[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
APRIL 9, 2007
No. 06-14614 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 97-02439-CV-JLK
NATIONAL FIRE INSURANCE COMPANY OF HARTFORD,
Plaintiff-Counter-
Defendant-Appellee,
versus
FORTUNE CONSTRUCTION COMPANY,
Defendant-Counter-
Claimant-Third-Party
Plaintiff-Appellant,
versus
ARKIN CONSTRUCTION COMPANY, INC.,
Third-Party
Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(April 9, 2007)
Before ANDERSON, BARKETT and PRYOR, Circuit Judges.
PER CURIAM:
Fortune Construction Company appeals from a judgment the district court
entered after this Court remanded a previous appeal by Fortune. Fortune contends
that the district court failed to comply with the mandate of this Court when it
refused to permit a purported claim of Fortune to go forward. Fortune also asserts
that the district court erroneously calculated the prejudgment interest for National
Fire Insurance Company of Hartford. We affirm in part, vacate in part, and
remand for further proceedings.
I. BACKGROUND
This controversy based on diversity jurisdiction arose out of two
construction projects. Nat’l Fire Ins. Co. of Hartford v. Fortune Constr. Co., 320
F.3d 1260, 1263 (11th Cir. 2003). As general contractor, Fortune entered two
separate subcontracts with Arkin Construction Company. Id. National Fire, as
surety, issued performance and payment bonds on behalf of Arkin, as principal, for
the two projects. Id.
During construction, Arkin began to experience financial difficulty. Id. The
subcontracts between Fortune and Arkin included provisions for liquidated
damages, which obligated Arkin to pay for delays in completion of the projects.
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Id. at 1264. Fortune invoked these clauses. Id. When it defaulted and abandoned
the construction projects, Arkin owed $1,693,500 in delay damages on one project
and $93,600 on the other project. Id.
Fortune completed the projects and presented to National Fire an accounting
of costs. Id. at 1265. National Fire responded that the costs were less than the
amount of money that had been, for various reasons, prepaid to Fortune on the
subcontracts. Id. National Fire requested that the balances on the subcontracts be
paid by Fortune to National Fire, as subrogee of Arkin. Id. Fortune refused to pay.
Id. Fortune contended that it had a superior right to the contract balances because
National Fire failed to perform on the performance bonds and Fortune had a right
to offset against the contract balances certain damages owed by Arkin, including
the liquidated damages for delay. Id.
National Fire filed a complaint in federal district court, and Fortune filed a
counterclaim and joined Arkin as a third-party defendant. Id. The district court
granted National Fire partial summary judgment on several issues. Id. At trial, the
district court directed judgment as a matter of law in favor of Fortune against
Arkin. Id. The jury determined the amount of the contract balances, which were
awarded to National Fire, and the district court added prejudgment interest. Id. at
1267. Fortune appealed.
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In an opinion issued February 7, 2003, this Court affirmed in part, reversed
in part, and remanded for further proceedings. Id. at 1279. This Court concluded
that Fortune had a right to offset against the contract balances the liquidated
damages owed by Arkin, but this Court also concluded that National Fire had a
superior right to recover certain payments not subject to offset. This Court noted
that the superior claims of National Fire “may exhaust the contract balances.” Id.
at 1276 n.19.
This Court also concluded that the district court had calculated prejudgment
interest for National Fire beginning in January 1998 more than three years too
early. Id. at 1279. This Court concluded that prejudgment interest for damages
related to one of the construction projects began to accrue on March 19, 2001, and
prejudgment interest for damages related to the other project began to accrue on
May 15, 2001. This Court did not address postjudgment interest. Id. The mandate
issued on April 9, 2003, and incorporated the opinion by reference.
On remand, the district court awarded the contract balances to National Fire.
The district court determined, as this Court predicted, that the superior claims of
National Fire, not subject to offset, exhausted the contract balances. Although
Fortune had a right to offset for the liquidated damages owed by Arkin, Fortune
recovered nothing.
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Faced with a futile right of setoff, Fortune asserted that it had also presented
an affirmative claim against National Fire for the liquidated damages owed by
Arkin, not merely a right of setoff against the contract balances. Fortune argued
that this Court recognized that Fortune had asserted an affirmative claim, and
Fortune argued that the mandate rule required the district court to consider the
affirmative claim. The district court disagreed. It reasoned that no such
affirmative claim had been asserted by Fortune and concluded that any mention of
the claim by this Court “appear[ed] to be dicta.”
The district court recalculated prejudgment interest from the dates identified
by this Court, but the district court failed to identify the date on which prejudgment
interest ceased to accrue. The district court did not disclose its calculations or
provide any further detail, and it did not mention postjudgment interest.
II. STANDARD OF REVIEW
We review de novo the application of the law of the case doctrine,
Alphamed, Inc. v. B. Braun Med., Inc., 367 F.3d 1280, 1285 (11th Cir. 2004),
which includes the mandate rule, Piambino v. Bailey, 757 F.2d 1112, 1120 (11th
Cir. 1985). We also review de novo the calculation of prejudgment interest, when
that calculation depends on the construction of state law. SEB S.A. v. Sunbeam
Corp., 476 F.3d 1317, 1319 (11th Cir. 2007).
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III. DISCUSSION
Fortune presents two arguments. First, Fortune contends that the district
court failed to comply with the mandate of this Court when it refused to consider
the alleged affirmative claim of Fortune against National Fire for liquidated
damages for delay owed by Arkin. Second, Fortune asserts that the district court
erroneously calculated prejudgment interest. We address each issue in turn.
A. The District Court Did Not Violate the Mandate Rule.
In the previous opinion of this Court, Fortune prevailed on its assertion that
it had a right to offset against the contract balances the liquidated damages owed
by Arkin, but when the superior claim of National Fire exhausted the contract
balances, the right of setoff gave Fortune no recovery. Faced with the futility of its
right of setoff, Fortune now attempts to change course. Fortune contends that it
has, from the beginning, presented an affirmative claim against National Fire for
the liquidated damages owed by Arkin, not merely a right of setoff against the
contract balances.
To compel the district court to permit the change in course, Fortune relies on
the mandate rule. Fortune asserts that, in the following sentence, this Court
recognized that Fortune had asserted the affirmative claim: “Fortune filed a
counterclaim against National Fire for failure to perform under the performance
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bonds and failure to make the required payments under the payment bonds with
respect to payments for Davis-Bacon Act violations, electrical overages, and the
liquidated delay damages.” Fortune contends that the mandate rule required the
district court to consider the merits of the alleged affirmative claim.
National Fire asserts, and the district court concluded, that any reference by
this Court to an affirmative claim against National Fire for the liquidated damages
owed by Arkin was dicta. National Fire also contends, and the district court
concluded, that this Court “express[ed] no opinion” as to whether National Fire
was responsible for the liquidated damages owed by Arkin. See Nat’l Fire Ins.
Co., 320 F.3d at 1260.
Under the mandate rule, “a trial court, ‘upon receiving the mandate of an
appellate court, may not alter, amend, or examine the mandate, or give any further
relief or review, but must enter an order in strict compliance with the mandate.’”
Transamerica Leasing, Inc. v. Inst. of London Underwriters, 430 F.3d 1326, 1331
(11th Cir. 2005) (quoting Piambino, 757 F.2d at 1119). The district court “‘is
bound to follow the appellate court’s holdings, both expressed and implied.’” Id.
(quoting Piambino, 757 F.2d at 1119). The rule “only applies if our prior opinion
determined [the issue], explicitly or by necessary implication.” Id. at 1332.
Although National Fire and the district court have misinterpreted our
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statement about “express[ing] no opinion,” because that statement related to
whether National Fire itself owed liquidated delay damages for its alleged breach
of contract, we otherwise agree with National Fire and the district court. The
previous opinion of this Court did not hold that Fortune had asserted an affirmative
claim against National Fire for the liquidated damages owed by Arkin. The
sentence relied upon by Fortune does not reference such an affirmative claim,
much less hold that Fortune asserted the claim. Even if the opinion had referenced
an affirmative claim, the reference would be dicta because it would not have been
“necessary to deciding the case then before us.” United States v. Eggersdorf, 126
F.3d 1318, 1322 n.4 (11th Cir. 1997). The district court was free to conclude, as it
did, that Fortune had never asserted an affirmative claim against National Fire for
the delay damages owed by Arkin and, in fact, had “consistently asserted
throughout the underlying litigation that it was not pursuing such an affirmative
claim.”
To the extent Fortune also argues, independent of its reliance on the mandate
rule, that the district court erroneously concluded that Fortune did not assert a
claim for relief separate from a right of setoff, the argument fails. When National
Fire stated before the district court that “Fortune has continued to assert in this
litigation that National Fire is liable for Arkin’s liquidated delay damages,”
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Fortune responded by clarifying the issue as a right of setoff only. In a brief filed
before the district court, Fortune clearly described the issue only as a right of
setoff:
NATIONAL FIRE has attempted to confuse the issues before this
Court by raising the question of the assessment of liquidated damages
against [National Fire] for the breach of [Arkin]. This is not the
question which will be faced by the Court. The real issue is the
appropriateness of the assessment of liquidated damages pursuant to
the terms of the subcontracts against the ARKIN contract balances.
Even though National Fire quoted this statement in its response brief in this appeal,
Fortune made no attempt in its reply brief to explain or refute the statement.
Fortune plainly chose to pursue only the right of setoff and may not now, faced
with the futility of that right, attempt to recast and revise the record.
B. We Remand to the District Court for Recalculation of Prejudgment Interest.
Fortune contends that the district court erroneously recalculated prejudgment
interest. Fortune argues that prejudgment interest ceased to accrue on the date of
the original final judgment, July 24, 2001. National Fire counters that prejudgment
interest ceased to accrue on the date of the judgment entered after remand, July 24,
2006.
We agree with National Fire. In this diversity case, Florida law governs the
award of prejudgment interest. See SEB, 476 F.3d at 1320. We recently explained
that, under Florida law, “prejudgment interest accrues until the date of the
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judgment after which postjudgment interest begins to accrue.” Id. at 1321.
The corresponding question is when postjudgment interest began to accrue.
Federal Rule of Appellate Procedure 37 governs the award of postjudgment
interest by a district court after an appeal. Id. at 1319. Under Rule 37(b), when we
remand to modify the amount of prejudgment interest and are silent in the mandate
about postjudgment interest, the district court on remand has no choice but to begin
postjudgment interest with entry of the postremand judgment. Id. at 1319-20.
Because we did not provide instructions in our mandate or opinion regarding
postjudgment interest, postjudgment interest began to accrue on the date of the
judgment after remand, July 24, 2006, and prejudgment interest, under Florida law,
ceased to accrue on the same date.
The district court neither explained its calculation of interest nor identified
the date on which prejudgment interest ceased accruing, but both parties contend
that the district court erred in its calculation. In the light of our recent opinion that
clearly resolves this issue, we remand to the district court to recalculate
prejudgment interest. We vacate the judgment of the district court to the extent
that it addresses prejudgment interest and instruct the court to calculate
prejudgment interest and award postjudgment interest consistent with this opinion.
Prejudgment interest ceased to accrue on the date of the judgment after remand,
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July 24, 2006, after which postjudgment interest began to accrue. That the
judgment of the district court did not address postjudgment interest is of no
consequence. See Christian v. Joseph, 15 F.3d 296, 298 (3d Cir. 1993) (“[P]ost-
judgment interest [under the federal statute] . . . accru[es] . . . regardless of whether
the district court order provided for post-judgment interest payments.”).
IV. CONCLUSION
The judgment of the district court is AFFIRMED in part and VACATED to
the extent that it addressed prejudgment interest for National Fire. We REMAND
with instructions to calculate prejudgment interest beginning on the dates identified
in our previous opinion, see Nat’l Fire Ins., 320 F.3d at 1279, and ending on July
24, 2006, and to award postjudgment interest beginning on that same date.
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National Fire Insurance v. Fortune Construction Co.
Court: Court of Appeals for the Eleventh Circuit
Date filed: 2007-04-09
Citations: 233 F. App'x 890
Copy CitationsCombined Opinion