Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-00646/USCOURTS-cand-3_05-cv-00646-12/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 28:1333 Admiralty

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COURT

For the Northern District of California

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UNITED 

STATES 

DISTRICT 

COURT

U

For the Northern District of California

NITED 

STATES 

DISTRICT 

COURT

U

For the Northern District of California

NITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

APL CO. PTE. LTD.,

Plaintiff,

v.

UK AEROSOLS LTD., INC.; U.G. CO., INC. dba

Universal Grocers Co.; KAMDAR GLOBAL, LLC,

Defendants. /

No. C 05-0646 MHP

MEMORANDUM & ORDER

Re: Motion for Entry of Judgment

On February 11, 2005 plaintiff APL Co. Pte. Ltd. (“APL”) brought this breach of contract

and negligence action against defendants UK Aerosols Ltd. (“UKA”), U.G. Co., Inc. (“UG”), and

Kamdar Global, LLC (“Kamdar”). On February 28, 2006 plaintiff amended its complaint to add

Imp-Ex Solutions, LLC (“Imp-Ex”) as a co-defendant. On February 23, 2007 the court granted

summary judgment in favor of APL. Now before the court is APL’s motion for entry of judgment. 

The court has considered the parties’ arguments fully, and for the reasons set forth below, the court

rules as follows.

BACKGROUND1

The factual background of this action has been recited in earlier orders. The dispute

concerns damage to a vessel owned by plaintiff APL resulting from goods shipped by defendant UK

Aerosols. On February 23, 2007 the court granted summary judgment in favor of APL, holding

defendants U.G. and Kamdar jointly and severally liable to APL for the negligence of UK Aerosols. 

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The parties subsequently agreed to stipulate to the amount of damages. However, the parties could

not agree on the amount of prejudgment because they disagree on the date on which prejudgment

interest should commence. 

LEGAL STANDARD

An award of prejudgment interest is intended to “accomplish the just restitution of injured

parties.” Alkmeon Naviera, S.A. v. M/V Marina L., 633 F.2d 789, 797 (9th Cir. 1980). In admiralty

the allowance of prejudgment interest is a matter reserved to the discretion of the trial court. 

However, it is routinely granted in all but exceptional circumstances. Mitsui & Co., Ltd. v. Amer.

Export Lines, Inc., 636 F.2d 807, 823 (2d Cir. 1981). “The district court also has broad discretion to

determine when prejudgment interest commences and what rate of interest to apply.” Columbia

Brick Works, Inc. v. Royal Ins. Co. of Amer., 768 F.2d 1066, 1068 (9th Cir. 1985) (citing

Independent Bulk Transport, Inc. v. The Vessel Moriana Abaco, 676 F.2d 23, 25 (2d Cir. 1982)).

DISCUSSION

An award of prejudgment interest is intended to make the prevailing party whole. 

Milwaukee v. Nat. Gypsum Co., 515 U.S. 189, 195–96 (1995). Applying this basic principle, prejudgment interest should commence when the claim arises. Here, APL claims that interest should

be awarded from August 3, 2004, the date on which UK Aerosols refused to pay for the clean-up

costs APL incurred as a result of the leaking goods. Defendants argue for an earlier date, November

24, 2003, the date at which the goods were delivered. The unusual posture of the parties—the

prevailing party arguing for a later date than that proposed by defendants—is a result of the

fluctuations of the applicable interest rate.2

 Defendants prefer the 52 week Treasury bill rate of

1.35% on November 24, 2003 to the somewhat higher rate on August 3, 2004.3

Where cargo is damaged as a result of the fault of the carrier, it is well established that prejudgment interest commences on the delivery of the goods. See Columbia Brick Works, 768 F.2d at

1070; Great American Trading Co. v. Amer. Pres. Lines, Ltd., 641 F. Supp. 396, 402 (N.D. Cal.

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1986) (Weigel, J.). The rationale underlying prejudgment interest awards based on the delivery date

is that the cause of action accrues at the time of delivery in actions for damage to cargo. States

Steamship Co. v. Amer. Smelting & Refining Co., 339 F.2d 66, 70 (9th Cir. 1964). “It is at this time

that the shipper becomes aware of the ‘loss or damage.’” Id. By contrast, a claim for indemnity

accrues at the time of payment for the loss or damage. Id. (“[In] the usual indemnity claim, [] a

cause of action does not accrue until the indemnitee has made actual payment.”). Thus, the injury in

a cause of action for damaged goods is not suffered until the damaged goods arrive, while the

damage in an indemnification case is incurred when the payment is made. The present action is

more like an indemnification action than one for damaged goods. APL seeks compensation for

damages to the vessel in the form of reimbursement for clean-up and repair costs. See Columbia

Brick Works, 768 F.2d at 1070 n.1 (collecting cases where court awarded interest for repairs based

on date of payment for repairs). The Ninth Circuit has observed that in cases in which the damages

award is based on repair and replacement, prejudgment interest is appropriate as of the date those

costs were incurred. Id. at 1070. Therefore, the court concludes that the appropriate date for the

commencement of prejudgment interest is the date on which APL incurred the costs as a result of

UK Aerosol’s refusal to pay, that is August 3, 2004. 

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\CONCLUSION

For the foregoing reasons, the court GRANTS APL’s motion for entry of judgment. 

IT IS SO ORDERED.

Dated: June 25, 2007 

MARILYN HALL PATEL

District Judge

United States District Court

Northern District of California

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1. Unless otherwise noted, all facts are taken from the second amended complaint (the “Complaint”

or “SAC”).

2. The parties agree that the applicable interest rate is the 52-week Treasury bill rate as proscribed

by 28 U.S.C. section 1961. 

3. APL has not specified the applicable rate on August 3, 2004. It notes, however, that the rate on

November 24, 2003 was “significantly lower” than that on its preferred date. Pl.’s Reply at 2. 

ENDNOTES

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