented by law, or by
the act of the creditor from paying the debt.
23 O.S. § 6 (emphasis added). Although the emphasized phrase of the statute refers
to “the debtor,” the court agrees with plaintiff that the phrase is an exception to the
rule stated that “[a]ny person who is entitled to recover damages certain, or capable
of being made certain by calculation” is entitled to prejudgment interest. Defendant
has not cited, and the court has not found, any authority to support defendants’
position that § 6 only applies to a debtor on the underlying obligation. Indeed, case
law indicates otherwise. See, MCC Management of Naples, Inc. v. International
Bancshares Corp., 468 Fed. Appx. 816, 829 (10th Cir. 2012) (Section 6 “allows an
award of prejudgment interest to a prevailing party[.]”) (unpublished decision cited
as persuasive pursuant to 10th Cir. R. 32.1(A)).
“Under § 6, ‘prejudgment interest will not be allowed unless the amount of
recovery is liquidated or capable of ascertainment by calculation or resort to wellestablished market values.’” Withrow v. Red Eagle Oil Co., 755 P.2d 622, 625
(Okla. 1988) (quoting Sandpiper North Apartments, Ltd. v. American Nat. Bank and
Trust Co. of Shawnee, 680 P.2d 983, 993 (Okla. 1984)). Contrary to defendants’
position,2 the court concludes that the damages awarded by the jury were for a sum
certain or capable of ascertainment by calculation. They were certain or capable of
ascertainment by calculation as of October 1, 2017. Plaintiff sought only the fees
incurred through September 2017. In this case, the jury was not required to weigh
conflicting evidence and determine the amount due by way of fees incurred by
plaintiff in the Rempe litigation. The damages figure remained unchanged from
plaintiff’s damages expert report in November 2017 to the jury verdict on March 2,

2

The court notes that defendants do not cite any authority to support their position that plaintiff’s
damages were not liquidated.

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2020. Defendants only contested the fact of liability for the fees. And unlike the
fees in Yousuf v. Cohlmia, 741 F.3d 31, 47-48 (10th Cir. 2014) and U.S. v. Hardage,
985 F.2d 1427, 1438 (10th Cir. 1993), there was no required determination of
reasonableness of the fees. The fact that this species of damages is subject, as a
matter of law, to an overarching limitation of reasonableness does not make this
claim a claim that is not certain or capable of being made certain by calculation.
Therefore, the court concludes that plaintiff is entitled to prejudgment interest on the
damages awarded for the state law tort claims.
Taxable Costs
Lastly, defendants object to plaintiff’s proposed final judgment because it
states: “Hetronic shall recover its costs, as provided by law.” Doc. no. 454-1, ¶ 7.
According to defendants, the cost statute, 28 U.S.C. § 1920, uses permissive
language rather than mandatory language. Doc. no. 454-2, ECF p. 2. Consequently,
defendants contend that the final judgment should state: “Hetronic may recover its
costs, as provided by law.”
Section 1920 specifies what costs are taxable in federal court.3 Rule 54(d)(1),
Fed. R. Civ. P., which also addresses costs, provides that costs, other than attorney’s
fees, “should be allowed to the prevailing party.” Under Tenth Circuit precedent,
“Rule 54 creates a presumption that the district court will award costs to the
prevailing party.” In re Williams Securities Litigation-WCG Subclass, 558 F.3d
1144, 1147 (10th Cir. 2009); see also, Marx v. General Revenue Corp., 568 U.S. 371,
377 (2013) (“As the Tenth Circuit correctly recognized, Rule 54(d)(1) codifies a
venerable

presumption

that

prevailing

3

parties

are

entitled

to

costs.”).

Section 1920 “enumerates six categories of costs that may be taxed: (1) clerk and marshal fees,
(2) fees for ‘recorded transcripts necessarily obtained for use in the case,” (3) expenses for printing
and witnesses, (4) expenses for exemplification and necessary copies, (5) docket fees, and (6)
compensation of interpreters and court-appointed experts.” Stender v. Archstone-Smith Operating
Trust, 958 F.3d 938 (10th Cir. 2020).

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“Notwithstanding the presumption, the word ‘should’ makes clear the decision
whether to award costs ultimately lies within the sound discretion of the district
court.” Marx, 568 U.S. at 377. The district court, however, “must provide a valid
reason” for denying costs. In re Williams Securities Litigation-WCG Subclass, 558
F.3d at 1147; see also, Klein v. Grynberg, 44 F.3d 1497, 1507 (10th Cir. 1995) (“there
must be some apparent reason to penalize the prevailing party if costs are to be
denied”). Here, defendants have not proffered any reason for this court to penalize
plaintiff by denying costs.
Plaintiff’s language in the proposed final judgment follows examples of prior
judgments entered by the court. In this case, the court sees no reason to deviate from
using the word “shall.” The court, however, will add the word “taxable” to clarify
that plaintiff shall recover “its taxable costs, as provided by law.” Of course,
plaintiff, as prevailing party, will “bear[] the burden of establishing the amount of
costs to which it is entitled.” In re Williams Securities Litigation-WCG Subclass,
558 F.3d at 1148. And Tenth Circuit precedent establishes that the amount requested
must be reasonable. Id.
Counterclaims
During the proceedings, defendants, Hetronic Germany GmbH, and
Hydronic-Steuersysteme GmbH, alleged several counterclaims against plaintiff.
Specifically, defendants alleged that (1) plaintiff breached the parties’ contracts (the
distribution and assembling partner agreements), by improperly terminating those
contracts (failing to give 30-day cure period); (2) plaintiff breached the parties’
contracts (the distribution and assembling partner agreements) by ignoring
plaintiff’s acquiescence to, and explicit approval of, defendants’ alleged wrongful
conduct; (3) plaintiff interfered with defendants’ business relations and slandered
their businesses by contacting third-party customers and knowingly making false
statements to those customers to the effect that defendants had violated the parties’
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agreements, the parties’ agreements had been terminated and defendants had
engaged in a scheme or other wrongful conduct against plaintiff; and (4) the
distribution and assembling partner agreements were illusory contracts for which
defendants were entitled to rescission.

Defendant, Hetronic Germany GmbH,

additionally alleged that plaintiff breached the parties’ contract (the distribution and
assembling partner agreement) by failing to give technical assistance as required by
the contract.
Prior to trial, plaintiff moved for summary judgment on the counterclaims.
Doc. no. 259. The court granted summary judgment on all counterclaims except the
breach of contract counterclaims for improper termination (failure to give 30-day
cure period) and acquiescence in conduct. Doc. no. 310. During trial, defendants
dismissed with prejudice the remaining breach of contract counterclaims. Doc. no.
415.
The court concludes that the final judgment should reflect that judgment is
entered in favor of plaintiff and against defendants on the counterclaims for which
partial summary judgment was previously granted by the court. The court also
concludes that the introductory paragraph of the final judgment should reflect the
disposition of all the counterclaims.
Conclusion
Based upon the foregoing, the court accepts plaintiff’s proposed final
judgment, with the additional language as described in this order.
judgment shall issue forthwith.
IT IS SO ORDERED this 29th day of May, 2020.

14-0650p0102a.docx

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The final