                              STATE OF MINNESOTA
                              IN COURT OF APPEALS
                                    A13-1846

                                 Arthur Allen Hogenson,
                                      Respondent,

                                           vs.

                                 Michael W. Hogenson,
                                      Appellant.

                               Filed August 11, 2014
                  Affirmed in part, reversed in part, and remanded
                                   Hudson, Judge

                             Hennepin County District Court
                                File No. 27-CV-12-5530

Arthur Allen Hogenson, Oak Grove, Minnesota (pro se respondent)

Kelly Griffitts, Elizabeth Woolford Peterson, Griffitts Law Offices, PLLC, Bloomington,
Minnesota (for appellant)

      Considered and decided by Halbrooks, Presiding Judge; Hudson, Judge; and

Smith, Judge.

                                    SYLLABUS

      The phrase “[e]xcept as otherwise . . . allowed by law” in Minn. Stat. § 549.09,

subd. 1(b) (2012), requires that, when the common law permits recovery of preverdict

interest on a claim, preverdict interest on any award be calculated according to common

law principles. When preverdict interest is not available under common law, it should be

calculated exclusively under Minn. Stat. § 549.09, subd. 1(b).
                                       OPINION

HUDSON, Judge

       On appeal from an award of prejudgment interest to respondent, appellant argues

that the district court erred by calculating preverdict interest at a rate of 10% under Minn.

Stat. § 549.09 and by awarding postverdict-prejudgment interest on the sum of the jury

award plus preverdict interest. In his related appeal, respondent argues that the district

court abused its discretion by denying his motions to amend his complaint to request

punitive damages and the establishment of a constructive trust. We affirm in part, reverse

in part, and remand to the district court.

                                             FACTS

       In 1999, appellant Michael Hogenson and his brother, respondent Arthur

Hogenson, owned and operated a waterproofing business called Standard Water Control

Systems, Inc. (Standard).1 The two also created a real estate investment company called

Hogenson Properties, Ltd. At some point, the parties disagreed over the operation of the

businesses and agreed that Michael would take sole ownership of Standard while Arthur

would take sole ownership of Hogenson Properties. In 2001, Arthur and John Gieseke

formed a competing waterproofing business, Diversified Water Diversion, Inc., as equal

owners.

       Arthur was incarcerated during 2007–08 after he pleaded guilty to felony tax

evasion and felony possession of a controlled substance. While he was in prison, a


1
 Due to the extensive procedural and factual history of this case, we refer to the parties
by their first names for clarity.

                                               2
default judgment of $737,679.65 was entered against him after a former Diversified

employee, Thomas Fallon, sued the company and Arthur individually for injuries

sustained on the job. See Fallon v. Hogenson, No. A08-2142, 2009 WL 2498699, at *1

(Minn. App. Aug. 18, 2009). At some point, Michael purchased the judgment from

Fallon for $62,600 and the judgment was assigned to MWH Properties, a company

owned by Michael. Arthur moved to vacate the Fallon judgment, arguing that the district

court lacked subject-matter jurisdiction because the Minnesota Worker’s Compensation

Act provided the sole remedy for Fallon to recover. That motion was denied, and the

Hennepin County Sheriff served levies on Arthur’s stock in Diversified and Hogenson

Properties. The district court agreed to stay execution of the judgment while Arthur filed

a motion to reconsider with the district court. That motion was denied. Arthur filed a

second motion to vacate the default judgment, and the district court again stayed

execution of the judgment; the second motion to vacate was also denied.

      After Arthur filed an appeal to this court, a sheriff’s sale of his stock in Diversified

and Hogenson Properties was held. Two companies owned by Michael and his wife,

IDCA and Asset Liquidators, purchased all of the stock. Then, while the appeal was still

pending, Michael, acting now on behalf of Hogenson Properties, changed the business

contact information, modified bank-account information, and redirected payments owed

to the company. Michael also removed trucks, equipment, and other vehicles owned by

Diversified from Arthur’s property and changed the company’s address with the

Secretary of State. See Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc.,

844 N.W.2d 210, 213 (Minn. 2014). In addition, Michael removed two tractors and other


                                             3
possessions from the property that belonged to Arthur personally. Michael’s wife also

conducted business as the vice president of Diversified, even though she had never been

elected to the position. Gieseke, Arthur’s business partner, who still owned 50% of

Diversified, was not notified of her actions.

       After Michael and his wife had taken these steps to control Diversified and

Hogenson Properties, this court remanded the district court’s order denying Arthur’s

motion to vacate the Fallon judgment for additional fact-finding. See Fallon, 2009 WL

2498699, at *4. On remand, the Fallon judgment was vacated for lack of subject-matter

jurisdiction.   Arthur then filed the suit at issue here against Michael and his wife

individually, as well as their companies IDCA, Asset Liquidators, and MWH. At the

time of summary judgment, the claims that remained included conversion of Arthur’s

shares in Diversified and Hogenson Properties, conversion of property on Arthur’s

homestead, and trespass onto the homestead. The summary judgment decision is not at

issue in this appeal. Arthur’s motion to amend his complaint to include a claim for

punitive damages was denied, and a jury trial was held on the issue of damages only.

The jury awarded Arthur $299,488 for conversion of his ownership interest in Hogenson

Properties and $0 for conversion of his ownership interest in Diversified. The jury also

awarded Arthur $5,000 for the conversion of two tractors, $100 for conversion of his

furniture and household possessions, and $7,500 for trespass to his homestead. Arthur

then moved the district court to amend his complaint to include a request to establish a

constructive trust for any rights that Hogenson Properties might have to repayment of




                                                4
funds previously advanced to Diversified by Hogenson Properties, when both companies

were under Arthur’s control. That motion was denied by the district court.

       The parties submitted written arguments on the issue of prejudgment interest. The

district court awarded Arthur preverdict interest at a rate of 10% on the conversion claims

from the date of conversion to the date of the verdict under common law and Minn. Stat.

§ 549.09, subd. 1(b). On the trespass claim, the district court awarded Arthur preverdict

interest at a rate of 10% from the date the claim was made to the verdict, solely under

subdivision 1(b). The amount of the jury awards plus preverdict interest totaled

$432,951.99. The district court also concluded that Arthur was entitled to prejudgment

interest on the $432,951.99 from the date of the verdict to the date of entry of judgment at

a rate of 10% under Minn. Stat. § 549.09, subd. 1(a). Michael appealed the district

court’s award of preverdict and postverdict-prejudgment interest. Arthur filed a related

appeal arguing that the district court abused its discretion by denying his motions to

amend his complaint for punitive damages and to establish a constructive trust.

                                         ISSUES

I.     Did the district court correctly award and calculate preverdict interest under
       Minn. Stat. § 549.09?

II.    Did the district court correctly calculate postverdict-prejudgment interest
       under Minn. Stat. § 549.09?

III.   Did the district court abuse its discretion by denying respondent’s post-trial
       motion to amend his complaint to seek a constructive trust?

IV.    Did the district court abuse its discretion by denying respondent’s motion to
       amend his complaint to seek punitive damages?




                                             5
                                       ANALYSIS

                                              I

       An award of prejudgment interest under Minn. Stat. § 549.09 is reviewed de novo.

Duxbury v. Spex Feeds, Inc., 681 N.W.2d 380, 390 (Minn. App. 2004), review denied

(Minn. Aug. 25, 2004). There are two subsets of prejudgment interest at issue here:

preverdict and postverdict-prejudgment. Importantly, the parties do not dispute that

postverdict-prejudgment interest is calculated solely under Minn. Stat. § 549.09,

subd. 1(a).   Rather, Michael disputes the calculation of preverdict interest on the

conversion claims. He argues that because preverdict interest was allowed for conversion

claims under common law, the district court should have applied a 6% preverdict interest

rate under Minn. Stat. § 334.01, subd. 1 (2012), instead of the 10% interest rate under

Minn. Stat. § 549.09. Michael also argues that, even if the district court correctly applied

the 10% interest rate, it erred by accruing interest from the date of the conversions and by

failing to apply the offer/counteroffer provision of section 549.09.2

History of the Conflict Between Section 549.09 and Section 334.01

       In 1984 the Minnesota Legislature amended section 549.09, extending the

availability of preverdict interest to most claims. Trapp v. Hancuh, 587 N.W.2d 61, 63

(Minn. App. 1998). The pertinent subdivision reads in part:

2
  Michael also argues that Arthur waived his right to preverdict interest on the conversion
claims because he failed to argue preverdict interest to the jury. Instead, Arthur requested
that the interest portion of the conversion jury instruction be removed and that the district
court judge calculate interest. Michael did not object to Arthur’s request at the time it
was made, but rather waited until after the verdict when the argument could not be
meaningfully addressed by the district court. Thus, we decline to address the argument
on appeal. See Thiele v. Stitch, 425 N.W.2d 580, 582 (Minn. 1988).

                                             6
              Except as otherwise provided by contract or allowed by law,
              preverdict, preaward, or prereport interest on pecuniary
              damages shall be computed as provided in paragraph (c) from
              the time of the commencement of the action or a demand for
              arbitration, or the time of a written notice of claim, whichever
              occurs first, except as provided herein. The action must be
              commenced within two years of a written notice of claim for
              interest to begin to accrue from the time of the notice of
              claim.

Minn. Stat. § 549.09, subd. 1(b). The center of this dispute rests in the interpretation of

the phrase “[e]xcept as otherwise . . . allowed by law.” Id.

       Under common law, preverdict interest began to accrue at the 6% rate prescribed

by section 334.01 from the date a claim arose and was only applied “when the amount

demanded [could] be ascertained by computation or reference to generally recognized

standards and [did] not depend on a contingency.” Trapp, 587 N.W.2d at 64. Under

section 549.09, prejudgment interest begins to accrue when an action is commenced or

when a written notice of the claim is made, whichever occurs first. Minn. Stat. § 549.09,

subd. 1(b). Interest accrues at a rate of 10% for awards over $50,000 and at a rate “based

on the secondary market yield of one year United States Treasury bills” for lesser awards.

Id., subd. 1(c)(2), (1). In addition, there is no requirement under section 549.09 “that the

damages be readily ascertainable.” Schwickert, Inc. v. Winnebago Seniors, Ltd., 680

N.W.2d 79, 88 (Minn. 2004).

       Arthur argues that, because interest on conversion claims began to accrue under

common law on the date the conversion occurred, the phrase “as otherwise . . . allowed

by law” overrides the accrual start date found in subdivision 1(b) and allows the

calculation to begin at the time of conversion. Nonetheless, Arthur still argues, and the


                                             7
district court concluded, that the 10% rate specified in section 549.09 should apply, rather

than the 6% rate under section 334.01. Michael argues that section 549.09 only applies to

claims that did not allow for preverdict interest at common law; thus, Arthur is limited to

the 6% rate under section 334.01.

       Since section 549.09 was amended in 1984, courts applying Minnesota law have

issued inconsistent decisions on how section 549.09 interacts with the existing common

law on preverdict interest and with section 334.01. The first case addressing the new

amendments was L.P. Medical Specialists, Ltd. v. St. Louis Cty., 379 N.W.2d 104 (Minn.

App. 1985), review denied (Minn. Jan. 31, 1986). There, this court concluded that 6%

interest under section 334.01 should be awarded from the date the payment was

demanded until the date that amended section 549.09 went into effect, but that thereafter

the prevailing party was entitled to interest calculated under section 549.09. Id. at 109–

10. Two conflicting positions have arisen out of this court since then. In Seaway Port

Auth. of Duluth v. Midland Ins. Co., 430 N.W.2d 242, 252 (Minn. App. 1988), this court

stated that “[t]he prejudgment interest statute [section 549.09] was not intended to disturb

the existing law of prejudgment interest, but to provide for prejudgment interest in

situations where prejudgment interest was not already allowed by law.” In that case, this

court concluded that the district court had not erred by calculating prejudgment interest

according to common law principles rather than under section 549.09. Id.; see also

Northwest Airlines, Inc. v. Flight Trails, 3 F.3d 292, 297 (8th Cir. 1993) (citing Seaway

and stating that section 549.09 “was not intended to disturb” existing law on prejudgment

interest).   Similarly, in Trapp, 587 N.W.2d at 64, this court concluded that


                                             8
“[p]rejudgment interest [under existing common law] from the time the claim arises is

appropriate when the amount demanded can by ascertained by computation or reference

to generally recognized standards and does not depend on a contingency.”

       In contrast, Nelson v. Ill. Farmers Ins. Co., 567 N.W.2d 538, 543 (Minn. App.

1997), review denied (Minn. Oct. 21, 1997), concluded that section 334.01 only remains

applicable to a very narrow section of claims, such as wages and tax refunds, while

section 549.09 should apply to all other litigants. See also Best Buy Stores, L.P. v.

Developers Diversified Realty Corp., 715 F. Supp. 2d 871, 878 (D. Minn. 2010)

(concluding that section 334.01 only applies to “obligations governed by specific interest-

rate laws”) (quotation omitted). The Minnesota Supreme Court has never discussed the

interplay between section 334.01 and section 549.09. See id. at 877 (noting that the

supreme court has never determined whether section 334.01 or section 549.09 would

apply in a breach-of-contract case).

       Ultimately, we are persuaded by Trapp and Seaway that section 549.09 was meant

to supplement, not replace, the existing law on preverdict interest. Nothing in the plain

language of section 334.01 would lead us to conclude that it applies only to very specific

types of claims, as suggested by this court in Nelson. Therefore, we conclude that the

phrase “[e]xcept as otherwise . . . allowed by law” requires that preverdict interest be

calculated under existing common-law principles whenever possible. Because preverdict

interest was allowed for conversion claims under common law, preverdict interest should

be calculated from the date of conversion at 6% under section 334.01 to the date of the

verdict if the damages are ascertainable or liquidated. See Trapp, 587 N.W.2d at 64;


                                            9
Dairy Farm Leasing Co. v. Haas Livestock Selling Agency, Inc., 458 N.W.2d 417, 419

(Minn. App. 1990). When damages are not readily ascertainable, or when a claim did not

allow for preverdict interest prior to the 1984 amendment, preverdict interest should be

calculated exclusively under section 549.09, subd. 1(b), “from the time of the

commencement of the action or a demand for arbitration, or the time of a written notice

of claim, whichever occurs first.” See Trapp, 587 N.W.2d at 64. All other prejudgment

interest, including from the date of the verdict to the date of judgment, and from the date

of judgment to the date of actual payment, should be calculated under the appropriate

subdivision of section 549.09 in every case.       See Minn. Stat. § 549.09, subd. 1(a)

(providing for postverdict prejudgment interest), subd. 2 (providing for interest from the

date of judgment to the date of payment).

Arthur’s Conversion Claims

       Applying the analysis above, preverdict interest on Arthur’s conversion claims

should be calculated at 6% under section 334.01 from the date of conversion to the date

of the verdict, provided that those conversion claims were readily ascertainable or

liquidated.   We conclude, however, that they were not.         “Traditionally, pre-verdict

interest was not allowed on an unliquidated claim . . . where the amount of damages

depended upon contingencies or jury discretion.” Lienhard v. State, 431 N.W.2d 861,

865 (Minn. 1988). Further, if the value of a claim “ha[s] to be determined by litigation, it

[is] neither liquidated nor readily ascertainable.” Trapp, 587 N.W.2d at 64.

       In this case, the purpose of the trial was to determine the amount of damages

Arthur incurred as a result of the conversion of his stock and property; thus the damages


                                            10
were not liquidated nor readily ascertainable. Accordingly, we reverse the district court’s

award of preverdict interest from the date the three conversion claims arose and remand

for the district court to calculate preverdict interest under section 549.09, subdivision

1(b), exclusively. See id. Because interest calculations begin to accrue under subdivision

1(b) “from the time of the commencement of the action or a demand for arbitration, or

the time of a written notice of claim, whichever occurs first,” we also remand for the

district court to determine the date of written notice for each of the conversion claims.

Arthur’s Trespass Claim

       The district court calculated preverdict interest on the trespass claim solely under

section 549.09, subdivision 1(b), and the parties do not dispute that decision. Rather,

Michael argues that the district court applied the wrong accrual date. The district court

awarded interest from November 4, 2010. On that date, Arthur filed a similar complaint

in a separate case that was ultimately dismissed without prejudice. It is not clear whether

the earlier complaint was part of the district court record in this case. If not, preverdict

interest should have been calculated from the date the complaint was filed in this case—

December 30, 2011. Accordingly, while we conclude that the district court properly

calculated preverdict interest on this claim under subdivision 1(b), we reverse the award

and remand for the district court to determine the proper date of written notice.

Offer/Counteroffer Provision

       Michael next argues that the district court erred by not applying the

offer/counteroffer provision of section 549.09, subdivision 1(b). Because this argument

was presented to the district court, but the district court did not issue a ruling on it, we


                                             11
assume the argument was implicitly rejected when the district court granted Arthur’s

motion for preverdict interest. See Alliance for Metro. Stability v. Metro. Council, 671

N.W.2d 905, 919 (Minn. App. 2003) (stating that a district court implicitly denied a

motion to continue discovery when it granted the opposing party’s motion for summary

judgment).

      A prevailing party shall receive preverdict interest

             only if the amount of its offer is closer to the judgment or
             award than the amount of the opposing party’s offer. If the
             amount of the losing party’s offer was closer to the judgment
             or award than the prevailing party’s offer, the prevailing party
             shall receive interest only on the amount of the settlement
             offer or the judgment or award, whichever is less, and only
             from the time of commencement of the action or a demand
             for arbitration, or the time of a written notice of claim, or as
             to special damages from when the special damages were
             incurred, if later, until the time the settlement offer was made.
             Subsequent offers and counteroffers supersede the legal effect
             of earlier offers and counteroffers. For the purposes of clause
             (2), the amount of settlement offer must be allocated between
             past and future damages in the same proportion as determined
             by the trier of fact.

Minn. Stat. § 549.09, subd. 1(b). The offer/counteroffer provision applies to all parties

seeking preverdict interest (whether their claim allowed for interest at common law or

not) because that provision is not qualified with the phrase “as otherwise . . . allowed by

law.” See id. “Valid offers and counteroffers under section 549.09 must be in writing

and must offer, in sufficiently clear and definite terms, to dispose completely the claims

between the negotiating parties.” Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d

826, 840 (Minn. 1988).




                                            12
       Michael claims that he first offered to settle the case in November 2010 when he

returned Arthur’s property, including the real estate holdings of Hogenson Properties.

Michael argues that this offer was closer in value to the jury award of $299,498 than the

$600,000 amount Arthur claimed in damages. But in his brief to this court, Michael

claims that he made a later settlement offer to Arthur, which would “supersede the legal

effect” of the original offer under Minn. Stat. § 549.09, subd. 1(b). Specifically, Michael

claims that he made a second offer to settle for $375,000 and that Arthur counteroffered

for $425,000. The evidence of this offer and counteroffer is contained in two e-mails

between the parties’ attorneys.

       Arthur contends that e-mails do not qualify as writings. We reject this contention,

but conclude that the e-mails in this case do not meet the requirements for a valid offer

and counteroffer under section 549.09. The e-mails are summaries of negotiations that

had taken place during mediation of these disputes and reflect that the parties

contemplated additional provisions to be included in any settlement provisions that were

not ultimately agreed upon between the parties. Finally, the figures proposed only

resolved the issue of damages for the conversion of the Hogenson Properties stock; the

other conversion claims and the trespass claim were not mentioned. Accordingly, the

district court did not err by implicitly rejecting Michael’s argument that the

offer/counteroffer provision should apply.

                                             II

       Michael next argues that the district court should have awarded Arthur

postverdict-prejudgment interest only on the damages the jury awarded, instead of


                                             13
awarding postverdict-prejudgment interest on the sum of the jury damages plus

preverdict interest. Michael does not cite any legal authority to support this argument.

Postverdict-prejudgment interest is awarded under Minn. Stat. § 549.09, subd. 1(a):

“[w]hen a judgment or award is for the recovery of money . . . interest from the time of

the verdict, award, or report until judgment is finally entered shall be computed . . . and

added to the judgment or award.” Preverdict interest is “an element of damages awarded

to provide full compensation by converting time-of-demand . . . damages into time-of-

verdict damages.” Lienhard, 431 N.W.2d at 865; see also Myers v. Hearth Technologies,

Inc., 621 N.W.2d 787, 794 (Minn. App. 2001), review denied (Minn. Mar. 13, 2001)

(citing Lienhard for the proposition that preverdict interest is an additional element of

compensatory damages).

       Because preverdict interest is part of compensatory damages, it is part of a

prevailing party’s judgment or award. Accordingly, the district court did not err by

including the preverdict interest in the total sum of the award upon which postverdict-

prejudgment interest should be calculated.

                                             III

       Arthur argues in his related appeal that the district court abused its discretion by

denying his postverdict motion to amend his complaint to seek a constructive trust and

for summary judgment establishing that trust. When issues not contained in the original

pleadings are actually tried with the express or implied consent of both parties, “they

shall be treated in all respects as if they had been raised in the pleadings.        Such

amendment of the pleadings as may be necessary to cause them to conform to the


                                             14
evidence and to raise these issues may be made upon motion of any party at any time.”

Minn. R. Civ. P. 15.02. A district court’s denial of a motion to amend a complaint will

not be reversed absent a clear abuse of discretion. LaFee v. Winona Cty., 655 N.W.2d

662, 668 (Minn. App. 2003), review denied (Minn. Mar. 27, 2003). A party seeking to

establish a constructive trust must show “by clear and convincing evidence that the

imposition of a constructive trust is justified to prevent unjust enrichment.” In re Estate

of Eriksen, 337 N.W.2d 671, 674 (Minn. 1983).

       The district court concluded that Arthur’s request for a constructive trust was

inconsistent with the manner in which the case was pleaded and tried. We agree. The

district court noted that Arthur prevailed on the “theory that [Michael] permanently

converted his stock in Hogenson Properties,” and then claimed that “he is entitled to a

constructive trust over the $20,000 debt owed by Diversified to Hogenson Properties.” In

particular, Arthur argued to the jury that the debt owed by Diversified to Hogenson

Properties was bad debt that should be used to offset Hogenson Properties’ tax liability,

thereby potentially increasing his award of damages for conversion of his stock in

Hogenson Properties.      By seeking to establish the constructive trust, Arthur was

essentially taking the opposite stance by claiming that the debt had value. Accordingly,

we conclude that the district court did not abuse its discretion by denying Arthur’s

motion.

                                            IV

       Arthur also argues in his related appeal that the district court abused its discretion

by denying his motion to amend his complaint to seek punitive damages. Under Minn.


                                             15
Stat. § 549.191 (2012), a party may move the district court seeking permission to amend

its pleadings to request punitive damages after a case has commenced. The party must

state the legal basis for punitive damages and provide one or more affidavits containing a

factual basis for the claim. Id. The relevant statute provides:

              (a) Punitive damages shall be allowed in civil actions only
              upon clear and convincing evidence that the acts of the
              defendant show deliberate disregard for the rights or safety of
              others.
              (b) A defendant has acted with deliberate disregard for the
              rights or safety of others if the defendant has knowledge of
              facts or intentionally disregards facts that create a high
              probability of injury to the rights or safety of others and:
              (1) deliberately proceeds to act in conscious or intentional
              disregard of the high degree of probability of injury to the
              rights or safety of others; or
              (2) deliberately proceeds to act with indifference to the high
              probability of injury to the rights or safety of others.

Minn. Stat. § 549.20 (2012):

       “[I]f the court finds prima facie evidence in support of the motion, the court shall

grant the moving party permission to amend the pleadings to claim punitive damages.”

Minn. Stat. § 549.121.      The plaintiff’s burden is to produce evidence, which, if

unrebutted, would show that the defendant acted with “willful indifference” by clear and

convincing evidence. Swanlund v. Shimano Indus. Corp. Ltd., 459 N.W.2d 151, 154

(Minn. App. 1990) (quotation omitted), review denied (Minn. Oct. 5, 1990). The district

court’s decision to deny a motion to add a claim for punitive damages is reviewed for an

abuse of discretion. Bjerke v. Johnson, 727 N.W.2d 183, 196 (Minn. App. 2007), aff’d,

742 N.W.2d 660 (Minn. 2007).




                                            16
       At the district court, Arthur argued that he should be permitted to seek punitive

damages because the brothers have a history of conflict and Michael’s actions of

trespassing and converting property while the Fallon judgment appeal was still pending in

this court showed malice and a deliberate disregard for Arthur’s rights. The district court

concluded that Arthur had not met his burden to establish a prima facie case because the

evidence of Michael’s actions did not “rise to the level of conscious or intentional

disregard contemplated by the punitive damages statute.” The district court noted that

Michael’s conversion and trespassing took place after receiving the advice of his lawyer

and, although the appeal was still pending, after three district court orders denied

Arthur’s motions to vacate the Fallon judgment. We see no abuse of discretion in the

district court’s conclusion that Arthur’s allegations did not establish a prima facie case

for punitive damages.

                                     DECISION

       We reverse the portion of the district court’s order awarding preverdict interest

from the date of conversion and remand for the district court to recalculate the interest

consistent with this opinion. We affirm the award of postverdict-prejudgment interest on

the sum of the jury verdict plus the preverdict interest. As to Arthur’s related appeal, we

affirm the district court’s order denying Arthur’s motions to amend his complaint to

request punitive damages and to request the establishment of a constructive trust.

       Affirmed in part, reversed in part, and remanded.




                                            17
