Pace Communications, Inc. v. Moonlight Design, Inc.

Decision Date11 August 1994
Docket NumberNo. 93-2690,93-2690
Citation31 F.3d 587
PartiesPACE COMMUNICATIONS, INCORPORATED, Plaintiff-Appellee, v. MOONLIGHT DESIGN, INCORPORATED, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Merle L. Royce, Donald A. Mackay (argued), Chicago, IL, for plaintiff-appellee.

Casandra E. Melton (argued), Robert H. Anderson, Chicago, IL, for defendant-appellant.

Before CUDAHY, EASTERBROOK and KANNE, Circuit Judges.

CUDAHY, Circuit Judge.

Moonlight Design, Inc. imports and sells bridal gowns. It sought to advertise its gowns in Elegant Bride, a bimonthly bridal magazine owned by Pace Communications, Inc. Moonlight Design promised to take out 24 pages of advertising in Elegant Bride over a one-year period, but backed out on five of those pages. It also breached two additional agreements to purchase advertising. Pace sued, and after a bench trial the district court awarded Pace a judgment of just over $50,000. Moonlight appeals.

I

Elegant Bride's target audience is made up largely of prospective brides. The magazine changed its name in the fall of 1990 from Southern Bride in an attempt to expand its circulation and reach a national audience. Even so, the magazine, which (like most bridal magazines) is sold almost exclusively at newsstands, ranks last in circulation among the four national bridal magazines, trailing Bride's and Your New Home, Modern Bride and Bridal Guide.

Elegant Bride began negotiating an advertising package with Moonlight in October 1990, and by January 1991 the parties were nearing agreement. On January 10, 1991, Chris Deluca, Pace's advertising salesperson, sent Hugh Chin, president of Moonlight, a facsimile copy of Elegant Bride's standard Insertion Order/Contract for Advertising form. Deluca had filled in the form, apparently according to the agreement the parties had ironed out. The form indicated that Moonlight would purchase a total of 24 pages of four-color advertising over six consecutive issues of Elegant Bride: 4 pages in April/May 1991, 2 pages in June/July 1991, 4 pages in August/September 1991, 4 pages in October/November 1991, 2 pages in December/January 1992 and 8 pages in February/March 1992. The total price for the 24 pages was $94,076. This price represented an almost $15,000 discount from Elegant Bride's 1990 published rate, 1 which, for advertisers who already received a volume discount for agreeing to purchase 24 pages of advertising in a year, would have been $109,038 (the net price of $4,543.25 per page, times 24 pages).

The parties had also apparently agreed to a few miscellaneous terms not contained on the contract form. Elegant Bride, for instance, agreed to provide Moonlight with "editorial coverage" in the magazine, and to place a Moonlight gown on the cover of the August/September 1991 issue. Deluca therefore typed these additional terms onto the form, and faxed the document to Chin.

Upon receiving the fax, Chin apparently believed that some of the terms on which they had agreed were not included on the contract form. He therefore typed these additional terms onto the form, signed it, and faxed it back to Deluca. The terms that Chin added provided that Elegant Bride would guaranty the magazine's circulation would include Moonlight in any "special promotions" over the duration of the contract, and would "improve in photography and covers." Neither Deluca nor anyone else at Pace ever signed the form with Chin's additions. Rather, Deluca sent Chin a fax indicating that Pace was "extremely pleased that you have decided to join our list of advertisers." No mention was ever made of the additional terms.

One of the standard provisions on the contract form also proves important. Paragraph 10 of the form notes that cancellation of space reservations "will result in an adjustment of the rate (short rate) based on past and subsequent insertions to reflect actual space used at the earned frequency or volume rate." There is no dispute about the general meaning of this language: where an advertiser contracts to purchase a certain number of pages of advertising (and receives a volume discount), but ends up purchasing fewer pages of advertising than promised, the advertiser is required to pay the per page rate that would apply to a contract for the number of pages actually purchased.

This "short rating" provision is made necessary by Elegant Bride's sliding scale of volume discounts. For example, Elegant Bride's 1991 rate card indicated that the base price for a full-page 4-color advertisement was $8,781. But discounts were offered for volume advertisers; the price per page fell to $8,342 for advertisers who purchased three pages in a year, $7,903 for six pages, $7,465 for twelve pages, and so on.

So, using the 1991 rates, if an advertiser was quoted $7,465 per page after promising to take out twelve pages over a year, and then purchased only ten pages, the advertiser would be required to pay $7,903 per page--the applicable volume discount for an advertiser who purchases between six and eleven pages over a year. This short-rating provision, which essentially stands for the reasonable proposition that an advertiser receives a volume discount based on the number of pages it actually purchases, not the number of pages it says it will buy, turned out to have fairly harsh implications for Moonlight.

Moonlight canceled two of the four pages it had agreed to purchase in the October/November 1991 issue, and three of the eight pages in the February/March 1992 issue. While the parties reached an oral agreement to make up the five re-scheduled pages in the April/May 1992 issue, Moonlight ultimately refused to do so. This decision proved very expensive. The contract form says that "insertion orders are accepted subject to provisions of our current rate card." Elegant Bride therefore "short-rated" Moonlight based on its 1991 rate card. Having to pay for the 19 pages of advertising based on the 1991 rates meant losing the volume discount it had achieved by agreeing to purchase 24 pages, and more importantly meant losing the $15,000 discount it had negotiated off of the published rates. Elegant Bride therefore billed Moonlight for 19 pages at $5,970.40 per page (which was the 1991 published rate, net of the 15 percent discount), which came to $113,437.60. Moonlight had already paid $75,099.75 toward this contract, so Elegant Bride invoiced Moonlight for the balance--$38,337.85. Had Moonlight gone ahead and taken out the five additional pages, the total bill would have been limited to the contract price, $94,076.

When Moonlight refused to pay, Elegant Bride brought suit for the balance indicated, plus an additional $11,781 for Moonlight's breach of separate advertising contracts. Moonlight's liability on those claims is not in dispute. Because the parties are of diverse citizenship, the district court's jurisdiction was premised on 28 U.S.C. Sec. 1332. Following trial, the district court entered judgment for Elegant Bride "in the amount of $50,118.85 plus interest and costs."

II
A

We confront at the outset two jurisdictional questions. The first regards whether the district court has entered a final judgment, which is necessary to trigger appellate jurisdiction. 28 U.S.C. Sec. 1291. The final paragraph of the court's opinion, indicating that it is entering final judgment for Pace Communications for $50,118.85, "plus interest and costs," is a bit perplexing.

Civil litigants who win money judgments in district courts are entitled to post judgment interest. This much is guaranteed them by statute, 28 U.S.C. Sec. 1961(a). Expressly awarding such interest as part of the judgment is redundant. And saying that litigants get interest, without specifying whether it is prejudgment or postjudgment, creates confusion.

This is so because where a court intends to award pre judgment interest, its judgment is not final (and therefore not appealable) until the amount of interest is calculated. While a motion for an award of costs is collateral to the merits, Buchanan v. Stanships, Inc., 485 U.S. 265, 108 S.Ct. 1130, 99 L.Ed.2d 289 (1988), and the merits therefore separately appealable, Budinich v. Becton Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988), pre judgment interest is different. It is part of the plaintiff's complete compensation, West Virginia v. United States, 479 U.S. 305, 310 n. 2, 107 S.Ct. 702, 706 n. 2, 93 L.Ed.2d 639 (1987), part of the merits of the underlying action.

A motion for prejudgment interest is therefore a Rule 59(e) motion to amend a judgment, Osterneck v. Ernst & Whinney, 489 U.S. 169, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989). A court that has decided to award prejudgment interest has not entered an appealable final judgment until that amount has been calculated. The district court here has not calculated an amount of prejudgment interest, so if its reference to "interest" means that it intends to do so, our jurisdiction has not yet ripened.

But Pace says that it never asked the court for prejudgment interest. While the complaint asks for "interest and costs," Pace's counsel told us at oral argument that it was not seeking pre judgment interest. We go along with Pace's interpretation, reading both the complaint and the district court's opinion to contain unnecessary references to post judgment interest. That conclusion renders the district court's judgment final, and secures our jurisdiction. We note, however, that postjudgment interest is awarded by automatic statutory provision. To expressly award postjudgment interest is superfluous. Worse yet, mentioning "interest" but failing to say anything more creates this jurisdictional muddle. By using more precise language, both litigants and district courts can (and should) chart a clearer course through such murky waters.

B

The second jurisdictional question comes by way of Moonlight's claim that the amount in controversy requirement was not...

To continue reading

Request your trial
42 cases
  • Pratt Central Park Ltd. Partnership v. Dames & Moore, Inc.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • July 19, 1995
    ...(1977); Rosado v. Wyman, 397 U.S. 397, 405 n. 6, 90 S.Ct. 1207, 1214 n. 6, 25 L.Ed.2d 442 (1970); Pace Communications, Inc. v. Moonlight Design, Inc., 31 F.3d 587, 591-92 (7th Cir.1994). The penalty for recovering less than $50,000 is the denial of costs, see 28 U.S.C. Sec. 1332(b), not the......
  • In re Radcliffe
    • United States
    • U.S. Bankruptcy Court — Northern District of Indiana
    • July 19, 2007
    ... ...         3. Glass Service, Inc. ("Company") is a company owned and previously ... ...
  • Wert v. Manorcare of Carlisle Pa, LLC, 62 MAP 2014
    • United States
    • Pennsylvania Supreme Court
    • October 27, 2015
    ...the non-ambiguity of the actual written term.” Id.at 37–38 (emphasis in original). See Pace Communications, Inc. v. Moonlight Design, Inc.,31 F.3d 587, 592 (7th Cir.1994)(finding a rule “requir[ing] that parties discuss a contract's every term in order to be bound by it ... would reward par......
  • Rice v. Sunrise Express, Inc.
    • United States
    • U.S. District Court — Northern District of Indiana
    • November 13, 2002
    ...interest has not entered an appealable final judgment until that amount has been calculated. Pace Communications, Inc. v. Moonlight Design, Inc., 31 F.3d 587, 591 (7th Cir.1994). In this case, the court ordered the parties to supplement the record with the amount of prejudgment interest due......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT