H.H. HANKINS & BRO v. EDGEWOOD PROPERTIES INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

H.H. HANKINS & BRO.,

Plaintiff-Respondent,

v.

EDGEWOOD PROPERTIES, INC.

Defendant-Appellant.

______________________________

June 10, 2015

Argued May 5, 2015 Decided

Before Judges Fasciale and Whipple.

On appeal from Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-197-09.

Andrew Ullrich argued the cause for appellant (The Weingarten Law Firm, L.L.C, attorneys; Mr. Ullrich, on the brief).

William G. Wright argued the cause for respondent (Capehart & Scatchard, P.A., attorneys; Mr. Wright, on the brief).

PER CURIAM

Defendant appeals from a February 26, 2014 order, entered on remand, awarding prejudgment interest. We affirm.

We discern the following facts from the record. Plaintiff, a lumber supplier, brought suit against defendant, a developer, asserting that defendant failed to pay for certain materials ordered and delivered for a construction project. Plaintiff also asserted a claim for damages based upon the theory of promissory estoppel. After a bench trial, the Law Division judge entered judgment in plaintiff's favor in the amount of $100,671.91. Defendant appealed,arguing that the verdict was not supported by the evidence. Plaintiff cross-appealed, arguing that the court erred by not awarding prejudgment interest or storage fees and in miscalculating attorneys' fees. We affirmed the judgment but remanded the matter to the Law Division to reconsider plaintiff's request for prejudgment interest and counsel fees. H.H. Hankins & Bro. v. Edgewood Props., Inc., No. A-5624-11 (App. Div. Mar. 18, 2013) (slip op. at 17).1

On May 13, 2013, the Law Division issued a memorandum of decision after a thorough review of plaintiff's proofs in support of its claim for attorneys' fees and determined that

[u]pon reconsideration, the court finds that plaintiff is entitled to an award of reasonable attorney[s'] fees in the amount of $6500 plus costs. Any higher amount would be unreasonable in light of the modest size of the recovery for unpaid invoices, notwithstanding the time expended by counsel.

The court then addressed prejudgment interest and concluded that

[t]he equities in this matter militate strongly in favor of plaintiff to award prejudgment interest . . . on the specially ordered goods. Prejudgment interest shall accrue on the specially ordered goods from the date purchased by plaintiff until the date sold by plaintiff or the judgment date, whichever is earlier. It would be inequitable to do otherwise.

As to the appropriate rate to be charged, the court does not find any unusual circumstances to be present warranting an imposition of interest at a rate different than the postjudgment rate. Therefore, interest shall accrue at the postjudgment rate for the time periods involved.

The court then entered an order awarding plaintiff attorneys' fees in the amount of $6500 for the trial, ordering the parties to confer on the appropriate amount of prejudgment interest on the specially ordered goods at the post-judgment rate, and directing the parties to so advise the court in order that a hearing could be scheduled if the parties did not reach agreement. The parties were unable to agree and the court conducted a hearing on February 24, 2014, to determine the appropriate amount of prejudgment interest as well as plaintiff's fees for services rendered for the appeal.

On February 26, 2014, the court issued a second memorandum of decision awarding appellate fees of $3500 plus costs, and awarding prejudgment interest in the amount of $34,383.07.

On appeal, defendant argues that it was inequitable to order prejudgment interest because plaintiff has retained lumber for which it was paid, and, if plaintiff is in possession of the lumber, it should deliver the lumber to defendant. We disagree.

We review a trial court's award of prejudgment interest under an abuse of discretion standard. "Although prejudgment interest in a tort action is expressly governed by [Rule] 4:42-11(b), 'the award of prejudgment interest on contract and equitable claims is based on equitable principles.'" Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 390 (2009) (quoting Cnty. of Essex v. First Union Nat'l Bank, 186 N.J. 46, 61 (2006)). "The equitable purpose of an award of prejudgment interest is compensatory, 'to indemnify the claimant for the loss of what the moneys due him would presumably have earned if payment had not been delayed.'" Ellmex Constr. Co. v. Republic Ins. Co., 202 N.J. Super. 195, 212-13 (App. Div. 1985) (quoting Busik v. Levine, 63 N.J. 351, 358, appeal dismissed, 414 U.S. 1106, 94 S. Ct. 831, 38 L. Ed. 2d 733 (1973)), certif. denied, 103 N.J. 453 (1986). "[P]rejudgment interest is not a penalty[;] . . . its allowance simply recognizes that until the judgment is entered and paid, the defendant has had the use of money rightfully the plaintiff's." Pressler & Verniero, Current N.J. Court Rules, comment 2.1 on R. 4:42-11 (2013).

The award of prejudgment interest herein relates exclusively to plaintiff's promissory estoppel claim, which we previously affirmed as supported by the evidence in the record. Hankins, supra, slip op. at 5-7. Defendant cannot now argue plaintiff is unjustly enriched by holding onto sold lumber having failed to raise the issue at trial.

On remand, the Law Division judge concluded that plaintiff was entitled to prejudgment interest "on the specially ordered but not delivered goods from the date of the purchase to the date of the sale" and that plaintiff proved at trial the value of the specially ordered goods was $288,576.41. The judge also found that plaintiff proved mitigation sales during discrete time periods, yielding a balance awarded to plaintiff of $65,879.92 on the promissory estoppel claim. The judge calculated prejudgment interest in the amount of $34,383.07 using the plaintiff's relevant time periods, and calculated declining balances utilizing the appropriate interest rates. We discern no abuse of the trial court's discretion.

Affirmed.

1 On March 28, 2013, plaintiff, pursuant to Rule 2:11-4, filed a motion in the Appellate Division for fees for the appeal. We referred the issue of attorneys' fees for appellate services to the trial court for disposition.