Opinion ID: 789821
Heading Depth: 3
Heading Rank: 2

Heading: Procedural background (including prejudgment and postjudgment interest issues)

Text: 18
19 Through a series of partial judgments, the district court addressed the claims discussed above, as well as the subsequent disputes over prejudgment interest, postjudgment interest, and attorney fees. In January of 2002, the court ruled on a motion by Scotts to dismiss the breach-of-contract, promissory-estoppel, and fraudulent-misrepresentation claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. It held that, even assuming as true the terms of the `Acquisition Sharing Agreement' as pled by Defendant Central Garden, no enforceable obligation resulted. For that reason, it dismissed the breach-of-contract claim and the promissory-estoppel claim. Because Central pled its fraudulent-misrepresentation claim with greater specificity, the court held that this claim could not be resolved at the Rule 12(b)(6) stage. 20 Scotts later moved for partial summary judgment on the fraudulent-misrepresentation claim. The district court granted the motion in April of 2002, holding that the evidence presented by Central d[id] not give rise to a genuine issue of material fact on the alleged falsity of the representation to enter into a joint venture on the Solaris line with Central. 2. Central's inventory-return claims 21 After the close of Central's case-in-chief, Scotts moved for judgment as a matter of law on the inventory-return claims. Noting that Central had waited seven months after the end of Program Year 2000 before attempting to return the excess inventory, and that Central had sold at least a portion of the inventory without giving notice to Scotts, the district court granted Scotts's motion with respect to the Program Year 2000 inventory. Central's claim based on the Miracle Gro products left over from Program Year 1999 was initially allowed to proceed to the jury because Central was still in possession of the inventory, but the claim was subsequently dismissed in part because Central had failed to give seasonable notice with regard to some of the Miracle Gro products. 3. The jury's verdict 22 In May of 2002, the jury returned a verdict in favor of Scotts for $22.5 million and a verdict in favor of Central for $12.075 million. The former was based entirely on Scotts's original breach-of-contract claim, but the latter was based on four separate awards: (1) $7,700,000 for breach of contract for the payment of agency fees, (2) $3,275,000 for excess shipments, (3) $750,000 for breach of contract on the incentive-compensation issue, and (4) $350,000 for the Miracle Gro products from Program Year 1999 that were subject to return. 4. The incentive-compensation award 23 After the jury verdict was entered, Scotts filed a motion pursuant to Rule 59(e) of the Federal Rules of Civil Procedure to alter the verdict with regard to the $750,000 incentive award. Because of the lack of evidence as to Central's actual sales for Program Year 2000, the district court set aside this portion of the jury verdict. 24 5. Prejudgment interest and attorney fees (Scotts) 25 Scotts also moved to amend the verdict to add prejudgment interest on its breach-of-contract claims for Program Year 2000, and sought attorney fees. The prejudgment-interest claims involved past-due accounts from four business units: gardens, lawns, growing media/organics, and horticulture. 26
27 Scotts claimed that the allowance of prejudgment interest for the gardens business unit was controlled by specific language contained in the 2000 Distributor Price List. This language, appearing in a section titled Terms about halfway through the seven-page document, provided that [a] service charge of 1 1/2% per month will be added to the unpaid balance of past due accounts. Holding that the price list constituted a written contract between the parties, the district court ruled that the specified interest rate — which amounted to 18% per annum — would be the prejudgment-interest rate for the portion of the verdict arising from the gardens unit. 28
29 Although the price list governing the lawns business for Program Year 2000 was silent as to the interest rate for past-due accounts, Scotts argued that the court should look to the service charges specified on each individual lawns invoice issued during Program Year 2000. A Terms & Conditions section appears on the reverse side of the sample invoice submitted by Scotts, and a section titled CREDIT specifies that [a] monthly service charge of one and one-half percent (1 1/2) or up to the maximum permitted by law if less, will be payable on any past due portions of the purchase price after the due date. Distinguishing a term on the back of an invoice from a term in the price list for future transactions, the district court held that the interest rate was unenforceable and that Scotts was limited to the statutory rate of 10% per annum on past-due lawns accounts. 30
31 The documents governing the growing media and horticulture business programs did not specify any interest rate for past-due accounts. Accordingly, the district court awarded Scotts the statutory interest rate on these balances due from Central. 32
33 The district court denied Scotts's motion for attorney fees. Noting that fee-shifting provisions on preprinted commercial contracts are generally held unenforceable by the Ohio courts, the district court found no reason to depart from the general rule. 6. Prejudgment interest (Central) 34 Unlike Scotts's detailed request for prejudgment interest, Central simply moved for any prejudgment interest to which it might be entitled, without presenting a method for calculating the amount. The court directed the parties to confer as to the net amount of prejudgment interest that they owed each other. After doing so, they agreed that $2,827,123.65 is the net amount of prejudgment interest that has accrued in favor of Plaintiff Scotts through May 16, 2002. 35 The district court also considered, and rejected, a request by Central for $1,574,630.00 in additional prejudgment interest resulting from additional amounts allegedly due and owing to Central from Scotts for Ortho/RoundUp shipments made during [Program Year] 2000. These additional amounts were not part of the jury award, and were unrelated to any evidence that was put before the jury. 36 7. Transition between prejudgment and postjudgment interest 37 The parties also disagreed as to the date through which prejudgment interest ran. Central argued that it stopped at the date of entry of judgment on the jury verdict (May 16, 2002), whereas Scotts claimed that it accrued until a final appealable order was entered by the district court (September 22, 2003). Holding without explanation that there is only one judgment in this case — the Rule 54(b) judgment entered on May 16, 2002, the district court held that prejudgment interest would end, and postjudgment interest begin, on that date.