Genetec, Inc. v. PROS, Inc

Background

The court had previously granted PROS summary judgment on its breach-of-contract counterclaim and denied Genetec summary judgment on its misrepresentation claims. The Clerk then entered a judgment stating that PROS had won summary judgment but did not specify the amount of damages.

PROS moved to supplement, correct, or amend the judgment. It requested $1,470,992.51, consisting of damages, attorney’s fees and costs, and prejudgment interest, as well as postjudgment interest. Genetec appealed the summary-judgment ruling. The Second Circuit stayed the appeal so this court could decide PROS’s motion. Genetec also moved to approve a supersedeas bond—a bond used to pause enforcement of a judgment during an appeal—and to stay enforcement of the judgment.

Motion to Amend the Judgment

The court granted PROS’s motion to amend the judgment. It explained that Rule 60(a) permits correction of clerical mistakes or omissions so that a judgment accurately reflects what the court actually decided, but does not permit a substantive change in the parties’ rights. The court concluded that it had intended to award PROS $697,924.48 in damages when it granted summary judgment, so adding prejudgment interest was permissible as a correction. But adding the subsequently documented attorney’s fees and costs was not merely a clerical correction because those amounts had not previously been presented or reviewed.

The court nevertheless amended the judgment under Rule 60(b)(1), which permits relief from a judgment because of mistake, and alternatively under Rule 59(e), which permits a court to correct a clear error or prevent manifest injustice. The court found that PROS’s summary-judgment presentation was unclear and that the parties had focused primarily on liability rather than the precise amount of damages. It also found that Genetec had an opportunity to challenge the fees and other damages in response to the amendment motion.

The court declined to bar PROS’s updated damages request under judicial estoppel. Judicial estoppel is a discretionary doctrine that can prevent a party from taking a position inconsistent with an earlier position when the party previously persuaded the court to accept that position and would otherwise gain an unfair advantage. The court found it unclear whether PROS’s current position was inconsistent with its earlier position and found no unfair prejudice to Genetec.

Attorney’s Fees and Costs

The parties’ contract required Genetec to pay reasonable legal fees and other costs PROS incurred to collect undisputed delinquent amounts. The court held that this provision covered the litigation as a whole. PROS had to establish the validity and enforceability of the contract and its own performance, which required it to litigate and defeat Genetec’s claims as well as pursue its counterclaim.

The court rejected Genetec’s argument that PROS’s fees had to be divided between the counterclaim and Genetec’s claims. It found that the contract did not require that division. After reviewing PROS’s billing records, the court found reasonable attorney’s fees of $767,251.15 and costs of $28,009.89, totaling $795,261.04.

Prejudgment Interest

The court awarded $160,947.24 in prejudgment interest. Under New York law, interest on contract-breach damages is generally calculated at nine percent per year. The court calculated interest on $514,784.23 in unpaid subscription and professional-services amounts from September 30, 2020, through March 21, 2024, when the original judgment was entered.

Postjudgment Interest

The court awarded PROS postjudgment interest on the entire judgment, including the damages, fee award, costs, and prejudgment interest. It ruled that postjudgment interest runs from the original judgment date.

Supersedeas Bond and Stay

The court granted in part and denied in part Genetec’s motion for approval of a supersedeas bond. Genetec had proposed a $697,924.48 bond, but the court found that amount inadequate because it did not cover the amended judgment, postjudgment interest, or expected appellate attorney’s fees.

The court allowed Genetec to stay enforcement of the judgment during the appeal if Genetec posts at least $1,653,023.91. That amount includes $1,470,992.51 in damages, $97,031.40 in postjudgment interest, and $85,000 in expected appellate attorney’s fees. The amended judgment will be stayed upon Genetec’s provision of that bond.

Disposition

Judge Jennifer L. Rochon granted PROS’s motion to amend the judgment. The Clerk was directed to issue an amended judgment confirming PROS’s right to collect $1,470,992.51 from Genetec, plus postjudgment interest. The court granted in part and denied in part Genetec’s motion for approval of a supersedeas bond, and ordered that the amended judgment would be stayed if Genetec provided a $1,653,023.91 bond.