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Promotion In Motion, Inc., Pim Brands, LLC v. Beech-Nut Nutrition Corporation

October 17, 2012

PROMOTION IN MOTION, INC., PIM BRANDS, LLC,
PLAINTIFFS,
v.
BEECH-NUT NUTRITION CORPORATION, A HERO GROUP CORPORATION,
DEFENDANT.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

This matter comes before the Court on Defendant/Counterclaimant Beech-Nut Nutrition's ("Beech-Nut's") application for an award of pre-judgment interest. Plaintiffs/Counterdefendants Promotion in Motion, Inc. and PIM Brands, LLC (collectively, "PIM") dispute the amount sought by Beech-Nut. For the reasons set forth below, the Court will grant Beech-Nut's application and award it prejudgment interest in the amount of $289,955.18.

I.BACKGROUND*fn1

This matter concerned a dispute between PIM and Beech-Nut over who was financially responsible for approximately 230,000 cases of unsold Fruit Nibbles, a brand of gummy fruit snacks manufactured by PIM to be sold under the Beech-Nut brand.

For purposes of this motion, it is sufficient to note the following: Beech-Nut paid PIM for those Fruit Nibbles and began selling them at retail under the Beech-Nut brand in the Fall of 2008. After receiving a number of serious complaints from consumers and retailers, Beech-Nut withdrew all PIM-produced Fruit Nibbles from the market. Although Beech-Nut advised PIM of its decision to do so on December 2, 2008, it is unclear when Beech-Nut formally requested reimbursement from PIM.

Through at least mid-January 2009, the parties continued to discuss who was financially responsible for the unsold Fruit Nibbles, as well Beech-Nut's desire to re-launch Fruit Nibbles with PIM, which was contingent on resolution of that issue. Thereafter, on February 23, 2009, Beech-Nut told PIM that it was going to re-launch Fruit Nibbles without PIM.

In response, on February 27, 2009, PIM commenced a breach of contract action against Beech-Nut in New Jersey Superior Court. On March 18, 2009, Beech-Nut removed this matter to federal court on the basis of diversity jurisdiction and asserted its own counterclaims against PIM for breach of contract.

The case was tried before a jury beginning on September 10, 2012. Prior to trial, the Court ruled that the terms set forth in four purchase orders governed the rights and liabilities of the parties for the unsold Fruit Nibbles. Those purchase orders contained language stating that they would "be construed in accordance with the laws of the state of New York." (Purchase Orders, ¶ 17.)

On September 12, 2012, a jury awarded $2,222,000.00 in damages to Beech-Nut.*fn2 In addition to its damages award, Beech-Nut is now seeking an award of pre-judgment interest. There are three points of contention between the parties regarding that request.

1. Whether New York or New Jersey law governs Beech-Nut's application for pre-judgment interest.

2. The relevant time period for which the Court should award prejudgment interest.

3. Whether the Court should compound any pre-judgment interest it awards.

II.DISCUSSION

1.New Jersey Law Governs Beech-Nut's Application for ...


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