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Touch-N-Buy Ltd. Partnership v. Girocheck Financial, Inc.

United States District Court, E.D. Michigan, Southern Division

May 7, 2018



          Nancy G. Edmunds United States District Judge

         The Court held a breach of contract bench trial in this case August 1-4, 2017. On February 5, 2018, the Court issued its Findings of Fact and Conclusions of Law [74] and awarded Plaintiff Touch-N-Buy, LP ("Plaintiff") $40, 390.45 plus interest in damages.

         Defendant GiroCheck Financial, Inc. ("Defendant") subsequently filed this Motion to Amend/Correct the Judgment, pursuant to Federal Rules of Civil Procedure 59(e) seeking to offset Plaintiff's judgment award with a previously issued Defendant award of attorney fees and costs. The Court having read the pleadings DENIES Defendant's request to offset the two money awards. The Court does however, for the reasons set forth below, amend its prior Findings of Fact and Conclusions of Law [74] and Plaintiff's Judgment [75], pursuant to Fed.R.Civ.P. 60, to clarify the interest portion of Plaintiff's damages award.

         I. Statement of Facts

         he background facts of this matter are set forth in great detail in the Findings of Fact and Conclusions of Law. (Dkt. 74.) Only a brief summary of pertinent facts is included here below.

         On July 12, 2012, Plaintiff and Defendant entered into a valid and enforceable agreement. On October 13, 2014 Defendant officially terminated the agreement. On March 9, 2015 Plaintiff filed suit against Defendant, alleging breach of contract, fraud, violation of the Michigan Sales Representative Commission Act ("SRCA"), and seeking exemplary damages. Defendant filed three counterclaims. On May 23, 2016, the Court addressed cross motions for summary judgment, granting in part Defendant's motion for summary judgment, and denying Plaintiff's motion for patrial summary judgment. (Dkt. 43.) Under SRCA, Defendant, having won on summary judgment, was entitled to reasonable attorney fees and costs. (Dkt. 43, at 10-11.) The Court later awarded Defendant $11, 698.38 in reasonable attorney fees and court costs. (Dkt. 52.) Both parties acknowledge this award has not yet been paid to Defendant.

         August 1-4, 2017, the Court held a bench trial on Plaintiff's remaining breach of contract claim. On February 5, 2018, the Court issued its Findings of Fact and Conclusions of Law (Dkt. 74), determining Defendant had breached the contract. The Court awarded Plaintiff breach of contract damages of $40, 390.45 plus interest. (emphasis added) (Dkt. 74.) Defendant now brings a motion, pursuant to Fed.R.Civ.P. 59(e), to amend the order and judgment to offset Plaintiff's judgment amount with the earlier Defendant award of attorney fees. Defendant states, "[f]or the sake of efficiency, to honor and acknowledge that both parties in this matter have been awarded monies by the [C]ourt and in an attempt to avoid having the parties piece-meal the payment of their respective awards, Defendant requests that the Court amend its February 5, 2018 Judgment to order that Defendant's award of attorney fees and costs of $11, 698.38 be setoff against Plaintiff's Judgment of $40, 390.45 to reflect that Plaintiff is entitled to Amended Judgment amount of $28, 691.07 with interest accruing from the date an Amended Judge is entered." (Dkt. 76, at 3; PgID 2198.) Plaintiff responds, "Defendant's motion is to allow Defendant to escape from interest in two respects. First, the reduction of Plaintiff's judgment lower the amount of interest which should have been accruing since the entry of the Judgment on February 5, 2018. Secondly, allowing interest to accrue as of the entry of this proposed Amended Judgment will allow Defendant to potentially escape from paying any interest whatsoever." The Court now clarifies the interest calculation and considers the question of setoff below.

         II. Analysis

         1. Federal Rules of Civil Procedure Rule 60(a)

         The Court finds it prudent to address an issue that the Parties briefs' have illuminated. In the Court's Findings of Fact and Conclusions of Law, as well as the Court's Judgment Order, the Court awarded Plaintiff damages "with interest." The Court failed to provide explicit explanation that the Court was awarding both prejudgment and post-judgment interest. This order amends the Court's February 5, 2018 Findings of Fact and Conclusions of Law, and the Judgment to make the clarification.

         Rule 60(a) provides, in relevant part, that "[c]lerical 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 it own initiative or on the motion of any party. . . ." Fed.R.Civ.P. 60(a). "The basic purpose of the rule is to authorize the court to correct errors that are mechanical in nature that arise from oversight or omission." In re Walter, 282 F.3d 434, 440 (6th Cir. 2002). The rule does not authorize the court to revisit its legal analysis or otherwise correct an error of substantive judgment. Id. "[A] court properly acts under Rule 60(a) when it is necessary to 'correct mistakes or oversights that cause the judgment to fail to reflect what was intended at the time of trial.' " Id. at 441 (quoting Vaughter v. Eastern Air Lines, Inc., 817 F.2d 685, 689 (11th Cir. 1987)). See also Pogor v. Makita U.S.A., Inc., 135 F.3d 384, 388 (6th Cir. 1998) (finding Rule 60(a) supported correction of the judgment to reflect the previously omitted specific amount of prejudgment interest awarded).

         As the Court found in its previous orders, and as agreed to by both parties, Florida law governs the contractual agreement between the parties, including any breach. In diversity cases, such as this, state law governs only awards of prejudgment interest and federal law controls post-judgment interest pursuant to 28 U.S.C. § 1961(a). See e.g. Broad Street Energy Co. v. Endeavor Ohio, LLC, 806 F.3d 402, 410 (6th Cir. 2015) (observing that "[f]ederal law governs" the calculation of post-judgment interest); Estate of Riddle v. So. Farm Bur. Life Ins. Co., 421 F.3d 400, 409 (6th Cir. 2005) ("In diversity cases in this Circuit, federal law controls post-judgment interest but state law governs awards of pre-judgment interest.") (internal quotation marks and citations omitted).

         A. Prejudgment Interest

         In Argonaut Ins. Co. v. May Plumbing Co., the Florida Supreme Court distilled over a century of precedent governing awards of prejudgment interest in tort and contract cases, concluding that prejudgment interest awards in Florida are governed by the "loss theory." Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212, 214-15 (Fla. 1985). Thus, "an award of prejudgment interest is not an opportunity for the plaintiff to obtain a windfall or for the court to penalize the defendant." Arizona Chemical Co., LLC v. Mohawk Industries, Inc., 197 So.3d 99, 102 (Fla. Dist. Ct. App. 2016); See also Nat'l Educ. Ctrs., Inc. v. Kirkland, 678 So.2d 1304, 1306 (Fla. 4th DCA 1996). In consideration of the compensatory goal of prejudgment interest awards in Florida, "when a verdict liquidates damages on a plaintiff's out-of-pocket, pecuniary losses, plaintiff is entitled, as a matter of law, to prejudgment interest at the statutory rate from the date of that loss." Argonaut, 474 So.2d at 215 (emphasis added). A verdict is said to have the effect of liquidating damages as long as the verdict establishes the loss and "the pertinent date can be ascertained from the evidence." Pace Property Fin. Auth., Inc. v. Jones, 24 So.3d 1271, 1272 (Fla. 1st DCA 2009). In Bosem v. Musa Holdings, Inc., 46 So.3d 42, 46 (Fla. 2010) (quoting William B. Hale, The Law of Damages, § 67 (2d ed. 1912)), the court stated that, whether the cases arises in tort or contract, if the plaintiff's damages are "wholly pecuniary, " the plaintiff should recover "not only the value of what he has lost, but receive it as nearly as may be as of the date of his loss." Here, as laid out in painstaking detail, the damages awarded to Plaintiff are pecuniary. "Generally, interest awarded as damages in a contract action runs from the date when the right to recover on the claim became vested or accrued, which is ordinarily the date of the breach." Craigside, LLC v. GDC View, LLC, 74 So.3d 1087, 1092 (Fla. 1st DCA 2011). The pecuniary losses caused by Defendant's breach of contract include sales staff training expenses, sales staff ...

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