Opinion ID: 170933
Heading Depth: 2
Heading Rank: 2

Heading: Accrual Dates

Text: The district court awarded GIT prejudgment interest on its entire claim from the date of termination: September 29, 1995. MK argues GIT had not incurred many of their costs at this point. It therefore submits prejudgment interest must be recalculated based on the various accrual dates of GIT's damages. GIT counters with MK's stipulation in the first trial that prejudgment interest should be calculated on all damages from the date of termination. In the second trial, the district court granted GIT's motion to enforce the stipulation. Stipulations cannot be disregarded or set aside at will. Wheeler v. John Deere Co., 935 F.2d 1090, 1097 (10th Cir.1991) (quotation omitted). Stipulations, however, are not absolute and will be set aside to prevent manifest injustice. United States v. Montgomery, 620 F.2d 753, 757 (10th Cir.1980). The district court has broad discretion to determine whether a party should be held to a stipulation or whether justice requires the stipulation be set aside. Wheeler, 935 F.2d at 1098. Whether a stipulation made in the first trial should remain binding during the retrial is determined by the nature of the stipulation and the circumstances underlying its formulation. Id. Formal stipulations made for the purpose of relieving a party from proving facts can generally be substituted as proof of the stipulated fact in a subsequent trial of the same action. Id. Where, however, a stipulation is limited expressly to a single trial and phrased in terms of conclusory, rather than evidentiary, facts, district courts may on retrial free a party from the stipulation. Id. Before the district court in the first trial, the following colloquy occurred: THE COURT: ... [T]he question I have for all of you is: Will you stipulate that the date from which interest will run if GIT prevails is the date of termination? MR. KELLY: GIT would stipulate, Your Honor. MR. FROST: MK would stipulate. J.A. Vol. 5 at 1320. Unlike Wheeler, a products-liability case involving a formal stipulation to the feasibility of designing a safer product, this stipulation was phrased in terms of conclusory, rather than evidentiary, facts. Wheeler, 935 F.2d at 1098. MK argues it would be manifestly unjust to hold it to this stipulation when many categories of damages in the first trial were not known at the time of the stipulation or had not yet occurred. We agree, in part. The district court did not abuse its discretion in holding MK to its stipulation for damages of the kind awarded in the first trial. Although the stipulation was not formal, district courts are vested with broad discretion in determining whether to hold a party to its prior stipulation. Where, however, damages were not incurred or known until after the first trial, the district court abused its discretion by holding MK to its 1996 stipulation. As this court explained in Reed v. Mineta, prejudgment interest does not accrue until the victim actually sustains the monetary injury. 438 F.3d 1063, 1066 (10th Cir.2006). Although a party may stipulate to paying prejudgment interest on a damage award sustained before the monetary injury, to hold that stipulation binding for damages not contemplated or knowable in the first trial would constitute manifest injustice. Many of GIT's damages were sustained on the date of termination. This includes the jury awards for work performed under the contract, the reasonable profit for work performed, and equitable adjustments. Post-termination costs, although technically incurred after the date of termination, were a central aspect of the first trial. When MK stipulated to the date from which interest would run, it fully understood post-termination costs would be included in this sum. It is thus not manifestly unjust to hold MK to its stipulation as to these awards. Prejudgment interest on these sums should run from the stipulated date of termination. GIT, however, did not incur a recoverable injury with respect to its subcontractors until it settled with them. [10] See Morrison Knudsen I, 175 F.3d at 1249-54 (explaining settlements with subs are not a recoverable injury under the contract until settlement is reached). Nor could MK foresee the amount the subs would recover from GIT. Thus, prejudgment interest should run from the dates of settlement. GIT settled with Bogue Construction, Inc. on February 27, 1997 ($243,126); G.A. Western Construction Co. on September 29, 1997 ($22,597); and Keers Environmental on August 15, 1996 ($28,137). A jury awarded Robinson damages based on GIT's breach of the subcontract on December 27, 1999 ($5,831,485). The costs associated with these settlements, like the settlements themselves, were not recoverable until the date of settlement. [11] See Morrison Knudsen I, 175 F.3d at 1250 (quotations omitted) (explaining costs are not recoverable until they are incurred). GIT had not yet settled with its subs (save Keers Environmental) prior to the first trial. Any attempt to enforce the stipulation against MK as to costs not yet incurred as of the date of trial, and therefore completely speculative, is manifestly unjust. See Montgomery, 620 F.2d at 757. Prejudgment interest relating to the Bogue Construction, G.A. Western, and Robinson settlements must run from the dates on which GIT settled with them. Despite the great discretion district courts have in calculating prejudgment interest, the district court abused its discretion by calculating prejudgment interest on the entire damage award from the date of termination. We therefore remand for recalculation of prejudgment interest on GIT's damage award in accordance with this opinion.