Opinion
Civil No. 99-832 (JRT/FLN)
January 7, 2004
Gary W. Leydig, WORKER, SITKO HOFFMAN, LLC, Chicago, IL, for plaintiff
David M. Jaffee, LEONARD STREET AND DEINARD, Minneapolis, MN. for plaintiff
John Edward Connelly, FAEGRE BENSON, Minneapolis, MN, for defendant
James B. Niehaus, Jay R. Carson, FRANTZ WARD, Cleveland, OH, for defendant
MEMORANDUM OPINION AND ORDER
Plaintiff Minnesota Supply Company ("Minnesota Supply") prevailed in a jury trial in this case based on violations of the Minnesota Heavy and Utility Equipment Manufacturers and Dealers Act ("the Act"). The jury returned a verdict for plaintiff on June 19, 2003 in the amount of $14,076,784. In a previous Opinion and Order, the Court reduced the verdict by $1,693,548, because the Court found that the jury had improperly included prejudgment interest in the verdict amount. Plaintiff now requests that the Court amend the verdict, pursuant to Federal Rule of Civil Procedure 59(e) to include statutory prejudgment interest. After reducing the jury verdict by the amount of improperly included jury-determined prejudgment interest, the Court should have calculated the statutory prejudgment interest, and included that amount in the verdict. Plaintiff's request for prejudgment interest is therefore appropriately granted under Rule 59(e). Plaintiff's motion is granted, and prejudgment interest is awarded in the amount indicated below.
I. ANALYSIS
In Minnesota both statute and common law govern the award of prejudgment interest. See Minn. Stat. § 549.09; Potter v. Hartzell Propeller, Inc., 189 N.W.2d 499, 504 (Minn. 1971). Section 549.09 provides that the prevailing plaintiff is entitled to preverdict interest on pecuniary damages computed from the time of the commencement of the action, except as otherwise provided by contract or allowed by law. Minn. Stat. § 549.09, subd. 1(b). The statute is clear: the prevailing party "shall receive interest" on any award, with a few limited exceptions that are not applicable here. Id.
As the Court has previously discussed, "[p]rejudgment interest is an element of damages awarded to provide full compensation by converting time-of-demand damages into time-of-verdict damages." Simeone v. First Bank Nat. Ass'n, 73 F.3d 184, 190-91 (8th Cir. 1996). Prejudgment interest is awarded to compensate the plaintiff for the loss of the use of the money owed. Id. (citing Johnson v. Kromhout, 444 N.W.2d 569, 571 (Minn.Ct.App. 1989)); see Baufield v. Safelite Glass Corp., 831 F. Supp. 713, 719 (D. Minn. 1993) (prejudgment "interest is calculated on amount of prevailing party's damages and is awarded to compensate for loss of use of money during pendency of litigation").
II. CALCULATIONS
A. Post-Verdict Interest
Minnesota Statute section 549.09, subd. 1(a), states that interest is to be awarded from the time of the verdict to the time of entry of judgment. In this case, the verdict was rendered June 19, 2003. Judgment was entered on September 26, 2003, in the amount of $12,383,236. The interest is to be computed as simple per-annum interest and is set at 4% for this year.
Ninety-nine days elapsed between the verdict, and entry of judgment. The verdict of $12,383,236, times the annual interest rate of 4% amounts to $495,329.44. This amount is then divided by 365 (days per year) to result in a daily interest rate of $1,357.07. Finally, the daily interest rate is multiplied by the number of days plaintiff was without the use of the award (99 days times $1,357.07) for a total award of $134,349.93. The Court thus awards plaintiff $134,349.93 for post-verdict interest.
The Court will not award additional interest, from the entry of judgment to the amended entry of judgment. The Minnesota statute is clear that the purpose of prejudgment interest awards is to compensate parties for the loss of use of funds. That rationale is not applicable here, where the majority of the verdict was entered on September 26, 2003, and plaintiff was not "deprived of the use" of those funds.
B. Prejudgment Interest
Prevailing parties are also entitled to interest from the date of the commencement of the action, through the date of the verdict. Minn. Stat. § 549.09, subd. 1(b). See also Lienhard v. State of Minnesota, 431 N.W.2d 861, 865 (interpreting Minnesota statute and determining that interest is available "irrespective of a defendant's ability to ascertain the amount of damages"); Myers v. Hearth Tech., Inc., 621 N.W.2d 787, 794 (Minn.Ct.App. 2001), rev. denied (recognizing that some post- Lienhard cases impose a "readily ascertainable" requirement, but concluding that such cases "are incorrect").
The Court must calculate interest for each year that the jury determined pl aintiff lost profits. As reflected in plaintiffs expert's damages report, those lost profits include $173,679 in 1997; $551,424 in 1998; $594,886 in 1999; $749,360 in 2000; $978,261 in 2001; and $1,148,661 in 2002. Plaintiff is entitled to interest from the time the lawsuit was commenced until the time of the verdict. The Court thus awards plaintiff $346,531.61 for prejudgment interest for this time period.
Interest rates are included per Minn. Stat. § 549.09, Historical and Statutory Notes.
The Court calculates this figure in the following manner:
May 28, 1999 to December 31, 1999 (217 days): $17,242.82 $173,679.00 (1997 damages) + 551,424.00 (1998 damages) $725,103.00 × 4% = $29,004.12 $29,004.12/365 days = $79.46 (per day) $79.46 × 217 (days) = $17,242.82
2000: $65,999.45 $173,679.00 (1997 damages) + 551,424.00 (1998 damages) + 594.886.00 (1999 damages) $1,319,989.00 × 5% = $65,999.45
2001: $124,160.94 $173,679.00 (1997 damages) + 551,424.00 (1998 damages) + 594,886.00 (1999 damages) + 749,360.00 (2000 damages) $2,069,349.00 × 6% = $124,160.94
2002: $60,952.20 $173,679.00 (1997 damages) + 551,424.00 (1998 damages) + 594,886.00 (1999 damages) + 749,360.00 (2000 damages) + 978,261.00 (2001 damages) $3,047,610.00 × 2% = $60,952.20
January 1, 2003 to June 19, 2003 (170 days): $78,176.20 $173,679.00 (1997 damages) + 551,424.00 (1998 damages) + 594,886.00 (1999 damages) + 749,360.00 (2000 damages) + 978,261.00 (2001 damages) + 1,148,661.00 (2002 damages)
$4,196,271.00 × 4% = $167,850.84 $167,850.84 / 365 days = $459.86 (per day) $459.86 × 170 (days) = $78,176.20TOTAL $346,531.61
ORDER
Based upon the foregoing, the submissions of the parties, and the entire file and proceedings herein, IT IS HEREBY ORDERED that:1) Plaintiff's motion to amend the judgment [Doc. No. 202] is GRANTED.
2) The Court's order of judgment entered on September 26, 2003, is amended to $12,864,117.54, which reflects the addition of $480,881.54 of prejudgment interest and post-verdict interest.
3) The Clerk is DIRECTED to AMEND JUDGMENT in favor of plaintiff [Doc. No. 199] to $12,864,117.54.