Homesteaders Life Company v. Gatens-Harding Funeral Home, Inc. et al

Filing 50

MEMORANDUM OPINION AND ORDER granting in part and denying in part Plaintiff's 40 MOTION for Entry of Judgment Order Pursuant to Rule 55 of Federal Rules of Civil Procedure. Signed by Judge Robert C. Chambers on 8/8/2016. (cc: counsel of record; any unrepresented parties) (jsa)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION

HOMESTEADERS LIFE COMPANY,
a foreign corporation,
Plaintiff,
v.

CIVIL ACTION NO. 3:15-12544

GATENS-HARDING FUNERAL HOME, INC.,
a West Virginia corporation,
CHAD R. HARDING, an individual, and
BILLIE J. HARDING, an individual,
Defendants.
MEMORANDUM OPINION AND ORDER
Following default judgment in its favor, Plaintiff Homesteaders Life Company requests a
judgment order pursuant to Federal Rule of Civil Procedure 55. ECF No. 40. For the reasons and
to the extent below, the Court partially GRANTS and partially DENIES Plaintiff’s request.
On June 28, 2016, the Court granted default judgment against Defendants and ordered
Plaintiff to submit evidence supporting the relief requested in the Complaint. ECF No. 38. Plaintiff
submitted the instant Motion, which seeks prejudgment interest on treble damages requested for
Plaintiff’s claim under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18
U.S.C. § 1962. The Motion lacks information about the authority and calculation for awarding
prejudgment interest on the RICO treble damage award. For that reason, the Court ordered Plaintiff
to supplement the Motion, ECF No. 45, which Plaintiff did, ECF No. 48.
Considering the Complaint’s prayer for relief, ECF No. 1, the instant Motion with
supplementation, ECF. Nos. 40, 48, and attachments to the instant Motion, including an affidavit

from Plaintiff’s executive vice president and general counsel, certain contracts executed by
Defendants, and logs of attorney’s fees and costs, the Motion properly supports all of Plaintiff’s
requested damages, except prejudgment interest sought on the RICO treble damage award.
Prejudgment interest on Plaintiff’s RICO treble damage award is not appropriate in this
case. The RICO statute is silent on whether prejudgment interest is available to a prevailing
plaintiff. See 18 U.S.C. § 1961, et seq.; Masco Corp. v. Bennett, No. 3:08-161-RJC-DCK, 2010
WL 1405136, at *3 (W.D.N.C. Mar. 31, 2010) (citing Bingham v. Zolt, 810 F.Supp. 100, 101
(S.D.N.Y.1993)). At least one court has recognized prejudgment interest on RICO damages may
be awarded if “the treble damages do not adequately compensate the plaintiff[,] or the defendant
acted unreasonably and unfairly to delay or obstruct the course of litigation.” Panix Prods., Ltd. v.
Lewis, No. 01-cv-2709, 2003 WL 21659370, at *3 (S.D.N.Y. Jul.15, 2003). In this case, the treble
damages adequately compensate Plaintiff for its losses, including attorney’s fees and costs
incurred, resulting from Defendants’ unlawful conduct. Although Defendant’s noncompliance
with Orders and the Federal Rules of Civil Procedure resulted in delaying this litigation,
Defendants’ noncompliance has already been addressed by sanctions in the form of default
judgment. For this reason, prejudgment interest will not be awarded on Plaintiff’s RICO treble
damage award.
Nonetheless, it is appropriate to award prejudgment interest on the compensatory damages
for Plaintiff’s West Virginia fraud claim. State law determines the availability and amount of prejudgment interest on state law claims. See Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614,
633 (4th Cir. 1999) (state law governs award of pre-judgment interest in diversity case). Claim 1
of the Complaint alleges Defendants committed fraud under West Virginia law by defrauding
Plaintiff through materially false representations. The false representations consisted of reports

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that 111 individuals insured with death benefits provided by Plaintiff had died and received funeral
goods and services from Defendants. In total, Defendants defrauded Plaintiff of $919,287.44 over
a ten-year period. Diversity jurisdiction and supplemental jurisdiction provide the Court with
power to hear Plaintiff’s West Virginia fraud claim. As Plaintiff points out, West Virginia law
provides for pre-judgment interest on special and liquidated damage awards. See W. Va. Code §
56–6–31(a). A pre-judgment interest rate of 7% applies to Plaintiff’s fraud damage award. W. Va.
Code § 56–6–31(b). Under a simple interest calculation, the Court first finds the amount of annual
interest on the principal amount equals $64,350.12.1 The total time elapsed between the accrual
date (August 19, 2015) and the date of judgment (June 28, 2016) equals 0.8949 years. 2
Accordingly, the total amount of pre-judgment interest owed by Defendants is $57,586.92.3
For the reasons and to the extent above, the Court partially GRANTS and partially
DENIES Plaintiff’s Motion for entry of a judgment order pursuant to Federal Rule of Civil
Procedure 55. The Motion and its attachments properly support all of Plaintiff’s requested
damages, except for prejudgment interest sought on the RICO treble damage award. Nonetheless,
it is appropriate to award prejudgment interest on Plaintiff’s West Virginia fraud claim.
Accordingly, the Court ENTERS the accompanying Judgment Order consistent with this Opinion
and Order.
The Court DIRECTS the Clerk to send a copy of this Opinion and Order to counsel of
record and any unrepresented parties.
ENTER:

1

August 8, 2016

Interest rate (0.07) * principal amount of damages ($919,287.44) = $64,350.1208, which rounds
to $64,350.12.
2
315 days/352 days = 0.8948863 years, which rounds to 0.8949 years.
3
.8949 years * $64,350.12 = $57,586.922388, which rounds to $57,586.92.
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