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General Steel Domestic Sales, LLC v. Chumley

United States District Court, D. Colorado

February 27, 2014

GENERAL STEEL DOMESTIC SALES, LLC, d/b/a General Steel Corporation, a Colorado limited liability company, Plaintiff,
v.
ETHAN DANIEL CHUMLEY, individually, and ATLANTIC BUILDING SYSTEMS, LLC, a Delaware corporation, doing business as Armstrong Steel Corporation, Defendants.

ORDER

PHILIP A. BRIMMER, District Judge.

This matter is before the Court on Plaintiff's Motion for Award of Prejudgment Interest [Docket No. 364] and the Motion to Alter or Amend Judgment Concerning Disgorgement Amount [Docket No. 365] filed by plaintiff General Steel Domestic Sales, LLC, doing business as General Steel Corporation ("General Steel").

I. BACKGROUND

On May 7, 2013, the Court ruled in favor of General Steel on its claim for false advertising under the Lanham Act, 15 U.S.C. ยง 1051 et seq., and against General Steel on its claims for trademark infringement and unfair competition. Docket No. 346 at 19-22, 31. The Court enjoined defendants Ethan Daniel Chumley and Atlantic Building Systems, LLC, doing business as Armstrong Steel Corporation ("Armstrong"), from engaging in the specific misrepresentations for which they were found liable and awarded General Steel disgorgement of Armstrong's profits in the amount of $243, 462.00, as well as costs. Id. at 39.

The Court found that Armstrong engaged in false advertising from mid-August 2010 through mid-February 2012. Docket No. 346 at 38. The Court further found that "there was no credible evidence at trial regarding Armstrong's gross or net earnings in 2011 or 2012." Id. Accordingly, the Court calculated disgorgement based on Armstrong's earnings for the four-and-a-half months in 2010 during which it was disseminating false advertisements. Id.

Plaintiff moves the Court to amend its judgment on the basis that there was evidence at trial establishing Armstrong's 2011 and 2012 profits. Docket No. 365. Plaintiff further moves the Court to amend its judgment to include an award of prejudgment interest. Docket No. 364. Defendants oppose these motions. Docket Nos. 382 and 383.

II. STANDARD OF REVIEW

A party is entitled to relief under Rule 59(e) on the basis of "(1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." Devon Energy Production Co., L.P. v. Mosaic Potash Carlsbad, Inc., 693 F.3d 1195, 1212 (10th Cir. 2012) (quoting Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000); see also Sithon Maritime Co. v. Holiday Mansion, 177 F.R.D. 504, 505 (D. Kan. 1998) ("Appropriate circumstances for a motion to reconsider are where the court has obviously misapprehended a party's position on the facts or the law, or the court has mistakenly decided issues outside of those the parties presented for determination."). "Clear error" is a "decision or action that appears to a reviewing court to have been unquestionably erroneous." Black's Law Dictionary 582 (8th ed. 2004).

III. ANALYSIS

A. Disgorgement Award

Plaintiff argues that the Court should amend its judgment in light of (1) Mr. Chumley's testimony that Armstrong's gross sales in 2011 totaled eight million dollars and (2) the testimony of plaintiff's expert, Gregory Taylor, that Armstrong's business grew in 2011 and that Mr. Chumley improperly took money out of the business for his personal use. Docket No. 365 at 2-5. Defendants counter that this testimony is insufficient to support a Rule 59 motion. Docket No. 383 at 2-3.

At trial, Mr. Chumley had the following exchange with plaintiff's counsel while testifying:

A.... it's only been recently that I have realized [my administrative assistant] is ill equipped at handling the books for a $10 million a year company. But as far as us categorizing things wrong, that could be ...

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