Opinion
96-CV-85S
May 6, 2003.
DECISION ORDER
INTRODUCTION
Currently before this Court are two motions for reconsideration of a Decision and Order issued on February 28, 2003. In addition, this Court must resolve the issue of whether federal or state law governs the calculation of post-judgment interest.
BACKGROUND
The facts of this case are summarized in the February 28, 2003 Decision and Order. Familiarity with that decision is presumed. On July 19, 2002, after a six-week trial, a jury awarded Plaintiffs Howard and Amy Underwood $7,190,712 for damages suffered as a result of a construction site accident that occurred in March 1994. Counsel for the parties filed various post-trial motions. Defendants B-E Holdings, Inc. and Bucyrus-Erie Company (collectively, Defendant "Bucyrus"), along with Third-Party Defendant Iroquois Rock Products, Inc. (Defendant "Iroquois") requested, inter alia, post-trial discovery and a hearing regarding Plaintiff Howard Underwood's income from various collateral sources.
Bucyrus and Iroquois will be referred to collectively herein as "Defendants."
On February 28, 2003, this Court issued a Decision and Order. With respect to the issue of post-trial discovery, this Court determined that Defendants were not entitled to such discovery. Further, this Court concluded that Defendants had not met their burden of establishing that the jury's award should be reduced to account for income from collateral sources.
On March 10, 2003, Bucyrus filed a Motion for Reconsideration of this Court's Decision and Order insofar as it pertained to the issue of collateral sources. Iroquois filed a Motion for Reconsideration with respect to the same issue on March 14, 2003.
Bucyrus filed a memorandum of law and reply affirmation in support of this motion.
Iroquois filed a memorandum of law and reply affidavit in support of this motion. Plaintiffs filed an attorney affidavit in response to both motions. In addition, this Court directed Plaintiffs to file a sur-reply addressing a specific issue raised in Defendants' motion papers. Although Plaintiffs filed their sur-reply one day late, it was considered by this Court.
On April 7, 2003, this Court received a letter from Plaintiffs' counsel indicating that the parties were unable to reach an agreement as to the appropriate post-judgment interest rate. This matter was discussed at a status conference held before this Court on April 8, 2003, and the parties were thereafter given the opportunity to file memoranda of law detailing their respective positions.
Plaintiffs filed an attorney affidavit and reply affidavit in support of their position. Bucyrus filed a memorandum of law in support of its position. Iroquois did not file a submission with respect to this issue.
DISCUSSION
A. Defendants' Motions for ReconsiderationMotions for reconsideration are not recognized in haec verba under the Federal Rules of Civil Procedure. However, it is well-established that a district judge may modify pre-trial rulings and interlocutory orders at any time prior to final judgment. See In re United States, 733 F.2d 10, 13 (2d Cir. 1984). Reconsideration of a prior decision is generally justified in any one of the following three circumstances: (1) an intervening change in controlling law; (2) new evidence; or (3) the need to correct a clear error of law or to prevent manifest injustice. See Virgin Atl. Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992); see also Amerisure Ins. Co. v. Laserage Tech. Corp., No. 96-CV-6313, 1998 WL 310750, at *1 (W.D.N.Y. Feb. 12, 1998) (citing United States v. Adegbite, 877 F.2d 174, 178 (2d Cir. 1989)).
The decision as to whether to grant such a motion lies within the discretion of the district court. See McCarthy v. Manson, 714 F.2d 234, 237 (2d Cir. 1983). The standard is "strict", and "reconsideration will generally be denied unless the moving party can point to . . . matters . . . that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Parties may not use a motion for reconsideration as a means to reargue matters already disposed of by prior rulings or to put forward additional arguments that could have been raised prior to the decision. See Duane v. Spaulding and Rogers Mfg. Inc., No. 92-CV-305, 1994 WL 494651, at *1 (N.D.N.Y. Aug. 10, 1994). After all, a "motion for reconsideration is not a device intended to give an unhappy litigant one additional chance to sway the judge." Nossek v. Bd. of Ed. of Duanesburg Cent. Sch. Dist., No. 94-CV-219, 1994 WL 688298, at *1 (N.D.N.Y. Nov. 10, 1994).
In the present case, Defendants offer two principal arguments in support of their respective motions. Both arguments deal with the issue of collateral sources. First, Defendants contend that this Court did not give sufficient weight to Plaintiffs' failure to formally update an interrogatory response regarding Howard Underwood's social security disability benefits. Second, they argue that this Court should have conducted a hearing on the issue of collateral sources. These arguments will be addressed in turn.
It should be noted that in its February 28, 2003 Decision and Order, this Court found that Defendants were not entitled to post-trial discovery regarding various collateral sources, including union, disability, retirement, and social security disability benefits. Defendants' motions for reconsideration seek reconsideration of this Court's ruling only with respect to social security disability benefits.
1. Plaintiffs' Interrogatory Response
During discovery in this case, Defendants submitted an interrogatory requesting information as to whether Plaintiff Howard Underwood was receiving social security disability benefits. Plaintiffs' response to that interrogatory stated that Howard Underwood was not receiving such benefits. Apparently, at some point after giving that answer, Howard Underwood began receiving social security disability benefits. Thereafter, Plaintiffs provided Iroquois with authorizations permitting Iroquois to obtain records from the Social Security Administration. In addition, Plaintiffs supplied both Defendants with numerous documents that included references to Howard Underwood and social security disability benefits. However, it appears that Plaintiffs never formally updated their initial interrogatory response.
Defendants argue that they are entitled to post-trial discovery due to Plaintiffs' failure to formally update their interrogatory response. This argument has already been advanced, considered, and rejected. In its February 28, 2003 Decision and Order, this Court found that based upon the information provided to Defendants during discovery, they "either knew, or reasonably should have known, of Howard Underwood's Social Security status." (Decision Order, p. 13.) Morever, this Court concluded that any objections "that Defendants had with respect to Plaintiffs' interrogatory responses should have been raised during discovery or within a reasonable time thereafter." (Decision Order, p. 12.)
A district court possesses wide discretion in determining what punishment, if any, is appropriate for failure to conform to the rules of discovery. See Outley v. City of New York, 837 F.2d 587, 590 (2d Cir. 1988). This Court finds no cause to revisit its determination that, on the facts of this particular case, Defendants were not entitled to post-trial discovery as a remedy for Plaintiffs' apparent failure to formally update their interrogatory response.
This Court also notes that in support of their motions for reconsideration, Defendants appear to suggest that Plaintiffs' failure to formally update their interrogatory response may have been willful. However, a review of the authorizations provided to Defendant Iroquois and the documents provided to both Defendants belies any assertion that Plaintiffs attempted to conceal Howard Underwood's receipt of social security disability benefits.
2. Collateral Sources Hearing
Defendants contend that they are entitled to a hearing, where they would present expert testimony on the benefits that Howard Underwood is entitled to receive in the future under the Social Security Act. They assert that this Court erred by electing not to conduct such a hearing and urge reconsideration of that decision.
This Court finds no error in its February 28, 2003 Decision and Order. It was this Court's understanding that Defendants had no evidence with respect to Howard Underwood's collateral source income. Indeed, Defendants' request for post-trial discovery was based upon the fact that they lacked such evidence. As such, after this Court determined that Defendants were not entitled to post-trial discovery, there seemed to be no need for a collateral sources hearing (because Defendants, the party with the burden of proof, appeared to have no evidence to present at a hearing). Although Defendants did request a collateral sources hearing shortly after the jury delivered its verdict, Defendants' current argument — that they are entitled to a collateral sources hearing despite their lack of direct evidence — was not squarely presented to this Court until now. However, due to the important policy considerations implicated by this issue, this Court will address the merits of Defendants' argument.
Section 4545 of the New York Civil Practice Law and Rules provides, in pertinent part, that "evidence shall be admissible for consideration by the court to establish that any . . . future cost or expense . . . will, with reasonable certainty, be replaced or indemnified, in whole or in part, from any collateral source. . . ." N.Y.C.P.L.R. § 4545(c). Subject to certain limitations, the court is then required to reduce the jury's award by the amount of collateral source income established by the evidence. N.Y.C.P.L.R. § 4545(c). In this context, the term "reasonable certainty" has been interpreted as requiring "clear and convincing proof." Caruso v. Russell P. LeFrois Builders, Inc., 635 N.Y.S.2d 367, 369 (N.Y.App.Div. 4th Dep't 1995). With respect to future social security disability payments, it is well-settled that such benefits are collateral sources within the meaning of § 4545. See Turnbull v. USAir, 133 F.3d 184, 186-88 (2d Cir. 1998).
In the present case, in order to qualify for a collateral sources set-off, Defendants "must show that it is highly probable that plaintiff will continue to be eligible for Social Security benefits." Caruso, 635 N.Y.S.2d at 369. In this regard, they seek to introduce expert testimony establishing that certain of Howard Underwood's future costs or expenses will, with reasonable certainty, be replaced or indemnified by social security disability benefits. Plaintiffs argue that an expert opinion is "by its very nature speculative" and can never serve as clear and convincing proof with respect to collateral sources.
This Court finds Plaintiffs' argument unpersuasive for the following reasons. First, § 4545 speaks broadly of "evidence" that "shall be admissible for consideration by the court" regarding collateral sources. Nothing in the language of the statute suggests that the legislature intended to categorically exclude expert testimony from the definition of "evidence." In addition, Plaintiffs failed to cite, and this Court could not find, any case law standing for that proposition. Second, the fact that an expert opinion may be, in some sense, speculative does not render it per se inadmissible. Indeed, the fact that the statute speaks of "reasonable" certainty indicates that some degree of speculation is inevitable when dealing with future collateral source income. Further, the opinion of Defendants' expert will no doubt be based upon objective facts adduced at trial, such as Howard Underwood's age and medical condition. In addition, the expert will likely rely upon objective data from the Social Security Administration regarding eligibility requirements and the amount of benefits.
As such, this Court finds that Defendants are entitled to a hearing to submit expert testimony on future benefits that Howard Underwood may be entitled to receive under the Social Security Act. If this testimony demonstrates that some of Howard Underwood's costs or expenses will, with reasonable certainty, be replaced by those benefits, the jury's award will be reduced accordingly pursuant to C.P.L.R. § 4545.
At the present time, this Court takes no position as to whether a formal "hearing" with live testimony is necessary. This matter will be discussed at the May 6, 2003 status conference. It should also be noted that the hearing will be limited to the evidence proffered by Defendants in the instant motion: expert testimony on the benefits that Howard Underwood is entitled to receive under the Social Security Act, in the future.
B. Post-Judgment Interest
Title 28 U.S.C. § 1961 provides that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court." Under this provision, interest is calculated from the date of the entry of a judgment at a rate equal to the United States Treasury Bill rate. 28 U.S.C. § 1961(a). In contrast, under New York law, interest on a money judgment is awarded at a rate of nine percent per annum. N.Y.C.P.L.R. §§ 5003, 5004. In the instant case, which is in federal court based upon diversity jurisdiction, Defendants argue that the federal interest rate established by § 1961 applies. Plaintiffs assert that the Erie doctrine compels this Court to set aside that provision and apply the nine percent rate established by New York law.
The parties do not dispute that the pre-judgment interest rate is governed by New York law. This is in accord with Second Circuit case law. See, e.g., Campbell v. Metro. Prop. and Cas. Ins. Co., 239 F.3d 179, 186-87 (2d Cir. 2001).
This question has not been squarely addressed by the Second Circuit. In Greenway v. Buffalo Hilton Hotel, 143 F.3d 47, 55 (2d Cir. 1998), the court applied the federal interest rate. However, that case involved both federal claims and pendant state law claims. Id. at 49. The present case involved only New York claims, which were tried in this Court based solely upon diversity of citizenship. Further, it does not appear that the court in Greenway was directly faced with the issue of which interest rate to apply. See id. at 55 ("[Defendant] does not dispute that plaintiff is entitled to post-judgment interest on his award, but does question the date from which that interest should be calculated.") District courts in this Circuit have reached divergent results when faced with this issue.
The following courts applied the New York interest rate: Kaledioscope Media Group, Inc. v. Entm't Solutions, Inc., No. 97-CIV-9396, 2001 WL 849532, at *5 (S.D.N.Y. July 19, 2001); DVCI Technologies, Inc. v. Timessqauremedia.com, Inc., No. 00-CIV-0207, 2000 WL 33159189, at *3 (S.D.N.Y. Nov. 29, 2000); Avildsen v. World Wide Entm't Corp., No. 81-CIV-3462, 1994 WL 529755, at *1 (S.D.N.Y. Sept. 29, 1994); Purgess v. Sharrock, No. 91-CIV-0621, 1993 WL 426524, at *1 (S.D.N.Y. Oct. 19, 1993). These courts applied the federal interest rate: Cayuga Indian Nation of New York v. Pataki, 188 F. Supp.2d 223, 243 n. 6 (N.D.N.Y. 2002); Caruolo v. ACS, No. 93-CIV-3752, 2001 WL 125678, at *2 (S.D.N.Y. Feb. 13, 2001); Arnold v. County of Nassau, 89 F. Supp.2d 285, 308 (E.D.N.Y. 2000), vacated on other grounds, 252 F.3d 599 (2d Cir. 2001).
For the following reasons, this Court finds that post-judgment interest shall be calculated at the rate established by 28 U.S.C. § 1961. First, the plain language of the statute indicates that it applies to "any money judgment in a civil case recovered in a district court." 28 U.S.C. § 1961(a) (emphasis added). Congress elected not to make an exception for judgments recovered in diversity cases. Second, every circuit court to address this issue has concluded that the federal rate applies to all money judgments recovered in civil cases, including diversity cases. See Forest Sales Corp. v. Bedingfield, 881 F.2d 111, 111-13 (4th Cir. 1989); Nissho-Iwai Co. v. Occidental Crude Sales, Inc., 848 F.2d 613, 622 (5th Cir. 1988); Bailey v. Chattem, Inc., 838 F.2d 149, 152-53 (6th Cir. 1988); Travelers Ins. Co. v. Transport Ins. Co., 846 F.2d 1048, 1053-54 (7th Cir. 1988); Weitz Co., Inc. v. Mo-Kan Carpet, Inc., 723 F.2d 1382, 1385-86 (8th Cir. 1983); Northrop Corp. v. Triad Int'l Marketing, S.A., 842 F.2d 1154, 1155-56 (9th Cir. 1988); Everaard v. Hartford Acc. and Indem. Co., 842 F.2d 1186, 1193-94 (10th Cir. 1988); G.M. Brod Co., Inc. v. U.S. Home Corp., 759 F.2d 1526, 1542 (11th Cir. 1985).
Finally, this Court finds Plaintiffs' Erie doctrine arguments unavailing. These arguments were fully analyzed by the Eighth Circuit in Weitz, the Fifth Circuit in Nissho-Iwai, and the Fourth Circuit in Forest Sales. This Court is in full agreement with the analysis and conclusions of those courts. In particular, this Court notes the Eighth Circuit's determination that post-judgment interest is "a subject with respect to which Congress has full power to legislate, even as to cases that get into the federal courts only because of diversity of citizenship." Weitz, 723 F.2d at 1386. Further, this Court concurs with the Fourth Circuit's finding that "the plain language of the text, the legislative history, and the policy expressed in the statute" all support the conclusion that post-judgment interest in diversity actions is governed by federal law. Forest Sales, 881 F.2d at 113.
CONCLUSION
For the foregoing reasons, this Court will not revisit its February 28, 2003 Decision and Order. However, this Court does find that Defendants are entitled to present expert testimony regarding Howard Underwood's future social security disability benefits. Further, this Court finds that the post-judgment interest rate shall be determined according to 28 U.S.C. § 1961.
ORDERS
IT HEREBY IS ORDERED that Defendant Bucyrus' Motion for Reconsideration (Docket NO. 281) is DENIED.
FURTHER, that Defendant Iroquois' Motion for Reconsideration (Docket NO. 285) is DENIED.
FURTHER, that Defendants shall be permitted to introduce expert testimony regarding Howard Underwood's future social security disability benefits.
FURTHER, that post-judgment interest shall be determined according to 28 U.S.C. § 1961.
SO ORDERED.