Weirton Medical Center, Inc. v. QHR Intensive Resources, LLC

Filing 74

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S 62 MOTION CONSTRUED AS MOTION UNDER RULE 60(a), APPROVING PARTIES' STIPULATION REGARDING AMOUNT OF PREJUDGMENT INTEREST AND AMENDING JUDGMENT. The Clerk is DIRECTED to entered an amen ded judgment in the amount of $1,621,099.40, the sum of the initial judgment of $1,486,903.11, the awarded continuing interest of $95,952.05, and the accrued prejudgment interest of $38,244.24. Signed by Senior Judge Frederick P. Stamp, Jr. on 8/19/16. (copies to USCA and counsel via CM/ECF) (lmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
WEIRTON MEDICAL CENTER, INC.,
Plaintiff,
v.

Civil Action No. 5:15CV131
(STAMP)

QHR INTENSIVE RESOURCES, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANT’S MOTION CONSTRUED
AS MOTION UNDER RULE 60(a),
APPROVING PARTIES’ STIPULATION REGARDING
AMOUNT OF PREJUDGMENT INTEREST
AND AMENDING JUDGMENT
Previously, this Court granted the defendant’s motion to
confirm the arbitration award and entered judgment in the amount of
$1,486,903.11 plus prejudgment interest from January 21, 2016, the
date the arbitrator issued the Final Award, to the date of this
Court’s memorandum opinion and order confirming the arbitration
award.

This Court stated that the amount of prejudgment interest

would be calculated at a later date, and this Court directed the
parties to file a joint report regarding a proposed calculation of
prejudgment interest.

The parties did so and stipulated to

prejudgment interest in the amount of $38,244.24.

The defendant

also filed a motion to alter or amend the judgment to include
continuing interest awarded by the arbitrator accruing between the
date of the arbitration hearing on April 13, 2015 and the date of
the Final Award on January 21, 2016.

For the following reasons,

the defendant’s motion to amend is granted and the parties’
stipulation as to prejudgment interest is approved.
I.

Background

Weirton Medical Center, Inc. (“WMC”) is a hospital in Weirton,
West Virginia.

WMC entered into an agreement with QHR Intensive

Resources,

(“QIR”)

LLC

in

which

QIR

would

provide

administrative services (“the Turnaround Agreement”).

hospital

Before the

engagement term was to end, WMC terminated the Turnaround Agreement
and refused to pay QIR’s invoices.

QIR forced arbitration in

accordance with the agreement, arguing that WMC breached the
agreement

by

failing

to

pay

the

invoices.

Eventually,

the

arbitrator entered his “Findings of Fact and Conclusions of Law”,
awarding damages to QIR.

QIR then filed a motion with the

arbitrator for attorneys’ fees and costs.

The arbitrator denied

the motion, concluding that the term of the arbitration agreement
providing

for

unconscionable.

the

award

of

attorneys’

fees

and

costs

was

The arbitrator then entered the “Final Award.”

The Turnaround Agreement included a “Late Payments” provision,
providing that “[i]nterest shall accrue from the date the original
payment was due at a rate of 1% per month until the payment is made
in full.”

ECF No. 62-1 at 36.

The arbitrator’s Findings of Fact

and Conclusions of Law state that “in accordance with the terms of
the [Turnaround] Agreement, the unpaid balance accrues interest at
a rate of 1% per month going back to the date when payment was due

2

. . . through the first day of the [arbitration] hearing” (April
13, 2015) and that “[i]nterest shall continue to accrue on this
Award at a rate of 1% per month until such time as this Award is
paid or until it is confirmed as a judgment by a court of competent
jurisdiction, at which time the further rulings of the court and
applicable law shall determine any additional interest.”

ECF No.

62-2 at 26.
On January 21, 2016, the arbitrator issued the Final Award,
providing

“[i]n

accordance

with

the

Findings

of

Fact

and

Conclusions of Law dated August 12, 2015, incorporated herein, I
. . . enter this Award in favor of QIR on its claim for breach of
contract, awarding damages in the amount of $1,486,903.11. . . .
This Award is in full settlement of all claims and counterclaims
submitted to this Arbitration.”

ECF No. 62-3 at 1-2.

This Court confirmed the award and entered judgment for QIR in
the amount of $1,486,903.11 plus prejudgment interest from January
21, 2016, the date the arbitrator issued the Final Award, to May
12, 2016, the date of this Court’s memorandum opinion and order
confirming the arbitration award.

The amount of the judgment was

taken from the Final Award, and this Court did not include the
arbitrator’s award of continuing interest provided in the Findings
of Fact and Conclusions of Law.

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II.

Discussion

First, in civil actions such as this where jurisdiction is
based on diversity of citizenship, the availability and amount of
prejudgment interest is governed by applicable state law.

AIG

Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 508 F.3d
995,

1001-02

(11th

Cir.

2007).

Under

West

Virginia

law,

prejudgment interest must be awarded on contractual obligations at
a rate set in the agreement or at the legal rate set by statute.
W. Va. Code § 56-6-31.

Here, the parties agree that prejudgment

interest from January 21, 2016 through May 12, 2016 should be
calculated at the rate of 1% per month (12% per annum).

The

parties agree that the late payment clause of the Turnaround
Agreement

should

interest.

be

applied

as

an

agreement

on

The parties’ stipulation is APPROVED.

prejudgment
Accordingly,

using the base principal amount of $1,038,626.92, the amount of the
award

before

interest,

the

accrued

prejudgment

interest

is

$38,244.24.1
Second, QIR asks this Court to amend the judgment to include
continuing interest awarded by the arbitrator in the Findings of
Fact and Conclusions of Law.

QIR filed this motion under Federal

Rule of Civil Procedure 59(e) and, alternatively, under Rule 60(a)
or (b).

For the reasons set forth below, this Court finds that the

1

This Court applied the following calculation: 1,038,626.92 x
(0.12/365) x 112 = $38,244.24.
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omission of the awarded continuing interest is a clerical mistake,
and, thus, this Court construes QIR’s motion as one under Rule
60(a).
Federal Rule of Civil Procedure 60(a) allows a court to
“correct a clerical mistake arising from oversight or omission
whenever one is found in a judgment, order, or other part of the
record.”

Fed. R. Civ. P. 60(a).2

The arbitrator’s Findings of

Fact and Conclusions of Law state that “in accordance with the
terms of the [Turnaround] Agreement, the unpaid balance accrues
interest at a rate of 1% per month going back to the date when
payment was due . . . through the first day of the [arbitration]
hearing” (April 13, 2015) and that “[i]nterest shall continue to
accrue on this Award at a rate of 1% per month until such time as
this Award is paid or until it is confirmed as a judgment by a
court of competent jurisdiction, at which time the further rulings
of the court and applicable law shall determine any additional
interest.”

ECF No. 62-2 at 26.

The Final Award stated that “[i]n

accordance with the Findings of Fact and Conclusions of Law dated
August 12, 2015, incorporated herein, I . . . enter this Award in

2

This Court notes that under Rule 60(a), “after an appeal has
been docketed in the appellate court and while it is pending, . . .
a mistake may be corrected only with the appellate court’s leave.”
Fed. R. Civ. P. 60(a). WMC has filed a notice of appeal. However,
the United States Court of Appeals for the Fourth Circuit has
issued a Jurisdictional Notice acknowledging QIR’s motion to amend
the judgment and suspending appellate proceedings until the motion
is resolved. ECF No. 64. Accordingly, this Court may grant QIR’s
motion under Rule 60(a) without the Fourth Circuit’s leave.
5

favor of QIR on its claim for breach of contract, awarding damages
in the amount of $1,486,903.11. . . .

This Award is in full

settlement of all claims and counterclaims submitted to this
Arbitration.”

ECF No. 62-3 at 1-2 (emphasis added).

In stating

the amount of the judgment, this Court mistakenly referred only to
the

amount

of

the

award

before

the

addition

continuing interest plus prejudgment interest.

of

the

awarded

As this was a

clerical mistake, this Court may, and does, correct the judgment to
reflect

the

arbitrator’s

award

of

continuing

interest.

Accordingly, using the base principal amount of $1,038,626.92, the
amount of the award before interest, the continuing interest
accruing at a rate of 1% per month from April 14, 2015, the day
after the first arbitration hearing, to January 20, 2016, the day
before the arbitrator issued the Final Award, is $95,952.05.3
WMC argues that the Final Award did not provide for continuing
interest of $95,952.05 because it definitively states that the
award was in the amount of $1,486,903.11 and that it is “in full
settlement of all claims and counterclaims submitted to this
Arbitration.”

ECF No. 62-3 at 1-2.

WMC further argues that QIR

has waived its right to seek the continuing interest because it did
not bring the omission of continuing interest in the Final Award to
the arbitrator’s attention as, WMC argues, QIR was required to do

3

This Court applied the following calculation: 1,038,626.92 x
(0.12/365) x 281 = $95,952.05.
6

by the applicable rules of the American Arbitration Association.
However, the Final Award expressly states that it was issued “[i]n
accordance with the Findings of Fact and Conclusions of Law” and
that

the

Findings

“incorporated”

into

of

Fact

and

Conclusions

the

Final

Award.

ECF

No.

of
62-3

Law
at

were
1-2.

Accordingly, this Court finds that by incorporating the Findings of
Fact and Conclusions of Law, the Final Award included the award of
continuing interest.
III.

Conclusion

For the foregoing reasons, the defendant’s motion to alter or
amend the judgment, construed as a motion to correct under Rule
60(a) (ECF No. 62) is GRANTED.

Further, the parties’ stipulation

regarding the calculation of prejudgment interest (ECF No. 63) is
APPROVED. Accordingly, the Clerk is DIRECTED to entered an amended
judgment in the amount of $1,621,099.40, the sum of the initial
judgment of $1,486,903.11, the awarded continuing interest of
$95,952.05, and the accrued prejudgment interest of $38,244.24.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the United States Court of Appeals for the Fourth Circuit regarding
Case No. 16-1647.

The Clerk is further DIRECTED to prepare an

amended judgment in accordance with this memorandum and order.

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DATED:

August 19, 2016

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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