Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-01769/USCOURTS-cand-3_14-cv-01769-12/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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Case No. 14-cv-01769 NC 

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CARSON INDUSTRIES, INC.,

Plaintiff,

v.

AMERICAN TECHNOLOGY 

NETWORK, CORP.,

Defendant.

Case No. 14-cv-01769 NC 

ORDER GRANTING PLAINTIFF’S 

MOTION TO AMEND JUDGMENT 

TO ADD PREJUDGMENT 

INTEREST

Re: Dkt. No. 144

I. INTRODUCTION

In this contract dispute over payment for night vision goggle kits, plaintiff Carson 

moves to amend the judgment to add prejudgment interest pursuant to Federal Rules of 

Civil Procedure 59(e) and 60(b). Because the judgment amount was ascertainable and 

therefore sufficiently certain under California Civil Code § 3287, the Court GRANTS 

Carson’s motion to add prejudgment interest.

II. STATEMENT

This case is about the sale of night vision goggle kits between two parties, Carson 

Industries Inc. and American Technology Network Corp. Carson sold night vision goggle 

kits to ATN. Carson shipped 880 goggle kits to ATN in December 2010 and the kits 

arrived on December 17, 2010. Dkt. No. 63-1 at 3, 4 (Exhibits 3 and 4; invoice and 

purchase order with date stamp).

The Court granted partial summary judgment to Carson on its sale to ATN of 463 

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goggle kits and 10 lenses in the total amount of $280,795.35, “because ATN did not give 

Carson notice of breach.” Dkt. No. 81, 9/25/2015 order. Subsequently, the Court granted 

summary judgment in favor of Carson on ATN’s counterclaim asserting that ATN paid for 

but did not receive 90 goggle kits in September 2010. Dkt. No. 103, 10/6/2015 order.

Finally, the Court granted summary judgment to Carson on the remainder of the 

case, which was comprised of “Carson’s claim for the remaining $120,241.17, or for 

ATN’s stated counterclaims that it is entitled to (1) $230,000 for its alleged repair costs for 

920 goggle kits at $250 per unit and (2) $50,000 that ATN paid to Carson in February 

2012.” Dkt. No. 142, 12/24/2015 order.

On December 24, 2015, the Court entered judgment in Carson’s favor for 

$401,036.52. Dkt. No. 143.

III. STANDARD OF REVIEW

Carson moves for amendment of the judgment under Federal Rules of Civil 

Procedure 59(e) and 60(b). Rule 59(e) requires Carson to move for amendment within 28 

days after entry of judgment. Rule 60(b) provides that “the court may relieve a party or its 

legal representative from a final judgment, order, or proceeding for the following reasons: 

(1) mistake, inadvertence, surprise, or excusable neglect.” Fed. R. Civ. P. 60(b).

Here, Carson discussed the topic of prejudgment interest with the Court during the 

pretrial conference, but failed to put an argument for prejudgment interest in its motion for 

summary judgment. Dkt. Nos. 116, 144 at 4. Under Rule 60(b)(1), Carson must show 

mistake or excusable neglect in order for the Court to amend the judgment to include 

prejudgment interest. As discussed below, the Court finds that Carson’s failure was 

excusable neglect and grants Carson’s motion because the prejudgment figure was 

ascertainable and proper under California state law.

IV. ANALYSIS

A. Certainty Under California Civil Code § 3287

In federal diversity actions, state law determines whether a party may recover

prejudgment interest. In re Exxon Valdez, 484 F.3d 1098, 1101 (9th Cir. 2007). California 

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United States District Court

Northern District of California

Civil Code § 3287 provides:

(a) 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 entitled 

also to recover interest thereon from that day, except during 

such time as the debtor is prevented by law, or by the act of the 

creditor from paying the debt. This section is applicable to 

recovery of damages and interest from any such debtor, 

including the state or any county, city, city and county, 

municipal corporation, public district, public agency, or any 

political subdivision of the state.

(b) Every person who is entitled under any judgment to receive 

damages based upon a cause of action in contract where the 

claim was unliquidated, may also recover interest thereon from 

a date prior to the entry of judgment as the court may, in its 

discretion, fix, but in no event earlier than the date the action 

was filed.

Cal. Civ. Code § 3287.

The test for determining certainty is whether the opposing party “actually know[s]

the amount owed or from reasonably available information could [] have computed that 

amount. Only if one of those two conditions is met should the court award prejudgment 

interest.” Chesapeake Indus., Inc. v. Togova Enters., Inc., 149 Cal. App. 3d 901, 907 

(1983). “This requirement reflects a general belief that a defendant should not be required 

to pay a penalty on a sum he could not ascertain prior to judgment.” Minor v. Christie’s 

Inc., No. 08-cv-05445 WHA, 2010 WL 2891599, at *2 (N.D. Cal. July 22, 2010).

Here, ATN could ascertain the amount that Carson sought to recover prior to 

judgment. Carson’s complaint alleged that “[o]n or about December 17, 2010, ATN 

became indebted to Plaintiff in the sum of $404,987.02 for goods and services sold to 

ATN, net of credits and/or partial payments.” Dkt. No. 2 at 3. Each of the Court’s 

summary judgment orders and its order clarifying issues for trial set out the claims Carson 

brought against ATN and the counterclaims ATN brought against Carson. See Dkt. Nos. 

81, 111, 142. 

ATN has disputed its liability throughout the case. In opposition to the present 

motion, ATN claims that a grant of prejudgment interest would violate its due process 

rights because it was not on sufficient notice of the judgment award. Dkt. No. 149. 

However, “[a] defendant’s denial of liability does not make damages uncertain for 

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purposes of Civil Code section 3287.” Cataphora Inc. v. Parker, 848 F. Supp. 2d 1064, 

1072-75 (N.D. Cal. 2012). The question is whether ATN had notice of what penalties it 

would endure if it lost at trial. Minor v. Christie’s Inc., 2010 WL 2891599, at *2. Because 

ATN could ascertain this sum before judgment, prejudgment interest on the $401,036.52

judgment is sufficiently certain under § 3287.

B. Rate of Interest Under California Civil Code § 3289

Unless specified in the contract, the rate of interest is ten percent per annum from 

the date of breach. Cal. Civ. Code § 3289. Given that the contract does not specify the 

interest rate, the default rate applies.

C. Date of The Breach From Which Prejudgment Interest Ran

Although the interest rate is statutorily applied, the Court must still ascertain the 

date of the breach in order to calculate prejudgment interest. Here, the goggle kits were 

delivered on December 17, 2010. See Dkt. No. 63-1 at 3 (Exhibits 3 and 4; invoices dated 

December 17, 2010). The purchase order contains a box entitled “Payment Terms” with 

the statement “net 10 days.” Id. at Exhibit 3. Under the terms of the contract, the breach 

occurred when the 10 day term expired and the invoice remained unpaid. As such, Carson

is entitled to prejudgment interest at a rate of ten percent from the date of breach on 

December 27, 2010, until the date of the judgment entered on December 24, 2015.

D. Calculating Prejudgment Interest

In CMA CGM, S.A. v. Waterfront Container Leasing Co., Inc., No. 12-cv-05467 

JSC, 2014 WL 4313026, at *8 (N.D. Cal. Aug. 29, 2014), Magistrate Judge Corley stated 

that the “formula for calculating prejudgment interest is as follows: I = P x r x t.” Under

the formula:

P = the principle amount ($401,036.52) (see Dkt. No. 143, 

Final Judgment)

r = the interest rate (10% under § 3289)

t = the time from the breach (December 27, 2010, ten days 

after the December 17, 2010 delivery) to the final judgment 

(December 24, 2015) (Dkt. No. 143) = Four years, 11 months, 

and 27 days, or 4.99 years

Therefore, the appropriate computation is: 401,036.52 x .10 x 4.99 = $200,117.22 in 

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prejudgment interest.

The judgment is accordingly adjusted to include $200,117.22 in prejudgment 

interest for a total award of $601,153.74. 

IT IS SO ORDERED.

Dated: February 9, 2016 _____________________________________

NATHANAEL M. COUSINS

United States Magistrate Judge

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