Opinion
No. 03 Civ. 2159 (HB).
March 17, 2005
OPINION ORDER
Following Plaintiff, Mark Boyce's ("Boyce"), successful suit for breach of contract against Soundview Technology Group, Inc. ("Soundview") under New York law, and a jury award of $400,000, Boyce filed the instant motion to correct the judgment and include prejudgment interest. For the reasons set forth below, pursuant to Fed.R.Civ.P. 60, Plaintiff's motion is hereby GRANTED.
I. BACKGROUND
The Court assumes familiarity with the facts and allegations as set forth in Boyce v. Soundview Technology Group, Inc., No. 03 Civ. 2159, 2004 WL 2334081 (S.D.N.Y. Oct. 14, 2004) (Baer, J.) (motion for new trial); Boyce v. Soundview Technology Group, Inc., No. 03 Civ. 2159, 2004 WL 876105 (S.D.N.Y. Apr. 22, 2004) (Baer, J.) (summary judgment); and will not repeat them here.
On February 20, 1997, Boyce and Soundview entered into a consulting agreement "that granted Boyce the right to purchase 800,000 shares of Wit Capital Group Inc. ("Wit Capital") common stock at a price of $1 per share." Boyce v. Soundview Technology Group, Inc., No. 03 Civ. 2159, 2004 WL 2334081, at *1 (S.D.N.Y. Oct. 14, 2004) (citing to Tr. 833:6-10). The express terms of the agreement provided that "the stock option grant may be exercised within one year if my [Boyce] employment services and/or consulting relationship with the company terminates completely." (Tr. 833:6-10). In May 1998, Boyce was terminated from Soundview.See id. Within the one-year provision, on April 5, 1999, Soundview denied Boyce's attempt to exercise his stock options.See id. B. Procedural Background
On March 27, 2003, Boyce filed suit for breach of contract and deceptive trade practices. (Compl. ¶¶ 43-62) (Dckt. 1). Boyce sought to recover "direct and consequential damages . . . together with all interest thereon." (Id. at ¶ 62(a)) (emphasis added). A jury trial commenced on July 19, 2004, and concluded on July 23, 2004. See id. The jury held that Soundview's refusal to allow Boyce to exercise his options constituted a breach of contract, and awarded Boyce $400,000 in damages. (Special Verdict Form, at ¶ 2).
On July 28, 2004, Boyce filed a motion, pursuant to Fed.R.Civ.P. 59, for a new trial limited to damages (Dckt. 72), which the Court denied on October 14, 2004. (Dckt. 78). Boyce filed a timely Notice of Appeal on November 4, 2004. (Dckt. 80).
On November 1, 2004, Soundview filed a Motion for Leave to deposit $400,000, plus post-judgment interest with the Court, in "complete satisfaction of judgment." (Dckt. 79). However, on December 21, 2004, both parties signed a Stipulation Withdrawing Premature Appeal in order to resolve Boyce's claim for prejudgment interest in this Court.
Boyce filed the instant motion, pursuant to Fed.R.Civ.P. 60, to correct the $400,000 judgment and include prejudgment interest from the date of Soundview's breach of contract, April 5, 1999, to the date of the jury's verdict, July 23, 2004. (Dckt. 86).
II. APPLICABLE STANDARD
Federal Rule of Civil Procedure 60(a) provides that "clerical mistakes in judgments, orders, or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party." Fed.R.Civ.P. 60(a). The Rule provides parties with a mechanism to ensure that any judgment accurately reflects the adjudication of the rights and obligations of the parties. See In re Frigitemp Corp. v. Lefrak, 781 F.2d 324, 327 (2d Cir. 1986). In such circumstances, "the goals of finality and repose are outweighed by the equitable goal of allowing a party who has in fact established his right to relief to receive that relief." Id. Indeed, the Second Circuit has held that a motion to correct a judgment and award prejudgment interest may be granted in two situations:
[1] where the judgment has failed to accurately reflect the actual decision of the decision-maker to award such interest[;] or [2] where the judgment has failed to include an amount of interest that the governing law requires to be automatically included in the judgment.See id.; see also Dudley v. Penn-Am. Ins., 313 F.3d 662, 666 (2d Cir. 2002) (holding that "Rule 60(a) is the proper vehicle for correcting a judgment in order to provide for an award of prejudgment interest where, among other things, governing law would make the interest award automatic or the district court clearly intended to make the interest award in its prior order").
III. DISCUSSION
A. The Prior Judgment Failed to Include Mandatory Prejudgment Interest
Under New York law, a plaintiff that prevails on a claim for breach of contract is entitled, as a matter of right, to prejudgment interest from the date of breach until the entry of final judgment. N.Y.C.P.L.R. § 5001(a)-(c) (2004); see U.S. Naval Inst. v. Berkley Publ'g Group, 936 F.2d 692, 698 (2d Cir. 1991). Proper application of New York Law requires courts to include prejudgment interest in any judgment for breach of contract. See Indu Craft, Inc. v. Bank of Baroda, 87 F.3d 614, 617 (2d Cir. 1996); Linkco, Inc. v. Fujitsu Ltd., 232 F. Supp. 2d 182, 191 (S.D.N.Y. 2002); Am. Cash Card Corp. v. ATT Corp., No. 03 Civ. 2159, 1999 WL 459932, at *3 (S.D.N.Y. Jul. 1, 1999); Employers Mut. Cas. Co. v. Key Pharm., 886 F. Supp. 360, 361-62 (S.D.N.Y. 1995).
N.Y.C.P.L.R. § 5001 specifically provides that "[i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract. . . ." (emphasis added).
The cases have articulated two circumstances that preclude a Rule 60(a) correction to include prejudgment interest: (1) where the claimant has failed request prejudgment interest at some time prior to filing the Rule 60(a) motion; or (2) if a finding of fact is required in order to determine the dates from which the interest should run. See Dudley, 313 F.3d at 665-66;Paddington Partners v. Bouchard, 34 F.3d 1132, 1140 (2d Cir. 1994); Employer's Mut., 886 F. Supp. at 364.
For example, in Employer's Mut., the counter-claimants failed to request prejudgment interest in their answer or motion papers, and the court failed to address the issue sua sponte. See 886 F. Supp. at 361. In its denial of the Rule 60(a) motion, the court stated that "had [the counter-claimants] petitioned for pre-decision interest prior to the entry of judgment, we undoubtedly would have complied with New York law and awarded it." Id. at 364. The court also noted that unresolved issues of fact remained as to the date from which prejudgment interest should run, which further precluded recourse under rule 60(a).See id.
Here, however, the complaint contained a clear, though brief, demand for the interest to which Boyce would be entitled should he prevail on his breach of contract claim. (Compl. ¶ 62). Boyce also specifically requested prejudgment interest in his Supplement to his Rule 26(a) disclosures, in which he requested damages "plus interest thereon from the date of breach." (Pl.'s Supp. 26(a) at 3). Boyce provided the Court with sufficient notice of his request for prejudgment interest before he filed the instant motion, and there exists no factual dispute as to the date from which prejudgment interest should run.
Accordingly, under New York law, since Boyce prevailed in a breach of contract action, he is entitled to prejudgment interest.
B. Duration of Prejudgment Interest Award
Pursuant to N.Y.C.P.L.R. § 5001(b)-(c), "[i]nterest shall be computed from the earliest ascertainable date the cause of action existed . . . to the date the verdict was rendered or the report or decision was made. . . ." However, Soundview argues that prejudgment interest, if granted, should run only to Soundview's June 18, 2004 settlement offer. (Def.'s Mem. Opp'n Pl.'s Rule 60 Mot., at 8). Soundview acknowledges that such a determination is decided as a matter of law, and presents no question of fact. (See id.)
Soundview's June 18, 2004 settlement offer did not toll the accrual of prejudgment interest. The statute upon which Soundview relies, N.Y.C.P.L.R. § 3219, is an exclusive procedure that enables a party to avoid the payment of prejudgment interest only if it tenders a settlement offer with the court. See Rivera v. Cincinnati Inc., No. 92 Civ. 4345, 1998 WL 898128, at *4 (S.D.N.Y. Dec. 23, 1998) (holding that "[t]he accrual of interest is halted by either tendering a deposit to the clerk of court in an amount sufficient to satisfy the claim or by tendering unconditional payment to the plaintiff."). Soundview did neither and, consequently, is not entitled to reap the benefits of the interest tolling provision. See N.Y.C.P.L.R. § 3219.
N.Y.C.P.L.R. § 3219 provides that "[a]t any time not later than ten days before trial, any party against whom a cause of action based upon contract . . . may be taken, may, without court order, deposit with the clerk of the court for safekeeping, an amount deemed by him to be sufficient to satisfy the claim asserted against him, and serve upon the claimant a written tender of payment to satisfy such claim. A copy of the written tender shall be filed with the clerk when the money is so deposited."
Accordingly, Boyce is entitled to prejudgment interest through the jury's verdict on July 23, 2004.
Having determined that Boyce is entitled to prejudgment interest, pursuant to Rule 60(a), the Court need not reach the question of whether the same result might be found pursuant to Rule 60(b). See Panama Processes, S.A. v. Cities Service Co., No. 78 Civ. 787, 1985 WL 487, at *1 (S.D.N.Y. Apr. 8, 1985).
IV. CONCLUSION
For the reasons set forth above, Boyce's Rule 60 motion is hereby GRANTED. The Clerk of Court is Ordered: (1) to calculate prejudgment interest from April 5, 1999 through July 23, 2004; (2) close all outstanding motions; and, (3) remove this case from my docket.IT IS SO ORDERED.