Opinion ID: 216819
Heading Depth: 1
Heading Rank: 3

Heading: discussioncross-appeal by ventas

Text: As an initial matter, we note HCP's argument that Ventas has waived the issues it raises on cross-appeal because Ventas' arguments are based largely on cryptic assertions and unexplained citations. (HCP Rep. at 43 (citing El-Moussa v. Holder, 569 F.3d 250, 257 (6th Cir. 2009).)) Although Ventas' briefing left much to be desired, we nonetheless find that the issues raised by Ventas on cross-appeal are properly presented. We now turn to those issues. Ventas challenges the judgment below on the basis that the district court erroneously precluded it from recovering additional damages. Specifically, Ventas argues that the district court erred by: 1) refusing to submit the issue of punitive damages to the jury; 2) converting its damages from Canadian to U.S. dollars based on the exchange rate as of the date of injury, rather than the date of judgment; 3) precluding Ventas from seeking compensatory damages based on increased financing costs and currency market fluctuations; and 4) declining to award prejudgment interest. As explained below, we conclude that the district court erred by not submitting the issue of punitive damages to the jury, therefore requiring us to REVERSE the decision below as to punitive damages, and REMAND for further proceedings. We AFFIRM in all other respects.
Ventas argues that there was sufficient evidence of fraud to submit the issue of punitive damages to the jury. The district court disagreed and granted judgment as a matter of law to HCP on the issue of punitive damages. [12] See Fed.R.Civ.P. 50(a). Upon review, we conclude that the district court erred in granting judgment as a matter of law in this instance.
The question of whether there was sufficient evidence to support a punitive damages award is a question of law, which we review de novo. Virostek v. Liberty Twp. Police Dep't, 14 Fed.Appx. 493, 508 (6th Cir.2001). Because we are sitting in diversity, we use the standards for a judgment as a matter of law applicable under the law of the forum state. Dewit v. Morgen Scaffolding, Inc., 78 F.3d 584 (6th Cir.1996) (table); see also Estate of Riddle ex rel. Riddle v. S. Farm Bureau Life Ins. Co., 421 F.3d 400, 407-08 (6th Cir.2005); Arms v. State Farm Fire & Cas. Co., 731 F.2d 1245, 1248 (6th Cir. 1984). As we have explained: Under Kentucky law, a motion for a directed verdictthe same thing as a motion for judgment as a matter of law under Rule 50(a)should be granted only if there is a complete absence of proof on a material issue in the action, or if no disputed issue of fact exists upon which reasonable minds could differ. In deciding such a question, every favorable inference which may reasonably be drawn from the evidence should be accorded the party against whom the motion is made. Estate of Riddle, 421 F.3d at 408 (quoting Adam v. J.B. Hunt Transp., Inc., 130 F.3d 219, 231 (6th Cir.1997)) (internal quotation marks, citations, and alterations omitted).
Before turning to the evidentiary record, we outline the applicable legal standard governing punitive damages under Kentucky law. Kentucky has long-recognized the availability of punitive damages in tort actions. See, e.g., Horton v. Union Light, Heat & Power Co., 690 S.W.2d 382, 388 (Ky.1985) (collecting cases); Engleman v. Caldwell & Jones, 243 Ky. 23, 47 S.W.2d 971, 972 (1932). In 1988, Kentucky abrogated the common law of punitive damages with the enactment of Kentucky Revised Statute (K.R.S.) §§ 411.184, et seq. The statute defines punitive damages as those damages, other than compensatory and nominal damages, awarded against a person to punish and to discourage him and others from similar conduct in the future. K.R.S. § 411.184(1)(f); see also Young v. Vista Homes, Inc., 243 S.W.3d 352, 366-67 (Ky.Ct.App.2007). The party seeking punitive damages shall recover punitive damages only upon proving, by clear and convincing evidence, that the defendant from whom such damages are sought acted toward the plaintiff with oppression, fraud, or malice. K.R.S. § 411.184(2). Here, Ventas seeks punitive damages on the sole basis of fraud. Under the statute, [f]raud means an intentional misrepresentation, deceit, or concealment of material fact known to the defendant and made with the intention of causing injury to the plaintiff. K.R.S. § 411.184(1)(b). This standard appears similar to that required to impose tort liability for fraud under Kentucky law, which requires a showing of the following by clear and convincing evidence: (a) material representation; (b) which is false; (c) known to be false or made recklessly; (d) made with inducement to be acted upon; (e) acting in reliance thereon; and (f) causing injury. Rickert, 996 S.W.2d at 468; see also Miller's Bottled Gas, Inc. v. Borg-Warner Corp., 817 F.Supp. 643, 646 (W.D.Ky.1993). Additionally, although not expressly stated in the statute, Kentucky law requires a plaintiff seeking punitive damages to prove that the relevant actions of the defendant were the proximate cause of the resulting injury to the plaintiff. See, e.g., Jackson v. Tullar, 285 S.W.3d 290, 297 (Ky.Ct.App.2007).
Based on the applicable law, the issue we confront is whether sufficient evidence exists that 1) HCP acted towards Ventas with fraud; 2) HCP had the intention of causing injury to Ventas; and 3) HCP's fraud proximately caused Ventas' injury. See K.R.S. § 411.184(1)(b); Jackson, 285 S.W.3d at 297. Viewing the evidence in the light most favorable to Ventas, as we must in reviewing this issue, we find that the issue of punitive damages should have gone to the jury. [13] See Estate of Riddle, 421 F.3d at 410 (remanding case for trial on punitive damages). The record is replete with evidence of intentional misrepresentations, deceit, and/or concealment of material facts by HCP. See Rickert, 996 S.W.2d at 468 (noting the following as relevant to a finding of fraud: character of the testimony, the coherency of the entire case as well as the documents, circumstances and facts presented); Cintas Corp. v. Sitex Corp., No. 2005-CA-002377, 2005-CA-002415, 2007 WL 3226984, at  1 (Ky.Ct.App. Nov. 2, 2007) (upholding punitive damage award on tortious interference claim between competitors). We begin by noting the testimony of Michael Warren, the Chairman of Sunrise. Warren testified that after being approached by HCP about its interest in making a topping bid, Warren requested that HCP not make its bid public and instead engage in confidential negotiations. When HCP refused, Warren was flabbergasted and surprised. (Tr.3A at 35-36.) This was the first time Warren had ever known a participant in a confidential auction process to make an unauthorized public bid. ( Id. at 35.) Warren also testified that Flaherty falsely stated to Sunrise that Flaherty had sent a signed, unconditional offer to Sunrise. Flaherty admitted at trial that he was not authorized to make an unconditional bid. Moreover, as discussed supra pages 313-17, the jury could reasonably conclude, based on the evidence, that HCP's February 14, 2007 press release was contaminated by fraudulent misrepresentations, and concealment. See Anderson v. Wade, 33 Fed.Appx. 750 (6th Cir.2002) (upholding punitive damages award under Kentucky law, where defendant intentionally concealed material facts and made material misrepresentations in the sale of land). Without repeating our entire discussion, we again note that HCP's announcement of its purported offer of $18.00 per unit failed to disclose material facts known to HCP, including: 1) that its offer of $18.00 per unit was conditional on HCP reaching an agreement with SSL; 2) that HCP's prior experiences with SSL suggested that it would be difficult for HCP and SSL to reach an agreement; and 3) that HCP was a party to a Standstill Agreement that likely prohibited its public offer. ( See, e.g., Tr.2B at 89 (testimony of Sunrise's independent investment banker, stating that HCP's 2/14/07 press release was misleading)). HCP instead misrepresented that its offer was largely identical to that made by Ventas, and that the HCP transaction had a greater certainty of completion. HCP never corrected the record directly, and in fact maintained that its offer was superior. ( See, e.g., Tr.5A at 25-27.) Flaherty admitted that he was not sufficiently confident of reaching an agreement with SSL to make an unconditional bid. (Tr.4B at 64.) We also believe that a reasonable jury could conclude that HCP engaged in its fraudulent conduct with the intention of inflicting harm on Ventas. Indeed, as we discussed, supra at pages 313-17, HCP's conduct suggests that its purported offer of $18.00 per unit was not genuine: the purported offer was not signed, which a knowledgeable witness described as unprecedented (Tr.3A at 47); HCP's CEO informed Sunrise that he had sent a signed contract to Sunrise, when in fact he had not; and HCP's CEO admitted that he was not authorized to make an unconditional bid for Sunrise. As Sunrise's CEO testified at trial about his experience with HCP: after you've been through all of that, you know, the conclusion that you come to as a business person is that these people are not real, they are not reliable, and so we were not going to attach our star to HCP. ( Id. at 82.) In fact, a financial advisor from Sunrise testified that, in January of 2007, HCP CEO Flaherty declined an offer of additional time to attempt to reach an agreement with SSL, stating that HCP was moving on to other things. (Tr.2A at 39.) HCP's investment banker reported to his colleagues that, although HCP remained focused on acquiring Sunrise, at a minimum, they plan on causing the other side to have to pay more. (App. at 362.) HCP's CEO code-named its topping bid strategy as project show me what you got, yoe mama, referring to the female CEO of Ventas. (Tr.4B at 126.) HCP believed that it would be hosed if Ventas acquired Sunrise ( id. at 156), as it might allow Ventas to catch HCP in the marketplace. ( Id. at 102.) Sunrise's CEO testified at trial that he did not believe HCP's offer for Sunrise to be bona fide, and suggested that HCP's bid drove up the market . . . and killed the $15 bid. (Tr.3A at 81.) A managing director of ING, one of the largest unitholders, testified about the possibility that HCP had used ING to cause Ventas to pay more for Sunrise. (R. 487 at 146.) A senior executive of HCP suggested that it would be okay if she ended up in 17.50. (Tr.5A at 135-37.) Finally, based on the evidence, a reasonable jury could conclude that HCP's fraud was the proximate cause of Ventas' injury. The jury found that HCP's tortious interference caused Ventas to pay an additional $1.50 per unit of Sunrise beyond its initial offer of $15.00 per unit. Although Sunrise units were trading at approximately $15.00 per unit after Ventas announced its proposed acquisition, the price per unit increased by 20% to approximately $18.00 per unit after HCP made its unauthorized public offer on February 14, 2007. The price would never return to $15.00 per unit, and Ventas would eventually raise its offer to $16.50 per unit to complete the acquisition. If the question had been presented to the jury, the jury could reasonably have found that it was the fraudulent character of HCP's conduct that proximately caused the injury to Ventas. As discussed above, the evidence suggests that HCP's public announcement of its offer was more than a simple breach of its Standstill Agreement with Sunrise, but instead was a fraudulent act designed to mislead the market and harm Ventas. The fraud contained in the February 14, 2007 press release caused the market price of Sunrise to increase from $15.00 to $18.00. The jury could reasonably have found that absent the fraudulent character of HCP's public announcement, the market price of Sunrise would not have increased, or would not have increased as dramatically. Additionally, the jury could have reasonably found that HCP never directly corrected its fraud, allowing some if not all of the effects of the fraud to linger in the market and continue to operate against Ventas. This is not a case where the alleged fraud by the defendant was collateral to the plaintiff's injury. For instance, in Hardaway Management v. Southerland, 977 S.W.2d 910, 916-17 (Ky.1998), the Kentucky Supreme Court denied recovery of punitive damages in a wrongful termination action under a state employment law. The only evidence of fraud was a termination letter from the employer that falsely stated the reasons for the plaintiff's termination. Id. at 916. The court disallowed punitive damages because the false statements did not cause any injury to the plaintiff. Id. at 917. The court reasoned that even if the statements were intended to prevent [the plaintiff from] recovering damages for her wrongful discharge, they failed in their intended effect. Id. Unlike Hardaway Management, HCP's alleged fraud in this case was the direct cause of Ventas' injury. Simply put, the jury could reasonably find that the fraud itself was the primary vehicle by which HCP inflicted injury on Ventas. Absent the intentional misrepresentations, deceit, and/or concealment by HCP, which we detail above, the market may well have reacted less favorably to HCP's purported offer of $18.00 per unit, or may perhaps have dismissed HCP's offer altogether. Cf. Bierman v. Klapheke, 967 S.W.2d 16, 19-20 (1998) (upholding punitive damages award, where the fraudulent acts exacerbated any injury that may have occurred). In light of the evidence presented at trial, we believe it was error for the district court to prevent the jury from considering an award of punitive damages. Accordingly, we REVERSE the decision of the district court as to punitive damages, and REMAND with instructions that the matter proceed to trial on the single issue of punitive damages. See Estate of Riddle, 421 F.3d at 410 (remanding case for trial on punitive damages). On remand, the district court shall be guided in part by K.R.S. § 411.186, which sets forth numerous factors that the jury should consider if the jury decides to award punitive damages.
Ventas appeals the district court's decision to apply the U.S./Canadian exchange rate as of the date of injury, rather than the date of judgment. Because the decision of the district court rests on an interpretation of state law, we review de novo. See Competex, S.A. v. Labow, 783 F.2d 333, 334 (2d Cir.1986) (stating that [b]ecause determination of the date on which to convert a foreign currency debt into dollars is a substantive question, federal courts sitting in diversity will apply state law). In the proceedings below, the parties disputed the exchange rate applicable to Ventas' damages. Ventas sought to apply the exchange rate as of the date of judgment, while HCP sought to apply the exchange rate as of the date of injury. The district court agreed with HCP, and held that [t]he proper exchange rate for Ventas'[] damages is determined on the date of injury, which was April 26, 2007, the date that the Sunrise unitholders approved Ventas' revised offer of $16.50 per unit. The district court relied upon the rule set forth in two older Supreme Court cases, that if the cause of action arises under U.S. law, then the conversion date is the date of injury. See, e.g., Die Deutsche Bank Filiale Nurnberg v. Humphrey, 272 U.S. 517, 47 S.Ct. 166, 71 L.Ed. 383 (1926); Hicks v. Guinness, 269 U.S. 71, 46 S.Ct. 46, 70 L.Ed. 168 (1925). On appeal, Ventas argues that the district court should have used the date of judgment exchange rate. Ventas contends that the Supreme Court cases cited by the district court are not controlling because state law governs the appropriate currency rate in diversity cases. (Ventas Br. at 71.) Ventas asserts that Kentucky would follow the commentary to § 823 of the Restatement (Third) of Foreign Relations Law (1987), which states that if the foreign currency has appreciated since the injury or breach, judgment should be given at the rate of exchange applicable on the date of judgment or the date of payment. Restatement (Third) of Foreign Relations Law § 823, cmt. (c). Although no Kentucky law is on point, we find that the district court correctly predicted that Kentucky would select the exchange rate from the date of injury. Nothing in Kentucky jurisprudence suggests that the state would rely on a comment to the Restatement (Third) of Foreign Relations, particularly in the face of Supreme Court precedent to the contrary. See, e.g., Mt. Lebanon Pers. Care Home, Inc. v. Hoover Universal, Inc., 276 F.3d 845, 852-53 (6th Cir.2002) (predicting that the Kentucky Supreme Court would reject a certain rule because, among other reasons, the U.S. Supreme Court had done so); accord Siematic Mobelwerke GmbH & Co. KG v. Siematic Corp., 669 F.Supp.2d 538, 542 (E.D.Pa. 2009) (In the absence of pertinent state law precedent, federal courts in diversity suits have frequently adopted the federal approach.) (collecting cases from courts applying the laws of Minnesota, Illinois, Colorado, Missouri, Tennessee, and Florida); Elite Entm't, Inc. v. Khela Bros. Entm't, Inc., 396 F.Supp.2d 680, 694 (E.D.Va.2005) (Courts generally agree that the judgment day interest rate is relevant only when the cause of action arises entirely under foreign law.) (predicting Virginia law). Furthermore, because the purpose of compensatory damages is to make the victim whole, selecting the date of injury for purposes of the exchange rate would better approximate the damage sustained by the victim since such an approach looks to the point at which the victim was injured. [14] The date of judgment is merely an arbitrary and speculative future date that is determined by variables unrelated to the underlying injury, including litigation posturing and docket pressures. Setting the currency conversion rate as of the date of injury provides for greater certainty in economic relationships, allowing market players to more accurately assess their risks. It also prevents bad faith attempts to, for instance, delay the entry of judgment to engage in currency speculation. Accordingly, we AFFIRM the district court decision to apply the date of injury rule for currency conversion as a matter of Kentucky law.
Ventas appeals the district court's decision to deny Ventas recovery of certain claimed compensatory damages. Specifically, the district court precluded Ventas from recovering: 1) the increased cost in U.S. dollars for the $15.00 component of the purchase price on April 26, 2007 as compared to the April 2, 2007 contracted-for closing date; and 2) the loss suffered by Ventas because HCP's improper interference delayed Ventas'[] planned equity raise to finance the acquisition. We now AFFIRM.
We briefly review the applicable law governing compensatory damages. Under Kentucky law, a successful tort plaintiff may recover compensatory damages arising from the defendant's tortious conduct. The existence of these damages must be proved to a reasonable certainty. See, e.g., Morgan v. Lanham, No. 2009-CA-001412, 2011 WL 918735, at  (Ky.Ct.App. Mar. 18, 2011) (emphasis omitted). Additionally, the defendant's tortious conduct must be the proximate cause of the damages. As the Kentucky Supreme Court has explained, [p]roximate cause . . . consists of a finding of causation in fact, i.e., substantial cause, as well as legal causation, meaning the absence of a public policy rule of law which prohibits the imposition of liability. Deutsch v. Shein, 597 S.W.2d 141, 144 (Ky.1980). With regard to legal causation, Kentucky courts look to foreseeability: it is not necessary that the defendant should have been able to anticipate the precise injury sustained, or to foresee the particular consequences, but only that the injury is a natural and probable consequence of the tortious conduct. Louisville Gas & Elec. Co. v. Roberson, 212 S.W.3d 107, 112 (Ky.2006) (Wintersheimer, J., concurring) (citing Eaton v. Louisville & N.R. Co., 259 S.W.2d 29 (Ky.1953)); see also Pile v. City of Brandenburg, 215 S.W.3d 36, 42 (Ky. 2006) (noting that an intervening cause may break the chain of causation if it is of an independent origin, unassociated with the underlying tortious conduct).
Ventas first argues that it is entitled to damages from the increased cost of financing the transaction. (Ventas Br. at 74.) Ventas explains as follows: HCP's deceptive press release forced Ventas to delay, from February 22[, 2007] to May 18, 2007, its planned sale of equity to finance the acquisition. As a result, Ventas incurred substantially higher financing costs as its stock value declined. ( Id. at 72.) The district court granted summary judgment for HCP on this claim. We review the district court's grant of summary judgment de novo. Wuliger v. Mfrs. Life Ins. Co., 567 F.3d 787, 792 (6th Cir.2009). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(a). The district court acknowledged that HCP's topping bid delayed any plan Ventas may have had to issue shares in February [of 2007], but granted summary judgment because it found no evidence that establishes an actual date for issuing shares. The district court reasoned that the evidence does not suggest that HCP knew of any actual plan by Ventas' to issue equity in this transaction, [n]or does any evidence suggest that HCP would know the timing on that issuance. Therefore, the district court found, Ventas'[] issuance of shares was not clearly foreseeable. The district court also held that HCP's acts [were] not substantial factors in bringing about the harm for which Ventas seeks compensation, and that Ventas received full market value for the shares when issued. On appeal, Ventas argues that it presented ample evidence that it planned to raise equity in late February 2007 to finance the acquisition. Ventas cites, with little explanation, an affidavit from its CEO; a presentation to the Ventas Board; and correspondence about a planned $1 billion equity raise. (Ventas Br. at 73-74 (citing App. at 748-50, 844-46; R. 193, Ex. 65 ¶¶ 4-6, 9 & Ex. C).) Ventas also notes that it was hell bent on proceeding with an equity raise. ( Id. at 74 (citing record evidence).) Additionally, Ventas argues that the record contains ample evidence of foreseeability, and cites: 1) a January 17, 2008 analysis from HCP's investment bankers showing that Ventas would finance the acquisition through $1.059 billion of `New Common Equity Issued;' ( id. (citing App. 366, R. 193, Ex. 104)); and 2) the testimony of HCP's CEO, stating that he expected Ventas' stock price to decline after HCP's public offer. ( Id. (citing Tr.4B at 154).) Having reviewed the record, we find that the district court properly granted summary judgment for HCP on this claim for damages. Kentucky law does not tolerate uncertainty as to the fact of damage, Lanham, 2011 WL 918735, at  (emphasis omitted), and as such, Ventas must show, with a reasonable certainty, that it sustained damages in the first instance. See id. Based on our review of record, we conclude that no reasonable jury could find, with any reasonable certainty, that Ventas had decided to conduct an asset sale to take place at any particular time. Without the record supporting such a finding, Ventas' claim for damages arising out of the timing of its claimed asset sale fails as a matter of law. The evidence relied upon by Ventas in support of this claim for damages is wholly speculative and does not purport to identify a planned date for the equity offering. ( See, e.g., App. at 844 (considering asset sales); id. at 1387 (examining a number of different options).) In fact, Ventas' CEO acknowledged in an email that the planned equity raise could well occur after February 22, 2007: she stated on February 3, 2007 that Ventas seeks maximum flexibility to hit the market for debt and/or equity securities (which might even be prior to the closing), then scheduled for April 2, 2007. ( Id. at 750 (emphasis added).) Accordingly, we AFFIRM the grant of summary judgment for HCP on Ventas' claim for damages due to a claimed delay in its equity raise.
Ventas next argues that it is entitled to damages based on the increased cost of the original $15.00 purchase price in U.S. dollars, as a result of exchange rate fluctuations in the international currency markets. ( See Ventas Br. at 69.) Ventas explains as follows: Ventas contacted to acquire Sunrise on April 2, 2007 for $15 per share, a total of C$1,137,712,410 . . . plus assumption of Sunrise's debt. HCP's interference forced Ventas to delay the closing to April 26[, 2007]. By April 26, 2007, the value of the U.S. dollar declined against the Canadian dollar from .89366 to.86565. The C$1,137,712,410 price cost $31,867,325 more in U.S. dollars on April 26[, 2007] than on April 2[, 2007]. ( Id. (internal record citations omitted).) In an August 27, 2009 oral ruling, the district court denied Ventas' claim for this measure of damages. The court reasoned that Ventas did not have an expectancy that could be proven to acquire the company on a specific date and certainly not at a particular value of the Canadian dollar. (Tr.7A at 28.) Rather, the district court held, Ventas' expectancy was to purchase the company at $15 Canadian. ( Id. at 50.) The district court also noted that the risk of currency changes is a risk everybody faced. ( Id. ) Ventas makes two arguments on appeal. The first is factual, that whether Ventas had a contractual expectation that the acquisition would close on April 2, 2007 is a fact issue for the jury. (Ventas Br. at 69.) The second is legal, that a decline in currency value is a direct and foreseeable consequence of a delay in contractual performance and is compensable. ( Id. (citing Walther & Cie v. U.S. Fid. & Guar., 397 F.Supp. 937, 945 (M.D.Pa.1975).)) Ventas contends that the tortfeasor should bear the risk of fluctuations in market prices during a period of delay caused by its wrongful conduct. ( Id. (citing Payne v. Wood, 62 F.3d 1418 (6th Cir.1995) (table).)) Additionally, Ventas argues that the increased currency cost was part of Ventas'[] reasonable costs to mitigate its loss by extending the shareholder vote on approval of the deal at $16.50. ( Id. (citing Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1237-38 (10th Cir.2006); Restatement of Torts § 919).) We reject Ventas' arguments and affirm the decision of the district court. As an initial matter, we agree with the district court that, as a matter of law, Ventas did not have a contractual expectancy to acquire Sunrise on a specific date and certainly not at a particular value of the Canadian dollar. (Tr.7A at 28.) The sole claim at trial was for tortious interference with a prospective advantage, which by its terms requires the plaintiff to prove an expectancy with which the defendant tortiously interfered. The right to recover. . . consequential damages can hardly be divorced from the tort that allegedly caused them, QSI-Fostoria D.C., LLC v. Gen. Elec. Cap. Bus. Asset Funding Corp., 389 Fed.Appx. 480, 486 (6th Cir.2010), and as the district court aptly noted: It seems to me that in the tort of the expectancy . . . the expectancy sued upon is the expectancy to purchase the company, to acquire the company, and to acquire the company at 15. I don't think there was an expectancy that could be proven to acquire the company on a specific date and certainly not at a particular value of the Canadian dollar. So I think that in terms of the tort of tortious interference with business expectancy, that expectancy that I have been defining it is to acquire the company at 15. It is undisputed that Ventas voluntarily obligated itself in the Purchase Agreement to acquire Sunrise, a Canadian company, at a fixed amount of Canadian dollars. (App. at 281.) The Purchase Agreement with which HCP tortiously interfered did not address the risk of currency fluctuations. Ventas cites to no evidence that it selected April 2, 2007 as the original closing date because of any expectation that the exchange rates would be of a certain value. Because Ventas' underlying tort claim alleges interference with an agreement completely divorced from the international currency markets, Ventas' instant claim for damages fails as a matter of law. Cf. Humphrey, 272 U.S. at 519, 47 S.Ct. 166 (A suit in this country is based upon an obligation existing under the foreign law at the time when the suit is brought, and the obligation is not enlarged by the fact that the creditor happens to be able to catch his debtor here.). Moreover, any subjective expectation that Ventas had of closing the deal on April 2, 2007 was destroyed by its own actions. On March 24, 2007, Ventas sent a letter to Sunrise in which it expressly waive[d] its right under the Purchase Agreement to insist that the Sunrise convene a unitholder meeting by March 31, 2007, which would permit the closing to occur on April 2, 2007. (App. at 1294-95.) Ventas instead requested that Sunrise postpone the unitholder meeting until April 11, 2007, so that the parties could update proxy materials to: 1) disclose that Sunrise's financial performance in the fourth quarter is materially worse than street estimates; and 2) describe the decision of the Ontario Court of Appeal. The letter explained that Ventas believes that it would be appropriate to give Unitholders 10 business days after release of the financial and other information described [in the letter] to evaluate such information. ( Id. at 1295.) Furthermore, although Kentucky courts have not addressed the question, we believe that Kentucky law would deny recovery of compensatory damages arising from currency market fluctuations wholly unrelated to the defendant's conduct. These damages are unforeseeable. See, e.g., Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329, 83 P.3d 322, 329-30 (2004) (holding that claimed damages caused by market forces during a delay caused by a defendant were unforeseeable as a matter of law). Ventas offers no citation to anything in the record to suggest otherwise. (Ventas Br. at 69-70; Ventas Rep. at 18-21.) We considered a similar issue in Layne v. Bank One, Kentucky, N.A., 395 F.3d 271 (6th Cir.2005) (applying Kentucky law). In Layne, two individuals obtained a loan from a bank that was secured by their pledge of shares of stock in an internet company as collateral. The internet bubble burst in February of 2001, and as a result, the value of the collateral substantially declined. The loans eventually went into default, after which the debtors discussed with the bank either paying down the balance, or pledging additional collateral, rather than have the bank liquidate the collateral. The discussions were unsuccessful, and the bank liquidated the shares for a fraction of their former price. The debtors brought a diversity action in federal court against the bank alleging, among other things, breach of a duty under Kentucky law to preserve the value of their collateral. The district court granted summary judgment to the bank on this claim, and we affirmed. We held, as a matter of Kentucky law, that the duty of preservation does not extend to protecting against market declines. Id. at 276. The investment risk, we held, is properly placed on the borrower given the volatility of the stock market. Id. at 277 (internal quotation marks and citation omitted). We then set forth a general rule that stock market fluctuation is unforeseeable as a matter of law, where the defendant has no knowledge of a pre-defined event that will impact the value of the security. See id. at 277 n. 7 (internal quotation marks and citations omitted). The same reasoning applies with equal force to the present case. The risk of market fluctuations is an uncontrollable, background risk that lurks in every commercial transaction. See, e.g., In re Callister, 15 B.R. 521, 533 (Bankr.D.Utah 1981) (stating that a market player is at the mercy of events beyond its control). More importantly, the risk is constant, and no more affects a plaintiff on one day rather than the next. Although the risk may have enured to Ventas' detriment in this case, Ventas could have received a windfall had the fluctuation differed. Mutuelles Unies v. Kroll & Linstrom, 957 F.2d 707, 714 (9th Cir.1992). We believe that it is only when a defendant's conduct is connected to the movements in the markets, or the defendant has knowledge of a pre-determined future event, that Kentucky courts will permit recovery of consequential damages arising from market fluctuations. [15] See Layne, 395 F.3d at 276-77 & n. 7. Cf. Burstyn v. Worldwide Xceed Grp., Inc., No. 01 CV 1125, 2002 WL 31191741, at  (S.D.N.Y. Sept. 30, 2002) (holding, in the securities law context, that the misrepresentations, and not the market forces behind the dot com collapse, must be the proximate cause of plaintiffs' injuries). Here, it is undisputed that HCP's tortious conduct was not directed at the currency markets; Ventas makes no allegation that HCP's tortious conduct in any way affected the U.S./Canadian dollar exchange rate. HCP's conduct simply provide[d] the occasion by which the injury was made possible. Clay v. Chesapeake & O. Ry. Co., 239 S.W.2d 231, 232 (Ky.1951). Accordingly, we AFFIRM the grant of judgment as a matter of law for HCP on Ventas' claim for damages on account of fluctuations in the currency markets.
Ventas appeals the denial of its Rule 59(e) motion for an award of prejudgment interest under state law. Because the Court is sitting in diversity, prejudgment interest is governed by state law. See Conte v. Gen. Housewares Corp., 215 F.3d 628, 633 (6th Cir.2000). We review the denial of a Rule 59(e) motion for an abuse of discretion. See U.S. Fire Ins. Co. v. City of Warren, 87 Fed.Appx. 485, 493 (6th Cir.2003). As applied to prejudgment interest, a district court abuses its discretion if it declines to award prejudgment interest that is mandatory under state law. See id. Under Kentucky law, if the claim is liquidated, interest follows as a matter of right, but if it is unliquidated, the allowance of interest is in the discretion of the trial court. Hale v. Life Ins. Co. of N. Am., 795 F.2d 22, 24 (6th Cir.1986). As the Kentucky Supreme Court has explained: Precisely when the amount involved qualifies as liquidated is not always clear, but in general liquidated means made certain or fixed by agreement of parties or by operation of law. Common examples are a bill or note past due, an amount due on an open account, or an unpaid fixed contract price. Nucor Corp. v. Gen. Elec. Co., 812 S.W.2d 136, 141 (Ky.1991). The district court in the instant case correctly concluded that Ventas' claim is unliquidated and therefore Ventas was not entitled to prejudgment interest as a matter of right. Although, as Ventas argues, the jury may have resorted to simple arithmetic to calculate damages in this case, Kentucky law is clear that in determining if a claim is liquidated or unliquidated, one must look at the nature of the underlying claim, not the final award. 3D Enters. Contracting Corp. v. Louisville & Jefferson Cnty. Metro. Sewer Dis., 174 S.W.3d 440, 450 (Ky.2005) (emphasis in original). The value of Ventas' underlying tort claim was neither agreed upon by the parties [nor] fixed by operation of law or the parties. Travelers Prop. Cas. Co. of Am. v. Hillerich & Bradsby Co., 598 F.3d 257, 275 (6th Cir.2010). Indeed, Ventas sought to recover damages beyond the $1.50 per unit increase in its offer, and, as the district court explained, the jury was free under the applicable law to award Ventas less than $1.50 per share if it found that Ventas could have offered a lower price to acquire Sunrise. (Tr. 11B at 17); see also Prosoft Automation, Inc. v. Logan Aluminum, No. 03-CV-142, 2006 WL 1228773, at  (W.D.Ky. Apr. 28, 2006) ([A]lthough the jury ultimately awarded Prosoft the full amount requested as compensation for [certain hours worked,] they were not reduced to a certainty in amount prior to trial. ) (emphasis in original). Accordingly, the district court's denial of an award of prejudgment interest to Ventas is AFFIRMED. [16]
For the reasons set forth above, the grant of judgment as a matter of law on the issue of punitive damages is REVERSED, and the case is REMANDED with instructions that the matter proceed to trial on the single issue of punitive damages. The remaining decisions of the district court discussed herein are AFFIRMED.