Berens v. Ludwig

• Decision Date: 22 May 1997
• Docket Number: No. 96 C 3534.,96 C 3534.
• Citation: 964 F.Supp. 1215
• Parties: Mark H. BERENS, Plaintiff, v. Eugene LUDWIG, Comptroller of the Currency, and Marquette Bank, N.A., as successor in interest to Marquette Bank of Shakopee, N.A., Defendants.
• Court: U.S. District Court — Northern District of Illinois

964 F.Supp. 1215

Mark H. BERENS, Plaintiff, v. Eugene LUDWIG, Comptroller of the Currency, and Marquette Bank, N.A., as successor in interest to Marquette Bank of Shakopee, N.A., Defendants.

No. 96 C 3534.

United States District Court, N.D. Illinois, Eastern Division.

May 22, 1997.

Richard M. Carbonara, Mark H. Berens, Altheimer & Gray, Chicago, IL, for Plaintiff.

James Michael Kuhn, U.S. Attorney's Office, Chicago, IL, Kenneth J. Lennon, Office of the Comptroller of Currency, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

Before the court is plaintiff Mark H. Berens' motion to alter or amend judgment pursuant to Federal Rule of Civil Procedure 59(e). For the reasons that follow, the court denies Berens' motion.

I. BACKGROUND

The court fully set out the facts underlying Berens' cause of action in its memorandum opinion and order, dated February 13, 1997, granting summary judgment against Berens and for defendant Comptroller of the Currency. See Berens v. Ludwig, 953 F.Supp. 249 (N.D.Ill.1997). All of those facts need not be repeated here, but the court will summarize the relevant ones and relate the facts not at issue in the first opinion.

Berens owned 33 shares of stock in Marquette Bank Shakopee, N.A. ("Shakopee"), making him a minority shareholder in Shakopee. On January 1, 1995, Marquette Bancshares, Inc. ("MBI"), Shakopee's majority shareholder, consolidated Shakopee with 10 other banks and received 100 percent of the stock of the consolidated institution, defendant Marquette Bank, N.A. ("Marquette Bank"). MBI had offered Berens $12,071 per share of stock that he owned, but Berens felt that this price was too low.

Accordingly, Berens sought an appraisal of his stock by the Comptroller of the Currency ("Comptroller") pursuant to 12 U.S.C. § 215(d), which allows any interested party in a bank consolidation to request that the Comptroller appraise a dissenting shareholder's stock. The Comptroller's appraisal is final and binding on all parties. After receiving evidence from both Berens and Marquette Bank with respect to the value of the stock, the Comptroller considered the parties' materials and conducted his own analysis of the stock's value.

In March 1996, the Comptroller determined that Berens' stock was worth $13,033.52 per share as of January 1, 1995. On May 15, 1996, Marquette Bank issued a check to Berens for $430,106.16, the total value of Berens' shares pursuant to the Comptroller's appraisal. Berens believed his stock was worth about $16,700 per share, however. Consequently, he sued the Comptroller pursuant to the Administrative Procedure Act, 5 U.S.C. § 702, alleging that the Comptroller's appraisal was conducted in an arbitrary and capricious manner, and asking the court to set aside the appraisal. He also sued Marquette Bank, seeking primarily to have Marquette Bank pay Berens interest from January 1, 1995, on the value of his shares of stock.

On November 8, 1996, Berens and Marquette Bank entered into an agreed order and stipulation, which provided as follows:

1. The Bank shall be bound by the value ascribed to its stock at issue in this cause by the adjudication of this case, whether entered by this Court by way of judgment or settlement or established by a reappraisal of the stock by the Office of the Comptroller of the Currency ("OCC");

2. The Bank shall be obligated to compensate Berens for the value of his stock on the basis described in paragraph 1. Such compensation shall be due to Berens on or before the tenth day following (1) entry of judgment fixing the value of the Bank stock, or (2) if the Court orders the OCC to perform a reappraisal of the stock, the delivery of such reappraisal;

3. The compensation due to Berens by virtue of the foregoing shall credit the Bank for funds already tendered to Berens by the Bank for Berens' Bank stock, which funds total $430,106.16. Berens shall be entitled to cash the check tendered to him by the Bank for this purpose, and such acceptance of those funds by Berens shall not be construed in any respect as an accord and satisfaction or in any wise as a release of Berens' continuing claim for greater compensation for his Bank stock....

4. On the basis of the foregoing provisions, the Bank shall be and hereby is dismissed from this action with prejudice, subject to its continuing obligations set forth above....

(Def.'s Mem. in Opp. to Pl.'s Mot. to Alter or Amend J. Ex. A.)

On February 13, 1997, the court granted the Comptroller's motion for summary judgment, finding that the Comptroller's appraisal was reasonable and entering judgment for the Comptroller and against Berens. The consequence of this ruling was that Marquette Bank, in May 1996, paid Berens the correct amount of money for his shares of stock, and so was not required to compensate Berens further for his stock.

On February 28, 1997, Berens moved to alter or amend the judgment to provide for interest on the amount that Marquette Bank paid Berens for his stock. Berens represented to this court that his proposed order providing for prejudgment interest was an agreed order, so the court entered it. Actually, only Berens and the Comptroller agreed to the order. Marquette Bank, to whom the order was directed, was not aware of the order until after it was entered. When the court became aware of this, the court vacated the order awarding interest to Berens, allowed Marquette Bank to respond to Berens' motion to alter or amend the judgment, and now addresses the motion on its merits.

II. DISCUSSION

Berens contends that he should be awarded interest on the value of his shares of stock from January 1, 1995, when the bank consolidation occurred, through November 8, 1996, when Berens and Marquette Bank entered an agreed order and stipulation dismissing Marquette Bank from Berens' lawsuit. Marquette Bank counters that Berens is not entitled to any interest at all.

A. Dates of interest accrual

As a preliminary matter, the court notes that Berens somewhat disingenuously claims that he was not entitled to cash the check that he received from Marquette Bank in May 1996 until November 8, 1996, when Berens and Marquette Bank entered the agreed order and stipulation. Though Marquette Bank issued the check on May 15, 1996, Berens claims in his motion that Marquette Bank conditioned his acceptance of the check as full and complete satisfaction of any claim by Berens against Marquette. (See Pl.'s Mot. to Alter or Amend J. at 2-3.) Thus Berens implies in his motion that Marquette Bank effectively prevented him from using his money until November 8, 1996.

In its response to Berens' motion, Marquette Bank makes clear that it did not impose any conditions on Berens' acceptance of the check, and that if Berens did not cash the check, it was his own choice not to do so. (See Mem. in Opp. to Pl.'s Mot. to Alter or Amend J. at 11; id. Ex. C.) Berens essentially concedes that this is true. (See Pl.'s Reply in Supp. of Mot. to Alter or Amend J. at 3.) Moreover, the court notes that as of May 15, 1997, Berens had not yet filed his lawsuit against Marquette Bank. If Berens anticipated bringing claims against Marquette Bank and feared waiving them, and for that reason did not want to accept payment from Marquette Bank, it still was his decision not to cash Marquette Bank's check.

Berens had the proper value of his shares by May 15, 1996. Though he held the check without cashing it, he did so of his own volition. Consequently, the court finds that if Berens were entitled to any interest at all on the value of his shares, it would be interest only from January 1, 1995, through May 15, 1996.

B. Prejudgment interest under federal common law

Berens contends that he is entitled to interest on the value of his shares pursuant to the "well-established [f]ederal common law right to prejudgment interest." (Pl.'s Mot. to Alter or Amend J. at 3.) Berens argues that because Marquette Bank effectively had use of $430,106.16 of Berens' money from January 1, 1995, through November 8, 1996, Marquette Bank must pay interest on that amount in order to compensate Berens completely.

Berens contends that prejudgment interest is presumptively available to aggrieved plaintiffs in federal court. He is correct that aggrieved plaintiffs who win judgments on their claims in federal court typically are entitled to interest on the judgment to compensate them fully for being deprived of their money from the time of the wrong to the time of the judgment. See, e.g., Gorenstein Enterprises, Inc. v. Quality Care — USA, Inc., 874 F.2d 431, 436 (7th Cir.1989) (citing numerous cases awarding prejudgment interest). However, prejudgment interest typically is awarded only to plaintiff's who prevail on their claims that they were victims of violations of federal law. See Gorenstein, 874 F.2d at 436 ("federal common law authorizes the award of [prejudgment] interest in appropriate cases to victims of violations of federal law").

In this case, Berens did not prevail on his cause of action. While Berens may have succeeded in obtaining a higher appraisal of his stock by the Comptroller than Marquette Bank had offered, that success was not part of the litigation in this court, but rather occurred prior to the litigation. In fact, Berens had not yet filed his lawsuit at the time Marquette Bank paid him the value of his shares as determined by the Comptroller. Berens lost his case in this court when the court found that the Comptroller's appraisal of Berens' shares of stock was reasonable, that is, that the Comptroller complied with the applicable federal law in appraising Berens' stock. That ruling meant that Berens was fully compensated by Marquette Bank at the time he filed his lawsuit. Thus, Berens is neither an aggrieved plaintiff nor a victim of a violation of federal law to whom prejudgment interest typically is awarded.

Berens also contends that public policy compels an award of prejudgment...