Freedom Mortg. Corp v. LoanCare, LLC

[Docket Nos. 382, 383, 384]

Mark S. Landman

Jerry A. Cuomo

Timothy J. Collazzi

LANDMAN CORSI BALLAINE & FORD P.C.

Wayne A. Mack

James H. Steigerwald

DUANE MORRIS LLP

Brad D. Feldman

DUANE MORRIS LLP

Robert J. Lack

Andrew M. Englander

FRIEDMAN KAPLAN SEILER ADELMAN & ROBBINS LLP

Stuart H. Singer

Sabria A. McElroy

Pascual A. Oliu

Evan Ezray

Savannah Mora

BOIES SCHILLER FLEXNER LLP

MEMORANDUM OPINION & ORDER

RENEE MARIE BUMB, CHIEF UNITED STATES DISTRICT JUDGE:

This matter, having been restored to the Court's active docket recently, is now before it upon the post-trial Motions to Amend the Judgment filed by Plaintiff/Counterclaim-Defendant Freedom Mortgage Corporation (“Freedom”) and Defendant/Counterclaimant LoanCare, LLC (“LoanCare”) pursuant to Federal Rules of Civil Procedure 58(b), 59(e), and 60(a), [Docket Nos. 382, 383], and LoanCare's Renewed Motion for Judgment as a Matter of Law filed pursuant to Rule 50(b), [Docket No. 384]. Having considered the parties' submissions without oral argument pursuant to Local Civil Rule 78.1(b), and for good cause shown, the Court will DENY Freedom's Motion to Amend the Judgment, GRANT LoanCare's Motion to Amend the Judgment, and GRANT LoanCare's Renewed Motion for Judgment as a Matter of Law. The Court will enter an amended final judgment separately.

I.

In July 2023, this matter proceeded to a two-week jury trial. Before the trial began, the Court dismissed Count II of LoanCare's Second Amended Counterclaim [Docket No. 90] (i.e., LoanCare's claim for conversion before termination), [Order, Docket No. 117 (dated Sept. 23, 2019)], and granted summary judgment to LoanCare as to Count V of Freedom's Amended Complaint [Docket No. 69] (i.e., Freedom's claim for tortious interference with contract). [Mem. Op. & Order, Docket No. 177 (dated July 23, 2020).] During the trial, the Court entered judgment as a matter of law in favor of LoanCare as to Counts I and II of Freedom's Amended Complaint (i.e.,

Freedom's claims for breach of contract and breach of the implied covenant of good faith and fair dealing). [Order, Docket No. 352.] On July 24, 2023, the jury rendered a verdict as to the parties' remaining claims and awarded LoanCare and Freedom $22,693,762 and $247,071, in compensatory damages, respectively. [Docket No. 365.] The jury declined to award LoanCare punitive damages. [Docket No. 368.] The next day, the Court entered judgment (the “Original Judgment”). [Docket No. 370.]

Following the trial, Freedom and LoanCare timely filed their Motions to Amend the Original Judgment to correct certain clerical errors and provide for prejudgment and postjudgment interest, [Docket Nos. 382, 383], and LoanCare renewed its Motion for Judgment as a Matter of Law as to its $22.7 million contract claim (i.e., Count IV of LoanCare's Second Amended Counterclaim), [Docket No. 384]. LoanCare also moved for attorneys' fees and expenses. [Docket No. 386.] The parties' post-trial motions were fully briefed as of November 7, 2023. [See generally Docket.] Having conferred with the parties on November 9, 2023, the Court administratively terminated the parties' post-trial motions, [Docket Nos. 382, 383, 384, & 386], and referred this matter for mediation before the Hon. Joel Schneider (Ret.). [Docket Nos. 407, 413.] Unfortunately, that effort proved unsuccessful. [Docket No. 414.] Accordingly, on April 5, 2024, the Court restored this matter to its active docket and reactivated the parties' post-trial motions. [Docket No. 415.] Thus, they are now ripe for adjudication.

II.

The Court first considers the Motions to Amend the Original Judgment, beginning with where the parties agree. Freedom and LoanCare both argue that the Original Judgment should be amended to correct certain clerical mistakes. [Compare Freedom's Mem. Supp. Mot. Amend J. at 1-2, Docket No. 382-1, with LoanCare's Mem. Supp. Mot. Amend. J. at 7, Docket No. 383-2.]

Under Federal Rule of Civil Procedure 60(a), the Court “may correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment.” FED. R. CIV. P. 60(a). The rule “encompasses only errors ‘mechanical in nature, apparent on the record, and not involving an error of substantive judgment.' ” Pfizer Inc. v. Uprichard, 422 F.3d 124, 129-30 (3d Cir. 2005) (quoting Mack Trucks, Inc. v. Int'l Union, UAW, 586 F.2d 579, 594 n.16 (3d Cir. 1988)); see also United States v. Stuart, 392 F.2d 60, 62 (3d Cir. 1968) (“Rule 60(a) is concerned primarily with mistakes which do not really attack the party's fundamental right to the judgment at the time it was entered. It permits the correction of irregularities which becloud but do not impugn it.”). “As long as the intentions of the parties are clearly defined and all the court need do is employ the judicial eraser to obliterate a mechanical or mathematical mistake, the modification will be allowed.” Pfizer, 422 F.3d at 130 (quoting In re W. Tex. Mktg., 12 F.3d 497, 504-05 (5th Cir. 1994)).

The Court employs the ‘judicial eraser' here. The jury voted in favor of LoanCare as to its conversion, fraudulent inducement, and unjust enrichment claims (i.e., Counts III, I, and V of LoanCare's Second Amended Counterclaim), [Docket

No. 365, at 1-3], but the Original Judgment omits any reference to the unjust enrichment claim, [see Docket No. 370]. Similarly, the jury voted in favor of Freedom as to its actual or constructive fraud and unjust enrichment claims (i.e., Counts III and IV of Freedom's Amended Complaint), [Docket No. 365, at 3-4], but the Original Judgment erroneously reflects that Freedom succeeded as to a contract claim, [Docket No. 370]. Finally, the Original Judgment does not address LoanCare's two contract claims as to which the jury found in Freedom's favor (i.e., Counts IV and VI of LoanCare's Second Amended Counterclaim), [compare Docket No. 365, at 2-3, with Docket No. 370], or LoanCare's other claims that it withdrew in open court (i.e., Counts VII, VIII, IX, X, XI, XII, and XIII of LoanCare's Second Amended Counterclaim), [compare Trial Tr. at 2261:16-22, Docket No. 378, with Docket No. 370]. The Court finds these errors and omissions in the Original Judgment to be mechanical in nature and clear from the record. See Pfizer, 422 F.3d at 130. Accordingly, the Court will enter the parties' proposed amended judgment to correct these clerical mistakes and omissions. See FED. R. CIV. P. 60(a).

III.

Next, the Court addresses the parties' joint request for prejudgment interest. Freedom and LoanCare both argue that they are entitled to prejudgment interest on their respective damages awards in accordance with New Jersey Court Rule 4:42-11, but they disagree as to whether prejudgment interest should accrue between (i) April 1 and November 1, 2021, and (ii) January 1 and July 10, 2023. [Compare Freedom's Mem. Supp. Mot. Amend J. at 3-9, Docket No. 382-1, with LoanCare's Mem. Supp.

Mot. Amend. J. at 1-6, Docket No. 383-2; see also Freedom's Opp'n LoanCare's Mot. Amend. J. at 1, Docket No. 391; LoanCare's Mem. Opp'n Freedom's Mot. Amend. J. at 1, Docket No. 393.]

Freedom submits that thirteen months of delays occasioned by the COVID-19 pandemic constitute “exceptional circumstances” that warrant the suspension of prejudgment interest on the parties' respective damages awards. [Freedom's Mem. Supp. Mot. Amend J. at 6.] LoanCare counters that, under ordinary equitable principles, Freedom should not be permitted to reduce the true value of LoanCare's damages award. [LoanCare's Mem. Opp'n Freedom's Mot. Amend. J. at 2.] Under Freedom's position, LoanCare and Freedom would be entitled to $3,887,720.96 and $45,105.85 in prejudgment interest, respectively. [Freedom's Mem. Supp. Mot. Amend J., Ex. A; Freedom's Opp'n LoanCare's Mot. Amend. J. at 7.] Under LoanCare's position, LoanCare and Freedom would be entitled to $4,622,999.11 and $53,118.57 in prejudgment interest, respectively. [LoanCare's Mem. Supp. Mot. Amend. J. at 2 & 6 n.4.] The Court first turns to whether any prejudgment interest is warranted.

A party may move for prejudgment interest pursuant to Federal Rule of Civil Procedure 59(e). See Keith v. Truck Stops Corp. of Am., 909 F.2d 743, 746 (3d Cir. 1990) (explaining that a request for prejudgment interest is properly brought under Rule 59(e) as a motion to alter or amend the judgment) (citing Osterneck v. Ernst & Whinney, 489 U.S. 169, 177 (1989)); see also Rosen v. Rucker, 905 F.2d 702, 705 (3d Cir. 1990). Rule 59(e) provides that a “motion to alter or amend a judgment must be filed no later than

28 days after the entry of the judgment.” FED. R. CIV. P. 59(e). Here, both parties timely moved for prejudgment interest under the rule, [compare Freedom's Mot. Amend. J., Docket No. 382 (dated Aug. 22, 2023), and LoanCare's Mot. Amend. J., Docket No. 383 (same), with Original Judgment, Docket No. 370 (dated July 25, 2023)], so the next question is what law applies to the parties' request for prejudgment interest. They both submit that New Jersey Court Rule 4:42-11 applies. [Freedom's Mem. Supp. Mot. Amend J. at 4; LoanCare's Mem. Supp. Mot. Amend. J. at 2.]

“Federal courts sitting in diversity must apply state law with respect to prejudgment interest.” Gleason v. Norwest Mortg., Inc., 253 Fed.Appx. 198, 203 (3d Cir. 2007) (citing Jarvis v. Johnson, 668 F.2d 740, 746 (3d Cir. 1982)). As to which state's law, the question is resolved here by applying the choice-of-law principles of the forum state-in this case, New Jersey-where a different state's substantive law governs the underlying...