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Williams v. Genesis Financial Technologies, Inc.

United States District Court, D. Colorado

October 22, 2018

LARRY WILLIAMS; and LNL PUBLISHING, INC., Plaintiffs,
v.
GENESIS FINANCIAL TECHNOLOGIES, INC.; GLEN LARSON; and PETE KILMAN, Defendants.

          OPINION AND ORDER GRANTING PREJUDGMENT INTEREST AND DENYING CHALLENGE TO TAXATION OF COSTS

          Marcia S. Krieger Chief United States District Judge.

         THIS MATTER comes before the Court pursuant to the Plaintiffs' Motion to Alter Judgment (# 141), the Defendants' response (# 143), and the Plaintiffs' reply (# 147); and the Plaintiffs' Motion to Review (# 148) the Clerk's taxation of costs, the Defendants' response (#49), and the Plaintiffs' reply (# 150).

         The Court assumes the reader's familiarity with the proceedings to date and offers only a cursory summary. Mr. Williams is a commodities analyst and trader and has created a variety of mathematical algorithms to identify trends in commodities prices. LNL Publishing (hereafter, “LNL”) is a corporate entity through which Mr. Williams does some business. The Defendants publish software that allows uses to analyze commodities prices. For several years, the Defendants and Mr. Williams were parties to an oral agreement by which the Defendants would incorporate Mr. Williams' algorithms into its software and both sides would promote the software to commodities investors; in exchange, the Defendants would pay Mr. Williams a share of certain revenues arising from software sales. After several years of harmony, that business arrangement soured. In or about July 2012, Mr. Williams demanded payment of sums due to him under the agreement, and in September 2012, Mr. Williams informed the Defendants that he was terminating the agreement. Nevertheless, the Defendants continued to sell the software containing Mr. Williams' algorithms and promoted the software using Mr. Williams' name, leading Mr. Williams to file the instant suit.

         Following a trial in August 2017, a jury returned a verdict partially in favor of the Plaintiffs, finding that: (i) Mr. Larson breached an oral contract he had reached with LNL regarding the sale of the software, and that LNL was entitled to $358, 277.50 in damages on that claim; and (ii) Genesis Financial Technologies (“Genesis”) was unjustly enriched at Mr. Williams' expense. The Court eventually awarded Mr. Williams $57, 052 in damages on the unjust enrichment claim. The jury found in favor of Mr. Kilman on all claims that the Plaintiffs had asserted against him. On March 30, 2018, the Court entered judgment as set forth above, directing post-judgment interest to accrue pursuant to 28 U.S.C. § 1961.

         LNL now moves (# 141) to amend the judgment to add prejudgment interest pursuant to C.R.S. § 5-12-102(1), at a rate of 8% per year from July 2012 to the entry of judgment in March 2018, for a total amount of $197, 341.72. Mr. Larson opposes that request, arguing that: (i) the jury was not asked to consider, and therefore rendered no opinion on, the question of prejudgment interest, and (ii) the evidence at trial does not sufficiently establish a conclusive accrual date from which to measure the running of such interest.

         Thereafter, the Clerk of the Court taxed costs in favor of the Plaintiffs, awarding $11, 933.55 in costs to the Plaintiffs and against Mr. Larson and Genesis, but awarding costs to Mr. Kilman and against the Plaintiffs in the amount of $19, 257.90. The Plaintiffs now move (#148) to either set aside or “apportion” the costs taxed in favor of Mr. Kilman because: (i) Mr. Kilman admitted that all of the claimed costs were actually incurred by Genesis, not himself; and (ii) to the extent the costs were incurred jointly by all three Defendants, Mr. Kilman's entitlement to the costs should be prorated and reduced by two-thirds to reflect that only Mr. Kilman was successful in his defense. The Court now takes up each motion in turn.

         A. Prejudgment interest

         C.R.S. § 5-12-102(1)(b) provides that when a debt becomes due and the parties have no other agreement regarding interest, interest accrues on that debt at a fixed rate of 8% per year, compounded annually, from that date the debt becomes due until judgment enters. The statute is mandatory in operation, leaving no discretion to the Court. Personnel Dept., Inc. v. Professional Staff Leasing Corp., 297 Fed.Appx. 773, 789-90 (10th Cir. 2008). A “wrongful withholding” occurs when a party “was deprived of something to which she was otherwise entitled.” Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d 821, 825 (Colo. 2008). A mere breach of contract is sufficient to demonstrate a wrongful withholding. Id.

         LNL points to trial exhibit 1, a July 20, 2012 letter in which Mr. Larson wrote to Mr. Williams, acknowledging that “$499, 327.50 is due to you, ” and that Genesis had already made a cash payment of $141, 050. The difference, $352, 877.50, is exactly the amount the jury awarded LNL, suggesting that the jury measured the breach of contract damages directly from the admissions in exhibit 1. That exhibit also makes clear that, prior to the July 20 date, Mr. Williams had already made a demand for “the amount of money you say [is] due to you.” Thus, the Court agrees with LNL that the proper application of C.R.S. § 5-12-102(1)(b) entails finding that Mr. Larson wrongfully withheld $352, 877.50 from LNL, beginning on or about July 20, 2012.

         In response to LNL's motion, Mr. Larson points to various items of evidence to suggest that, contrary to the admissions in his July 20 letter, the amounts owed to LNL were unquantifiable, that the amounts owed or previously paid were different than those shown in exhibit 1, that Mr. Williams had not asked for payment of the monies owed, and that Mr. Williams prevented Genesis from selling products to generate the funds to make a payment. All of these items of evidence were presented to and considered by the jury, but the jury's verdict and the amount awarded make it clear that the jury rejected them. Rather, apparently the jury resolved the breach of contract claim against Mr. Larson simply from the admissions made by Mr. Larson in exhibit 1. Accordingly, Mr. Larson has not rebutted LNL's prima facie showing that he wrongfully withheld $352, 877.50 from LNL since July 20, 2012.

         Mr. Larson has not challenged the computation of prejudgment interest in LNL's motion, and thus, the Court adopts that calculation. Accordingly, LNL's motion is granted. The Court deems the Judgment amended to reflect that, in addition to the $352, 877.50 in damages, LNL is also entitled to an additional $197, 341.72 in prejudgment interest pursuant to C.R.S. § 5-12-101(1)(b).

         B. Taxation of costs

         Fed. R. Civ. P. 54(d)(1) provides that a prevailing party may obtain the costs of litigation against the non-prevailing party. It is undisputed that the jury found in favor of Mr. Kilman on the Plaintiffs' claims against him, rendering him entitled to have his costs paid by the Plaintiffs. On May 24, 2018, the Clerk of the Court taxed $19, 257, 70 in costs in favor of Mr. Kilman and against the Plaintiffs. Those costs consisted of $11, 330.05 in transcripts obtained for use in the case; $632.23 in witness fees; $2, 983.99 in costs of exemplification and copies; and $4, 291.63 in costs relating to the taking of depositions.

         The Plaintiffs do not challenge the reasonableness or propriety of the particular amounts taxed by the Clerk. Rather, they challenge Mr. Kilman's eligibility to receive the full amount of costs taxed. First, they contend that Mr. Kilman should not be entitled to any costs because he “admitted [that his] employer, [Genesis], paid for all costs incurred throughout the proceedings.” The Court will assume the accuracy of this statement, notwithstanding the fact that the ...


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