Marco Crane & Rigging Company v. Greenfield Products LLC

• Court: District Court, D. Arizona
• Decided: January 11, 2023
• Docket: 2:17-cv-01836-GMS
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Marco Crane & Rigging Company, No. CV-17-01836-PHX-GMS

10 Plaintiff, AMENDED JUDGMENT

11 v.

12 Greenfield Products LLC, et al.,

13 Defendants. 14 15 16 BACKGROUND 17 On appeal, the Ninth Circuit reversed this Court’s determination that under the facts 18 of this case, Plaintiff could have been comparatively negligent as defined by state statute 19 without being contributorily negligent and that such comparative negligence could reduce 20 the amount of the products liability award. The Ninth Circuit thus vacated the reduction 21 in damages on the product liability claim resulting from the jury’s allocation of 22 comparative fault to the Plaintiff and, further, this Court’s denial of Marco Crane’s motion 23 for prejudgment interest on that amount. It further instructed this Court to “award interest 24 on the portion of the jury’s strict-liability award that represents liquated damages and to 25 determine (a) the date from which interest should begin to accrue on that portion of the 26 award and (b) the applicable interest rate under Arizona Revised Statutes section 44-1201.” 27 (Doc. 260-1 at 6.) It also directed this Court to determine the rate of interest that would 28 accrue to the unliquidated part of the jury award upon the entry of the verdict (Doc. 207) 1 on October 23, 2020. 2 I. Comparative Fault: Damages Award on the Products Liability Claim. 3 The jury awarded Marco Crane $603,523.67 on its products liability claim. In 4 accordance with the instruction of the Court of Appeals, this Court, therefore, revises its 5 judgment on that claim to $603,523.67. 6 II. Prejudgment Interest 7 A. Products Liability Claim 8 In its decision, the Ninth Circuit noted that “the parties appear to agree that Marco 9 Crane asserted only $323,935.06 in unliquidated damages on the strict-liability claim.” 10 (Doc. 260-1 at 6.) Therefore, “the remainder of the award would represent liquidated 11 damages on which Marco Crane would be entitled to prejudgment interest.” (Doc. 260-1 12 at 6.) Of course, if this constitutes an actual determination by the appellate panel, this 13 Court is obliged to implement it; but the Court does not read it as such. The language in 14 which the Circuit has couched the observation suggests that it is not a determination of the 15 panel but only a statement as to the apparent facts. Further, the Circuit remanded to this 16 Court to determine what that amount was. 17 Yet, on remand, Greenfield asserts that there never was any such agreement about 18 the amount of Marco Crane’s unliquidated damages. This Court, as well, on its admittedly 19 incomplete review of the record, can find no such agreement. Though Marco Crane, in its 20 Reply, had the opportunity to address Greenfield’s denial of any agreement as to liquidated 21 claims, it does not do so. Instead, Marco Crane claims a right to prejudgment interest on 22 the entire amount of the corrected award, $734,983.38—coming from $603,523.67 on the 23 products claim and $131,459.71 on its implied warranty claim. 24 This argument is based on speculation that the jury intended to award total damages 25 of $1,058,813.46––all of Marco Crane’s claimed damages––at trial instead of what it 26 actually awarded: $734,983.38. Marco Crane speculates that the jury arrived at the 27 $603,523.67 amount by awarding both Marco Crane’s alleged products liability damages 28 ($927,353.75) and warranty damages ($131,459.71) on the products liability claim and 1 then reducing this amount by the percentage of the comparative fault that it attributed to 2 Marco Crane on the products liability claim (43%).1 3 There are several problems with this argument. First, this court is prohibited from 4 speculating about a jury’s thought process in arriving at a damages award in the absence 5 of special interrogatories. Porterfield v. Burlington N. Inc., 534 F.2d 142, 147 (9th Cir. 6 1976) (holding that “[w]e cannot, by way of speculation, pierce the general verdict to draw 7 the conclusions contended for by [the appellant].”); see also Asdale v. Int’t Game Tech., 8 549 Fed. App’x. 611, 614 (9th Cir. 2013) (holding that “because the jury used a general 9 verdict form we cannot speculate about the jury’s thought process.”). 10 Second, even were the Court to engage in speculation, it would be obliged to follow 11 the presumption that the jury followed the court’s instructions. CSX Transp. Inc., v. 12 Hensley, 556 U.S. 838, 841 (2009) (holding that “in all cases, juries are presumed to follow 13 the court’s instructions.”); United States v. Reyes, 660 F.3d 454, 468 (9th Cir. 2011) 14 (holding that “jurors are presumed to follow the court’s instructions.”). And, for the jury 15 to have done what Marco Crane speculates, it would have had to ignore two separate 16 instructions of the Court—one of which was delivered twice. 17 The Court twice instructed the jury that it should determine the actual damages 18 involved on the products liability claim, and if it found that Marco Crane was 19 comparatively negligent, it should not deduct its percentage of fault from those damages. 20 See, e.g., (Tr. at 629 (“The Court will later reduce the damages awarded to the plaintiff by 21 the percentage of any fault you have assigned to the plaintiff.”)); (Tr. at 634 (“[I]f you 22 determine that plaintiff is partially at fault, then you need to put down the percentage of 23 fault attributable to the plaintiff and the percentage of the fault attributable to the defendant. 24 25 1 See Doc. 264 at 3 n.2 (“As discussed above, Marco Crane presented $603,418.69 in liquidated damages due to the loss of the dolly, cleanup costs, and repair costs on its strict 26 liability claim, along with $323,935.06 in lost profits. The total for the strict liability claim was $927,353.75. The jury also awarded all of Marco Crane’s damages on its warranty 27 claim, $131,459.71. When one adds $927,353.75 to $131,459.71, the total damage figure is $1,058,813.46.”); Id. at 4 (“If one multiplies $1,058,813.46 by .57, the resultant figure 28 is exactly the strict liability award: $603,523.67.”). 1 And that has to total 100 percent. Do not reduce the amount of the damages by the percent 2 attributable. If you find that any fault is attributable to the plaintiff, do not reduce the 3 amount of damages by that percentage. The Court will do it at a later time. Any Questions 4 about that?”).) Plaintiff’s speculation impermissibly posits that the jury ignored the Court’s 5 instructions not to deduct any amount from the damages on the products liability claim to 6 account for any fault by Marco Crane. 7 Further, the Court instructed the jury that Greenfield was not making a claim that 8 Marco Crane was comparatively negligent on Marco Crane’s warranty claim. (Tr. at 635 9 (“The defendant is not asserting that the plaintiff is comparatively at fault on the breach of 10 implied warranty claim. The plaintiff—the defendant is only asserting that as to the 11 products liability claim. Do you understand that?”).) Under Marco Crane’s speculation, 12 the jury reduced all of Marco Crane’s claimed damages by its comparative fault (43%), 13 including its claimed damages on its implied warranty claim. But if it did that, it also, 14 inexplicably, again awarded Marco Crane the full amount of its claimed damages 15 ($131,459.71) on the implied warranty claim as well as awarding it the amount of its 16 claimed damages on the implied warranty claim on the products liability claim reduced by 17 the amount of Marco’s comparative fault. Marco Crane thus speculates that the jury 18 intended to award twice the amount of damages Marco Crane claimed on its implied 19 warranty claim—once for the whole amount of the damages, and once for the amount of 20 the damages minus the percentage of fault attributed by the jury to Marco Crane on its 21 products liability claim. Such double-counting in the award would require vacating, if not 22 otherwise adjusting downward the jury award. This only serves to underline the need for 23 the rule prohibiting speculation about the basis of a jury’s damages award. 24 Nor does Marco Crane offer any other evidence that it claimed the amount of 25 $603,523.67 or any separate amounts that would aggregate to that amount from Greenfield 26 before trial. Under Arizona law, prejudgment interest begins when the creditor provides 27 the debtor with “sufficient information and supporting data so as to enable the debtor to 28 ascertain the amount owed.” Homes & Son Constr. Co. Inc. v. Bolo Corp., 526 P.2d 1258, 1 1261 (Ariz. Ct. App. 1974). Further, “prejudgment interest generally accrues from the date 2 of demand, not from the date of loss.” Alta Vista Plaza, Ltd. v. Insulation Specialists Co., 3 919 P .2d 176, 178 (Ariz. Ct. App. 1995). But Marco Crane never establishes that it made 4 a demand on Greenfield prior to trial for identifiable amounts that aggregate to the damages 5 the jury awarded on the products liability claim––there is no mention of $603,523.67 worth 6 of demands in its briefing on remand or elsewhere. Thus, it would not have been possible 7 for Greenfield to “calculate exactly the amount of damages without relying on the opinion 8 or discretion of a . . . jury.” Scottsdale Ins. Co. v. Cendejas, 220 Ariz. 281, 288, 205 P.3d 9 1128, 1135 (Ct. App. 2009). Thus, the principal award on which Marco Crane seeks 10 prejudgment interest was not liquidated, and, therefore, under Arizona law, no prejudgment 11 interest can be awarded on the products liability claim before the date of the jury’s verdict 12 on October 23, 2020. 13 B. Implied Warranty Claim 14 The Court previously awarded some prejudgment interest on the implied warranty 15 claim. It awarded prejudgment interest against the $23,481.36 principal amount expended 16 for testing and modifying the dolly, but it did not award prejudgment interest against the 17 $107,978.35 balance for lost profits because that amount was based on conservative 18 estimation and averaging, not a precise calculation. (Doc. 226 at 5.) Under the Ninth 19 Circuit’s decision, neither of these interest awards is subject to change. When it awarded 20 prejudgment interest on the award of $23,481.36, this Court also determined the 21 appropriate rate of interest under the statute due to the nature of the obligation involved. 22 That rate was ten percent. (Doc. 226 at 6.) Thus, interest on $23,481.36 of the total 23 judgment continues to accrue at ten percent per annum. Such a rate amounts to about $6.43 24 per day. Pursuant to the Court’s previous order, this interest will run from March 14, 2019, 25 until the date the jury rendered its verdict, October 23, 2020.2 26 2 “The general rule is that when an appellate court reverses a judgment of the district court 27 and directs that a money judgment in favor of a claimant be entered upon remand, prejudgment interest runs through the date of the newly-entered judgment.” Am. Tel. & 28 Tel. Co. v. Uni. Comp. Sys., Inc., 98 F.3d 1206, 1209 (9th Cir. 1996). There is, “however, [] an exception to this rule . . . when a legally sufficient determination of damages had been 1 C. Total Unliquidated Award 2 Finally, the Ninth Circuit’s memorandum decision also states that “Marco Crane is 3 entitled to prejudgment interest on the unliquidated portion of the jury’s award from the 4 date of the verdict because any “obligation [usually] becomes liquidated on the rendition 5 of a verdict in a sum certain.” The Court interprets this portion of the Ninth Circuit’s order 6 as awarding Marco Crane prejudgment interest on the unliquidated portion of the jury’s 7 award at the time it became liquidated, October 23, 2020, through the date of this Amended 8 Judgment. 9 The applicable interest rate is determined by the nature of the defendant’s obligation 10 to pay the liquidated damages at issue. A.R.S. § 44-1201(A), (B). In Arizona, prejudgment 11 interest is awarded at 10% under subsection (A), on a loan, “money lent at interest,” 12 indebtedness “something (as an amount of money) that is owed,” or other obligation, 13 “things of the same nature or class as ‘loan’ and ‘indebtedness.’” Metzler v. BCI Coca- 14 Cola Bottling Co. of L.A., Inc., 235 Ariz. 141, 145–46 (2014). Alternatively, the 15 prejudgment interest in subsection (B) is used when the amount “depends on a judgment 16 for its existence.” Id. at 146. To determine the applicable interest rate, “courts must look 17 to the fundamental nature of the underlying obligation to determine which subsection 18 applies.” Id. at 390. 19 In previously making this determination as it pertained to the liquidated amount 20 spent on modifications and testing done on the dolly prior to use, the Court determined that 21 ten percent was the appropriate rate of interest. It did so because the amount was necessary 22 to make a product usable that was purchased at a bargained-for price with the assumption 23 that the product would be usable. Thus, in its December Order, this Court applied 24 subsection (A)’s interest rate to Marco Crane’s liquidated damages on part of its breach of 25 implied warranty claim because that “cost [was] akin to a debt because Defendant was

26 made at the time of some prior judgment, which the judgment upon remand essentially reinstates.” Id. This exception is applicable here: the Court made a legally sufficient 27 determination with respect to the liquidated damages on the implied warranty claim that was unchanged by the Ninth Circuit’s order. Additionally, in its Brief, Marco Crane 28 expressed its present understanding that this prejudgment interest ran “from March 14, 2019, through the date of the verdict, October 23, 2020.” (Doc. 264 at 4.) 1 obligated to pay this cost pursuant to the contract.” (Doc. 266 at 6.) 2 However, Greenfield is obligated to pay the costs of Marco Crane’s damages on its 3 strict liability claim and the balance of the implied warranty claim pursuant to the jury’s 4 verdict. Consider, for example, that Marco Crane’s damages on its strict liability claim 5 arise from the loss of the dolly, cleanup costs, and crane repair costs, and lost profit 6 calculations on both the implied warranty and product liability claims. Unlike costs that 7 accrue when a party defaults on a debt or a loan obligation, Greenfield did not become 8 obligated to pay these costs because of any pre-existing legal arrangement with Marco 9 Crane that is analogous to a loan or “general indebtedness.” In fact, Greenfield would have 10 no independent legal obligation to pay Marco Crane’s liquidated damages but-for the 11 Court’s judgment enforcing the jury’s verdict. Thus, any prejudgment interest on this 12 award is “interest on any judgment,” which, under subsection (B), is set at a rate that is 13 “the lesser of ten percent per annum or at a rate per annum that is equal to one per cent plus 14 the prime rate as published by the board of governors of the federal reserve system in 15 statistical release H.15 or any publication that may supersede it on the date that the 16 judgment is entered.” A.R.S. § 44-1201(B). On October 23, 2020, the prime rate was 17 3.25%,3 making the applicable interest rate on amended judgment indebtedness 4.25% per 18 annum. 19 Accordingly, the cost associated with the balance of the damages on Marco Crane’s 20 claims ($711,502.02) is not akin to a debt, and the interest rate identified in A.R.S. 21 § 44-1201(B) applies 1% plus the prime rate of 3.25%, i.e., 4.25%, from the date of the 22 judgment, October 23, 2020, until the date of this Amended Judgment. This amount equals 23 approximately $82.85 per day. Under state law, this interest does not compound. Metzler, 24 235 Ariz. 141, 146 (2014) (“[T]he statute does not contemplate or provide for compound 25 interest.” (citing Westberry v. Reynolds, 134 Ariz. 29, 34 (App. 1982) (holding that prior 26 version of § 44–1201(A) mandates simple interest, not compound interest, for any legal 27 indebtedness)). 28 3 Selected Interest Rates, Fed. Rsrv., https://www.federalreserve.gov/releases/h15/. 1 CONCLUSION 2 For the reasons above, as of October 23, 2020, Marco Crane was entitled to a total 3|| Amended Judgment of $734,983.38. Marco Crane is further awarded prejudgment interest 4|| on $23,481.36 of that amount at a rate of ten percent (10%) per annum beginning on March 5|| 4, 2019 (this amounts to $6.43 per day running from March 4, 2019, to October 23, 2020). 6 || Marco Crane is also awarded prejudgment interest on the unliquidated balance of its award, 1.e., $711,502.02, at a rate of 4.25% per annum beginning on October 23, 2020 (this || amounts to $82.85 per day running from October 23, 2020, to the date of this Amended □□ Judgment). 10 Accordingly, 11 IT IS THEREFORE ORDERED that Plaintiff is awarded $603,523.67 on its 12]|| product liability claim, which, when combined with the $131,459.71 on its implied 13 || warranty claim, results in a total Amended Judgment of $734,983.38. 14 IT IS FURTHER ORDERED GRANTING Plaintiff prejudgment interest on 15 || $23,481.36 of its implied warranty award, at the rate of 10% per annum from March 4, 2019, to October 23, 2020 ($6.43 a day). 17 IT IS FURTHER ORDERED GRANTING Plaintiff prejudgment interest on the 18 || remaining $711,502.02 of judgment at the rate of 4.25% per annum from October 23, 2020, to the date of Amended Judgment ($82.85 a day). 20 Dated this 11th day of January, 2023. 21 - 22 A Whacrsay Sooo) 3 Chief United States District Judge 24 25 26 27 28

-8-