Total E&P USA, Inc. v. Marubeni Oil & Gas (USA), Inc. et al

MOTION for Prejudgment and Post-Judgment Interest

S.D. Tex.February 25, 2019

1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION TOTAL E&P USA, INC. * CIVIL ACTION NO. Plaintiff * 4:16-cv-02674 * v. * JUDGE VANESSA GILMORE * MARUBENI OIL & GAS (USA) INC. * Defendant * ******************************************* MARUBENI OIL & GAS (USA) LLC’S MOTION FOR PREJUDGMENT AND POST-JUDGMENT INTEREST Marubeni Oil & Gas (USA), LLC (“MOGUS”) hereby submits this Motion for Prejudgment and Post-Judgment Interest. MOGUS requests an award of $2,737,930 in prejudgment interest through February 25, 2019,1 plus any additional interest that accrues between February 25, 2019 and the date of the entry of judgment. MOGUS also requests that this Court find that it is entitled to post-judgment interest from the date of judgment until Total fully pays the judgment. INTRODUCTION After a nine-day trial in this matter, the jury returned a verdict finding that MOGUS is entitled to damages from Total E&P USA, Inc. (“Total”) through June 30, 2017 in the amount of $21,649,695.36.2 The parties agreed to submit all issues related to interest to the Court after the jury’s verdict. Under the MC 305 Operating Agreement (the “MC 305 OA”) which governs this 1 As noted below, this interest calculation is based upon the jury verdict of $21,649,695.36. MOGUS reserves the right to seek additional interest that may be due in the event the verdict or judgment is modified. If interest were calculated based upon the $33,066,695.36 invoiced to Total for costs incurred as of June 2017, Total would owe interest in the amount of $4,082,790 as calculated through February 25, 2019. See Hartman Declaration, Exhibit A hereto. 2 Dkt. 293. Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 1 of 6 2 dispute, MOGUS is entitled to recover prejudgment interest from Total.3 MOGUS is also entitled to post-judgment interest pursuant to 28 U.S.C. § 1961 once judgment is entered in this case. LAW AND ARGUMENT A. MOGUS is entitled to prejudgment interest in the amount of $2,737,930 as of February 25, 2019. It is well-settled that this Court has the authority to award prejudgment interest.4 According to the United States Supreme Court, an award of prejudgment interest constitutes “an element of complete compensation.”5 The Fifth Circuit has also held that “the only way the wronged party can be made whole is to award him interest from the time he should have received the money.”6 Here, MOGUS is entitled to recover prejudgment interest from Total under the MC 305 OA. Specifically, in Exhibit C, Section I.3.B of the MC 305 OA, the parties agreed: [E]ach Party shall pay its proportion of all bills within fifteen (15) days of receipt date. If payment is not made within such time, the unpaid balance shall bear interest compounded monthly using the U.S. Treasury Bill three month rate plus 3% in effect on the first day of the month for each month that the payment is delinquent or the maximum contract rate permitted by the applicable usury laws in the jurisdiction in which the Joint Property is located, whichever is the lesser, plus attorney’s fees, court costs, and other costs in connection with the collection of unpaid amounts. Interest shall begin accruing on the first day of the month in which the payment was due.7 3 MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA). 4 See, e.g., Payne v. Panama Canal Co., 607 F.2d 155, 166 (5th Cir. 1979); Oil, Chemical & Atomic Workers Int’l Union v. American Cyanamid Co., 546 F.2d 1144 (5th Cir. 1977). 5 West Virginia v. United States, 479 U.S. 305, 310 (1987). 6 Louisiana & Arkansas Ry. Co. v. Export Drum Co., 359 F.2d 311, 317 (5th Cir. 1966); see also Millcraft-SMS Servs., LLC v. United Steel Workers of Am., 346 F. Supp. 2d 1176, 1187 (N.D. Ala. 2004). 7 MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA) (emphasis added). On December 22, 2017, MOGUS filed its Motion for Partial Summary Judgment on Liability, seeking “summary judgment finding TOTAL liable to pay its 50% share of decommissioning expenses associated with the MC 305 Wells, plus interest, costs, and attorneys’ fees.” Dkt. 151, at ECF p. 39 (emphasis added). MOGUS specifically referenced the MC 305 Operating Agreement’s interest provision which governs its claim. Id. at ECF p. 11, n.13 (citing ¶ I.3.B. of Exhibit C to the MC 305 OA). This Court granted MOGUS’s motion. Dkt. 230. Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 2 of 6 3 Consistent with the MC 305 OA, MOGUS’s accounting/COPAS expert, Oscar Hartman, has calculated the prejudgment interest amount due and owing to MOGUS under the terms of the foregoing provision. Mr. Hartman’s calculations are supported by his declaration, attached as Exhibit A hereto. As shown therein, Mr. Hartman calculated prejudgment interest based upon the jury verdict of $21,649,695.36 with interest accruing from the dates that payments were due from ATP as successor-in-interest to Total. Based on Mr. Hartman’s calculations, MOGUS is entitled to recover prejudgment interest from Total in the amount of $2,737,930 through February 25, 2019. MOGUS is also entitled to additional prejudgment interest that accrues between February 25, 2019 and the date of the entry of judgment. MOGUS believes that Total will argue that interest should not have accrued until MOGUS began tendering invoices directly to Total (as opposed to ATP). MOGUS disputes Total’s position as being contrary to the MC 305 OA because Total had previously assigned its rights and interests to ATP and, thus, payment was due under Section I.3.B when MOGUS invoiced ATP. Nevertheless, MOGUS has requested that Mr. Hartman also calculate interest based on the dates MOGUS tendered invoices to Total. Should the Court accept Total’s view of when interest accrues, MOGUS would be entitled to recover prejudgment interest from Total in the amount of $2,532,261 through February 25, 2019 if the interest rates provided in the MC 305 OA were to apply. Alternatively, to the extent that Total’s position is contrary to the MC 305 OA, the prevailing prejudgment interest rate in Alabama may apply, which is 6% per annum.8 If that rate applied here, MOGUS would be entitled to $3,503,885 in interest. See Hartman Declaration, Exhibit A hereto. 8 See Hand Arendall, LLC v. Joiner, 2012 WL 4323190, at *1 (S.D. Ala. Sept. 20, 2012); Ala. Code §§ 8-8-1 and 8- 8-8. Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 3 of 6 4 B. MOGUS is entitled to post-judgment interest. MOGUS also seeks post-judgment interest calculated in accordance with 28 U.S.C. § 1961 from the date that the Court enters judgment until Total satisfies the judgment. That section provides as follows: (a) Interest shall be allowed on any money judgment in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment. The Director of the Administrative Office of the United States Courts shall distribute notice of that rate and any changes in it to all Federal judges. (b) Interest shall be computed daily to the date of payment except as provided in section 2516(b) of this title and section 1304(b) of title 31, and shall be compounded annually.9 MOGUS therefore requests that the Court find that it is entitled to post-judgment interest from the date of judgment until paid. CONCLUSION AND RESERVATION OF RIGHTS MOGUS and Total agreed in their contract that interest accrued in collecting Total’s unpaid share of decommissioning costs is recoverable. As such, MOGUS respectfully requests that this Court award MOGUS $2,737,930 in prejudgment interest through February 25, 2019, plus any additional interest that accrues between February 25, 2019 and the date of the entry of judgment. MOGUS further requests that this Court find that it is entitled to post-judgment interest from the date of judgment until Total satisfies the judgment. MOGUS also reserves the right to seek 9 28 U.S.C. § 1961. The post-judgment interest rate is currently 2.55% for judgments entered through February 24, 2019. See https://www.txs.uscourts.gov/page/post-judgment-interest-rates Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 4 of 6 5 additional interest that may be due in the event the verdict or judgment is modified to reflect additional amounts due and owing from Total. Respectfully submitted, LOOPER GOODWINE P.C. /s/ Paul J. Goodwine Paul J. Goodwine (Attorney-in-Charge) LA Bar No. 23757; SDTX ID No. 437800 Holly O. Thompson LA Bar No. 31277; SDTX ID No. 2953818 Taylor P. Mouledoux LA Bar No. 31889; SDTX ID No. 1581156 Taylor P. Gay LA Bar No. 35140; SDTX ID No. 3251449 650 Poydras Street, Suite 2400 New Orleans, Louisiana 70130 Telephone: (504) 503-1500 Telecopier: (504) 503-1501 pgoodwine@loopergoodwine.com hthompson@loopergoodwine.com tmouledoux@loopergoodwine.com tgay@loopergoodwine.com -and- SCHONEKAS, EVANS, McGOEY & McEACHIN, LLC Kyle Schonekas LA Bar No. 11817; SDTX ID No. 305350 Joelle F. Evans LA Bar No. 23730; SDTX ID No. 436275 Andrea V. Timpa LA Bar No. 29455; SDTX ID No. 3362943 909 Poydras Street, Suite 1600 New Orleans, LA 70112 Telephone: (504) 680-6050 Telecopier: (504) 680-6051 kyle@semmlaw.com joelle@semmlaw.com andrea@semmlaw.com Attorneys for Marubeni Oil & Gas (USA) LLC Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 5 of 6 6 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing pleading has been served on all counsel of record for the parties via e-mail, FedEx and/or by electronic filing in the Court’s electronic filing system on this 25th day of February 2019. /s/ Paul J. Goodwine Paul J. Goodwine Case 4:16-cv-02674 Document 305 Filed on 02/25/19 in TXSD Page 6 of 6