Telefonica S.A. v. Millicom Intl. Cellular S.A.

2024 NY Slip Op 33315(U)

Opinion

Telefonica S.A. v Millicom Intl. Cellular S.A. 2024 NY Slip Op 33315(U) September 19, 2024 Supreme Court, New York County Docket Number: Index No. 651838/2020 Judge: Andrew Borrok Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 651838/2020 NYSCEF DOC. NO. 767 RECEIVED NYSCEF: 09/19/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 53 ----------------------------------------------------------------------------------- X

TELEFONICA S.A., INDEX NO. 651838/2020

Plaintiff, MOTION DATE 03/27/2024 - V - MOTION SEQ. NO. 009 MILLICOM INTERNATIONAL CELLULARS.A., MILLICOM SPAIN S.L. DECISION+ ORDER ON Defendant. MOTION ----------------------------------------------------------------------------------- X

HON. ANDREW BORROK:

The following e-filed documents, listed by NYSCEF document number (Motion 009) 733, 734, 735, 736, 737,738,739,740,741,744 were read on this motion to/for RENEW/REARGUE/RESETTLE/RECONSIDER

Upon the foregoing documents, Millicom International Cellular S.A. and Millicom Spain S.L.

(collectively, Millicom)'s motion (Mtn. Seq. No. 009) to reargue, renew, and modify the Court's

Prior Decision (hereinafter defined) with respect to prejudgment interest is DENIED.

Simply put, CPLR 5001 provides for prejudgment interest to be "recovered upon a sum awarded

because of a breach ofperformance of a contract' (CPLR 5001 [a] [emphasis added]) and that

"[i]nterest shall be computed from the earliest ascertainable date the cause of action existed"

(CPLR 5001[b]).

The sum amount awarded in the Prior Decision [hereinafter defined] because of a breach of

performance of the SPA [hereinafter defined] was $623 million and prejudgment interest was

awarded from the date of the breach - i.e., the earliest ascertainable date the cause of action

existed. It is irrelevant under CPLR 5001 that the principal amount of the judgment was 651838/2020 TELEFONICA S.A. vs. MILLICOM INTERNATIONAL Page 1 of 7 Motion No. 009

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ultimately reduced to approximately $60,571,987 1 based on Telelfonica S.A.'s subsequent

mitigation cover transaction which occurred some approximately 15 months after Millicom

breached the SPA as to the award of prejudgment interest between the time that the breach

occurred and the time that the cover transaction took place.

The statute does not say that prejudgment interest is to be awarded on the sum awarded based on

the breach of performance of a contract "after deducting any other future_amounts received or net

of any future mitigation amounts received" by the non-breaching party. It does not say that or

anything like that. This in fact would frustrate the purpose of the statute which is designed to

make the non-breaching party whole (Brushton-Moira Cent. School Dist. v Fred H Thomas

Assoc., P.C., 91 NY2d 256,261 [1998] "Damages are intended to return the parties to the point

at which the breach arose and to place the nonbreaching party in as good a position as it would

have been had the contract been performed."; NML Capital v Republic ofArgentina, 17 NY3d

250, 266 [2011] holding that the purpose of CPLR 5001 is to provide "for the loss of use of

money the [non-breaching party] was owed during a particular period of time"; see also Spodek v

Park Prop. Dev. Assoc., 96 NY2d 577, 581 [2001] "CPLR 5001 (a) permits a creditor to recover

prejudgment interest on unpaid interest and principal payments awarded from the date each

payment became due under the terms of the promissory note to the date liability is established.

This application not only comports with the plain language of the statute that mandates the award

of interest to verdict in breach of contract actions, but also is consistent with our long-standing

recognition that the purpose of awarding interest is to make an aggrieved party whole" [internal

citations omitted]). The benefit that Millicom received based on Telefonica's subsequent cover

1 The parties have agreed that this is appropriate amount of the delta between the price and the cover transaction in certain competing proposed judgments submitted to the Court. 651838/2020 TELEFONICA S.A. vs. MILLICOM INTERNATIONAL Page 2 of 7 Motion No. 009

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transaction is reduction of the principal amount due, not elimination of prejudgment interest from

the earliest ascertainable date the cause of action existed (i.e., the time the breach occurred) on

the sum awarded because of the breach ofperformance of the contract until such cover

transaction took place. 2

A motion for leave to reargue must be based on matters of fact or law allegedly overlooked or

misapprehended by the court in determining the prior motion but cannot include any matters of

fact not offered on the prior motion (CPLR 2221 [d]). A motion for leave to reargue is not

intended to provide an unsuccessful party with successive opportunities to present arguments

different from those originally presented (Setters v AI Prop. and Dev. (USA) Corp., 139 AD3d

492, [1st Dept 2016], Foley v Roche, 68 AD2d 558, 567-68 [1st Dept 1979]). Nor is a motion to

reargue intended "to serve as a vehicle to permit the unsuccessful party to argue once again the

very questions previously decided" (Foley, 68 AD2d at 567). Where a motion to reargue is

addressed to correct purported factual errors, the factual errors must be material and

unmistakable (Mendez v Queens Plumbing Supply, Inc., 39 AD3d 260,260 [1st Dept 2007]).

A motion for leave to renew "shall be based upon new facts not offered on the prior motion that

would change the prior determination or shall demonstrate that there has been a change in the

law that would change the prior determination; and shall contain reasonable justification for the

failure to present such facts on the prior motion" (CPLR § 2221[e]). Although motions to renew

are addressed to the court's sound discretion (William P. Pahl Equip. Corp. v Kassis, 182 AD2d

2 For the avoidance of doubt (and although not the subject of this motion), the Court notes that from the time that the cover transaction took place, the Court shall award prejudgment interest only on the net amount due - i.e., the $60,571,987 representing the delta between the price and the cover transaction. Both parties have agreed 651838/2020 TELEFONICA S.A. vs. MILLICOM INTERNATIONAL Page 3 of 7 Motion No. 009

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22, 27 [1st Dept 1992]), such motions should be "granted sparingly" and are not a second chance

for parties who have not exercised due diligence submitting facts in the prior motion (Beiny v

Wynyard (In re Beiny), 132 AD2d 190, 209-210 [1st Dept 1987]). Failure to include facts

known to the movant at the time of the prior motion but not included in the movant' s prior

submissions cannot serve as the basis for a renewal motion.

As relevant, by Decision and Order dated February 13, 2024 (the Prior Decision; NYSCEF Doc.

No. 721), the Court granted Telefonica's motion for partial summary judgment (and denied

Millicom's competing motion for summary judgment) holding that there were no issues of fact

that Millicom breached the Share Purchase Agreement (the SPA; NYSCEF Doc. No. 356) when

it failed to close in May, 2020, and awarded the sum of $623 million of damages caused by

Millicom's breach. Because Telefonica had some 15 months later entered into a cover

transaction for $533 million (and in the meantime received a substantial dividend as a result of

its continued ownership of Telefonica's Costa Rican subsidiary), the Court afforded Millicom a

credit in such amount by reducing the principal amount then due and indicated that Telefonica

could submit judgment on notice.

As relevant, with respect to prejudgment interest from the time period from the breach up

until the cover transaction, the Court applied CPLR 5001 and held that Telefonica was entitled

to prejudgment interest "on the sum awarded because of the breach" of $623 million and that

Telefonica was entitled to prejudgment interest running from the earliest possible date that the

cause of action existed (i.e., the date of the breach) up until the cover transaction took place.

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Millicom now moves for renewal to extent that the Court awarded prejudgment interest based on

any legal theory other than statutory prejudgment interest pursuant to CPLR 5001 and to reargue

the Court's prejudgment interest award, arguing that this award contravenes the plain language

of CPLR 5001. The arguments fail.

As discussed above, with respect to prejudgment interest, the basis for the Court's Prior Decision

was CPLR 5001 - not any other legal theory. Inasmuch as this is the only basis upon which

Millicom seeks renewal, the branch of the motion seeking renewal is denied.

Reargument is also not appropriate because Millicom fails to show that the Court overlooked or

misapplied CPLR 5001.

As discussed above, CPLR 5001 provides in relevant part:

(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach ofperformance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion.

(b) Date from which computed. Interest shall be computedfrom the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.

(c) Specifying date; computing interest. The date from which interest is to be computed shall be specified in the verdict, report or decision. If a jury is discharged without specifying the date, the court upon motion shall fix the date, except that where the date is certain and not in dispute, the date may be fixed by the clerk of the court upon affidavit. The amount of interest shall be computed by the clerk of the court, to the date the verdict was rendered or the report or decision was made, and included in the total sum awarded.

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(CPLR 5001 [emphasis added]).

The breach occurred when Millicom improperly refused to close. This is the "earliest

ascertainable date the cause of action existed" (CPLR 5001 [b ]). At that point in time, Millicom

owed Telefonica the $623 million contract price. This is the "sum awarded because of a breach

of performance of a contract" (CPLR 5001[a]).

Subsequently, some 15 months later, Telefonica mitigated its damages by entering into a

replacement transaction for approximately $61 million less. The amount of the judgment is

properly reduced by the amount of the mitigation. As discussed above, this is the benefit that

Millicom properly receives. The argument that they are entitled to wipe out the interest from the

date of the breach to the point of the cover transaction is both contrary to the statute's express

language and its purpose and would afford Millicom a windfall. Making Telefonica whole

requires an award of prejudgment interest as to the sum awarded because of the breach from the

earliest ascertainable date the cause of action existed- i.e., the date of the breach. To hold

otherwise, twists logic beyond recognition.

For the avoidance of doubt, it does not matter that the parties' experts agree that the principal

amount due Telefonica is reduced by the mitigation of the cover transaction. Lastly, the Court

notes that the Court cited Trehan as persuasive authority as having correctly applied the principle

that the loss of the use of the money is a harm for which the non-breaching party must be

compensated by an award of prejudgment interest (NYSCEF Doc. No. 721 at 5, footnote 3;

Trehan v Tuli, 2016 WL 6775501, at *5 [SDNY Aug. 23, 2016], report and recommendation

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adopted, 2016 WL 6778802 [SDNY Nov. 15, 2016] "The value of the paintings is sufficient to

reduce the damages the defendants must pay, but it is not sufficient to compensate Trehan for his

inability to use the funds that the defendants should have returned to him.").

The Court has considered the parties' remaining arguments and found them unavailing.

Accordingly, it is hereby

ORDERED that Millicom's motion for reargument or renewal (Mtn. Seq. No. 009) is denied.

9/19/2024 DATE ANDREW BORROK, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED 0 DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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