United States District Court, W.D. Texas, San Antonio Division
Nautilus, Inc. Plaintiff,
Icon Health & Fitness, Inc. Defendant.
MEMORANDUM OPINION: GRANTING IN PART AND DENYING IN
PART THE PLAINTIFFS MOTION TO ALTER OR AMEND
ROYCE LAMBERTH, UNITED STATES DISTRICT JUDGE
January 19, 2018, the Court granted Nautilus's motion for
summary judgment [ECF #41] and awarded damages to Nautilus in
the amount of $1, 782, 508-$1, 507, 408 in royalties and
$275, 100 in late-payment interest for the time period
between November 30, 2015, and January 20, 2017. (ECF #9 at
26-27). But the Court's opinion and order granting the
summary judgment motion did not address pre-judgment
interest, post-judgment interest, or late-payment interest
for the time since January 20, 2017. Nautilus now moves to
amend the Court's judgment to address those matters.
Specifically, Nautilus asks the Court to amend its judgment
"to include (1) additional late payment interest
pursuant to the parties' Agreement in the amount of $349,
712.36; (2) judgment that Nautilus is entitled to additional
and ongoing late payment interest pursuant to the
parties' Agreement until payment is made by ICON in full;
(3) pre-judgment interest in the amount of $763, 472.56; and
(4) post-judgment interest in the amount of 1.79% to accrue
until the judgment is paid in full by ICON." (ECF #96 at
reasons given below, the Court will grant in part and deny in
part Nautilus's motion.
of the Federal Rules of Civil Procedure allows a motion to
alter or amend judgment within 28 days after the entry of
judgment. (Fed. R. Civ. P. 59(e)). Under Rule 59(e), amending
a judgment is appropriate in three circumstances: (1) when
there has been an intervening change in the controlling law,
(2) when the movant presents newly discovered evidence that
was previously unavailable, or (3) when there has been a
clear error of law or fact. (Demahy v. Schwartz
Pharma, Inc., 702 F.3d 177, 182 (5th Cir. 2012)). A
motion under Rule 59 cannot be used to raise new arguments or
claims that could or should have been made before the
judgment issued. (MarseillesHomeowners Condo. Ass'n
v. Fid. Nat. Ins. Co., 542 F.3d 1053, 1058 (5th Cir.
2008)). And while Rule 59 motions are generally disfavored,
they are the appropriate vehicle to update damages numbers
and to amend judgments to include pre-and post-judgment
interest. (Kg. Heck v. Triche, 775 F.3d
265, 276-77 (5th Cir. 2014) (noting that post-judgment
motions to add interest must be brought pursuant to Rule
59(e)); Tellez v. GEO Group, Inc., No. 15-cv-00465,
2018 WL 1146398, at *6 (W.D. Tex. Mar. 1, 2018) (granting
pre- and post-judgment interest and costs in the context of a
Rule 59(e) motion)).
The Court Will Amend Its Prior Judgment to Grant Pre-judgment
Interest / Late-Payment Interest to Nautilus.
motion for summary judgment, Nautilus requested
"additional late payment interest owed pursuant to the
parties' agreement accrued subsequent to the filing of
its prior expert report on damages, in addition to
pre-judgment interest." (ECF #41-1 at 1-2). The Court,
in its prior judgment, did not address these requests. That
was an oversight on the Court's part and is grounds
enough to re-open the Court's analysis and, if necessary,
amend the judgment.
Court will first analyze whether Nautilus is entitled to
additional late-payment interest, pre-judgment interest, or
both. If Nautilus is entitled to any of those, the Court will
amend the judgment to reflect that.
Nautilus Cannot Recover Both Late-Payment Interest and
requests both "additional late payment interest pursuant
to the parties' [contract]" and "pre-judgment
interest." (ECF #96 at 6-7). Nautilus may receive
additional late-payment interest under the contract. But
Nautilus may not receive pre-judgment interest above and
beyond the late-payment interest.
prevailing plaintiff in a contract case tried under Texas law
is entitled to an award of prejudgment interest in all but
exceptional circumstances." (Am. Int'l
Trading Corp. v. Petroleos Mexicanos, 835 F.2d 536,
541 (5th Cir. 1987)). And under Texas law, when a contract
provides for late-payment interest, that interest is the
pre-judgment interest for the case. (See Perry Roofing
Co. v. Olcott, 722 S.W.2d 538, 544 (Tex. 1986)
("[A] trial court may award prejudgment interest in a
contract action where the contract itself does not fix the
amount of damages."); People's United Equip.
Fin. Corp. v. Morris, No H-16-365, 2018 WL 287860, at *3
(S.D. Tex. Jan. 4, 2018) (using the parties' contractual
interest rate as the rate for pre-judgment interest)). It
would constitute an impermissible double recovery for a party
to receive both contractual late-payment interest and
statutory pre-judgment interest. The reason for that is clear
when one considers the injury that pre-judgment interest is
intended to remedy-the "judgment creditor's lost
opportunity to invest the money awarded as damages."
(Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002)).
Late-payment interest serves the same purpose, being an
agreed-upon estimation of the value of the contract
creditor's money due. (Perry Roofing , 722
S.W.2d at 544 (equating prejudgment interest with
contractually specified damages)). Thus, a prevailing party
in a contract action is entitled to specified contractual
late-payment damages in lieu of pre-judgment interest (to the
extent permitted by law).
case, the implication of this doctrine is that Nautilus
cannot receive all of the relief for which it asks. Nautilus
cannot receive both "additional late payment interest
pursuant to the parties' [contract]" and
"pre-judgment interest" because the contractual
late-payment interest supplants the role of pre-judgment
interest. Therefore, the Court will deny Nautilus's
motion to the extent that Nautilus seeks multiple recoveries
for the lost time value of the royalties owed to it. ...