Free Opening Brief in Support - District Court of Delaware - Delaware

Case 1:04-cv-00163-GMS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
DONALD M. DURKIN CONTRACTING
INC.

Plaintif
vs.

CITY OF NEWARK , et aI. Defendants
and

: CASE NO. 04- 0163- GMS

CITY OF NEW ARK Third-Party
vs.

Plaintiff

DONALD M. DURKIN CONTRACTING FEDERAL INSURANCE COMPANY and URS CORPORATION Third-Party Defendants
ST. PAUL FIRE & MARIE INSURANCE
COMP ANY
Intervenor

OPENING BRIEF OF PLAINTIFF IN SUPPORT OF MOTION TO AMEND JUDGMENT TO ADD INTEREST PURUSANT TO FEDERAL RULE OF CIVIL PROCEDURE 59(e)
POWELL, TRACHTMAN, LOGAN, CARRE & LOMBARDO, P. Paul A. Logan Delaware Supreme Court ID #3339 475 Allendale Road , Suite 200
King of Prussia, P A 19406 Telephone: 610- 354- 9700 Telefacsimile: 610- 354- 9760
Attorneys for Plaintif and Third Party

Defendant Donald M Durkin Contracting
Dated: October 25

2006

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.... ..... ............................ .,............ ............................ ......... ....., .... .......... ...................., ............................................... ....................... ..... ....... ........ ............... ..,. ..........

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TABLE OF CONTENTS
Pa2e
T ABLE OF CfT A TIONS ............................................................................................................ ii

NATURE AND STAGE OF PROCEEDINGS.............

II.

SUMMARY OF ARGUMENT
CONCISE STATEMENT OF FACTS ............................................................................
ARGUMENT.... ......

III.
IV.

Durkin is Entitled to Collect Pre- Judgment Interest........................................ 3
Durkin is Entitled to Collect Pre- Judgment Interest at a Rate 21 and 23...... of 5% Per Annum on Pay Applications Nos. 18, 19,

Durkin is Entitled to Collect Pre-Judgment Interest for the Compensatory Damages for Unpaid Cost of Work As Provided
Under 6 Del.

2301(a) ............................................................................... 5

Durkin is Entitled to Collect Pre- Judgment Interest for the Damages Awarded for Civil Rights Violations As Provided Under 28 U.
1961........................................................................................................... 6

Durkin is Entitled to Collect Post-Judgment Interest .......................................
CONCLUSION AND RELIEF SOUGHT .......................................................................

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TABLE OF CITATIONS
Pa2e
CASES
Brandywine 100 Corporation

New Castle County, et aI. 541 A.2d 598 , 1988 Del. LEXIS 120 (Del. Sup. Ct. 1988) ........................................................................................
v.

Chrysler Corporation

Chaplake Holdings, Ltd., et al. 822 A.2d 1024 , 2003 Del. LEXIS 269 (Del. Sup. Ct. 2003) ...................................................................................
v. v.

Citadel Holding Corp.

Roven 603 A.2d 818 (Del. 1992) ...........................................................

Citrin

v.

International Airport Centers LLC, et aI.,

2006 Del. Ch. LEXIS 166 (Del. Ct.

Ch. 2006)............................................................................................................................
DeLaCruz v.

Pruitt 590 F. Supp. 1296 , 1984 U. S. Dist. LEXIS 20675 (N. D. Ind. 1984) .............
v.

Golden State Transit Corp.

Los Angeles 773 F. Supp. 204 1991 U. S. Dist. LEXIS 11798 (C. D. Cai. 1991)........................................................................................................ 7
v.

Jackson

Madric 2006 Del. Super. LEXIS 49 (Del. Supr. Ct. 2006)...........................................
v. Royal MacCabees Life Insurance Company,

McCalla

269 F. 3d 1128 2004 U. S. App.

LEXIS 10796 (9th Cir. 2004) ..............................................................................................
Metropolitan Mutual Fire and Insurance Co.

Carmen Holding Co. 220 A.2d 778 (Del. 1966)..........................................................................................................................
v.

Miner

v.

City of Glens Falls 999 F. 2d 655 , 1993 U. S. App. LEXIS 19416 (2d Cir. 1993) ...........
v.

Moskowitz

Mayor and Council of Wilmington 391 A.2d 209, 1978 Del. LEXIS 784

(Del. Sup. Ct. 1978)............................................................................................................
Savarese, et al.

883 F.2d 1194 , 1989 U.S. App. LEXIS 12983 v. Agriss, et al., (3d. Cir. 1989)...................................................................................................................... 7
v.

Springer

Henry, et. ai 2004 WL 2127172 (D: Del. Sept. 16 2004) ....................................... , 7

State Farm Mutual Automobile Insurance Company, et aI. v. Baron, et aI., 2002 Del. P. LEXIS 66 (Del. Ct. Com. Pis. 2002) ..........................................................................
United States of America et aI. v. Star Bright Construction Company, et al. 848 F. Supp. 1161 , 1994 U.S. Dist. LEXIS 4240 (D. Del. 1994)........................................

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Pa2e

STATUTES
6 Del. C. g 2301 ..............................................................................................................................
6 Del. C. g 2301 (a)................................................................................................................... , 4 , 6
28 U . S. C. g 1961 ...................................................................................................................... , 2 , 8

28 U. S. C. g 1961 (a) ..........................................................................................................................
28 U. S. C.
g 1961 (b)

.......................................................................................................................... 8

42 U. S. C. g 1983 ...............................................................................................................................

RULES
Fed. R. Civ. P. 59( e) .......................................................................................................................

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NATURE AND STAGE OF PROCEEDINGS
The jury retured a

verdict for Plaintiff and Third Pary Defendant Donald M. Durkin

Contracting, Inc. (" Durkin ) against Defendant City of Newark and Councilpersons (collectively
the " City ) on October 5, 2006. The Court entered judgment for Durkin based upon the verdict
on October

2006. Durkin fies this Motion pursuant to Rule 59( e) to amend the judgment to

add interest.

II.

SUMMARY OF ARGUMENT

Under Delaware law , Durkin is entitled as a matter of right to interest in the following

categories of the award on contract amounts: (1) pre-judgment interest on the pay applications
submitted by Durkin , but not paid by the City and (2) unpaid cost of work due to Durkin as of
the date of termination. Chrysler Corporation v.

Chaplake Holdings,

Ltd. , et al.

822 A. 2d

1024 , 2003 Del. LEXIS 269 (Del.
interest on the civil rights award.

Sup. Ct. 2003). Durkin is also
Springer v. Henry, et. ai,

entitled to

pre-judgment

See e. g.

2004 WL 2127172 (D. Del.
to receive post-

Sept. 16 ,

2004) (Appendix (" App.

) AI- AI6).

Finally, Durkin is entitled

judgment interest on the entire judgment amount , which includes compensatory damages for
work performed (Jury Verdict Form LA. 1), post termination expenses (Jur
Verdict

Form LA.2)
28 U.

and damages for civil rights violation (Jury Verdict Form LB). (App. AI7- A24).
g 1961.

See

Each of the foregoing categories has been carefully segregated to avoid any duplication
or overlap in claimed costs , and the appropriate rate of interest has been applied to each category.

III.

CONCISE STATEMENT OF FACTS

On October
$36 667 573. 33. On

5 , 2006
October

the jury returned

a

verdict for Durkin in the

amount of

2006 the Court entered judgment in favor of Durkin in the

amount of$36 667 573.33. (D. L 298).
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The jury awarded Durkin monies it billed the City in payment applications Nos. 18 ,

19

, 21 and 23 included as part of the compensatory damages awarded. (Trial Exhibit DUR-

(Jury Verdict Form LA.!) (App. AI7- A24).

Durkin

is entitled to receive interest on each of

these payment applications as provided for in the contract between the City and Durkin. (Trial
Exhibit DUR-

, Art. 6 , Bates no. CC- 1232). (App. A25).
666. 55 for compensatory damages for unpaid cost of
Form LA. 1 and Trial Exhibit DUR- 68).
pursuant to 6 Del. C. g2301

The jury awarded Durkin $5,492

work as of the date

of termination. (Jury Verdict

Durkin is entitled to receive pre-judgment interest on this amoune

from the date of termination - February 3 , 2004 - until the date judgment was entered - October
2006. (D. L 298).

The jury awarded Durkin $25 000 000. 00 for civil rights violations. (Jury Verdict Form

LB. App. AI7- A24).

Durkin

is entitled to pre-judgment interest on the violation of civil rights

award from the date of termination - February 3 , 2004 - until the date judgment was entered October

2006. (D. L 298).

Durkin is also entitled
$36 667 573. 33. Under 28 U.
judgment - October

to

post-judgment interest on the entire jury verdict award of
Durkin is entitled to receive interest from the date of

C. g1961 ,

2006 - until the judgment is paid in full.

I Payment Application No. 22 was a credit of($47 912. 90) due to the City. (Trial Exhibit DUR- 9).
2 The $5 492 666. 55 award for compensatory damages includes $275 837. 79 for the amount of unpaid Payment Applications , which is entitled to interest as provided under the Contract. (Trial Exhibit DUR, Art. 6 , Bates no. CC- 1232). Accordingly, the amount of compensatory damages that is entitled to interest pursuant to 6 Del. C. 92301 is $5 216 828. 76 ($5,492 666. 55 - $275 837. 79).

3 Council voted to terminate Durkin immediately on February 2 , 2004 (Trial Exhibit DUR- 6) and notified See Complaint 127 App. A26Durkin of the termination by correspondence dated February 3 2004. A69.
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IV.

ARGUMENT

Durkin is Entitled to Collect Pre-Jud2ment Interest
Rule 59( e) permits a party to file a Motion to amend the judgment if the Motion is filed

no later than ten (10) days after entry of the judgment. Federal courts have noted that motions
under Rule 59( e)
interest.

are permitted to

amend judgments to add pre-judgment and post-judgment
269 F. 3d 1128 , 2004

See e. g.

McCalla

v.

Royal MacCabees Life Insurance Company,

S. App. LEXIS 10796 (9 Cir. 2004) (and cases cited therein).

Delaware law recognizes the right to collect
Chrysler Corporation v.

pre-judgment interest on a debt.

See

Chaplake Holdings,
v.

Ltd., et al.

822 A. 2d 1024

2003 Del. LEXIS 269

(Del. Sup. Ct. 2003).

See also Moskowitz

Mayor and Council of Wilmington 391 A.2d 209
Citadel Holding Corp. v.

1978 Del. LEXIS 784 (Del. Sup. Ct. 1978);
(Del. 1992);

Roven

603 A.2d 818, 826

Metropolitan Mutual Fire and Ins. Co.

v.

Carmen Holding Co.,

220 A.2d 778 ,

781

(Del. 1966). Pre-judgment

interest is awarded as a matter of right ,

not by judicial discretion.

Moskowitz

v.

Mayor and Council of Wilmington 391 A.2d 209 , 1978 Del. LEXIS 784 (Del. Sup.
Citrin v.

Ct. 1978).

See also

International Airport Centers LLC, et al.,
v. Madric,

2006 Del. Ch. LEXIS 166

(Del. Ct. Ch. 2006); and

Jackson

2006 Del. Super. LEXIS 49 (Del. Supr. Ct. 2006).

Delaware federal courts have applied Delaware law recognizing the right to collect pre-

judgment

interest.

See,

g. United

States of America et aI.

v.

Star Bright Construction

Company, et aI. 848 F. Supp. 1161 , 1994 U. S. Dist. LEXIS 4240 (D. Del. 1994). The interest is
calculated from the date when the payment was due. Id.

When the underlying obligation arises

out of a contract , the court should look to the contract to determine to

determine when the

interest begins to accrue.

Id. See also

State Farm Mutual Automobile Insurance Company, et

aI.,

v.

Baron, et aI.,

2002 Del. C. P. LEXIS 66 (Del. Ct. Com. Pis. 2002). When the contract does

not specify an interest rate , 6 Del. Code g2301(a) states " the legal rate of interest shall be 5%
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over the Federal Reserve discount rate including any surcharge as of the time from which interest
is due. "
6 Del.

Code g2301(a).

While pre-judgment interest is awarded as a matter of right , the right to pre-judgment
interest is not self-executing. Brandywine 100 Corporation v.

New Castle County, et aI. ,

541

A2d 598 ,

1988 Del. LEXIS 120 (Del. Sup. Ct. 1988). The request for pre-judgment interest must
Id.

be requested in the pleadings or raised at trial.

Durkin requested interest in its Complaint
See

and is accordingly, entitled to have the judgment amended to include pre-judgment interest.

Complaint Count I and Count VII , App. A26- A69.

Durkin is Entitled to Collect Pre- Judgment Interest at a Rate of 5% Per Annum on Pay Applications Nos. 18. 19. 20. 21 and 23
The contract between Durkin and the City provides that " (aJll monies not paid when due

as provided in Aricle 14 of the General Conditions shall bear interest at a rate of five percent per
annum.
(See

Contract at Trial Exhibit DUR-

, Aricle 6 , App. A25. )

Aricle 14 ofthe General

Conditions sets forth the process for payment applications to be submitted by Durkin , reviewed
by the Engineer (URS Corporation) and paid by the City. (Contract , Article 14 , App. A70- A74.
Under the contract , within ten (10) days after Durkin submits a payment application , the

Engineer wil either recommend the payment application to the City for payment or return it to
Durkin with written reasons for the refusal. (Contract , Article 14 , Section 14.4 , App. A70- A74.

If the Engineer approves the payment application for payment , it is presented to the City.

Id.

Payment is due to Durkin ten (10) days after the Engineer presents the payment application to the
City for payment.

Id.

Payment applications Nos. 18 , 19 , 20 and 21 were approved for payment by the Engineer
on December 29 ,
2003. See

Trial Exhibit DUR- , Engineer

s Certificate for

Payment. The

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aggregate amount of these payment applications was $210 834. 62.

Payment was then

due from

the City on Januar 8 , 2004. (Contract Aricle 14 , Section 14.4 , App. A70- A74.

Durkin is entitled to pre-judgment interest on these monies at a rate of 5% per anum
from January 8 , 2004 until October 11 ,

2006 - the date of Judgment - for payment applications

Nos. 18 , 19

20 and 21. The total pre-judgment interest due for payment applications Nos. 18

20 and 21 is $29, 083. 62.

Payment application No. 23 was approved for payment by the Engineer on January 22
2004. See

Trial Exhibit DUR- 9, Engineer

s certification for

payment. The

total amount of

payment application No. 23 was $65, 003.17. Payment was then due from the City on February
2004. (Contract , Article 14 , Section 14.4 , App. A70- A74. )
to pre-judgment interest at a 5% per anum from
February 1

Consequently, Durkin

is entitled

2004 until October 11 ,

2006 for

Application No. 23 , yielding the total pre-judgment interest due for payment application No. 23
is $8 753.17.

In summary, the total amount of pre-judgment interest due on payment applications nos.
, 19
21 & 23 is

$37, 836.

Durkin is Entitled to Collect Pre- Judgment Interest for the Compensatory Damages for Unpaid Cost of Work As Provided Under
6 Del. &230 l(

The jury awarded Durkin $5 492 666. 55 as the unpaid cost of work performed as of the

date of termination. (Jury Verdict Form LA. 1 and Trial Exhibit DUR- 68). Since this amount

4 The calculation is as follows: 5% per annum interest on $210 834. 62 from 1/8/04 to 1/8/05 = $10 541.73 + 5% per annum interest 1/8/05 to 1/8/06 = $10 541.73 + 5% per anum interest 1/8/06 to 10/11/06 = $8 000. 16. $10 541.73 + $10 541.73 + $8 000.16 = $29 083. 62.

5 The calculation is as follows: 5% per annum interest on $65 003. 17 from 2/1/04 to 2/1/05 = $3 250. 16 + 5% per annum interest 2/1/05 to 2/1/06 = $3 250. 16 + 5% per annum interest 2/1/06 to 10/11/06 = 252. 85. $3 250. 16 + $3 250. 16 + $2 252. 85= $8 753. 17. 6 The calculation is as follows: $29 083. 62 + $8 753. 17 = $37 836. 79.
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includes the amounts in payment application nos. 18 ,

19

, 20 , 21 and 23 ($275 837. 79), which

pre-judgment interest was already computed per the terms of the contract , and the contract does

not provide for any pre-judgment rate of interese Durkin is entitled to statutory pre-judgment
interest on the balance of $5 216 828. 76
($5

492 666. 55 - $275 837. 79) pursuant to 6 Del. Code

g2301(a), which indicates that the rate shall be 5% over the Federal Reserve discount rate

including any surcharge as of the time from which interest is due.

The unpaid cost of the work was due to be paid to Durkin as of the date of termination February 3, 2004. See

Trial Exhibit No. DUR- 6 and Complaint

127 App. A50. The Federal

Reserve discount rate including any surcharge

as of Februar 3 ,

2004 was 2. 5%.

See

http://ww . frbdiscountwindow. org/historicalrates. cfm ?hdr ID=20&dtlD=5 2.
Code g2301(a), the appropriate
interest rate for the

Under 6 Del.

unpaid cost of work in the amount of

216 828. 76 is 7. 5% per annum (2. 5% + 5%). Thus , the total pre-judgment interest for the
unpaid cost of work is

$1,050,512.

Durkin is Entitled to Collect Pre- Judgment Interest for the Damages Awarded for Civil Rights Violations As Provided Under 28 U.
&1961
The jury awarded Durkin $25

000 000. 00 for damages due to civil

rights violations.

Durkin is entitled to collect pre-judgment interest on this damage award.
There is no

reference in 42 U.

C. g 1983 as to the

award of pre-judgment interest.

Where a federal statute is silent as to the availability of pre-judgment interest , the Court has
7 Article 6 of the Contract provides for interest on " all monies not paid when due as provided in Article 14 of the General Conditions... , which relates only to progress payments on approved applications for payment. Excepting the amounts in payment applications 18 , 19, 20 , 21 & 23 , the amounts for compensatory damages awarded by the jury were not derived from Article 14 pay applications , but from computations pursuant to Article 11 , for which there is no interest rate on late payments specified.

8 The calculation is as follows: 7. 5% interest on $5 216 828. 76

from 2/3/04 to 2/3/05 = $391

262. 16 +

5% interest from 2/3/05
$267 987. 78.
$391

to 2/3/06 = $391 262. 16 + 7. 5% interest from 2/3/06 to 10/11/06 = 262. 16 + $391 262. 16 + $267 987. 78 = $1 050 512. 10.

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discretion to award such interest.

See e. g.

Savarese, et al.

v.

Agriss, et al.

883 F . 2d 1194 ,

1989

S. App. LEXIS 12983 (3d. Cir. 1989) (and cases cited therein) (awarding
interest is left to the discretion of the district court).

pre-judgment

Most federal courts that addressed the issue of awarding pre-judgment interest in Section

1983 cases have concluded that pre-judgment interest should be awarded.

For example ,

the

District Court for the Central District of California awarded pre-judgment interest on a Section
1983 claim , indicating,
inter alia

that a Section 1983 plaintiff should

recover pre-judgment

interest because " (t)he purpose of a g 1983 damages award is to compensate the plaintiff for

injuries caused by the deprivation of constitutional rights "
element of compensation ,
not a penalty.
Golden State Transit Corp.

and "

)rejudgment interest is an
v.

Los Angeles

773 F.

Supp. 204 , 1991 U. S. Dist. LEXIS 11798 (C. D. Cai. 1991) (internal citations omitted). Other
federal courts have echoed this analysis in awarding pre-judgment interest. DeLaCruz v.

Pruitt,

590 F. Supp. 1296 , 1309 , 1984 U.S.

Dist. LEXIS 20675 (N. D. Ind.

1984) (awarding pre-

judgment interest to a successful Section 1983 plaintiff, the Court noted that " prejudgment

interest serves to fuher the congressional purposes underlying g 1983. .. "
Glens Falls
999 F.2d 655 ,

Miner

v.

City of

662 , 1993 U. S. App. LEXIS 19416 (2d Cir. 1993) (court affirmed

award of pre-judgment

interest in a g 1983 case " to fully compensation plaintiff for actual

damages incurred.
See e. g.
Springer v.

This Court has also awarded pre-judgment interest in a Section 1983 case.
Henry, et. ai 2004 WL 2127172 (D. Del. Sept. 16 2004) (App. AI- AI6).
g1961 to determine the proper

Durkin suggests that this Court utilize 28 U.S. c.

amount

pre-judgment interest that should be awarded. This would be consistent with this Court' s prior
determination of the proper amount of pre-judgment interest to award in a Section 1983 case.
Springer v. Henry, et. ai,

2004 WL 2127172 (D. Del. Sept. 16 2004) (App. AI- AI6).

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Accordingly, Durkin is entitled to pre-judgment interest calculated " at a rate equal to the

weekly average I- year constant maturity Treasury yield , as published by the Board of Governors
of the Federal Reserve System.

28 U.S. c. gI961(a).

9 The interest shall be compounded

annually.

See

28 U.

C. gI961(b). The

total pre-judgment interest for the $25 000 000. 00 award

is

$2,370.491.33

Durkin is Entitled to Collect Post- Jud2ment Interest
A party is entitled to recover interest on any money judgment in a civil case recovered in
a district court. See

28 U.

C. g1961. The interest is to be " calculated from the date of the entry

of the judgment, at a rate equal to the weekly average I- year constant maturity Treasury yield , as
published by the Board of

Governors of the Federal Reserve System , for the calendar week
C. gI961(a). The post-judgment

preceding the date of the judgment." 28 U.
be compounded annually. See

interest shall also

28 U.

C. gI961(b).

Judgment was entered for Durkin in the amount of $36 667 573. 33 on October
(D. I. 298). Accordingly, the appropriate interest rate under 28 U.

2006.

C. g1961 is 4. 90%.

The
for

daily interest for the post-judgment interest award is $4 922. 50 per day. The yearly interest
the post-judgment interest award is $1 796 711.09 , which is compounded annually

9 Refer to http://ww. frbdiscountwindow. org/historicalrates. cfm?hdrID=20&dtlID=52.
10

The calculation is as follows: Annual date week ending 2/6/04 to 1/28/05 average interest is 2. 0194% *
000 principal =

$25 000

$504, 855.

. Annual date week ending 2/4/05 to 1/27/06 average interest is

$955, 205. . Annual date week ending 460 061. 67 principal and compounded interest = 2/3/06 to 10/6/06 average interest is 4. 9700% * $26 910,429. 66. Total pre-judgment interest on civil rights award = $504 855. 77 + $955 205. 90 + $910,429. 66 = $2,370,491.33

7452% * $25 504 855. 77 principal and compounded interest =

II Refer to http://ww.frbdiscountwindow. org/historicalrates. cfm?hdrID=20&dtlID=52.
Durkin reserves the right to supplement the post-judgment interest calculation at the time of payment of the judgment by the City.
12

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CONCLUSION AND RELIEF SOUGHT
For the reasons set forth above , Plaintiff Donald M. Durkin Contracting, Inc. respectfully

requests that this Cour grant its Motion to Amend the Judgment to Add Interest Pursuant to
Federal Rule of Civil Procedure Rule 59(e) in the amount of $3 527 755. 21 which includes prejudgment interest and post-judgment interest up to and including October 25 , 2006 (which is the
date of the fiing of this Motion).

13 Accordingly, the Judgment should be amended to reflect a
Donald M. Durkin Contracting, Inc. respectfully requests

Judgment of

$40, 195, 328.
a

. Plaintiff

leave to re- fie

supplemental Motion to calculate the entire post-judgment interest at the time of

payment ofthe judgment by the City.
Dated: October 25

2006

POWELL, TRACHTMAN, LOGAN, CARRE & LOMBARDO, P.
Paul A. Logan Paul A. Logan Delaware Supreme Cour ID #3339 475 Allendale Road , Suite 200 King of Prussia , P A 19406 (T) 610- 354- 9700; (F) 610- 354- 9760
By: Isl

Attorneys for

Plaintif

The calculation is as follows: $37 836. 79 (pre-judgment interest on Pay Applications) + $1 050 512. (pre-judgment interest on compensatory damages for unpaid cost of work) + $2 370 491.33 (pre-judgment
13

interest on civil rights damages)
interest of $4 922. 50)
= $3

+ $68

915 (14 days (10/11/06

to 10/25/06) of post-judgment daily

527 755. 21.

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