Lyons v. Clancy ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Paul Lyons, et al., No. CV-20-00866-PHX-MTL 10 Plaintiffs, ORDER 11 v. 12 William Clancy, et al., 13 Defendants. 14 15 Before the Court is Plaintiffs Paul and Marilyn Lyons’ Motion to Amend Default 16 Judgment Re: Post-Judgment Interest. (Doc. 24.) Plaintiffs move to amend the Court’s 17 prior order granting default judgment, pursuant to Rule 59 of the Federal Rules of Civil 18 Procedure,1 to include an award of post-judgment interest. Defendants have not responded. 19 The Court rules as follows.2 20 I. 21 The Court previously granted Plaintiffs’ motion for default judgment against 22 Defendants William and Judith Clancy, Jere Clancy, Ole Gray Mare, LLC, and Clancy 23 Company PLLC. (Doc. 22.) It awarded $126,620 in compensatory damages and $50,000 24 in punitive damages. The order denied Plaintiffs’ motion in all other respects. (Id. at 18.) 25 Plaintiffs now assert that the Court “failed to include the applicable interest rate,” pursuant 26 to A.R.S. § 44-1201(B), in its prior order. (Doc. 24 at 2.) 27 1 Plaintiffs also move, alternatively, under Rule 60. (Id. at 1.) 2 2 The Court believes that oral argument would not significantly aid the decisional process. 28 See Fed. R. Civ. P. 78(b) (court may decide motions without oral hearing); LRCiv 7.2(f) (same). 1 In connection with Plaintiffs’ motion for default judgment, and to determine 2 damages under Rule 55(b)(2)(B), the Court ordered Plaintiffs to file a brief indicating the 3 ways in which they intended to “prove damages” and an “assessment of the factors 4 addressed in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).” (Doc. 18.) Further, 5 the Court ordered Plaintiffs to “submit a proposed form of judgment, which includes the 6 exact amount of damages Plaintiffs are seeking under each theory of damages. Any 7 damages not included in the proposed judgment will be deemed to be waived.” (Id.) 8 Plaintiffs’ resulting brief justified the compensatory and punitive damages sought, 9 which the Court ultimately awarded. (Doc. 19 at 3–5.) It included only one passing 10 reference to interest: “[t]here is no doubt that Defendants breached their agreements with 11 Plaintiffs and at a minimum owe Plaintiffs $126,260 plus interest, attorney’s fees and 12 costs.” (Id. at 3.) The proposed judgment included, without justification, an award of “post- 13 judgment interest on the total amount of damages, plus attorney’s fees and costs at the rate 14 of 10%.” (Doc. 20 at 3.) Plaintiffs provided no authority in support of this request. 15 II. 16 Rule 59(e) provides that a party may move to amend a judgment within 28 days of 17 its entry.3 Fed. R. Civ. P. 59(e). The Court may amend the judgment if “1) the motion is 18 necessary to correct manifest errors of law or fact upon which the judgment is based; 2) 19 the moving party presents newly discovered or previously unavailable evidence; 3) the 20 motion is necessary to prevent manifest injustice; or 4) there is an intervening change in 21 controlling law.” Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 22 2003) (italics and quotations omitted). A district court has “considerable discretion” in 23 granting or denying Rule 59(e) motion. McDowell v. Calderon, 197 F.3d 1253, 1255 n.1 24 (9th Cir. 1999) (citation omitted). 25 III. 26 The Court does not agree with Plaintiffs that it “failed” to include post-judgment 27 interest in the original order. (Doc. 24 at 1.) Plaintiffs carried the burden of proving their 28 3 Plaintiffs’ motion was filed less than 28 days after the Court’s January 8, 2021 order, and was therefore timely under Rule 59(e). 1 requests for relief. See Bd. of Trustees. of the Boilermaker Vacation Tr. v. Skelly, Inc., 389 2 F. Supp. 2d 1222, 1226 (N.D. Cal. 2005). The entry of default judgment is entirely “within 3 the discretion of the court.” Lau Ah Yew v. Dulles, 236 F.2d 415, 416 (9th Cir. 1956). The 4 Court also will not “manufacture arguments” for parties. Greenwood v. Fed. Aviation 5 Admin., 28 F.3d 971, 977 (9th Cir. 1994). Plaintiffs did not justify an award of post- 6 judgment interest, and the Court accordingly did not award it. See Trident Inv. Partners 7 Inc. v. Evans, No. CV-20-01848-PHX-DWL, 2021 WL 75826, at *10 (D. Ariz. Jan. 8, 8 2021) (“[Plaintiff] does not provide any justification for its alleged entitlement to post- 9 judgment interest. The Court thus declines to award post-judgment interest.”). 10 Further, Plaintiffs do not invoke the correct legal authority in the present motion. 11 Plaintiffs move for post-judgment interest pursuant to A.R.S. § 44-1201(B), a state law 12 providing that, unless specified in a statute or the parties’ contract, “interest on any 13 judgment shall be at the lesser of ten per cent per annum or at a rate per annum that is equal 14 to one per cent plus the prime rate as published by the board of governors of the federal 15 reserve system[.]” Plaintiffs argue that, because the “current applicable rate is 16 4.25% . . . [i]t would be unjust not to include post-judgment interest since Arizona law 17 clearly provides for such.” (Doc. 24 at 2.) However, “[i]n federal diversity actions, Arizona 18 law generally determines the rate of prejudgment interest but post-judgment interest is 19 governed by federal law.” Thompson v. StreetSmarts, Inc., No. CV-10-1885-PHX-LOA, 20 2011 WL 2600744, at *13 (D. Ariz. June 30, 2011). See also AT&T Co. v. United Computer 21 Sys., Inc., 98 F.3d 1206, 1209 (9th Cir. 1996) (“In diversity actions, state law determines 22 the rate of prejudgment interest, and postjudgment interest is governed by federal law.”).4 23 Plaintiffs assert that diversity jurisdiction exists in this case. (Doc. 1 at 2; Doc. 17.) They 24 therefore should have requested post-judgment interest under federal, rather than state, law. 25 Despite these issues, an award of post-judgment interest in civil cases is automatic 26 upon the award of a money judgment under federal law. Pursuant to Section 1961(a), 27 “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district 28 4 The pending motion does not request pre-judgment interest, and accordingly the Court will not address it. (Doc. 24.) 1 court.” 28 U.S.C. § 1961(a) (emphasis added). “[E]ven when a money judgment does not 2 explicitly contain a post-judgment interest award, such an award, at the rate specified in 3 the statute, is granted.” Strategic Diversity, Inc. v. Alchemix Corp., No. CV-07-929-PHX- 4 GMS, 2014 WL 12643318, at *1 (D. Ariz. Aug. 15, 2014). Accordingly, “it was not 5 necessary to include an explicit post-judgment interest award in the judgment, and its 6 absence will not harm Plaintiff.” Id. See also Barnard v. Theobald, 721 F.3d 1069, 1078 7 (9th Cir. 2013) (“Under 28 U.S.C. § 1961, the award of post judgment interest on a district 8 court judgment is mandatory.”). 9 Upon Plaintiffs’ request, and seeing no opposition from Defendants, the Court will 10 grant Plaintiffs’ motion to the extent that the judgment will be amended to specify an award 11 of post-judgment interest at the applicable federal rate, to be calculated from the date of 12 the Court’s original January 8, 2021 judgment. (Doc. 23.) See 28 U.S.C. § 1961(a) (post- 13 judgment interest is calculated “from the date of the entry of judgment”); United States v. 14 Hougham, 301 F.2d 133, 135 (9th Cir. 1962) (“[P]ost-judgment interest should be 15 calculated from the date of the entry of the judgment in which the money damages, upon 16 which interest is to be computed, were in fact awarded.”). 17 IV. 18 Accordingly, 19 IT IS ORDERED that Plaintiffs’ Motion to Amend Default Judgment Re: Post- 20 Judgement Interest (Doc. 24) is granted to the extent that the Court’s prior Order and 21 Judgment (Docs. 22, 23) are amended to include an award of post-judgment interest 22 pursuant to 28 U.S.C. § 1961. 23 IT IS FURTHER ORDERED awarding Plaintiffs post-judgment interest at the 24 federal statutory rate pursuant to 28 U.S.C. § 1961, effective January 8, 2021. 25 IT IS FINALLY ORDERED directing the Clerk of the Court to enter an amended 26 judgment accordingly. This matter shall remain closed. 27 / / 28 / / 1 Dated this 20th day of April, 2021. 2 Wichal T. dhurdle Michael T. Liburdi 5 United States District Judge 6 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _5-