Interstate Coffee Services Co. v. Premier Coffee Co.

13 Mass. L. Rptr. 466
CourtMassachusetts Superior Court
DecidedOctober 5, 2001
DocketNo. 9100818
StatusPublished

This text of 13 Mass. L. Rptr. 466 (Interstate Coffee Services Co. v. Premier Coffee Co.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interstate Coffee Services Co. v. Premier Coffee Co., 13 Mass. L. Rptr. 466 (Mass. Ct. App. 2001).

Opinion

VOLTERRA, J.

INTRODUCTION

Plaintiff Interstate Coffee Services Co., Inc. (“Interstate”) brought this action against Premier Coffee Co., Inc. (“Premier”) and others, alleging breach of employment agreements and breach of the duty of loyalty. The parties entered into a settlement agreement in April 1994. The defendants subsequently breached the agreement and following a jury waived trial, this Court (Carey, J.) awarded damages and civil fines for contempt. This matter is before the Court on Interstate’s motion for final judgment. Interstate argues that it is entitled to final judgment in the amount of $987,000.00; prejudgment interest on the entire amount of the award; and attorneys fees and costs in the amount of $85,041.81, representing $51,251.81 awarded by the Court before April 27, 1995, and $33,790.00 allegedly earned for all work done after April 27, 1995. The defendant argues that Interstate is not entitled to prejudgment interest for the entire award, and that Interstate is not entitled to attorneys fees it alleges came due after April 27, 1995. For the reasons set forth below, Interstate’s motion for final judgment is ALLOWED. In addition, the plaintiff is entitled to prejudgment interest on the compensatory and liquidated damages portion of the award. The plaintiff is also entitled to attorneys fees and costs consistent with this opinion.

BACKGROUND

The long, complicated history of this case begins in 1991, when Interstate initially brought suit against the defendants for breach of employment agreements and breach of their duty of loyalty. The parties, at the behest of the Court, consented to mediation and entered into a settlement agreement on April 7, 1994. The parties, pursuant to the settlement, agreed to an immediate payment of $ 150,000.00 by the defendants to the plaintiff, and then a deferred lump-sum payment of $350,000.00 on or before April 1, 2001. The defendants also agreed to certain business concessions, a noncompetition agreement, and liquidated damages. The entire settlement document was entered as a judgment and court order.

The defendants, however, violated the terms of the settlement agreement. As a result, the plaintiffs filed a complaint for contempt in this Court on October 6, 1994. Following a three-day trial, the Court (Carey, J.) found “overwhelming evidence that each defendant willfully, intentionally and deliberately violated a clear and unequivocal order of [the] court, namely the judgment of April 7, 1994.” See Interstate Coffee Services Co., Inc. v. Premier Coffee Company, Inc., Civil No. 91-00818 (Bristol Super. Ct., February 24, 1995) at 6. [467]*467The Court awarded the plaintiff $5,000 in compensatory damages; $35,000 in liquidated damages; and $947,000 in civil fines for a total judgment of $987,000. The aforementioned Court findings contained a provision under which one-half of the civil fines would be suspended if the defendants complied with certain disclosure and security obligations. The defendants did not comply, and Judge Carey’s award stands as the judgment.

The Court (Carey, J.) also awarded the plaintiff attorneys fees in the amount of $47,276.81 on April 12, 1995, and $3,975.00 on April 27, 1995.

The plaintiff now moves for final judgment on the contempt action. The plaintiff argues that it is entitled to statutory prejudgment interest on the amount of $987,000.00. The plaintiff contends that this interest began to run on April 8, 1994, namely the date the defendants first breached the settlement agreement. The plaintiff also requests an award of updated counsel fees and costs in the amount of $33,790.00 for all work done after April 27, 1995, and filed copies of fee statements together with an affidavit. The defendants object to the award of prejudgment interest, arguing that the statute that provides the basis for the imposition of interest is inapplicable to this case. The defendants also object to the date from which prejudgment interest must be calculated. The defendant argues that if prejudgment interest attaches, it must attach at the date the plaintiff commenced the contempt action, namely October 6, 1994. Finally, the defendants object to the entry of a final judgment containing attorneys fees for services performed after April 27, 1995, and request the right to depose plaintiffs counsel regarding this issue.

DISCUSSION

The plaintiff is entitled to prejudgment interest on the compensatory and liquidated damages portion of the judgment from the date of breach, namely April 8, 1994. It is not entitled to prejudgment interest for the civil fines imposed in the judgment. In addition, the plaintiff is entitled to attorneys fees and costs in the amount of $51,251.81 for work completed on or before April 27, 1994, and $30,411.00 for work completed after April 27, 1994.

The applicable statute in the instant case is M.G.L.c. 231, §6C.2 The section, which concerns interest added to damages in contract actions, pertains to the instant case because the settlement agreement was a negotiated instrument between the two parties. See Peters v. Wallach, 366 Mass. 622, 628 (1975) (agreement to settle preexisting claims is enforceable in contract). As such, Section 6C is designed to compensate a damaged party for the loss of use or unlawful detention of money. See Sterilite Corp. v. Continental Casualty Co., 397 Mass. 837, 841 (1986). An award of interest is made so that a person wrongfully deprived of the use of money should be made whole for his loss. Id. In passing Chapter 231, the Legislature intended to abrogate the common law rule which distinguished liquidated and unliquidated damages. See Id. at 840. Thus, when interpreting the statute, a Court must recognize the elimination of the distinction between liquidated and unliquidated damages but preserve the principle of restoring to the party only that which he has lost. See Id. at 841.

According to §6C, interest is added by the clerk of the court from the date of the breach. If the date of the breach is not established, interest is added from the date of the commencement of the action. Although the Court (Carey, J.) did not specifically make a finding of a date of breach in its February 1995 opinion, the Court, in its rulings of law, established that the defendants were in breach as of April 7, 1994. Notably, the Court held that the defendants violated certain disclosure obligations in the settlement agreement, and fixed April 7, 1994 as the date of breach. See Interstate Gourmet Coffee, Civ. No. 91 -00818, at 23. The Court also held that the defendants were in breach on April 22, 1994 for failing to remove certain equipment. See Id. at 22. Where the date of breach of a contract is established, interest on damages is computed from that date. See Ward v. American Mutual Liability Insurance Co., 15 Mass.App.Ct. 98, 101 (1983). Thus, in the instant case, it is apparent that Judge Carey believed the defendants had breached the settlement agreement immediately after signing it. Accordingly, this Court rules that the defendants breached the settlement agreement on April 7, 1994, and interest on damages shall run from that date.

As noted above, an award of interest is made so that a person wrongfully deprived of the use of his money should be made whole for his loss. See Sterilite, 397 Mass. at 841. No interest is due on sums when the plaintiff was not deprived of the use of those sums. See Id. at 842.

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Related

Ward v. American Mutual Liability Insurance
443 N.E.2d 1342 (Massachusetts Appeals Court, 1983)
Peters v. Wallach
321 N.E.2d 806 (Massachusetts Supreme Judicial Court, 1975)
Sterilite Corp. v. Continental Casualty Co.
494 N.E.2d 1008 (Massachusetts Supreme Judicial Court, 1986)

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Bluebook (online)
13 Mass. L. Rptr. 466, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interstate-coffee-services-co-v-premier-coffee-co-masssuperct-2001.