Bel-Bel Int'l v. Barnett Bank

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
No. 96-4598 ELEVENTH CIRCUIT
12/15/98
THOMAS K. KAHN
D. C. Docket No. 89-2510-CIV-LCN CLERK

BEL-BEL INTERNATIONAL CORP.,

Plaintiff -Appellee-Cross-Appellant,

versus

COMMUNITY BANK OF HOMESTEAD, KENNETH
GRAVES, VITO STRANO, GROWERS PACKING
COMPANY, JOSEPH TORCISE, and CODELIA TORCISE,

Defendants-Appellants-Cross-Appellees.

Appeals from the United States District Court
for the Southern District of Florida

(December 15, 1998)

Before TJOFLAT and BIRCH, Circuit Judges, and RONEY, Senior Circuit Judge.

TJOFLAT, Circuit Judge:

This case is one of many arising out of the bankruptcy of a Florida tomato farming

operation owned by Joe Torcise.1 The case before us involves one set of creditors converting

1
Other reported cases include Torcise v. Community Bank of Homestead (In re Torcise),
116 F.3d 860 (11th Cir. 1997); Community Bank of Homestead v. Torcise (In re Torcise), 187
property that was pledged as collateral to another creditor. We hold that there is no bar to

requiring the converting creditors to return the property they converted, and therefore affirm the

judgment of the district court.

I.

Joe Torcise owned two tomato farms – one in Homestead, Florida, and the other in

Immokalee, Florida. He also owned Growers Packing Company, which packed his tomatoes and

those of several other farmers.

In the late 1980s, Torcise began facing financial difficulties. In response, he started

“check-kiting” – he wrote checks from one bank account to another, and then wrote checks from

the second account back into the first, thus artificially inflating the balances of both accounts. In

November 1988, one of the banks involved in this process – Community Bank of Homestead –

discovered the check-kiting, but only after honoring $4.3 million of Torcise’s bad checks. In an

attempt to recoup its losses, Community Bank persuaded Torcise to sign a promissory note

(dated November 18, 1988) for the amount of the overdrafts. The collateral for this note was the

accounts receivable (the “receivables”) of the Homestead and Immokalee tomato crops for the

coming winter and spring, respectively.2

B.R. 18 (S.D. Fla. 1995); Torcise v. Community Bank of Homestead, 131 B.R. 503 (S.D. Fla.
1991); Torcise v. Riff (In re Growers Packing Co.), 150 B.R. 82 (Bankr. S.D. Fla. 1993); and
Torcise v. Cunigan (In re Torcise), 146 B.R. 303 (Bankr. S.D. Fla. 1992).
2
The Homestead farm yielded a winter crop; the Immokalee farm yielded both a fall and
a spring crop.

2
 Torcise also sought to deal with his financial problems through more legitimate means,

namely, by seeking new sources of capital. Torcise received unsecured loans from a number of

sources, including defendants Kenneth Graves and Vito Strano, and Steven and Sam Torcise

(“the Brothers”). Another source of funding was Bel-Bel International Corporation, a small

Panamanian corporation created by a Venezuelan family for the purpose of investing in the

United States. On November 29, 1988, Bel-Bel loaned $2.5 million to Torcise and his wife,

Codelia, secured by a first priority security interest in the Homestead tomato crop for the coming

winter – the same crop that Torcise had pledged as collateral to Community Bank.3 The loan

documents included a representation by Torcise that the collateral was unencumbered, and

provided that Torcise would not further encumber this collateral without Bel-Bel’s consent.

One of the terms of Bel-Bel’s loan was that Torcise was to provide a “good standing

letter” from his other lenders indicating that his loans were not in default. Bel-Bel received such

a letter from Community Bank on December 8, 1988, stating that none of Torcise’s loans were in

default. Conspicuously absent from the letter was any mention of Torcise’s $4.3 million in

overdrafts resulting from his check-kiting activity, or of the loan given to cover those overdrafts.

By the end of 1988, Torcise had fully repaid the $4.3 million note to Community Bank

(thereby extinguishing Community Bank’s claim on the Homestead receivables4), using receipts

from the Immokalee fall crop. This speedy repayment, however, strained Torcise’s cash flow to

3
Bel-Bel actually made two separate loans to Torcise, one for $2 million and one for
$500,000 two months later. Both loans were made on the same terms; they are treated as a
single $2.5 million loan for the purpose of this opinion.
4
The district court held that this claim was never adequately established in the first
instance; the repayment of the note makes the issue moot for the purposes of this appeal.

3
the point that it became difficult for him to meet his current operating expenses. Consequently,

in March 1989, Torcise lacked the resources to harvest the spring crop at his Immokalee farm, or

to keep Growers Packing operating such that any tomatoes picked at Immokalee could be

marketed.

In response to this problem, Community Bank arranged a complex financing scheme with

Torcise and some of his creditors. Community Bank lent a total of $3.55 million to Strano ($1.5

million), Graves ($750,000), and the Brothers ($1.3 million). These individuals then gave the

money to Torcise. Over $3.2 million of this money was immediately returned to Strano, Graves,

and the Brothers as partial repayment for pre-existing debts.5 Community Bank then created a

“lock-box” account into which the receivables for Torcise’s Homestead crop would be

deposited. Sixty percent of this account was to be used to repay the $3.55 million loan from

Community Bank; the remaining forty percent was to be released to Torcise for use in harvesting

the Imokalee crop.6 At the time that this arrangement was made, all of the participants were

aware that the receivables from Torcise’s Homestead crop had been pledged previously to Bel-

Bel.

Between April 6 and May 24, 1989, approximately $5 million in receivables from the

Homestead crop was deposited into the lock-box account. Of this amount, almost $3.6 million

was used to repay the Community Bank loan.

The Bel-Bel note came due on June 1, 1989. Torcise was unable to pay. Consequently,

Bel-Bel agreed to extend Torcise’s repayment schedule through August 18. Torcise was still

5
The $3.55 million loan thus operated in essence as a consolidation loan.
6
This ratio was later changed to 70/30.

4
unable to pay. Bel-Bel then filed suit in the Southern District of Florida on November 13, 1989,

against Torcise and his wife, Growers Packing Company, Community Bank, Graves, and

Strano.7 A few weeks later, Torcise, his wife, and Growers Packing Company filed for Chapter

11 bankruptcy.8 The bankruptcy judge granted relief from the automatic stay of litigation

proceedings against the bankrupts, and allowed Bel-Bel’s suit to proceed.9

Following a bench trial, the district court found Torcise and his wife liable to Bel-Bel for

payment of the $2.5 million note. Torcise was also found liable for fraudulent inducement based

on his representation that the Homestead tomato crop was unencumbered, when it had in fact

previously been pledged to Community Bank as collateral for the $4.3 million note to cover

Torcise’s overdrafts. In additon, the court found that Bel-Bel still had a security interest in the

Homestead crop receivables, and therefore that Bel-Bel could demand those receivables from

Community Bank, Graves, and Strano in repayment of Torcise’s debt.10 The district court

additionally found these defendants liable for impairment of collateral, tortious interference with

the contractual relationship between Bel-Bel and Torcise, civil conversion, and conspiracy to

7
Bel-Bel also sued other persons, including the Brothers; these persons have since settled
out of the case.
8
Joe Torcise and Growers Packing filed for bankruptcy on November 30, 1989; Codelia
Torcise filed on December 7, 1989. The bankruptcy proceedings were jointly administered.
9
The commencement of bankruptcy proceedings automatically stays any pending
litigation against the debtors. See 11 U.S.C. § 362 (1994).
10
This holding was based on Florida Statutes chapter 679.306(2), a part of the Uniform
Commercial Code that governs a secured party’s rights upon the disposition of its collateral.

5
commit these torts.11 Finally, Community Bank was held liable for fraudulent nondisclosure,

based on its failure to disclose Torcise’s overdrafts in the “good standing letter.”

The defendants were held jointly and severally liable for compensatory damages,

consisting of principal and accrued interest on the $2.5 million note at the time the lock-box

account was created, and prejudgment interest at the statutory rate from the date of the creation

of the lock-box account to the date on which the district court entered its “findings of fact and

conclusions of law.”12 In addition, punitive damages were assessed against Community Bank

($300,000), Graves ($50,000), and Strano ($50,000).

All defendants appeal, and Bel-Bel cross-appeals. Parts II and III of this opinion dispose

of some preliminary matters raised by the defendants – claims that the district court lacked

subject matter jurisdiction and that the case should have been dismissed for failure to join

necessary parties. Part IV addresses the substantive appeals of Community Bank, Graves, and

Strano, focusing on the district court’s holding that they are liable for conversion. Part V

discusses the issues raised by Torcise on appeal, and part VI discusses Growers Packing’s claim

that the judgment against it is void. Finally, part VII addresses the issues raised by Bel-Bel’s

cross-appeal.

II.

11
Growers Packing Company was also found to be part of this conspiracy.
12
This sum was reduced slightly by settlement recoveries received by Bel-Bel from other
defendants.

6
 The defendants’ initial challenge to the district court’s decision is that the parties in this

case are not completely diverse, and thus the district court lacked subject matter jurisdiction over

the case. Federal jurisdiction in this case is premised on diversity of citizenship. See 28 U.S.C.

§ 1332(a) (1994). Diversity jurisdiction requires that the plaintiff be a citizen of a state (or

nation) different from that of any of the defendants. See Strawbridge v. Curtiss, 7 U.S. (3

Cranch) 267, 267, 2 L.Ed. 435 (1806). For purposes of diversity jurisdiction, a corporation is “a

citizen of any State by which it has been incorporated and of the State where it has its principal

place of business.” 28 U.S.C. § 1332(c)(1) (1994). A corporation’s principal place of business

is determined by looking at the “total activities” of the corporation. See Village Fair Shopping

Ctr. Co. v. Sam Broadhead Trust, 588 F.2d 431, 434 (5th Cir. 1979).13

Defendants concede that Bel-Bel is incorporated in Panama (and is therefore a

Panamanian citizen) and that none of the defendants are Panamanian citizens. Defendants argue,

however, that Bel-Bel’s principal place of business is Florida, and therefore Bel-Bel, in addition

to being a Panamanian citizen, is a Florida citizen. The defendants point out that Bel-Bel’s only

investment was in Florida, that Bel-Bel maintained a bank account in Florida, and that Bel-Bel

had an accountant and attorneys in Florida. Many of the defendants in this case are also Florida

citizens; therefore, the defendants argue that complete diversity is lacking and the district court

did not have jurisdiction. In response, Bel-Bel contends that its principle place of business is

Venezuela (not Florida), and therefore complete diversity is present. Bel-Bel points out that all

of its shareholders were Venezuelan citizens, that Bel-Bel was not involved in the day-to-day

13
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.

7
operation of the Florida tomato farm, and that Bel-Bel’s corporate decisionmaking took place in

Venezuela. The district court, after holding an evidentiary hearing on the matter, found that Bel-

Bel’s principle place of business was Venezuela. We review this finding for clear error. See

Vareka Invs., N.V. v. American Inv. Properties, Inc., 724 F.2d 907, 910 (11th Cir. 1984).

The evidence suggests that Bel-Bel is, in essence, a small corporation designed as a

vehicle through which a handful of Venezuelan investors could make loans to the Torcises’

Homestead, Florida, tomato farm. Thus, the money and the management were based in

Venezuela. Bel-Bel’s operations in Florida, meanwhile, consisted of only those things necessary

to monitor its investment. In such a situation, the evidence was sufficient to support the district

court’s finding that Bel-Bel’s “principal place of business” was Venezuela. See id. (affirming

the district court’s finding of diversity on similar facts).

Furthermore, this is not the type of situation that section 1332(c)(1)’s “principal place of

business” doctrine was intended to address. That requirement was intended to prevent local

businesses from avoiding local trials simply because they were incorporated in Delaware (or

another foreign jurisdiction), and to reserve diversity jurisdiction for parties that are sufficiently

foreign to have a legitimate fear of local prejudice. See S. Rep. No. 1830 (1958), reprinted in

1958 U.S.C.C.A.N. 3099, 3102. In the case at hand, Bel-Bel has substantial indicia of being a

foreign corporation, and is thus not the type of organization that Congress, in enacting section

1332(c)(1), intended to keep out of federal court.

Thus, in light of the policy behind 28 U.S.C. § 1332(c)(1) and Bel-Bel’s substantial

Venezuelan connections, we hold that the district court did not commit clear error in finding that

Bel-Bel’s principle place of business was in Venezuela. The parties were therefore completely

8
diverse, and the district court properly exercised subject matter jurisdiction pursuant to 28 U.S.C.

§ 1332(a)(2).

III.

The defendants also allege that the district court erred in denying Community Bank’s

motion under Rule 19 of the Federal Rules of Civil Procedure to require joinder of certain

necessary parties. Specifically, the defendants claim that the bankruptcy estates of the Torcises

and Growers Packing were necessary parties to this action under Rule 19(a)(2)(ii), which

requires that parties be joined in an action if disposition of the action in that party’s absence may

“leave any of the persons already parties subject to a substantial risk of incurring double,

multiple, or otherwise inconsistent obligations.”14 Fed. R. Civ. P. 19(a)(2)(ii). The defendants

argue that the receivables sought by Bel-Bel are the same as those sought by the bankruptcy

estates (on a fraudulent conveyance or preference theory) in certain adversarial litigation in the

bankruptcy court; not joining the estates in Bel-Bel’s suit thus created a substantial risk of

double liability.

Community Bank made essentially the same argument in the bankruptcy court, there

arguing that Bel-Bel was a necessary party to the adversarial bankruptcy litigation, because a

judgment for both the estates and Bel-Bel would lead to double liability. The bankruptcy court

14
Rule 19 actually contemplates a two-part inquiry. First, the court is to use the criteria
in Rule 19(a) to determine whether a party ought to be joined. See Fed. R. Civ. P. 19. If so, and
if joinder of that party is impossible, the court is to use the criteria in Rule 19(b) to determine
whether the court should nevertheless proceed in that party’s absence. See id. Because the
district court did not find that the bankruptcy estates met the criteria of Rule 19(a), it did not
reach the Rule 19(b) question.

9
rejected the argument, and the district court affirmed the bankruptcy court on an interlocutory

appeal. Community Bank appealed that decision to the Eleventh Circuit, which also concluded

that Rule 19 did not require the joinder of Bel-Bel in the adversarial bankruptcy litigation.15 See

Torcise v. Community Bank of Homestead (In re Torcise), 116 F.3d 860, 865-67 (11th Cir.

1997). This decision is squarely “on point” with the issue raised in this appeal; we are therefore

bound by it and thus reject defendants’ appeal of the district court’s denial of Community Bank’s

Rule 19 motion.16 See Cargill v. Turpin, 120 F.3d 1366, 1386 (11th Cir. 1997) (holding that a

prior panel decision is binding on subsequent panels).

15
The panel reasoned that Bel-Bel was not a necessary party in the bankruptcy litigation
because (1) the suits alleged different causes of action – the bankruptcy litigation involved
fraudulent conveyance and preference claims, while this action involves tort claims; (2) the
responsible parties were different in each case – Strano and Graves were not in the bankruptcy
litigation; and (3) Community Bank had improperly acquired control over a sufficient amount of
receivables to be able to pay Bel-Bel $2.5 million and pay the estates $3.55 million without
incurring double liability. See Torcise v. Community Bank of Homestead (In re Torcise), 116
F.3d 860, 866 (11th Cir. 1997).
16
This decision also controls our resolution of defendants’ related claim that the
judgment rendered in the adversarial bankruptcy proceeding (based on the fraudulent
conveyance and preference allegations) is res judicata as to Bel-Bel’s claims in this suit.
According to the defendants, Bel-Bel’s claims in this suit are identical to those at issue in the
adversarial bankruptcy litigation. Thus, Bel-Bel should have raised those claims in the
adversarial bankruptcy litigation (even though it was a not party). Because Bel-Bel did not, and
because the adversarial bankruptcy proceeding resulted in a final decision on the merits, res
judicata bars the raising of the claims in this action.
This claim is essentially a restatement of the argument that Bel-Bel was a necessary party
in the bankruptcy litigation. Almost by definition, a party whose claim would be extinguished
by a decision in an action (under res judicata) is a necessary party to that action under Rule 19.
The prior panel decision in In re Torcise thus dictates that we reject the res judicata claim. Cf.
Bel-Bel Int’l Corp. v. Barnett Bank of S. Fla., N.A., 158 B.R. 252, 257-58 (S.D. Fla. 1993)
(rejecting defendants’ res judicata claim in this case using reasoning similar to that by which In
re Torcise rejected defendants’ Rule 19 argument).

10
 We also note that the risk of double liability in this case is largely illusory. If Bel-Bel

obtains relief as a creditor in the bankruptcy proceedings before the defendants have satisfied

Bel-Bel’s judgment in this case, the defendants can challenge Bel-Bel’s attempt to obtain

satisfaction of the judgment on that ground and presumably reduce their payments by whatever

amount Bel-Bel obtains in bankruptcy. See Hurley v. Gaertner (In re Hurley), 158 B.R. 115, 122

(N.D. Ill. 1993) (noting that “courts possess the power ‘in all cases to compel credits on

judgments or executions, where it would be illegal or inequitable to proceed to collect the

amount claimed’”) (quoting Sandburg v. Papineau, 81 Ill. 446 (1876)). If Bel-Bel has not

obtained relief as a creditor in the bankruptcy proceedings when the defendants satisfy the

judgment, then the defendants can claim an equitable lien or constructive trust on whatever

amount from the estates is allocated to Bel-Bel. Cf. United States v. Cannistraro, 694 F.Supp.

62, 72 n.11 (D.N.J. 1988), vacated in part, 871 F.2d 1210 (3d Cir. 1989) (noting that constructive

trusts are applied in numerous contexts to prevent unjust enrichment). In either case, the

defendants would not be subject to double liability.

IV.

Bel-Bel’s primary claim against defendants Community Bank, Graves, and Strano was

conversion. Conversion is “the exercise of wrongful dominion or control over property to the

detriment of the rights of the actual owner.” Seymour v. Adams, 638 So.2d 1044, 1046-47 (Fla.

5th DCA 1994). A lienholder is considered to be an “owner” for the purposes of conversion if he

has a present right of possession. See Farmer’s Home Admin. v. Dino (In re Dino), 17 B.R. 316,

318 (Bankr. M.D. Fla. 1982); Dekle v. Calhoun, 53 So. 14, 15 (Fla. 1910). Bel-Bel had a present

11
right of possession to the receivables from the Homestead tomato crop by virtue of Torcise’s

defaults.17 Community Bank, Graves, and Strano exercised control over these receivables. The

exercise of control was wrongful because the receivables had been previously pledged to Bel-Bel

as security, and (under the security agreement) the defendants did not have the right unilaterally

to take control of those receivables. The exercise of control was also to the detriment of Bel-Bel,

which lost the money that otherwise would have provided repayment for the loan. Thus, Bel-Bel

had a strong claim for conversion.

The defendants, however, argue that Bel-Bel’s conversion claim was barred by the

“specific fund” requirement: “To state a claim for the conversion of money, there must exist a

specific fund capable of separate identification.” Bankest Imports, Inc. v. ISCA Corp., 717

F.Supp. 1537, 1542 (S.D. Fla. 1989). According to the defendants, the money received by

Torcise for the Homestead tomato crop was dispersed among several parties, and as a result there

is no specific fund that Bel-Bel can claim was converted. The cases upon which the defendants

rely, however, all involve contractual rights to payments for which no particular source was

specified – i.e., the payment money could come from anywhere. See Advanced Surgical Techs.,

Inc. v. Automated Instruments, Inc., 777 F.2d 1504, 1505 (11th Cir. 1985); Gambolati v.

Sarkisian, 622 So.2d 47, 50 (Fla. 4th DCA 1993); Belford Trucking Co. v. Zagar, 243 So.2d 646,

648-49 (Fla. 4th DCA 1970). In the case before us, there was a specific, identifiable fund – the

receivables from the Homestead crop – in which Bel-Bel had a property right and from which

17
The security agreement between Bel-Bel and Torcise gave Bel-Bel the right to take
control of the receivables in the event of default. The district court found that, at the time the
“lock-box” arrangement was instituted, Torcise had “numerous prior defaults.” This finding is
not challenged.

12
Bel-Bel was entitled to be repaid when Torcise defaulted. The specific fund requirement thus

placed no bar on Bel-Bel’s claims. Cf. Allen v. Gordon, 429 So.2d 369, 371 (Fla. 1st DCA 1983)

(allowing a conversion action for a specific sum of money improperly transferred from one bank

account to another).

Furthermore, the policy underlying the specific fund requirement makes it inapplicable to

Bel-Bel’s claim. The specific fund requirement is an exception to the general rule that an

obligation to pay money cannot be enforced through an action for conversion. See Capital Bank

v. G & J Invs. Corp., 468 So.2d 534, 535 (Fla. 3d DCA 1985). This general rule is an expression

of the principle that “an action in tort is inappropriate where the claim is based on a breach of

contract.” Douglas v. Braman Porsche Audi, Inc., 451 So.2d 1038, 1039 (Fla. 3d DCA 1984).

There was no contractual relationship between Bel-Bel and the persons who converted the

receivables from the Homestead tomato crop; therefore, Bel-Bel’s claim could not be

characterized as an attempt to transform a breach of contract action into a tort action. Bel-Bel’s

claim was thus not the type of claim to which the specific fund requirement was intended to

apply.

In addition to being held liable for conversion, Community Bank, Graves, and Strano

were held liable for tortious interference and impairment of collateral, and Community Bank was

held liable for fraudulent nondisclosure.18 The remedy granted for each of these torts, however,

was identical to the remedy granted for conversion – joint and several liability for the $2.5

18
Each of these defendants was also held liable for punitive damages, see supra part I;
those holdings are not challenged.

13
million for which Bel-Bel was secured, plus interest.19 In essence, Bel-Bel sought the same

relief on a variety of legal theories. Therefore, in light of our affirmance of the district court’s

holding regarding conversion, we do not need to reach the defendants’ appeals regarding Bel-

Bel’s other claims.

V.

Defendants Joseph and Codelia Torcise were held liable for payment of the $2.5 million

note plus interest. The Torcises challenge this holding on two grounds. First, they claim that the

bankruptcy court’s relief from the automatic stay did not give Bel-Bel leave to pursue its claim

on the note; rather, the relief from stay permitted Bel-Bel to pursue only its fraud claim. Second,

the Torcises argue that Bel-Bel was not entitled to any interest on this claim that accrued after

they filed for bankruptcy.

The bankruptcy court’s order granting relief from stay concluded, without exception, that

Bel-Bel’s suit in district court should proceed. This suit included Bel-Bel’s contractual claim

against the Torcises for repayment of the note. We therefore hold that the district court did not

err in entertaining this claim. In addition, Bel-Bel, as a secured creditor, was entitled to post-

petition interest on its claim. See 11 U.S.C. § 506(b); Orix Credit Alliance, Inc. v. Delta

Resources, Inc. (In re Delta Resources, Inc.), 54 F.3d 722, 727 (11th Cir. 1995). The district

court therefore properly held the Torcises liable for interest that accrued on their debt after they

filed their bankruptcy petition.

19
The joint and several liability results from the district court’s holding that the
defendants were liable for conspiracy to commit the alleged torts. This holding is not
challenged.

14
 Joe Torcise also challenges the district court’s holding that he is liable for fraudulent

inducement.20 The relief granted on this claim, however, was the same as that for the contractual

claim – $2.5 million plus interest. Fraudulent inducement thus operated as an alternative

holding; having affirmed on the primary holding (the contractual claim), we do not need to

address the alternative legal theory on which the district court granted relief.

VI.

Growers Packing Company was held to be part of the conspiracy to convert funds

belonging to Bel-Bel, see supra note 11, and was therefore held jointly and severally liable for

the $2.5 million note, plus interest. In response, Growers Packing argues that Bel-Bel was not

granted relief from the automatic stay against litigation as to Growers Packing, and thus any

judgment against it is void.

Growers Packing raised this issue for the first time after the district court issued its

“findings of fact and conclusions of law,” but before the district court issued a final judgment.

The final judgment was issued without reference to Growers Packing, but the district court

withheld jurisdiction to determine whether Growers Packing should be added to the judgment.

20
The district court found that Torcise had misled Bel-Bel as to the status of its collateral
(the Homestead tomato crop) by claiming in the loan documents that the collateral was
unencumbered, when it had in fact been pledged to Community Bank as security for the $4.3
million note to cover Torcise’s overdrafts. The district court also found that this
misrepresentation had induced Bel-Bel to make the loan.

15
Bel-Bel then filed a motion to amend the judgment to include Growers Packing; the motion was

granted.21

We review the grant of a motion to amend a final judgment for an abuse of discretion.

See Barnes v. Southwest Forest Indus., Inc., 814 F.2d 607, 611 (11th Cir. 1987). We find no such

abuse here. Growers Packing was a party to this action when the motion for relief from stay was

before the bankruptcy court. Growers Packing was also a party to the jointly-administered

bankruptcy actions. The stay order did not omit Growers Packing when declaring that Bel-Bel’s

district court litigation would be permitted to proceed. It was therefore reasonable for the district

court to conclude that Growers Packing was included in the relief from stay order, and that

judgment against Growers Packing was therefore appropriate.

VII.

Bel-Bel cross-appeals the denial of a motion to amend its complaint to add an allegation

of civil theft. The amendment of pleadings is left to the discretion of the trial court. See

21
The issue of whether Growers Packing was included in the relief from the automatic
stay should have been raised in a motion to amend Growers Packing’s answer, not in a motion to
amend the judgment. If Bel-Bel was not in fact granted relief from the automatic stay as to
Growers Packing, then Bel-Bel violated the stay by filing a lawsuit against Growers Packing.
Such a violation would be an affirmative defense for Growers Packing. See, e.g., Barr v.
Overmyer (In re Overmyer), 121 B.R. 272, 275-76 (Bankr. S.D.N.Y. 1990); Redmond v.
Redmond, 718 A.2d 668, 676 (Md. Ct. Spec. App. 1998). Growers Packing did not, however,
assert this affirmative defense in its answer. Thus, the proper course for the district court to have
taken would have been to recognize Growers Packing’s argument as an attempt to amend its
answer. Such an attempt might have been denied as untimely. If the motion had been granted,
but followed by a rejection of the argument on the merits, we would be presented with a question
of law (the interpretation of the bankruptcy court’s relief from stay order) that we would review
de novo. Our conclusion would nevertheless be the same – that Growers Packing was included
in the relief from stay, and therefore the district court was correct in permitting Bel-Bel’s claims
against Growers Packing to proceed. Thus, the district court’s procedural error was harmless.

16
Technical Resource Servs., Inc. v. Dornier Med. Sys., Inc., 134 F.3d 1458, 1463-64 (11th Cir.

1998). In this case, the district court found that the proposed amendment was untimely and

redundant. In light of the numerous counts alleged in the complaint and the fact that the motion

to amend came several years after the initial complaint was filed, the district court’s finding did

not constitute an abuse of discretion.

Bel-Bel also appeals the calculation of interest on the amended final judgment.22 The

amended final judgment stated that prejudgment interest would run through August 30, 1995 (the

date on which the district court issued its “findings of fact and conclusions of law”), and that

postjudgment interest would begin accruing as of the date of the amended final judgment (April

16, 1996). This resulted in a gap of nearly eight months for which Bel-Bel was awarded neither

prejudgment nor postjudgment interest.

A prevailing party is entitled, under Florida law, to prejudgment interest. See Argonaut

Ins. Co. v. May Plumbing Co., 474 So.2d 212, 214-15 (Fla. 1985). Prejudgment interest is, by

definition, interest that accrues until judgment is rendered. Because final judgment was not

rendered in this case until April 16, 1996, Bel-Bel was entitled to prejudgment interest at the

statutory rate that had accrued until that date.

The defendants argue that Bel-Bel waived this objection to the amended final judgment

by not raising it in the district court. We disagree. Bel-Bel properly raised the issue of interest

22
There were two “final” judgments in this case – the “final judgment” and the “amended
final judgment.” The amended final judgment disposed of certain motions that were made after
the final judgment was entered.

17
simply by requesting it;23 Bel-Bel is now entitled to raise on appeal any errors concerning the

district court’s resolution of its request.

VIII.

We remand this case to the district court with instructions to provide for prejudgment

interest accruing until the date of the amended final judgment. In all other respects, the

judgment of the district court is AFFIRMED.

SO ORDERED.

23
Furthermore, Bel-Bel explicitly raised the issue of the appropriate dates for
prejudgment interest in its reply to the defendants’ post-trial motions.

18