Opinion
01 Civ. 2709 (HB).
July 15, 2003.
OPINION ORDER
I. INTRODUCTION
In a judgment entered on March 15, 2002 against Panix Promotions Ltd., Panix of the U.S., Inc. and third-Party defendant Panos Eliades (collectively "Panix"), a jury awarded $6,821,159 to Lennox Lewis for breach of fiduciary duty, $396,082 for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962 et seq., and $56,400 for fraud. Lewis moves pursuant to Rule 59 of the Federal Rules of Civil Procedure and CLPR § 5001 for an order to: (i) amend the March 15, 2002 judgment to treble the $396,082 base amount of Lewis' RICO award to $1,188,246 and (ii) add prejudgment interest to the award from the date of May 1, 1999. Panix opposed Lewis' motion and cross-moved on April 17, 2002 to amend the judgment to reduce the total award to $6,821,159 on the basis that the jury intended for the amount it awarded Lewis for the RICO violation and the fraud claim to be subsumed within the amount it awarded for breach of fiduciary duty. On July 17, 2002, in Lewis' reply to Panix's opposition, he additionally cross-moved to have a judgment entered in the amount of $792,164, separate from the remaining $7,273,641 sought. No opposition was received in response to Lewis' cross-motion. This request was made in order to ensure enforceability of the majority of the verdict in Great Britain, which may not enforce the entire judgment if a portion of it is based on treble RICO damages. Panos Eliades lives and maintains most of his assets in Great Britain.
For the following reasons, Lewis' motion for treble damages on the RICO award and bifurcation of the judgment is granted. Lewis's motion for prejudgment interest from May 1, 1999 is granted-in-part and denied-in-part and Panix's cross-motion to amend the judgment is denied.
This Court assumes familiarity with the facts in Panix Promotions, Ltd. v. Lewis, 2002 WL 72932 (S.D.N.Y. Jan. 17, 2002), Panix Promotions, Ltd v. Lewis, 2002 WL 122302 (S.D.N.Y. Jan 22, 2002), and Panix Promotions, Ltd. v. Lewis, 2002 WL 1217672 (S.D.N.Y June 4, 2002) and will not repeat them herein.
II. DISCUSSION
A. Panix's Motion to Amend the Judgment
Panix contends that the judgment should be amended to $6,821,159 under the assumption that the jury intended to subsume the damages from the fraud and RICO claims within the damages for breach of fiduciary duty. Panix claims that to add all of the damage awards together, as the Court did in the judgment, would result in a double recovery. Rule 59 states in relevant part, "[a]ny motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." Fed.R.Civ.P. 59(e). Panix filed its motion to amend the judgment on April 17, 2002, however, well after the period to make its motion under Rule 59 expired. On this ground alone, I would deny Panix's cross-motion as untimely. See Fed.R.Civ.P. 6(b); Gilroy v. Erie-Lackawanna R. Co., 44 F.R.D. 3, 4 (S.D.N.Y 1968).
In any event, the jury was clearly instructed "to make the prevailing party whole once," and "to put it or him in the same position that it would have been in had there been no wrongful conduct." Trial Tr. at 2039. When the jury sought clarification of the verdict sheet, this Court advised the parties without objection that the jury would be instructed to "list [the] damage amount due for each claim." Burstein Affid. In Support of Cross-Motion ("Burstein Affid. II") Exh. E at 2089. The Court explicitly explained to the parties that it expected the jury to "give exactly what they believe [is due] for each claim" and that the Court would "add it up," as indeed reflected in the judgment. Id. Panix raised no objections at the time to the Court's instruction or explanation as to how damages would be totaled. Panix proffers no evidence to show that the jury departed from the Court's instructions to make the prevailing party whole only once. In view of Panix's failure to seek clarification of the verdict at the time it was rendered, failure to proffer any evidence that the jury disregarded this Court's instruction, failure to object to the Court's notice as to how damages would be totaled, and failure to timely move to amend the judgment, I must deny Panix's motion.
B. Prejudgment Interest on State Law Claims
Lewis claims that the prejudgment interest on damages from the breach of fiduciary duty and fraud should be calculated from May 1, 1999 because his damages were incurred at various times and this is the date by which he had paid Panix 50% of the management fees, and which he contends is a reasonable intermediate date under New York C.P.L.R. § 5001(b). Panix claims that interest should be calculated from either March 22, 2001, the date the action was commenced, or June 6, 2001, the date Lewis asserted his counterclaims, because there is no reasonable intermediate date from which to calculate the interest. Panix contends that it is impossible to choose an intermediate date upon which interest should accrue because Lewis' claims include actual damages, lost income, and return of management profits, and that determining a reasonable intermediate date based on which conduct the damages were awarded for and when that damage occurred would be speculative. See Hanover Data Servs., Inc. v. Arcata Nat'l Corp. v. Arcata, 115 A.D.2d 403, 404, 496 N.Y.S.2d 34 (1st Dep't 1985) (in the absence of a reasonable intermediate date, interest should be calculated from the date the action was commenced).
Prejudgment interest on the awards for breach of fiduciary duty and fraud is governed by New York C.P.L.R. § 5001, which states in relevant part:
(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance 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 computed from 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.
N.Y.C.P.L.R. § 5001 (emphasis added). Although an action for breach of fiduciary duty is generally considered of an equitable nature, "[e]ven on [such] a claim with equitable underpinnings . . . prejudgment interest [is] mandatory where the only relief sought was compensatory damages." Lewis v. S.L. E., Inc. 831 F.2d 37, 39 (2d Cir. 1987) (citing Spector v. Mermelstein, 485 F.2d 474, 481 (2d Cir. 1973)) (emphasis added). Prejudgment interest is generally granted "in order to compensate the injured party for the loss, over a period of time, of the use of the property to which it was entitled." Id. at 40. In determining the date from which to calculate the interest when damages were incurred at various times, courts have wide discretion in choosing a reasonable date. See Conway v. Icahn Co., Inc., 16 F.3d 504, 512 (2d Cir. 1994). In my view, May 1, 1999, the date by which Lewis had paid Panix 50% of the management fees, is a reasonable intermediate date from which to calculate the prejudgment interest for damages from the state law claims, i.e., $6,877,559. See, e.g., Decor by Nikkei Interna'l, Inc. v. Federal Republic of Nigeria, 497 F. Supp. 893, 912 (S.D.N.Y. 1980) (awarding interest on damages under § 5001 from the median date of the twelve-month period during which the plaintiff would have received payment but for the defendants' breach of contract); Trans. Displays Inc. v. Winston, 870 F. Supp. 74, 78 n. 6 (S.D.N.Y. 1994) (picking July 15 as a reasonable intermediate date when plaintiff had received funds throughout the month).
C. RICO Damages
1. Treble RICO Damages
Panix does not dispute that the RICO damages awarded to Lewis must be trebled. The RICO statute authorizes treble damages, and these damages are remedial, not punitive in nature. 18 U.S.C. § 1964(c); PacifiCare Health Sys., Inc. v. Book, 123 S.Ct. 1531, 1535 (2003) ("Indeed, we have repeatedly acknowledged that the treble-damages provision contained in RICO itself is remedial in nature"). The jury award of $396,082 for RICO damages was not trebled in the judgment, and thus, the amount awarded on the RICO claim must be increased to $1,188,246, as requested by Lewis.
"Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee . . ." 18 U.S.C. § 1964(c) (emphasis added).
2. Prejudgment Interest on RICO Damages
Lewis contends that he is also entitled to prejudgment interest on the RICO damages from May 1, 1999 because (i) he was deprived of the use of money that was rightfully his, (ii) Eliades's conduct was egregious, and (iii) the jury severely limited the amount of the RICO verdict. Panix asserts that the treble damages more than make Lewis whole and prejudgment interest on the RICO damages would be an undue windfall. In addition, Panix refutes the notion that the conduct was egregious, as evidenced by the fact that the jury refused to award punitive damages and only found clear and convincing evidence of fraud to the amount of $56,400.
The RICO statute is silent on the issue of prejudgment interest. Bingham v. Zolt, 810 F. Supp. 100, 101 (S.D.N.Y. 1993), Abou-Khadra v. Mahshie, 4 F.3d 1071, 1084 (2d. Cir. 1993). In Wickham Contracting Co. v. Local Union No. 3, 955 F.2d 831, 833 (2d Cir. 1992) the Second Circuit identified factors to consider in determining whether or not to award prejudgment interest. Namely, "the award should be a function of (i) the need to fully compensate the wronged party for actual damages suffered, (ii) considerations of fairness and the relative equities of the award, (iii) the remedial purpose of the statute involved, and/or (iv) such other general principles as are deemed relevant by the court." Bingham, 810 F. Supp. at 101 (citing Wickham, 955 F.2d at 833). Prejudgment interest on RICO damages may be awarded under circumstances in which the treble damages do not adequately compensate the plaintiff or the defendant acted unreasonably and unfairly to delay or obstruct the course of litigation. Bingham, 810 F. Supp. at 102, Mitland Raleigh-Durham v. Myers, 840 F. Supp. 235, 242 (S.D.N.Y. 1993).
Although Lewis contends that the jury "severely limited the amount of the RICO verdict," I find no basis to conclude that the amount awarded was so severely restricted so as to fail to adequately compensate Lewis after trebling. Further, in view of the jury's refusal to award punitive damages, I disagree with Lewis' claim that Eliades' conduct was so egregious as to warrant prejudgment interest on top of treble damages. Lewis' motion for prejudgment interest on the RICO claim is denied.
D. Bifurcated judgment
Although the cross-motion to further amend the judgment and bifurcate damages was arguably filed belatedly in conjunction with the reply to Panix's opposition to Lewis' motion, Panix submitted no opposition to Lewis' cross-motion. Although filed after the 10 day limit imposed by Rule 59(e), the cross-motion is not time-barred because it is essentially an amendment to Lewis' original motion to amend, that was timely filed within the 10 day limit imposed by Rule 59(e). See U.S. East Telecommunications, Inc. v. U.S. West Information Sys., Inc., 1993 WL 385810, at *5 (S.D.N.Y. 1993) ("Despite the unequivocal, jurisdictional requirement that . . . Rule 59 motions must be brought within ten days of entry of judgment, courts have allowed that once such motions are timely filed, later amendments of those motions, even those which raise new grounds for relief, will be permitted."); see also Meriwether v. Coughlin, 879 F.2d 1037, 1040-42 (2d Cir. 1989) (allowing a timely oral motion under Rule 59(b) to preserve the right to file written amendments after the 10 day limit had expired). Lewis' unopposed cross-motion is granted.
Great Britain, where Panos Eliades lives and maintains most of his assets, apparently may not honor the judgment if it includes treble damages, such as those provided in the RICO statute. Lewis seeks a separate judgment to ensure enforceability of the remainder of the judgment.
III. CONCLUSION
For the foregoing reasons, Lewis's motion for treble damages and bifurcated judgment is granted, and the motion for prejudgment interest is granted-in-part and denied-in-part. Panix's cross-motion for amended judgment is denied. The Clerk of the Court is directed to enter two judgments nunc pro tunc as of the date of the original entry of judgment against Panix, one for $792,164 and one for $7,273,641 with interest to be calculated from May 1, 1999 to the date of the verdict, February 14, 2002, based on the sum of $6,877,599, corresponding to the damages awarded for the state law claims.