UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
January 5, 1984
KAI GRANHOLM, Plaintiff, against The Vessel TFL EXPRESS, her engines, boilers, tackle, etc., in rem, TIMUR CARRIERS (Pte.) Ltd. and TRANS FREIGHT LINES, INC., her owners in personam, Defendants.
The opinion of the court was delivered by: HAIGHT
MEMORANDUM OPINION AND ORDER
HAIGHT, District Judge:
On December 13, 1983, this Court filed its Memorandum Opinion and Order holding both colliding vessels in fault, fixing plaintiff's damages in the amount of $77,655.30, and directing the entry of judgment in that amount with interest from the date of judgment. Familiarity with that opinion and order is assumed.
Plaintiff now moves to reopen the case to permit further proof on the point of damages. While not cited in plaintiff's papers, this motion lies under Rule 59(a), F.R.Civ.P. Plaintiff also moves to amend the judgment pursuant to Rule 52(b) so as to allow him prejudgment interest. Defendant opposes both branches of the motion.
The motion under Rule 59(a) to reopen the case is denied. I do so in what I conceive to be a sound exercise of judicial discretion. The holding at issue rejected a particular item of plaintiff's damage claim for insufficiency of proof. Slip op. at 41-44. If my disallowance of that claim was erroneous, plaintiff may appeal from it. But if, as I have concluded, the item was insufficiently proved, no reason appears or is suggested why the requisite proof was not offered at trial. Generally it is required of a litigant seeking to reopen the proof that he proffer evidence "which was not available, or by the use of reasonable diligence could have been availab,e for use at the original trial." Mayer v. Higgins, 208 F.2d 781, 783 (2d Cir. 1953). The policy reason for the rule is apparent. Litigation would be intolerably drawn out if parties failing to offer evidence readily available to them were permitted to reopen the proof if disappointed in the result. Evidence of the cost of electronic design and installation in Finland, which I have held was necessary to establish this particular aspect of plaintiff's claim, was certainly available to him at the time of trial.
This brings me to the question of prejudgment interest. Awarding of prejudgment interest in admiralty rests in the trial court's discretion. Independent Bulk Transport, Inc. v. Vessel "Morania Abaco", 676 F.2d 23, 25 (2d Cir. 1982). However, prejudgment interest "should be granted in the absence of exceptional circumstances." Mitsui & Co., Ltd. v. American Export Lines, 636 F.2d 807, 823 (2d Cir. 1981). Independent Bulk Transport cites Mitsui for the proposition that "it is an abuse of discretion to deny prejudgment interest in admiralty cases except under extraordinary circumstances." 676 F.2d at 25.
Defendant in the case at bar argues for denial of prejudgment interest on the authority of Afran Transport Co. v. The Bergechief, 285 F.2d 119 (2d Cir. 1960). Two vessels collided. Each was at fault. Damages were divided equally under the coolision liability law then prevailing; proportional fault under United States v. Reliable Transfer Co., Inc., 421 U.S. 397, 44 L. Ed. 2d 251, 95 S. Ct. 1708 (1975) had not yet come to pass. One shipowner was owed a balance of $69,203 in damages measured by repair costs. The district court denied prejudgment interest on that balance. The Second Circuit affirmed. Its opinion at 285 F.2d 120 may be read as holding that in a mutual fault collision case, "normally the award of interest may await the court's judgment which fixes the amount due," although adding the caveat:
"But we would not exclude all discretion in the mutual fault collision case; thus if one vessel is grossly at fault the award of interest to the other may ameliorate somewhat the harsh American rule that division of damages must be equal without reference to the degree of fault. Here under the circumstances shown in our opinion in Afran Transport Co. v. The Bergechief, supra, 2 Cir., 274 F.2d 469, we think denial of pre-decree interest was right." Ibid.
But the case at bar, while resulting from mutual fault, caused damage only to plaintiff. In consequence, Ore Carriers of Liberia, Inc. v. Navigen Company, 305 F. Supp. 895 (S.D.N.Y. 1969), aff'd, 435 F.2d 549 (2d Cir. 1970), furnishes the closer analogy. The owner of a chartered vessel suffered damages when the vessel attempted to navigate a river without tug assistance. The charterer had breached its warranties of safe port and berth, but the shipowner was at fault in permitting the vessel to proceed with knowledge of the unavailability of tugs. Plaintiff shipowner recovered judgment for half its damages. The question of prejudgment interest was then litigated. Judge Metzner awarded interest, writing at 305 F. Supp. at 897:
"Defendants argue that this case is a mutual fault case and therefore the exception to the normal admiralty rule is applicable. The misconception here, however, flows from categorizing this case on the basis of the court's finding of mutual fault. Defendants overlook the controlling factor calling the exception into play, namely, a collision between two vessels with cross-claims between the respective owners of the vessels. Here one party paid all the damages and the question for the court was whether the other party was liable for all or part of this damage. The situation is precisely analogous to the situation in The Hannah A. Lennen, 77 F. Supp. 471 (D.Del.1948), a mutual fault collision case in which only one party claimed damages. There the court distinguished The Wright as follows:
"Where only one libel is filed the only uncertainties are those accompanying every admiralty action and every action sounding in tort, viz., the uncertainty of proving liability and the amount of damages. In such cases there is no uncertainty as to the party who should pay all or a portion of the damages if liability can be proven.If interest could not be allowed until the damages are liquidated and the responsibility fixed, it is difficult to see in what admiralty cases of collision interest could ever be discretionary or allowed from a date preceding the decree fixing liability, and the general rule regarding interest in admiralty proceedings would have no force." Id. at 472."
The Second Circuit, affirming, expressed its agreement that:
". . . where the only question is whether one party who has paid all damages is entitled to reimbursement, an award of pre-judgment interest is appropriate." 435 F.2d at 551.
These principles squarely apply to the case at bar.
In Ore Carriers the damages were liquidated on the basis of repair costs. In the case at bar plaintiff claims for a total loss of his property. Repairs have not been made, and out-of-pocket expenses never incurred. But the law of this circuit permits admiralty prejudgment interest on damages measured by cost estimates where no money has been expended. In re Hibbard, 27 F.2d 686, 687 (L. Hand, Ct.J.); Independent Bulk Transport Inc., supra, at 26. See also Inland Tugs Co. v. Ohio River Co., 709 F.2d 1065, 1074-75 (6th Cir. 1983) (prejudgment interest awarded on fair market value of plaintiff's sunken vessel).
In the exercise of my discretion, I award plaintiff Granholm prejudgment interest from July 14, 1981, the date he abandoned his yacht. The interest applies to all items of claim except that for plaintiff's personal injuries.
The parties do not address the rate of interest in their briefs. While I have discretion there as well, the rate should be measured "by interest on short-term, risk-free obligations" during the pertinent period. Independent Bulk Transport, Inc., supra, at 27. The parties are directed to agree on a rate if they can, without prejudice to defendant's right to challenge the award in principle on appeal if so advised. They may consult money market rates or Treasury bill rates. Failing agreement, the settlement of counter-amended judgments with supporting affidavits and briefs will be necessary.
Settle amended judgment in accordance with this opinion.