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BRC Rubber & Plastics Inc. v. Continental Carbon Co.

United States District Court, N.D. Indiana, Fort Wayne Division

December 3, 2019

BRC RUBBER & PLASTICS, INC., an Indiana corporation, Plaintiff,
v.
CONTINENTAL CARBON COMPANY, a Delaware corporation, Defendant.

          OPINION AND ORDER

          Susan Collins United States Magistrate Judge

         On August 22, 2019, this Court issued an Opinion and Order (the “Order”) setting forth Findings of Fact and Conclusions of Law following a bench trial in this case filed by Plaintiff BRC Rubber & Plastics, Inc. (“BRC”), against Defendant Continental Carbon Company (“Continental”), concluding that BRC had proven by a preponderance of the evidence its claim that Continental had repudiated a five-year Agreement to supply BRC with approximately 1.8 million pounds of carbon black annually.[1] (ECF 227). The Court awarded BRC damages in the amount of $842, 683.37, which represents the costs that BRC incurred in purchasing carbon black from another supplier as cover after Continental's repudiation of the Agreement. (Id. at 30). In the Order, the Court took under advisement BRC's request for an award of prejudgment interest, observing that BRC first requested prejudgment interest in the last sentence of its proposed findings of fact and conclusions of law submitted after the trial. (Id. at 30-31). The Court afforded the parties an opportunity to submit supplemental briefs on the issue, and these briefs have now been considered. (See ECF 228, 229, 231, 234). For the following reasons, the Court FINDS that BRC is entitled to prejudgment interest in the amount of $400, 184.12.

         A. Applicable Law

         “The basic purpose of prejudgment interest is to put a party in the position it would have been in had it been paid immediately. It is designed to ensure that a party is fully compensated for its loss.” Am. Nat'l Fire Ins. Co. v. Yellow Freight Sys. Inc., 325 F.3d 924, 935 (7th Cir. 2003) (citations omitted); see Ind. Ins. Co. v. Sentry Ins. Co., 437 N.E.2d 1381, 1391 (Ind.Ct.App. 1982) (“The award of prejudgment interest is founded solely upon the theory that there has been a deprivation of the use of money or its equivalent and that unless interest is added the injured party cannot be fully compensated for the loss suffered.” (citation omitted)). “In diversity actions, federal courts must look to state law to determine the propriety of awarding prejudgment interest.” Dale R. Horning Co. v. Falconer Glass Indus., Inc., 730 F.Supp. 962, 969 (S.D. Ind. 1990) (citing Travelers Ins. Co. v. Transp. Ins. Co., 846 F.2d 1048, 1051 (7th Cir. 1988)).

         In Indiana, “[p]rejudgment interest is awarded where the damages are ascertainable in accordance with fixed rules of evidence and accepted standards of valuation at the time the damages accrued.” Cincinnati Ins. Co. v. BACT Holdings, Inc., 723 N.E.2d 436, 441 (Ind.Ct.App. 2000) (citation and internal quotation marks omitted). “After it has been determined that a party is liable for damages, prejudgment interest is appropriate only when a ‘simple mathematical computation' is required.” Id. (citation omitted); see Care Grp. Heart Hosp., LLC v. Sawyer, 93 N.E.3d 745, 757 (Ind. 2018) (“An award of prejudgment interest in a contract action is appropriate purely as a matter of law when the breach did not arise from tortious conduct, the amount of the claim rests on a simple calculation, and the trier of fact does not need to exercise its judgment to assess the amount of damages.” (citations and footnote omitted)).

Examples of cases where prejudgment interest is appropriate include those for breach of contract when the damages were principal payments made under a promissory note; the amount of a mechanics' lien for a contractor's unpaid bills for a remodeling project; and an amount stipulated to at a damages hearing. In these cases, the amount of damages was clear and did not require any interpretation or judgment on the part of the trier of fact.

WESCO Distrib., Inc. v. ArcelorMittal Ind. Harbor LLC, 23 N.E.3d 682, 714 (Ind.Ct.App. 2014) (internal citations omitted).

         Notwithstanding the foregoing, prejudgment interest “has been allowed even where some degree of judgment must be used to measure damages.” Cincinnati Ins. Co., 723 N.E.2d at 441.

Prejudgment interest on damages may be appropriate even though the fact finder has to use some degree of judgment in measuring damages; the question in each case must turn on its facts depending on whether the jury appears to have been able to make a computation “according to known standards of value, ” or whether its award was by necessity largely a matter of subjective judgment about the value of certain losses. In resolving this question, factors such as the difference between the jury award and the amount sought, the nature and completeness of plaintiff's proof and the nature of the defendant's proof on damages, if any, are relevant.

Pub. Serv. Co. of Ind., Inc. v. Bath Iron Works Corp., 773 F.2d 783, 796 (7th Cir. 1985) (internal citation omitted) (applying Indiana law).

         A request for prejudgment interest raised for the first time in a post-trial motion is timely. See Brooms v. Regal Tube Co., 881 F.2d 412, 424 n.9 (7th Cir. 1989), overruled in part on other grounds by Saxton v. Am. Tel. & Tel. Co., 10 F.3d 526, 533 n.12 (7th Cir. 1993). That is, a plaintiff does not waive a request for prejudgment interest by failing to raise it in the complaint or even the final pretrial order. See RK Co. v. See, 622 F.3d 846, 853 (7th Cir. 2010) (stating that a failure to request prejudgment interest in a final pretrial order did not result in waiver); Brenton H. v. Bd. of Educ. of City of Chi., No. 10-cv-1360, 2011 WL 4501408, at *6 (N.D. Ill. Sept. 28, 2011) (rejecting defendant's argument that plaintiff had waived prejudgment interest where he did not raise it in his complaint). “[A]n award of prejudgment interest is generally not considered a matter of discretion.” INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566, 578 (Ind.Ct.App. 2003); see also AM Gen. LLC v. Demmer Corp., No. 3:12-CV-00333-WCL-RBC, 2015 WL 1256370, at *10 (N.D. Ind. Mar. 18, 2015).

         “Prejudgment interest is computed from the time the principal amount was demanded or due and is allowable at the permissible statutory rate when no contractual provision specifies the interest rate.” Cincinnati Ins. Co., 723 N.E.2d at 441. Where the parties have not agreed to an interest rate, Indiana law supplies a rate of eight percent per annum.[2] Care Grp. Heart Hosp., LLC, 93 N.E.3d at 757 (citing Ind. Code § 24-4.6-1-102); see also Firstmark Standard Life Ins. Co., 699 N.E.2d at 693.

         C. Discussion

         1. BRC's Proposed Calculation of ...


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