United States District Court, W.D. North Carolina, Charlotte Division
MAX O. COGBURN, Jr., District Judge.
THIS MATTER is before the court on the following post-judgment motions: (1) plaintiff's Motion to Amend Judgment (#298); (2) plaintiff's Motion for Attorneys' Fees (#301); (3)Defendant Griffin's Motion for Judgment NOV (#304); (4) Defendant Griffin's Motion for a New Trial (#306); (5) plaintiff's Motion for Leave to Register Judgment in District Courts Outside the Western District (#314); (6) Defendant Griffin's Motion to Stay Proceedings to Enforce a Judgment (#318); and (7) Defendant Griffin's Motion for Leave to File Supplemental Document (#349). Oral arguments were heard on those motions on January 7, 2015, in Charlotte, North Carolina. The motions will be discussed seriatim .
I. Motion to Amend Judgment (#298)
Plaintiff first seeks to amend the judgment to provide for prejudgment interest consistent with the contractual obligation between plaintiff and Defendant Griffin under the terms of the guaranty and North Carolina law. As a corollary, plaintiff seeks to amend the judgment as to Defendant Jones based on a miscalculation of prejudgment interest at the time Defendant Jones confessed judgment during the trial. Under Rule 59(e), Federal Rules of Civil Procedure, it is plaintiff's burden to show clear error requiring amendment of the Judgment. Robinson v. Wix Filtration Corp., 599 F.3d 403, 407 (4th Cir. 2010).
After the jury returned its verdict in this matter, plaintiff requested that the court award prejudgment interest. The court declined that request and entered judgment in the amount determined by the jury, a sum that was clearly equal to the amount of the debt at the time of default. The court then reasoned that an award of interest was not appropriate as the court recalled that counsel for plaintiff had made an argument to the jury seeking an award of interest.
In preparing for the hearing of this motion, the court instructed the parties to file a copy of the trial transcript. While the transcript does reveal that plaintiff put evidence of the accrued interest into evidence and mentioned interest in opening,  no argument was in fact made during closing by plaintiff seeking an award of interest from the jury. Further, such review has also revealed that the court did not provide the jury with any instruction or issue on an award of interest. Thus, it now appears to the court that the issue of prejudgment interest was indeed one for the court and that, based on a review of the transcript, it was clear error not to take up the issue of prejudgment interest.
Plaintiff contends it is entitled to $8, 451, 630.54 in prejudgment interest under the guaranty, which specified 18% per anum (1.5% per month) from default. First, under North Carolina law, which governs the agreement, an award of prejudgment interest is appropriate. An award of prejudgment interest in a breach of contract action is governed by Chapter 24-5(a) of the North Carolina General Statutes, which provides, in pertinent part:
In an action for breach of contract, except an action on a penal bond, the amount awarded on the contract bears interest from the date of breach. The fact finder in an action for breach of contract shall distinguish the principal from the interest in the award, and the judgment shall provide that the principal amount bears interest until the judgment is satisfied. If the parties have agreed in the contract that the contract rate shall apply after judgment, then interest on an award in a contract action shall be at the contract rate after judgment; otherwise it shall be at the legal rate.
Id. Further, "[o]nce breach is established, plaintiffs are entitled to interest from the date of the breach as a matter of law." Cap Care Grp., Inc. v. McDonald, 149 N.C.App. 817, 824 (2002). Further, federal case law, albeit unreported, provides that "[t]he district court's refusal to recognize this part of the contract constituted an impermissible revision of the contract." Questech Financial, LLC v. Trivedi, 109 Fed.Appx. 514, 516, 2004 WL 1662462, 1 (4th Cir. July 27, 2004). Finally, as to Defendant Griffin's argument that such an award is inappropriate as the underlying arrangement was a loan and implicit argument that such an award would be usury, the court disagrees as North Carolina usury law only applies to lending transactions. N.C. Gen.Stat. § 24-2.1 (2011); Odell v. Legal Bucks, LLC, 192 N.C.App. 298, 314 (2008). While plaintiff certainly wired CBR funds, such funds were clearly intended to fund the purchase of inventory and any profit contemplated by the parties was clearly attributable to markup on such inventory, not interest. Thus, it appears from all of the evidence of record that from the date of default to the date of judgment, plaintiff is entitled to $8, 451, 630.54 in prejudgment interest, for which Defendant Griffin and Defendant Jones are jointly and severally liable. The court will amend the judgment accordingly.
II. Motion for Attorneys' Fees
Plaintiff contends that, in accordance with the terms of the contract and North Carolina law, it is entitled to collect from defendants an attorneys' fee in the amount of $2, 915, 279.33. Such sum represents the principal amount of the debt in default plus interest accrued at the contract rate until the date the action was filed, multiplied by the contractual attorneys' fee rate of 15%.
It is undisputed that the guaranty executed by Defendant Griffin (and Defendant Jones) provide for the payment of a reasonable attorneys' fee in the event of default, as follows: "reasonable attorney's fees, which may be incurred by Baker & Taylor in enforcing this personal guaranty...." Complaint, Ex. B (#1-2 at 2). While generally disfavoring the award of attorneys' fees to prevailing parties, North Carolina law provides for an award of attorneys' fee in the collection of a debt. First, defendants' guaranties are evidence of an indebtedness. Stillwell Enter. v. Interstate Equip. Corp., 30 N.C. 286, 294 (1980). Second, the North Carolina General Statutes provide that where the agreement provides for a "reasonable attorneys' fee, " but does not specific what that fee is, 15% of the "outstanding balance" is a reasonable fee as a matter of law, as follows:
Obligations to pay attorneys' fees upon any note, conditional sale contract or other evidence of indebtedness, in addition to the legal rate of interest or finance charges specified therein, shall be valid and enforceable, and collectible as part of such debt, if such note, contract or other evidence of indebtedness be collected ...