Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00653/USCOURTS-caed-1_06-cv-00653-12/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 23:1441 Contract Real Estate

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

JAMES M. OLVEY, )

)

)

)

Plaintiff, )

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vs. )

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ERROTABERE RANCHES, et al., )

)

)

Defendants. )

)

)

No. CV-F-06-653 OWW/SMS

MEMORANDUM DECISION GRANTING 

PLAINTIFF'S MOTION TO ALTER

OR AMEND JUDGMENT TO INCLUDE

PRE-JUDGMENT AND POSTJUDGMENT INTEREST 

Plaintiff James M. Olvey moves to alter or amend the

judgment pursuant to Rule 59(e), Federal Rules of Civil

Procedure, to include pre- and post-judgment interest as follows:

1. Costs of suit in the sum of $3,373.13,

prejudgment interest in the amount of

$6,454.98 on the land rent claim, and

prejudgment interest in the amount of

$9,755.28 on the OA-249 seed claim for a

total amount of Judgment of $72,708.39

($53,125.00 + $6,454.98 + $9,755.28 +

$3,373.13 = $72,708.39);

2. Interest on the Judgment of $72,708.39

shall accrue at the rate of 1.63% per annum

from April 7, 2008 until paid in full.

Case 1:06-cv-00653-OWW -SMS Document 161 Filed 06/17/08 Page 1 of 9
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A. Pre-Judgment Interest.

In diversity actions, state law determines whether prejudgment interest should be awarded and the rate of pre-judgment

interest. Bangert Bros. Const. Co., Inc. v. Kiewit Western Co.,

310 F.3d 1278, 1297 (10 Cir.2002); Citicorp Real Estate, Inc. th

v. Smith, 155 F.3d 1097, 1108 (9 Cir.1998). th

California Civil Code § 3287(a) provides: 

Every person who is entitled to recover

damages certain, or capable of being made

certain by calculation, and the right to

recover which is vested in him upon a

particular day, is also entitled to recover

interest thereon from that day ....

“‘The more liberal view now prevails that interest will be

allowed as damages where the demand, although unliquidated is of

such a nature that the amount is capable of ascertainment by mere

computation, or can be established with reasonable certainty, or

determined by reference to well-established market values.’” Katz

v. Enos, 68 Cal.App.2d 266, 278 (1945); accord Shell Chemical

Corp. v. Owl Transfer Co., 173 Cal.App.2d Supp. 796, 804 (1959). 

“Damages are deemed certain or capable of being made certain

within the provisions of subdivision (a) of section 3287 where

there is essentially no dispute between the parties concerning

the basis of computation of damages if any are recoverable but

where their dispute centers of the issue of liability giving rise

to damage.” Esgro Central, Inc. v. General Ins. Co., 20

Cal.App.3d 1054, 1060 (1971). As explained in Children’s Hosp.

and Medical Center v. Bonta, 97 Cal.App.4th 740, 774 (2002):

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‘The test for recovery of prejudgment

interest under [Civil Code] section 3287,

subdivision (a) is whether defendant actually

know[s] the amount owed or from reasonably

available information could the defendant

have computed that amount ...’ ... ‘The

statute ... does not authorize prejudgment

interest where the amount of damage, as

opposed to the determination of liability,

“depends upon a judicial determination based

upon conflicting evidence and it is not

ascertainable from truthful data supplied by

the claimant to his debtor.” ... ‘ ... Thus,

where the amount of damages cannot be

resolved except by verdict or judgment,

prejudgment interest is not appropriate.’

See also Fireman’s Fund Ins. Co. v. Allstate Ins. Co., 234

Cal.App.3d 1154, 1174 (1991):

Whatever uncertainty about the extent of

Fireman’s liability may have been fostered by

the alternative theories Fireman’s proposed,

we do not view that uncertainty as an

impediment to the award of prejudgment

interest. While Fireman’s proposed a general

formula based on four inapt theories of

lesser liability, it also suggested a

specific amount due Allstate and Northbrook

under each theory. Through it all, the

extent of Fireman’s exposure remained purely

a question of law. Thus, the amounts

proposed under Fireman’s theories or the

amounts legally compelled by section 3634

were readily ascertainable. 

See also Block v. Laboratory Procedures, Inc., 8 Cal.App.3d 1042,

1046-1047 (1970):

‘ ... The existence of a bona fide dispute

between the parties as to the amount owing

under an express contract does not render

that sum unliquidated.’ ... The mere fact

that there is a slight difference between the

amount of the damages claimed and the amount

of the award does not preclude an award of

prejudgment interest ... ‘It is the rule that

if damages may be determined by reference to

reasonably ascertainable market values, they

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are ‘capable of being made certain by

calculation’ within the meaning of section

3268 ....’

...

Where the person liable does not know what

sum he owes and where damages can be arrived

at only by judicial determination on

conflicting evidence, the damages are

uncertain and there is no basis for the award

of prejudgment interest.

“[I]t is clear the policy underlying the requirement for

prejudgment interest where the damages are deemed ‘certain’ or

‘capable of being made certain ...’ ... is that in situations

where the defendant could have timely paid that amount and has

thus deprived the plaintiff of the economic benefit of those

funds, the defendant should therefore compensate with appropriate

interest.” Wisper Corp. v. California Commerce Bank, 49

Cal.App.4th 948, 962 (1996).

Plaintiff argues that, although Defendants disputed

liability, Defendants were aware of the exact amounts Plaintiff

claimed Defendants owed on the two claims for which Partial 

Judgment was entered:

Not only were the amounts due for both the

land rent and OA-249 seed set forth in

written invoices from the Plaintiff to the

Defendants, with respect to the land rent,

Defendants expressly admitted that the fair

market value for the land rent was the same

$24,035 figure invoiced by Plaintiff and

(ultimately) awarded by the jury.

Plaintiff refers to Defendants’ response to Plaintiff’s requests

for admission: “Defendants admit that the fair rental value in

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2005 of the field including access and use of the agricultural

well was $24,025.00.”

Defendants respond that Plaintiff is not entitled to

prejudgment interest on the land rent claim. Defendants contend

that Plaintiff, in his Complaint, the Pretrial Order, at trial

and during closing arguments, claimed that the total rent due for

the use of the land and water was $24,025.00, plus between

$7,600.00 and $86,000.00 for additional use of water. Defendants

refer to Paragraph 58 of the Complaint:

OLVEY alleges that the fair market rental

value of the field on which the wheat crop

was planted was $24,025, plus the use of

water from OLVEY’s production well, for which

Defendants also did not pay.

The Pretrial Order states:

VI. RELIEF SOUGHT

1. Plaintiff seeks compensatory damages in

the sum of $24,025, which represents the fair

market rental value of the land upon which

Defendants planted their wheat crop ....

2. Compensatory damages for the fair market

value of the water used by Defendants in

excess of the water needed to irrigate

Defendants’ wheat crop, which Plaintiff

estimates to be $86,000.

At trial Plaintiff testified that he was owed $24,025 for rent

and water on his field plus approximately $86,000 for water used

on other fields. In closing argument, Plaintiff’s counsel argued

that Plaintiff was due $24,025 for land rent plus either $86,000

or $7,000, based upon who the jury believed as to the amount of

water used on other fields. Defendants’ counsel avers that

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documentary evidence admitted at trial establishes that

Defendants disputed that the rent did not include the use of

water from the agricultural well. Defendants admit that they

conceded at trial that they owed Plaintiff for rent of the land,

but testified that the rent would be $155/acre, which would cover

the three months that they were on the land while Plaintiff

actually owned it, as opposed to the original six month estimate

for the entire 2005 season. Defendants testified and argued to

the jury that the total amount of rent due was $12,000. 

Defendants assert that the jury disagreed with Defendants that

the rent should only run for the three months Plaintiff owned the

property, but agreed with Defendants that the rent included the

use of water. Defendants argue:

Under no scenario has Plaintiff established

or can even attempt to credibly argue that

the ‘damages’ for the alleged rental value of

the property and water was at any point

before the jury returned its verdict certain,

capable of being made certain or liquidated. 

Before and during trial Defendants disputed

the amount owed, the calculation of the

amount owed, the duration of the rent period,

and the rate by which additional water would

be charged if it was in fact charged.

Plaintiff replies that Defendants’ contentions establish

that “the use of the land itself was always calculated at the

fixed, unchanged, and adjudged $24,025.” Plaintiff asserts that

the “only disputed issue ... was the value and amount of water

used in addition to the fixed, certain, ascertainable and finally

adjudged land rent”:

It is clear that the value of water used and

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the value of land rent are two separate

numbers. Also, Plaintiff is requesting prejudgment interest on only the land rent

claim. 

Plaintiff argues that Defendants’ claim that, although the

parties agreed on the cost of land per acre, the dispute over the

term of the land rental does not make the amount of damages

uncertain because the agreed upon rental is merely multiplied by

the term found by the jury.

Plaintiff has established that he is entitled to prejudgment

interest under the standards set forth in case law. The amount

of land rent was certain and capable of calculation; at issue

during the trial was liability. With regard to Plaintiff’s claim

for compensatory damages for the use of water, that claim is

separate from the land rent claim and does not render the land

rent claim uncertain. 

Defendants argue that Plaintiff is not entitled to

prejudgment interest on the seed claim. Defendants refer to

evidence presented at trial that they did not order or receive

OA-249 in 2003, but that they instead received, but did not agree

to pay for, OA-265, and to evidence in the form of crop and spray

maps which confirmed that no OA-249, as opposed to OA-265 shown

on the maps, was or could have been planted. Defendants assert

that Plaintiff conceded on cross-examination that if the crops

had in fact been sprayed with round-up as indicated by the maps,

the seed planted could have not been OA-249. Defendants assert

that Plaintiff’s counsel then argued that the 2003 seed with

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Defendants do not dispute that the accrual date on the 1

prejudgment interest for the land rent claim is July 31, 2005 and

that the accrual date on the seed sale claim is November 30, 2004.

Defendants also do not dispute Plaintiff’s prejudgment interest

calculations based on a 10% per annum rate.

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either OA-249 (at $75/bag for a total amount due of $29,100), or

OA-265 (at $90/bag for a total amount due of $35,000). The jury

returned a verdict for Plaintiff on Question 34 (“Did Defendants

request by words or conduct that Plaintiff provide goods, cotton

seed, for the benefit of Defendants”) and found the “reasonable

value of the goods provided to Defendants” to be $29,100. 

Defendant argues that neither Plaintiff nor Defendant “had or

could have ascertained the total amount due for the 2003 seed

sales until the jury decided which seed had been delivered,

rendering the amount due on this claim obviously unliquidated.” 

As Plaintiff correctly replies, Defendants “err by focusing

on the issue of liability and not whether the damages were

certain or capable of being made certain:

It is clear as to the OA-249 Seed, the amount

that was invoiced, claimed, and ultimately

awarded is one and the same, $29,100. Since

there was no disparity between the amount

claimed and the final judgment, this tends to

show, in addition to the invoice and nonopposition to the calculation of the figure,

that the damages for the OA-249 seed claim

were in fact certain, liquidated,

ascertainable and capable of being

calculated.

Plaintiff’s motion to alter or amend the judgment to include

prejudgment interest in the amounts set forth in the motion is

GRANTED.1

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B. Post-Judgment Interest.

Defendants concede that Plaintiff is entitled to postjudgment interest and do not dispute the interest rate to be

applied. Plaintiff’s motion to alter or amend the judgment to

include post-judgment interest is GRANTED.

CONCLUSION

For the reasons stated:

1. Plaintiff’s motion to alter or amend the judgment

pursuant to Rule 59(e), Federal Rules of Civil Procedure, to

include pre- and post-judgment interest is GRANTED;

2. Counsel for Plaintiff shall prepare and lodge a form of

order and judgment reflecting the ruling in this Memorandum

Decision within 5 days of the filing date of this Memorandum

Decision.

IT IS SO ORDERED.

Dated: June 17, 2008 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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