The opinion of the court was delivered by: David R. Strawbridge United States Magistrate Judge
A trial of this matter, limited to the single issue of Plaintiff Stephen Schutter's (alternatively "Schutter" or "Plaintiff") entitlement to an award of punitive damages on his breach of fiduciary duty claim against Defendant Philip Banks ("Banks") took place on December 10, 2008. Upon consideration of the evidence presented, the arguments of counsel, and the Court's charge, the jury found in favor of Schutter, by answering affirmatively the interrogatory: "Do you find that the conduct of Mr. Banks was outrageous, such as to warrant the imposition of punitive damages?" (Doc. 228). They then assessed those damages at $30,000. (Doc. 228). Presently before the Court is Schutter's "Supplemental Memorandum in Support of Damages Arising From Interest, Costs, and Attorneys Fees," filed on December 29, 2008. (Doc. 239). Banks was given until January 12, 2008 to file any response. As of the date of this Order, he has not done so. We now enter an Order resolving Plaintiff's final damage claims and award judgment in his favor.
In his supplemental memorandum, Plaintiff seeks two forms of additional relief -- interest upon the $100,000 escrow amount and reimbursement for attorneys fees and costs. We address each assertion in turn.
Plaintiff asserts that he is entitled to interest upon the $100,000 escrow amount as "an element of Plaintiff's damages." (Doc. 239 at 1). We agree. By our October 6, 2008 grant of summary judgment, we found that Banks had breached his fiduciary duty to Schutter by virtue of his improper retention and unauthorized depletion of the escrow funds at the heart of this dispute. (Doc. 165). We thus found that Schutter was entitled to a return of the full $100,000. We left the question of interest to be dealt with after trial and upon consideration of further submissions from counsel.
In this diversity case, Pennsylvania law controls the question of how to determine interest.
41 Pa.C.S.A. § 202 provides a statutory rate of interest of 6% per annum where there exists "an obligation to pay a sum of money 'with interest' without specification of the applicable rate." We find it appropriate to apply this provision under the circumstances here.*fn1 Applying that interest rate against the $100,000 escrow funds at issue here, we conclude that Schutter is entitled to 6% interest per year from the date that Banks deposited the funds with Bryn Mawr Trust Company ("BMT").
We note that the escrow funds, in fact, were deposited into Banks's BMT escrow account in two tranches -- $10,000 on December 12, 2005 and $90,000 on January 9, 2006. (See Doc. 162 at 38 & 40). As of the date of this Order, 3 years and 71 days, of interest are due upon the $10,000 deposit. As such, $1,916.72 in interest is due upon that deposit.*fn2 As of the date of this Order, 3 years and 43 days of interest are due upon the $90,000 deposit. As such, $16,836.19 in interest is due upon that deposit.*fn3 All told, we find that Schutter is owed a total of $18,752.91 in interest upon the escrow funds.
B. Attorneys Fees and Costs of Litigation
1. Schutter's Entitlement
Plaintiff asserts that he is further entitled to reimbursement for all fees and expenses incurred over the course of this litigation. (See Doc. 239 at 11). We note, at the outset and as a general matter, that in this diversity case, Pennsylvania law governs a party's entitlement to such reimbursement. See First State Underwriters Agency of New England Reinsurance Corp. v. Travelers Ins. Co., 803 F.2d 1308, 1317 (3d Cir. 1986) (citing Alyeska Pipeline Service v. Wilderness Society, 421 U.S. 240, 259 n. 31 (1975) and Montgomery Ward & Co. v. Pacific Indemnity Co., 557 F.2d 51, 56 (3d Cir. 1977)). Generally, Pennsylvania law permits the recovery of such fees and expenses only where there exists a clear agreement to that end between the parties, or an express statutory provision providing for such an entitlement. See, e.g., Corace v. Balint, 210 A.2d 882, 887 (Pa. 1965) (citations omitted); see also First State Underwriters, 803 F.2d at 1318; Fortney v. Tennekoon, Civ. A. No. 95-4685, 1998 U.S. Dist. LEXIS 3926, *36 (E.D. Pa. Mar. 13, 1998).
Here, there is no agreement between the parties providing Plaintiff with a basis for the reimbursement of litigation costs and attorneys fees. As such, we turn to statutory authority, 42 ...