ALPHA RHO ALUMNI CORPORATION v. FIRST UNITED BANK AND TRUST, INC.
Filing
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MEMORANDUM ORDER AND OPINION DENYING DEFENDANT'S MOTION TO ALTER OR AMEND JUDGMENT. The Court denies the Defendant's 56 Motion and sets a hearing on the matter of prejudgment interest and damages for 6/8/2016 09:30 AM in Wheeling District Judge Courtroom, North before District Judge John Preston Bailey. Signed by District Judge John Preston Bailey on 5/31/16. (mh)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
CLARKSBURG
ALPHA RHO ALUMNI CORPORATION,
Plaintiff,
v.
CIVIL ACTION NO. 1:15-cv-44
(Judge Bailey)
FIRST UNITED BANK AND
TRUST, INC.,
Defendant.
MEMORANDUM ORDER AND OPINION
DENYING DEFENDANT’S MOTION TO ALTER OR AMEND JUDGMENT
Currently pending before this Court is Defendant First United Bank and Trust, Inc.’s
(“First United”) Motion to Alter or Amend Judgment [Doc. 56], filed on April 22, 2016.
Plaintiff Alpha Rho Alumni Corporation (“Alpha Rho”) filed a Response in Opposition [Doc.
58] to the Motion on May 6, 2016. First United filed a Reply in Support [Doc. 59] on May
13, 2016. Having been fully briefed, this matter is now ripe for adjudication. For the
reasons set forth below, this Court denies First United’s Motion to Alter or Amend
Judgment.
I. BACKGROUND
As this Court has previously discussed the procedural and factual history of this
matter at length in the Memorandum Order and Opinion Granting Plaintiff’s Motion for
Summary Judgment and Denying Defendant’s Motion for Summary Judgment (“the
Summary Judgment Order”) [Doc. 54], the same does not bear repeating here. As one can
infer from the title of that Order, Alpha Rho was granted summary judgment on April 8,
2016 [Id.]. In relevant part, the Summary Judgment Order provided that:
this Court finds that the contested terms of the contract and modifications are
unambiguous. As such, the modifications effectively changed the end date
for interest only payments at a fluctuating rate on the loan from January 21,
2007 to February 21, 2009. First United improperly fixed the loan interest
rate at 8.5% on January 21, 2007, and it should have billed Alpha Rho at a
fluctuating rate up through February 21, 2009, in accordance with the terms
of the original contract in the interest only period. Accordingly, First United is
liable for contractual damages to Alpha Rho for its failure to correct the
interest rate up through the present day.
[Id. at 10]. In accordance with the terms of the Summary Judgment Order, the parties were
ordered to submit affidavits as to the damages that Alpha Rho sustained in this breach of
contract action, including prejudgment interest as provided by W.Va. Code § 56-6-27 [Id.
at 10-11]. Both parties submitted their Affidavits on April 22, 2016 [Docs. 55 and 57], the
same day that First United filed in the instant Motion to Alter or Amend [Doc. 56]. As noted
above, this matter is now ripe for adjudication.
II. STANDARD OF REVIEW
A party may file a motion to alter or amend a judgment within 28 days after the entry
of the judgment. See Fed. R. Civ. P. 59(e). As this Court noted in Schoene v. McElroy
Coal Company and CONSOL Energy, 2016 WL 676449 at *1(N.D. W.Va. Feb. 18, 2016),
“[a] district court has some discretion when ruling upon a motion to alter or amend a
judgment pursuant to Rule 59(e) because the rule does not list specific grounds (citing Fed.
R. Civ. P. 59(e)).” The Fourth Circuit Court of Appeals has outlined three grounds upon
which a Fed. R. Civ. P. 59(e) motion may be granted: “(1) to accommodate an intervening
change in controlling law; (2) to account for new evidence not available at trial; or (3) to
correct a clear error of law or prevent manifest injustice.” Pettis v. Nottoway County
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School Bd., 592 Fed.Appx. 158, 161 (4th Cir. 2014); Robinson v. Wix Filtration Corp.
LLC, 599 F.3d 403, 411 (4th Cir. 2010).1 Additionally, such “motions may not be used ...
to raise arguments which could have been raised prior to the issuance of the judgment, nor
may they be used to argue a case under a novel legal theory that the party had the ability
to address in the first instance.” Robinson, 599 F.3d at 411; see also Medicus Ins. Co.
v. Cross, 2015 WL 2090019, at *1 (N.D. W.Va. May 5, 2015). A Fed. R. Civ. P. 59(e)
motion may also not be used to re-litigate old matters and is an extraordinary remedy that
should be used sparingly. Id. It is likely improper to use such a motion to ask the court
to “rethink what the court has already thought through-rightly or wrongly.” Above the Belt,
Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va.1983).2
III. DISCUSSION:
A.
First United’s Argument that the “Construction Loan Agreement and
Promissory Note are Contradictory and are Ambiguous” is Denied:
In its fourth point of its Motion to Alter or Amend, First United contends that,
“[b]ecause the Construction Loan Agreement and Promissory Note are contradictory, they
are ambiguous when considered together” [Doc. 56 at 7-9]. Of note, while First United
cited the grounds for Fed. R. Civ. P. 59(e) relief outlined in Schoene in its Motion to Alter
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This Court outlined substantively the same grounds for relief in Schoene: “(1) it is
necessary to correct manifest errors of law or fact upon which the judgment is based, (2)
there is newly discovered evidence, (3) it is necessary to prevent manifest injustice, or (4)
there has been an intervening change in controlling law.” 2016 WL 676449 at *1 (citing 11
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure
§ 2810.1 (2d. ed. 1995)).
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As Magistrate Judge James E. Seibert often intones, “there is a special place in
Hell for lawyers who file motions to reconsider.”
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or Amend, it did not specify which factor applied to its argument that the language of the
contract was ambigious. Instead, it trots out the same evidence cited in its Motion for
Summary Judgment [Doc. 42], which this Court has already interpreted as being
unambiguous in Alpha Rho’s favor. Indeed, in its Response, Alpha Rho counters by noting
that this Court’s “prior analysis of the contract at issue in this case was full and complete
and should not be disturbed,” and that this Court’s prior determination that the contractual
language is the “law of the case,” and should not be re-visited by this Court [Doc. 58 at 12]. Only in its Reply does First United specifically argue that its argument as to the
contractual language, “falls squarely into one of the exceptions to the ‘law of the case’
doctrine,” namely that it seeks to clarify this Court’s previous decision which was either,
“clearly erroneous or would work manifest injustice” [Doc. 59 at 5].
First United’s
arguments are misplaced, as this Court’s prior decision was not “clearly erroneous,” nor
would “manifest injustice” result from upholding the previous ruling.
Again, First United merely recites the same contractual passages which were
discussed at length in this Court’s Summary Judgment Order and now argues that this
language should be deemed ambiguous. As the Eastern District of Virginia noted in Above
the Belt, Inc., “[i]t is clear . . . that there are circumstances when a motion to reconsider
may perform a valuable function. In this case no function at all, other than reiteration, was
served by the motion.” 99 F.R.D. at 100. The same applies here.
In the Summary Judgment Order, this Court clearly interpreted controlling contract
law, and applied that law to the evidence of this case. This Court’s opinion involved no
manifest error of fact or law, nor will First United suffer manifest injustice as a result of this
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Court’s ruling. See Pettis, 592 Fed.Appx. at 161; see also Schoene, 2016 WL 676449 at
*1. Accordingly, for the reasons more fully stated in the Summary Judgment Order, this
Court upholds its earlier ruling, and finds, again, that language of the contract and the
modifications are unambiguous. As such, First United’s argument in its Motion to Amend
that the “Construction Loan Agreement and Promissory Note are contradictory and,
therefore, ambiguous,” is overruled [Doc. 56 at 7].
B.
First United’s Arguments that Prejudgment Interest Was Improperly Awarded,
Would be Punitive in Nature, or that Justice Requires that it be Stricken are all
Without Merit:
First United also makes a number of arguments regarding this Court’s awarding of
prejudgment interest to Alpha Rho in the Summary Judgment Order. Each of those
contentions must be addressed in turn.
First United contends that because Alpha Rho, in its Motion for Summary Judgment,
requested prejudgment interest under W.Va. Code § 56-6-31 (“56-6-31") and not W.Va.
Code § 56-6-27 (“56-6-27"), this Court’s award of interest pursuant to 56-6-27 was
improper [Doc. 56 at 4]. In making this argument, First United contends that it “should be
given the opportunity to discover and present evidence to the Court on whether
prejudgment interest is appropriate in this case” [Id. at 5]. However, this contention
fundamentally mis-characterizes the procedural history of this case.
As Alpha Rho demonstrates in its Response, it has alleged this action as one
founded upon contract and asserted its right to prejudgment interest since the inception of
this case, including in the “WHEREFORE” paragraph of the Complaint [Doc. 58 at 4; see
also Doc. 1-5 at 5-6]. First United specifically denied, “all allegations asserted in the
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WHEREFORE paragraph of the Complaint and further denies that [Alpha Rho] is entitled
to any relief or damages requested” [Doc. 4 at 4]. Moreover, Alpha Rho asserted a claim
for prejudgment interest in its Motion for Summary Judgment [Doc. 43-1 at 13-14], to which
First United could, and did, respond [Doc. 49 at 13-14]. First United, inexplicably, did not
address the issue of prejudgment interest in its own Motion for Summary Judgment or in
any other dispositive motion leading up to this case. This oversight does not mean that
First United was not given the opportunity to address the issue of prejudgment interest;
instead, First United simply did not adequately take advantage of its opportunities to
address that issue.
Ample West Virginia case law provides that, “[i]n an action founded on contract, a
claimant is entitled to have the jury instructed that interest may be allowed on the principal
due, [56-6-27], but is not entitled to the mandatory award of interest contemplated by [56-631], since this statute does not apply where the rule concerning interest is otherwise
provided by law.” Syl. Pt. 3, Ringer v. John, 230 W.Va. 687, 742 S.E.2d 103 (2013) (citing
Syl. Pt. 4, Thompson v. Stuckey, 171 W.Va. 483, 300 S.E.2d 295 (1983)). First United
was on notice from the outset of this action that this case is one which is, “founded upon
contract,” and had numerous opportunities to correctly address which statutory provision
governing prejudgment interest should apply to this action, including in its Response to
Alpha Rho’s Motion for Summary Judgment. First United squandered those opportunities,
and its complaint that it, “had no notice prompting it to present evidence or formulate
argument in opposition to a potential prejudgment award,” [Doc. 59 at 2], is without merit.
In a similar vein, this Court is also not persuaded by First United’s argument that it
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awarded prejudgment interest pursuant to 56-6-27 sua sponte. As noted previously, Alpha
Rho has contended that it is entitled to prejudgment interest since the advent of this action.
While Alpha Rho cited 56-6-31(a), not 56-6-27, in its Motion for Summary Judgment
arguing that it was entitled to the same, that does not mean that this Court’s award was one
which was sua sponte. Sua sponte is defined by Black’s Law Dictionary as, “without
prompting or suggestion; on its own motion.” Black’s Law Dictionary (10th ed. 2014). This
Court did not act “without prompting or suggestion” in awarding prejudgment interest
pursuant to 56-6-27, but instead applied the correct provision of the West Virginia Code to
Alpha Rho’s argument that it was entitled to prejudgment interest. Accordingly, this Court,
again, merely applied the correct statutory provisions to Alpha Rho’s argument that it was
entitled to prejudgment interest. First United’s suggestions to the contrary are without
merit.
Finally, First United argues that while prejudgment interest under 56-6-31 is
mandatory under West Virginia law, the same is merely discretionary under 56-6-27 [Doc.
56 at 6]. As such, this Court should, for equitable considerations, allow First United to
present evidence on this point now that it has notice of an available award under 56-6-27
[Id.]. First United is correct in that this Court’s award of prejudgment interest to Alpha Rho
was discretionary. See Syl. Pt. 3, Ringer v. John, 230 W.Va. 687, 742 S.E.2d 103; see
also Syl. Pt. 4, Thompson v. Stuckey, 171 W.Va. 483, 300 S.E.2d 295. However, the use
of the word “jury” in 56-6-27 has been interpreted by the Supreme Court of West Virginia
to mean “fact-finder.” In Velasquez v. Roohollahi, 2014 WL 5546140 at *3 (W.Va. Nov.
3, 2014), the Supreme Court of West Virginia held that, “[b]ecause the present case sounds
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in contract, prejudgment interest was not mandatory; rather, it was left to the fact-finder's
determination. In this case, the circuit court was the factfinder . . ..” Accordingly, the
Supreme Court upheld the Circuit Court of Kanawha County’s discretionary finding that the
plaintiff therein was not entitled to prejudgment interest. Here, this Court found that there
was no genuine issue of material fact that Alpha Rho was entitled to summary judgment
and an award of prejudgment interest. Pursuant to the case law cited above, this finding
was well within the purview of this Court in so doing. First United’s arguments to the
contrary are overruled.
IV. CONCLUSION
For the reasons stated above, this Court hereby DENIES Defendant First United’s
Motion to Alter or Amend Judgment [Doc. 56].
As an additional matter, the parties are hereby ORDERED to meet and attempt to
reconcile the substantial differences in damages requested in their Affidavits [Docs. 55 and
57] both with regards to actual damages and prejudgment interest. Prejudgment interest
must be calculated as simple interest, not compound interest, at a rate of 7% (seven
percent). In the event that the parties are unable to reconcile these differences, they are
directed to attend a hearing on the matter of prejudgment interest and damages on June
8, 2016 at 9:30 a.m. in Wheeling, WV.
It is so ORDERED.
The Clerk of Court is directed transmit copies of this Order to all counsel of record.
DATED: May 31, 2016.
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