AMERICAN STEAMSHIP CO., a New York corporation, and ARMSTRONG STEAMSHIP CO., a Delaware corporation, Plaintiffs,
HALLETT DOCK CO., a Minnesota corporation, Defendant.
Brent L. Reichert, and Gerardo Alcazar, Robins Kaplan Miller & Ciresi LLP, Counsel for Plaintiffs.
David R. Hornig, and Guerric S.D. L. Russell, Nicoletti Hornig & Sweeney, and Scott A. Witty, and John D. Kelly, Hanft Fride PA, Counsel for Defendant Hallett Dock Co.
MEMORANDUM OF LAW & ORDER
MICHAEL J. DAVIS, Chief District Judge.
This matter is before the Court on Plaintiffs' Motion for Prejudgment Interest Against Hallett Dock Company. [Docket No. 474]
This matter was tried before a jury and, on February 21, 2013, the jury returned its verdict. The jury found that Defendant Hallett Dock Company ("Hallett") breached its contract with Plaintiffs American Steamship Company and Armstrong Steamship Company (collectively, "ASC"), breached implied and express warranties, was liable for negligent misrepresentation, and was negligent, and that all of these breaches were a direct cause of the damage to the Walter J. McCarthy, Jr. ("McCarthy"). The jury awarded $4, 682, 322.55 in damages, and attributed 100% of the fault to Hallett. On February 25, 2013, the Court entered judgment on the jury's verdict.
ASC now requests prejudgment interest at a rate of 10% per year from January 14, 2008, the date of the holing, until February 25, 2013, the date of judgment, for a total of $2, 398, 888.54.
The McCarthy was holed on hidden concrete and rebar debris in Hallett's slip on January 14, 2008. The gash in the McCarthy's hull caused significant damage that had to be immediately addressed to prevent further damage to the vessel. On April 4, 2008, ASC provided Hallett with a notice of the claim against Hallett. The repair of the McCarthy was completed in May 2008. The McCarthy passed inspection on May 5, 2008, and sailed on May 6, 2008. ASC filed this lawsuit against Hallett on September 25, 2009.
A. Propriety of an Award of Prejudgment Interest
"Prejudgment interest is awarded in admiralty suits in the discretion of the district court to ensure compensation of the injured party in full and should be granted unless there are exceptional or peculiar circumstances." Ohio River Co. v. Peavey Co. , 731 F.2d 547, 549 (8th Cir. 1984). For example, peculiar circumstances might exist where the plaintiff unduly delays prosecuting the lawsuit. City of Milwaukee v. Cement Div., Nat'l Gypsum Co. , 515 U.S. 189, 196 (1995). No peculiar or exceptional circumstances exist here. The Court concludes than an award of prejudgment interest is appropriate to fully compensate ASC for the losses that it suffered.
B. Date that Prejudgment Interest Began to Accrue
The parties disagree on when the prejudgment interest began to accrue: Hallett asserts that interest should be calculated from the date ASC paid for repairs, which it claims was October 21, 2009, while ASC asserts that the prejudgment interest should be awarded from the accident.
The purpose of an award of prejudgment interest "is to ensure that an injured party is fully compensated for its loss." Cement Div., Nat'l Gypsum Co. , 515 U.S. at 195 (footnote omitted). "By compensating for the loss of use of money due as damages from the time the claim accrues until judgment is entered, an award of prejudgment interest helps achieve the goal of restoring a party to the condition it enjoyed before the injury occurred." Id. at 196 (citations omitted). The Eighth Circuit has held that, when damages consist of the cost of repairs, the prejudgment interest should be awarded from the date of payment for the repairs. See Fed. Barge Lines, Inc. v. Republic Marine, Inc. , 616 F.2d 372, 373 (8th Cir. 1980). Thus, "[w]here... a vessel is damaged but not put out of service interest is generally allowed only from the date of the expenditure for repairs, and not from the date of the collision [because] [t]he award of interest is made as compensation for the deprivation of the use of money or property." Utility Serv. Corp. v. Hillman Transp. Co. , 244 F.2d 121, 125 (3d Cir. 1957). On the other hand, when the loss of property or money occurs immediately at the time of the casualty, prejudgment ...