United States Court of Appeals
For the First Circuit
No. 09-2688
MYRELLA S. FIORENTINO,
Plaintiff, Appellee,
v.
RIO MAR ASSOCIATES LP, SE, ET AL.
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Pérez-Giménez, U.S. District Judge]
Before
Boudin and Howard, Circuit Judges,
and Barbadoro,* District Judge.
Jennifer Suzanne Carroll for appellants.
Eric A. Tulla with whom José Bagué and Rivera, Tulla & Ferrer
were on brief for appellee.
December 2, 2010
*
Of the District of New Hampshire, sitting by designation.
BARBADORO, District Judge. This case requires us to
determine which of several judgments entered by the district court
triggers the commencement of interest under the federal
postjudgment interest statute, 28 U.S.C. § 1961.
I.
In December of 2000, while vacationing at the Westin Rio
Mar Beach Hotel in Puerto Rico, Edward Fiorentino fractured his
cervical spine in a swimming accident, rendering him a
quadriplegic. A year later, on December 5, 2001, Mr. Fiorentino
and his wife Myrella filed suit in the District of Puerto Rico
alleging negligence on the part of the hotel and affiliated
entities (collectively “Rio Mar”) and medical malpractice on the
part of the hospital that treated Mr. Fiorentino (“Hospital”). Rio
Mar and the Hospital subsequently filed cross-claims against each
other.
In June of 2005, the plaintiff1 settled with the
Hospital. Under the settlement agreement, which was not initially
disclosed to Rio Mar, the plaintiff received $1.4 million in
exchange for releasing the Hospital from further liability. The
settlement agreement also provided that
“[i]n the event that the herein appearing
settling defendants have or could have any
1
Mr. Fiorentino died of unrelated causes prior to trial and
Mrs. Fiorentino moved forward with the suit as both his personal
representative and on her own behalf. Thus, we refer to Mrs.
Fiorentino when we use the term “plaintiff.”
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responsibility in this case for the incidents
described in the complaint, plaintiffs [sic]
assume such responsibility and waive their
rights to claim and/or recover from any other
defendants or third party, that portion of
responsibility attributable to the settling
defendants.”
See also Rio Mar Assocs., LP, SE v. UHS of P.R., Inc., 522 F.3d
159, 162, 166 (1st Cir. 2008)(describing the settlement agreement
as akin to a “Pierringer release” or “proportionate share”
agreement in which each defendant is responsible for its share of
the damages).
The district court turned its attention to what remained
of the case shortly after the plaintiff settled her claims against
the Hospital. It began by bifurcating the plaintiff’s claims
against Rio Mar from Rio Mar’s cross-claim against the Hospital.
As the district court later explained, “[W]hat I've done in this
case is . . . bifurcation. I have tried plaintiffs’ [sic] causes
of action against [Rio Mar] first. Once that is over, if there is
any reason to go forward with [Rio Mar’s] cross-claim against the
hospital, then we'll have another jury trial . . . .”
At trial, the court instructed the jury that “[i]f you
find that [Rio Mar]. . . [is] responsible for Mr. Fiorentino’s
accident on December 7, 2000, you must also determine that [it is]
liable for all damages sustained by him as a consequence of the
medical services provided to him to treat the physical injuries
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[he] suffered . . . .” On August 19, 2005, the jury returned a
verdict of $1.844 million against Rio Mar.
A week later, on August 26, the district court granted
the plaintiff’s motion for judgment against Rio Mar pursuant to
Federal Rule of Civil Procedure 54(b), leaving Rio Mar’s cross-
claim against the Hospital as the only unresolved claim. Although
Rio Mar challenged the underlying verdict, it did not object to the
Rule 54(b) certification.
Rio Mar obtained a copy of the plaintiff’s settlement
agreement with the Hospital after the verdict was returned2 and
promptly filed a motion to amend the judgment to reduce the $1.844
million judgment by the $1.4 million the plaintiff had already
recovered from the Hospital. While that motion was pending, the
Hospital filed a motion to dismiss Rio Mar’s cross-claim. On April
3, 2007, the court denied Rio Mar’s motion to amend the judgment,
granted the Hospital’s motion to dismiss Rio Mar’s cross-claim, and
cleared the way for an appeal by entering a final judgment on all
issues.
This court affirmed the jury’s verdict on both liability
and damages, but concluded that the district court had erred in
denying Rio Mar “some process by which it could test how the
plaintiff’s total damages -- $1,844,000 -- should be allocated as
2
Rio Mar filed a motion to compel disclosure of the settlement
agreement prior to the trial but the district court did not rule on
the motion until after the jury verdict.
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between it and the Hospital.” Rio Mar, 522 F.3d at 164, 168. The
decision went on to explain that, although a dollar-for-dollar
credit for the $1.4 million settlement was not warranted, Rio Mar
was entitled to a setoff for the proportionate share of the
plaintiff’s damages that were caused by the Hospital’s negligence.
See id. at 166-67. Consequently, the court vacated the denial of
Rio Mar's motion to amend the original judgment, reversed the
dismissal of Rio Mar’s cross-claim against the Hospital, and
remanded the case for a second trial on Rio Mar’s cross-claim. Id.
at 167-68.
On remand, the jury in the second trial found that Rio
Mar was 30 percent at fault and the Hospital was 70 percent at
fault. Accordingly, on October 30, 2009, the district court
granted Rio Mar’s motion to alter the original $1.844 million
judgment and reduced the amount Rio Mar owed to $553,200 (30
percent of $1.844 million). At the same time, the district court
granted the plaintiff’s request for postjudgment interest from the
date of the original judgment, and issued an amended judgment
ordering relief consistent with its decisions.
II.
Rio Mar challenges the district court’s determination
that postjudgment interest began to accrue on August 26, 2005, when
the court first entered judgment. Rio Mar’s primary argument is
that the original judgment should not have started the interest
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clock because the extent of its liability was not determined until
the Hospital’s proportionate share of the liability was ascertained
and deducted from the original verdict. Alternatively, Rio Mar
argues that postjudgment interest should not have run from the date
of the original judgment because the judgment did not comply with
Rule 54(b). We address each argument in turn under the de novo
standard of review. Radford Trust v. First Unum Life Ins. Co. of
Am., 491 F.3d 21, 24 (1st Cir. 2007) (explaining that the
determination as to when postjudgment interest begins to run
presents a legal issue that is reviewed de novo).
A.
The postjudgment interest statute applies to “any money
judgment in a civil case recovered in a district court.” 28 U.S.C.
§ 1961(a). Interest begins to run “from the date of the entry of
the judgment.” Id. The statute does not explain what should
happen when the original judgment is altered, but both Supreme
Court and First Circuit precedents provide guidance.
In Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827
(1990), the Supreme Court considered whether postjudgment interest
should run from a judgment that was later vacated. In that case,
after a jury verdict and judgment in the plaintiff’s favor, the
district court ordered a new trial on damages only because the
evidence did not support the jury’s damages award. Id. at 830.
The retrial resulted in a new damages determination that was upheld
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on appeal. Id. Noting that “[t]he purpose of postjudgment
interest is to compensate the successful plaintiff for being
deprived of compensation for the loss from the time between the
ascertainment of the damages and the payment by the defendant,”
id. at 828, the Supreme Court held that postjudgment interest did
not begin to run with the entry of the initial judgment because
“damages have not been ‘ascertained’ in any meaningful way” by a
verdict that is not supported by sufficient evidence, id. at 836
(internal quotations omitted).
In Cordero v. De Jesus-Mendez, 922 F.2d 11 (1st Cir.
1990), we were faced with a case in which a new trial was required
on damages because the court’s instructions to the jury may have
led it to award duplicative damages. Id. at 15-16. In holding
that postjudgment interest should run from the date of the original
judgment, we distinguished Kaiser because sufficient evidence had
been introduced during the first trial in Cordero to support the
original damages award. Id. at 18.
More recently, in Radford Trust, 491 F.3d at 24, the
district court awarded partial summary judgment to the plaintiff on
liability in an ERISA case and determined that the plaintiff was
entitled to collect twenty-four months of benefits. Id. at 23.
Judgment was entered on the partial summary judgment order, but the
amount that was due to the plaintiff could not be determined until
later in the case after the benefits due had been calculated and a
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substantial legal issue concerning the applicability of a claimed
offset for Social Security benefits had been resolved. Id. We
held that the original judgment was not a “money judgment” and
therefore did not start the postjudgment interest clock because the
judgment “left open the possibility that the parties would dispute
the amount of damages.” Id. at 24.
The parties draw different conclusions from these
precedents. The plaintiff argues that this case is controlled by
Cordero because the jury’s verdict on liability was not disturbed,
judgment was entered for a sum certain, and sufficient evidence was
produced during the first trial to support the damages that were
ultimately awarded. Rio Mar argues that Radford Trust is
determinative because, as in that case, the original judgment did
not finally establish the specific amount that the defendant owed
to the plaintiff.
We conclude that the plaintiff has the better argument.
The original judgment in the present case followed a trial in which
Rio Mar was found liable and the plaintiff’s total recoverable
damages were assessed. The jury’s liability determination was
upheld on appeal and no credible argument was advanced that the
damages determination was insupportable. Although the original
judgment was later modified, all of the damages that were
ultimately awarded were embodied in the original judgment. See
Tinsley v. Sea-Land Corp., 979 F.2d 1382, 1383 (9th Cir. 1992)
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(finding that first judgment meaningfully ascertained damages where
finding of ship’s unseaworthiness and total damages figure were
affirmed despite remand to determine plaintiff’s comparative
negligence and to reduce the award accordingly). The case is thus
indistinguishable from Cordero and quite different from Radford
Trust, where we held that the original judgment did not qualify as
a “money judgment” under the statute.
The result we reach is also consistent with the purpose
that underlies the postjudgment interest statute. Rio Mar has
retained the use of the money that was ultimately awarded to the
plaintiff by the 2009 judgment, even though both Rio Mar’s
liability to the plaintiff and the total amount of plaintiff’s
damages were determined as of the date of the original judgment in
August 2005. Where, as in this case, the damages that are
ultimately awarded are embodied in an original money judgment that
is later reduced but that is otherwise unassailable, there is no
good reason why the defendant should not be required to compensate
plaintiff for her loss of the use of the money embodied in the
original judgment from the time that the original judgment issued.
B.
Rio Mar also argues that postjudgment interest should not
accrue from the original Rule 54(b) judgment even if the judgment
meaningfully ascertained the plaintiff’s damages because the
judgment did not include the express findings required by Rule
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54(b) and, in any event, it should not have been issued while Rio
Mar’s cross-claim remained pending.3 We hold that Rio Mar has
forfeited its right to raise these arguments by failing to present
a timely challenge to the Rule 54(b) judgment in the district
court.
Rule 54(b) permits “the court [to] direct entry of a
final judgment as to one or more, but fewer than all, claims or
parties only if the court expressly determines that there is no
just reason for delay.” Fed. R. Civ. P. 54(b). A Rule 54(b)
judgment can have both jurisdictional and non-jurisdictional
consequences. Compare Kersey v. Dennison Mfg. Co., 3 F.3d 482,
485-86 (1st Cir. 1983) (holding that circuit court lacks appellate
jurisdiction when district court abuses its discretion in issuing
Rule 54(b) certification), with Fratus v. Republic W. Ins. Co., 147
F.3d 25, 29-30 (1st Cir. 1998) (recognizing that entitlement to
postjudgment interest may be triggered by a proper Rule 54(b)
certification). When a proper Rule 54(b) judgment is a
prerequisite to appellate jurisdiction, the court must undertake
its own inquiry on the subject and the right to raise the issue on
appeal cannot be lost through inattention. See Spiegel v. Trs. of
3
Although Rio Mar contends otherwise, its argument, at most,
would prevent interest from starting to run until April 3, 2007,
when the court entered a final judgment disposing of both the
cross-claim and the motion to amend the original judgment. At that
point, a final judgment had been entered with respect to all claims
and any deficiency in the Rule 54(b) judgment would not prevent
postjudgment interest from beginning to accrue from that date.
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Tufts Coll., 843 F.2d 38, 43 (1st Cir. 1988) (noting that appellate
court has duty to assess the sufficiency of a Rule 54(b) judgment
sua sponte when it is the basis for a claim of appellate
jurisdiction). In contrast, when a Rule 54(b) judgment has been
relied on only for the non-jurisdictional purpose of determining
when postjudgment interest should begin to run, a challenge to the
judgment is subject to the general rule that appellate arguments
may be lost by failing to present them in the district court. See
Dávila v. Corporación de P.R. Para La Difusión Pública, 498 F.3d 9,
14-15 (1st Cir. 2007) (describing forfeiture rule).
In the present case, the district court’s Rule 54(b)
judgment had no effect on this court’s appellate jurisdiction. The
first appeal was not taken until after the district court had
dismissed the cross-claim, denied the motion to amend the judgment,
and entered a final judgment with respect to all claims in 2007.
The current appeal was taken from the final judgment entered in
2009 following the trial on Rio Mar’s cross-claim. Thus, Rio Mar’s
challenge to the Rule 54(b) judgment is non-jurisdictional and,
therefore, subject to forfeiture if it was not properly preserved
for appeal.
Forfeited claims are subject to review only for plain
error. Tasker v. DHL Ret. Sav. Plan, 621 F.3d 34, 40 (1st Cir.
2010). Accordingly, such claims cannot succeed unless “the
appellant demonstrates that (1) an error occurred (2) which was
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clear or obvious and which not only (3) affected the [appellant’s]
substantial rights, but also (4) seriously impaired the fairness,
integrity, or public reputation of the judicial proceedings.”
Dávila, 498 F.3d at 14-15 (internal citations and quotation marks
omitted).
Regardless of whether the district court erred in issuing
the Rule 54(b) judgment, any such error was not so grave as to
seriously threaten the fairness, integrity, or reputation of the
proceedings. The only effect of the allegedly deficient judgment
was to trigger the accrual of postjudgment interest on August 26,
2005. Far from causing unfairness or undermining the integrity of
this litigation, the resulting interest award merely requires Rio
Mar to pay a reasonable interest rate for the time that it
controlled the funds at issue. We need go no further. Because
even an erroneous Rule 54(b) judgment would not undermine the
fairness, integrity, or reputation of these proceedings, Rio Mar’s
challenge to the judgment cannot prevail under plain error review.
III.
For the foregoing reasons, we affirm the district
court's award of postjudgment interest running from the original
judgment on August 26, 2005.
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