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Jama Corp. v. Gupta

January 3, 2008

JAMA CORPORATION ET AL., PLAINTIFFS,
v.
DR. GIRIWARLAL GUPTA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Plaintiff's post-trial motion for further relief. This motion requests prejudgment interest on the breach of contract claim, delay damages on the trademark infringement claim, a trebling of damages of the trademark infringement claim, a permanent injunction enjoining Defendants from further use of the trademark, an order directing Defendants to change the name of the Old West Cowboy Boots Corporation, and an order of sequestration and turn over of all documents, packaging, advertising and products bearing the "Old West" trademark. (Doc. 43, 3:99-CV-1624.) For the reasons set forth below, the Plaintiff's motion will be granted in part and denied in part. The Court will grant Plaintiff's motion for prejudgment interest, as prejudgment interest is a legal right in a breach of contract claim. The Court will deny Plaintiff's motion for delay damages, as they are inapplicable to a lost profits claim. The Court will deny the Plaintiff's motion for a trebling of damages, as held in the Court's Order of January 2, 2008. The Court will issue a permanent injunction against the Defendants, as the Plaintiff satisfies the requisite factors for an injunction. This injunction will also enjoin the Defendants from the use of "Old West" in the name of the business "Old West Cowboy Boots Corporation." Finally, the Court will deny the Plaintiff's motion for sequestration and turnover, as the Plaintiff has a sufficient remedy in the permanent injunction.

BACKGROUND

The facts of this case are well-known to the parties and the Court. Therefore, the Court will only discuss the facts relevant to this motion.

On March 21, 2003, Plaintiff filed a motion for further relief, including prejudgment interest, delay damages, treble damages on trademark infringement, a permanent injunction, an order directing Defendants to change the name of "Old West Cowboy Boots Corporation," and a sequestration and turnover of all documents, packaging, advertising, and products bearing the trademark "Old West." (Doc. 43, 3:99-CV-1624.)

This motion is fully briefed and ripe for disposition.

DISCUSSION

I. Prejudgment Interest on Breach of Contract Claim

The Third Circuit Court of Appeals has held that federal courts sitting in diversity cases should apply state law with respect to prejudgment interest. American Mut. Liability Ins. Co. v. Kosan, 635 F. Supp. 341, 346 (W.D. Pa. 1986), aff'd 817 F.2d 751 (3d Cir. 1987) (citing Jarvis v. Johnson, 668 F.2d 740, 746 (3d Cir. 1982)).Plaintiff seeks prejudgment interest on the breach of contract claim pursuant to 42 PA. CONS. STAT. ANN. § 8101, which provides"[e]xcept as otherwise provided by another statute, a judgment for a specific sum of money shall bear interest at the lawful rate from the date of the verdict or award, or from the date of the judgment, if the judgment is not entered upon a verdict or award." 42 PA. CONS. STAT. ANN. § 8101. This statute generally addresses the awarding of post-judgment interest. However, prejudgment interest is awardable in breach of contract cases pursuant to the case law of Pennsylvania.

"In a contract action the award of such [prejudgment] interest does not depend upon discretion but is a legal right."Gold & Co., Inc. v. Northeast Theater Corp., 421 A.2d 1151, 1154 (Pa. Super. Ct. 1980) (citing Palmgreen v. Palmer's Garage, Inc., 117 A.2d 721, 722 (Pa. 1955); West Republic Mining Co. v. Jones & Laughlins, 108 Pa. 55, 68 (1884)). Prejudgment interest is granted despite the good faith of the party contesting the claim. Id.Accordingly [p]laintiffs were entitled to interest at the rate of 6% per annum from the time when they should have been paid for the services rendered by them. In all cases of contract interest is allowable at the legal rate from the time payment is withheld after it has become the duty of the debtor to make such payment; allowance of such interest does not depend upon discretion but is a legal right. It is a right which arises upon breach or discontinuance of the contract provided the damages are then ascertainable by computation and even though a bona fide dispute exists as to the amount of the indebtedness.

Palmgreen v. Palmer's Garage, Inc., 117 A.2d 721, 722 (Pa. 1955) (citations omitted). The legal rate of interest refers to the rate of six (6) percent per annum. 41 P.S. § 202 ("Reference in any law or document enacted or executed heretofore or hereafter to 'legal rate of interest' . . . shall be construed to refer to the rate of interest of six per cent per annum."). Furthermore, Pennsylvania courts have held that an award of prejudgment interest should be computed as simple interest. See Widmer Engineering, Inc v. Dufalla, 837 A.2d 459, 469 (Pa. Super. Ct. 2003) (citing Spang & Co. v. USX Corp., 599 A.2d 978, 984 (Pa. Super. Ct. 1991)).

Plaintiff requests that the rates of interest should be calculated from the dates on which the five (5) bills of exchange were due and payable. These dates were August 12, 1999 ($65,506.50); August 14, 1999 ($80,353.50); September 1, 1999 ($83,847.75); September 20, 1999 ($14,586.00); and September 22, 1999 ($26,888.00). See Pl.'s Tr. Ex. 12. Such bills of exchange totaled $271,181.75.

Defendant Old West Cowboy Boots Corporation argues that Plaintiff is not entitled to prejudgment interest, as the damages from the breach of contract are not ascertainable with mathematical precision. This argument stems from the fact that the jury awarded the Plaintiff $315,000, which is greater than the $271,181.75 claimed by the Plaintiff. In the alternative, Defendant states that the $43,818.25 above the $271,181.75 claimed should be offset by the interest claim.

However, the Plaintiff's damages are ascertainable, and the bills of exchange provide dates on which the payments were due and payable. As prejudgment interest is a legal right in breach of contract claims, the Plaintiff will be awarded prejudgment interest on the five bills of exchange beginning on each due date. Prejudgment interest runs from the time of the breach until the date of judgment. See McDermott v. Party City Corp., 11 F. Supp. 2d 612, 633 (E.D. Pa. 1998).Plaintiff requests that prejudgment interest run until the time when the Court determines attorneys fees and other damages. However, in this case, judgment was entered in favor of the Plaintiff on March 20, 2003. (Doc. 207.) Therefore, the calculation of interest will run from the date of each bill of exchange until March 20, 2003. The prejudgment interest on the August 12, 1999 bill of exchange is calculated at $14,170.94. The prejudgment interest on the August 14, 1999 bill of exchange is calculated at$17,356.36.The prejudgment interest calculated on the September 1, 1999 claim is calculated at $17,863.02 The prejudgment interest on the September 20, 1999 claim is calculated at $3,061.86The prejudgment ...


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