[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUG 7, 2007
THOMAS K. KAHN
No. 05-14914
CLERK
________________________
D. C. Docket No. 01-02849-CV-ASG
MILLENNIUM PARTNERS, L.P., on
its own behalf and f.u.b.o. all brokers and
any other entities claiming an interest in the subject
property,
AIG TRADING CORPORATION, on its
own behalf and f.u.b.o. of all brokers and other entities
claiming an interest in the subject property,
Plaintiff-Appellees,
GREAT AMERICAN INSURANCE
COMPANY, INC., et al.,
Plaintiffs,
ONE BEACON INSURANCE CO.,
Intervenor-Plaintiff
Appellee,
versus
COLMAR STORAGE, LLC,
Defendant-Appellant,
CREDIT LYONNAIS ROUSE (USA)
LIMITED,
Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 7, 2007)
Before PRYOR, KRAVITCH and ALARCÓN,* Circuit Judges.
ALARCÓN, Circuit Judge:
Appellant Colmar Storage, L.L.C. (“Colmar”) appeals from the final
judgments entered by the District Court in favor of Appellees AIG Trading Corp.
(“AIG”), Millenium Partners, LLP (“Millenium”), and One Beacon Insurance
Company (“One Beacon”).1 Colmar contends that the District Court committed
reversible error by (1) denying its motion for judgment as a matter of law with
respect to Millenium’s, AIG’s and One Beacon’s bailment claims; (2) denying its
motion for leave to add the anti-subrogation rule as an affirmative defense; (3)
admitting evidence that was prejudicial; (4) overturning the jury's damages verdict
*
Honorable Arthur L. Alarcün, United States Circuit Judge for the Ninth Circuit, sitting
by designation.
1
One Beacon insured Irving R. Boody & Co., Inc. (“Boody”), a commodity trading
company.
2
as to Millenium, AIG and One Beacon, and awarding each of them an additur and a
new trial on certain damages; and (5) awarding prejudgment interest to Millenium,
AIG and One Beacon that ran from October 4, 2000, Millenium’s, AIG’s, and
Boody’s date of loss. We will affirm because we conclude that the District Court
acted within its discretion in denying Colmar’s motion to amend and admitting
evidence regarding the denial of a building permit and a subsequent remedial
measure. The District Court also did not err in denying Colmar’s motion for
judgment as a matter of law, awarding additurs, granting a new trial regarding
actual damages, and awarding Millenium, AIG and One Beacon prejudgment
interest from the date of Millenium’s, AIG’s, and Boody’s loss.
I
Colmar is engaged in the business of storing coffee and other perishables. In
February 2000, it leased a warehouse from Cramco Realty Inc. (“Cramco”). The
warehouse is located in a low-lying area of Miami, Florida, that is prone to
flooding when it rains heavily. The warehouse was certified by the New York
Board of Trade’s Coffee and Cocoa Exchange Board (“Coffee Exchange”) for the
storage of coffee. Pursuant to the terms of the lease agreement, Cramco
constructed two subterranean truck loading wells, but they were built without a
county building permit. The Miami-Dade County Department of Environment
3
Resources Management (“DERM”) refused to issue a building permit for the
construction because the ramps were not adequately equipped with pumps and
drains. Colmar stored coffee for Millenium, AIG, and Boody in the warehouse.
On October 2 and 3, 2000, a tropical storm system settled over the Miami
area. By the time the storm had subsided, over 15 inches of rain had fallen near the
warehouse. The National Weather Service issued a flood watch on October 2,
2000. However, it was not until the early morning of October 4, 2000, that a flood
warning was issued by the National Weather Service. Although Colmar learned
that heavy rains were expected, it did not set up a provisional pump in the
warehouse.
After the storm had subsided, Colmar inspected the warehouse and
discovered that it had been inundated with water. In parts of the warehouse, the
flood waters rose as high as twelve to sixteen inches off the ground level. As a
result, the bags of coffee beans on the lowest tier were contaminated by water. The
coffee beans that had been exposed to water had swollen. This caused some of the
bottom bags to burst and topple over entire pallets of the coffee beans. Water from
the bottom tier of bags percolated up into the second tier. This made the coffee
beans in the bags swell and caused additional pallets to fall over. Colmar
completed its clean-up efforts of the warehouse on January 22, 2001.
4
II
On June 29, 2001, Millenium and AIG each filed separate complaints
against Colmar alleging breach of contract, bailment, and negligence. Millenium’s
and AIG’s claims were brought on behalf of their respective subrogated insurers,
Westport Insurance Corporation and Lexington Insurance Company (“Lexington”).
They alleged that Colmar breached its duty to employ reasonable care to protect
the coffee beans stored at Colmar's facility from water damage. They prayed for
compensatory and consequential damages. Great American Insurance Company,
Inc. (“Great American”), One Beacon, and Dornoch Ltd. (“Dornoch”) also filed
complaints alleging similar claims. Their complaints were consolidated with the
complaints filed by Millenium and AIG.
On August 15, 2003, Colmar moved for summary judgment. It asserted that
the economic loss doctrine barred Great American’s, One Beacon’s, Dornoch’s,
Millenium’s and AIG’s tort claims for negligence and bailment, that their damages
were caused by an Act of God, and that AIG’s claim was barred by the anti-
subrogation rule. The District Court granted Colmar’s motion to dismiss the
negligence claims. It denied the motion to dismiss the bailment claims. The
District Court also dismissed the motion for summary judgment based on the Act
of God defense because conflicting expert testimony concerning the foreseeability
5
of the tropical storm event and flooding presented genuine issues of material fact
that should be decided at trial. The District Court refused to consider the anti-
subrogation rule defense, which was initially raised in Colmar’s motion for
summary judgment in regard to AIG’s claims, because it was not raised in
Colmar’s answer or the joint pretrial status report.
The breach of warehouse contract and bailment claims were tried to a jury.
Great American’s, One Beacon’s, Dornoch’s, Millenium’s and AIG’s bailment
claim was based on discrete theories of liability: Colmar breached its duty to
exercise reasonable care to prevent damage from flooding; Colmar failed to
exercise reasonable care in its remediation efforts to prevent damage to the coffee
beans caused by the flooding of the warehouse. Great American, Dornoch, and
Colmar each stipulated to the value of the damaged coffee beans that were
destroyed. Millenium, AIG and Colmar stipulated to the number of bags of coffee
beans that were destroyed.
At trial, Colmar requested that a jury instruction be given that would
“instruct the jury to allocate the damages pursuant to the different potential
actionable conduct on the part of the defendant.” Specifically, Colmar argued to
the District Court:
in your instruction on Count 2, you tell the jury that the
plaintiff’s claim Colmar breached its duty to act as a
6
reasonably prudent warehouseman, both in failing to
protect the goods at the time of the flooding incident and
in failing to protect the goods from further damage after
the flooding incident.
These are two distinct claims, and yet in this
damages instruction, you are peremptorily telling them
what the damages are. . . . [T]hey need to be instructed
that they have to allocate those damages according to the
incident that caused it.
In denying Colmar’s request, the District Court stated: “I don’t find a basis for
allocation here based upon the evidence of this case.” On appeal, Colmar has not
challenged the District Court’s denial of the request for an allocation instruction.
Thus, that claim is forfeited. See Access Now, Inc. v. Southwest Airlines Co., 385
F.3d 1324, 1330 (11th Cir. 2004) (“[T]he law is by now well settled in this Circuit
that a legal claim or argument that has not been briefed before the court is deemed
abandoned and its merits will not be addressed.”).
The jury returned a verdict for Colmar on the breach of warehouse contract
claim but found for Great American, One Beacon, Dornoch, Millenium and AIG
on their bailment claim. The jury did not find for Colmar on its “Act of God”
affirmative defense. The jury awarded Great American, One Beacon, Dornoch,
Millenium and AIG roughly 40-60% of the stipulated damages.
Great American, One Beacon, Dornoch, Millenium and AIG filed post-trial
motions seeking judgment as a matter of law or a new trial on damages. Colmar
7
also filed motions for judgment as a matter of law and for a new trial. The District
Court awarded Great American, One Beacon, Dornoch, Millenium and AIG
additurs as to their claimed ancillary damages. It also awarded an additur and
entered judgment as a matter of law as to the value of lost coffee for Great
American and Dornoch. It ordered a new trial on the value of lost coffee for
Millenium, AIG and One Beacon. Each of Colmar’s post-trial motions was
denied.
The retrial on the value of the coffee took place on April 12-14, 2005.
Colmar stipulated to the value of Millenium’s and AIG’s coffee beans damaged by
the flood. Thus, the jury was asked to determine the value of One Beacon’s loss
caused by Colmar’s failure to exercise reasonable care. Colmar and One Beacon
stipulated to a fair market value per pound of coffee and that at least 691 bags of
coffee beans owned by One Beacon’s insured were destroyed. In addition, One
Beacon claimed that an additional 3059 bags of coffee were damaged. The jury
rejected One Beacon’s claim, finding that no additional bags had been damaged or
destroyed.
The District Court entered final judgments for AIG on May 24, 2005, and
for Millenium and One Beacon on June 8, 2005. Colmar has timely appealed.
This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
8
III
A
Colmar contends that the District Court abused its discretion when it denied
Colmar’s motion for leave to amend its pleadings to add the anti-subrogration rule
as an affirmative defense. Lexington, AIG’s subrogated property insurer, is also
Colmar’s liability insurer. Colmar maintains that it did not discover that Lexington
was AIG’s insurer until it had completed a Rule 30(b)(6) of the Federal Rules of
Civil Procedure deposition of an AIG representative on July 24, 2003.
Consequently, it asserts that it was unaware of the availability of the defense until
after that date.
On August 15, 2003, Colmar filed a motion for leave to amend its
affirmative defenses, seeking to add an anti-subrogation defense against the claims
brought by AIG. Since Colmar filed its motion for leave to amend after the
District Court’s scheduling order deadline had passed, the District Court indicated
that Colmar had to demonstrate good cause under Rule 16(b) of the Federal Rules
of Civil Procedure before it would consider whether amendment was proper under
Rule 15(a) of the Federal Rules of Civil Procedure. Based upon Colmar’s assertion
that it possessed no knowledge of Lexington’s position as an insurer of AIG prior
to the July 2003 deposition, the District Court initially determined that Colmar had
good cause to amend and, therefore, granted its motion for leave to amend the
9
answer. However, in a motion for reconsideration, AIG presented evidence that
Colmar had in fact been furnished both documents and disclosures indicating that
Lexington was AIG’s insurer as early as June of 2002. Furthermore, on July 24,
2002, AIG specifically disclosed to Colmar that Lexington was one of its insurers.
Relying upon Rule 50 of the Federal Rules of Civil Procedure, the District Court
exercised its discretion to reconsider its previous order and determined that the
evidence presented in support of AIG’s motion for reconsideration was sufficient
to refute the facts upon which Colmar had relied to demonstrate “good cause” for
leave to amend under Rule 16 of the Federal Rules of Civil Procedure. We review
for abuse of discretion the District Court's denial of Colmar’s request for leave to
amend. Fed. Deposit Ins. Corp. v. Morley, 915 F.2d 1517, 1523 (11th Cir. 1990).
It is undisputed that Colmar received documents and disclosures indicating
that Lexington was AIG’s insurer as early as June of 2002. Colmar explains its
delay in requesting amendment of its answer in that “Lexington’s status as an
insurer of AIG is not alone problematic; rather, it is Lexington’s payment of AIG’s
claim and subrogation to AIG’s right of recovery against Colmar that brings the
anti-subrogation rule into play.” However, it is clear that Lexington’s payment of
AIG’s insurance claim was likely inevitable and that, with some investigation,
Colmar could have discovered its possible anti-subrogation defense. “If we
10
considered only Rule 15(a) without regard to Rule 16(b), we would render
scheduling orders meaningless and effectively would read Rule 16(b) and its good
cause requirement out of the Federal Rules of Civil Procedure.” Sosa v. Airprint
Sys., Inc., 133 F.3d 1417, 1419 (11th Cir. 1998). The fact that Colmar failed to
conduct such investigation does not equate to “good cause” for leave to amend
under Rule 16 of the Federal Rules of Civil Procedure. The District Court did not
abuse its discretion in granting AIG’s motion for reconsideration, and denying
Colmar’s motion to amend to add a new affirmative defense.
B
Colmar contends that the District Court erred in not granting its motion for
judgment as a matter of law because One Beacon, Millenium and AIG failed to
prove necessary elements of their bailment claims. “In a bailment situation, the
plaintiff makes a prima facie case for damages when he shows that the bailed
property was delivered to the bailee in good condition and that it was damaged
while it was in the care, custody, and control of bailee.” Parker v. Miracle Strip
Boat & Motors Headquarters, Inc., 341 So. 2d 197, 198 (Fla. 1976); F LA. S TAT. §§
677.204 and 677.403 (2007).
We review a district court's denial of a motion for
judgment as a matter of law de novo, applying the same
standards as the district court. In considering the
sufficiency of the evidence that supports the jury's
11
verdict, we review the evidence “in the light most
favorable to, and with all reasonable inferences drawn in
favor of, the nonmoving party.” If reasonable and fair-
minded persons in the exercise of impartial judgment
might reach different conclusions based on the evidence
presented, the motion should be denied.
Montgomery v. Noga, 168 F.3d 1282, 1289 (11th Cir. 1999) (internal citation
omitted).
1
Colmar contends that Millenium and AIG failed to produce sufficient
evidence establishing their ownership of the damaged coffee beans. According to
Colmar, correspondence and invoices that it sent to AIG’s and Millenium’s brokers
fail to qualify as “documents of title” under the Florida Uniform Commercial
Code, which defines the instrument as follows:
"Document of title" includes bill of lading, dock warrant,
dock receipt, warehouse receipt or order for the delivery
of goods, and also any other document which in the
regular course of business or financing is treated as
adequately evidencing that the person in possession of it
is entitled to receive, hold and dispose of the document
and the goods it covers. To be a document of title a
document must purport to be issued by or addressed to a
bailee and purport to cover goods in the bailee's
possession which are either identified or are fungible
portions of an identified mass.
12
F LA. S TAT. A NN. § 671.201(15) (West 2007). Thus, Colmar argues that Millenium
and AIG failed to establish ownership by only producing correspondence and
invoices that Colmar sent to their brokers. The District Court disagreed.
The record shows that Millenium and AIG were in the business of trading
coffee, and, therefore, they were beneficial owners of lots of coffee held through
independent brokers who had taken delivery of the commodity and stored it with
Colmar. The brokers arranged for the purchase and storage of the coffee, held the
warehouse receipts physically for the owners, and billed the owners for all costs
associated with the broker efforts. It was industry practice for Millenium’s and
AIG’s brokers to act as their agent with respect to the fees associated with coffee
storage; thus, it would seem logical that documentation of the broker-coffee trader
relationship and related fees should sufficiently establish legal ownership of the
coffee.
Additionally, the Statement of Stipulated Facts that was read to the jury
establishes that Millenium and AIG were corporations engaged in the coffee trade
who stored bags of coffee in the warehouse. These stipulations are further
bolstered by additional stipulations which set forth the agreements of the parties as
to the additional costs incurred by Millenium and AIG as a result of damage to the
13
coffee. In light of this evidence, a juror could reasonably conclude that Millenium
and AIG did indeed own the coffee.
2
Colmar also contends that One Beacon, Millenium and AIG failed to
establish that a reasonable warehouseman would have acted differently under the
circumstances. Under Florida law,
[a] warehouseman is liable for damages for loss of or
injury to the goods caused by his or her failure to
exercise such care in regard to them as a reasonably
careful person would exercise under like circumstances
but unless otherwise agreed he or she is not liable for
damages which could not have been avoided by the
exercise of such care.
F LA. S TAT. A NN. § 677.204(1) (West 2007).
Colmar stored perishable commodities in its facility. The warehouse was a
ground level structure located in a low lying area that was prone to flooding.
Evidence was presented that neighboring warehousemen, who were aware of the
region’s propensity for flooding, proactively placed perishables on more than one
pallet to protect them from rising flood waters. Furthermore, as a member of the
Coffee Exchange, Colmar had an affirmative duty to verify that the warehouse was
in compliance with federal, state and local ordinances. That it failed to identify
and remediate the truck wells that Cramco constructed – none of which possessed
14
the necessary pumps or drainage required under local building ordinances –
demonstrates a departure from the standard of care. Finally, when the storm hit
Miami, Colmar did nothing to protect the coffee in the warehouse from flooding.
In light of the facts presented by One Beacon, Millenium and AIG, reasonable and
fair-minded persons in the exercise of impartial judgment might reach different
conclusions regarding whether Colmar negligently breached the standard of care
for a diligent warehouseman. Therefore, the District Court did not err in denying
Colmar’s motion for judgment as a matter of law.
3
Finally, Colmar alleges that even if the One Beacon, Millenium and AIG are
successful in establishing ownership of the coffee and breach of the reasonable
warehouse standard, they failed to provide sufficient evidence to establish that
Colmar’s negligent acts were the actual and proximate cause of the damage to the
coffee beans. Colmar relies heavily upon its contention that the severe storm event
that caused the flooding constituted an “Act of God” and was therefore outside of
its control. Yet, Colmar’s departures from the standard of care, such as storing the
coffee beans in a warehouse at ground level in an area of Miami that is prone to
flooding, failing to identify and remediate the truck wells that Cramco constructed
that did not possess the necessary pumps or drainage required under local building
15
ordinances, and failing to act in any way to protect the coffee beans from flooding
in the warehouse when the storm hit Miami in October 2000, are sufficient to
establish both the actual and legal cause of the coffee bean damage. We must
review the evidence in the light most favorable to One Beacon, Millenium and
AIG. Montgomery, 168 F.3d at 1289. Consequently, we conclude that reasonable
and fair-minded persons in the exercise of impartial judgment might reach different
conclusions based on the evidence presented that, but for Colmar’s negligent acts,
the flood waters would not have entered inside the warehouse and damaged One
Beacon’s, Millenium’s and AIG’s coffee. Therefore, the motion for judgment as a
matter of law was appropriately denied.
C
Colmar argues that the District Court abused its discretion in admitting
irrelevant and highly prejudicial evidence concerning (1) the denial of a building
permit for exterior truck wells at the warehouse because of concerns related to
drainage; and (2) the installation of pumps in the truck wells by a subsequent
tenant to prevent future flooding after Colmar had vacated the premises. “We
review rulings on the admission of evidence and motions for new trial for abuse of
discretion.” Ad-Vantage Telephone Directory Consultants, Inc. v. GTE Directories
Corp., 37 F.3d 1460, 1463 (11th Cir. 1994). Abuse of discretion exists “if the
16
district court ‘made a clear error of judgment . . . or . . . applied an incorrect legal
standard.’” Peat, Inc. v. Vanguard Research, Inc., 378 F.3d 1154, 1159 (11th Cir.
2004) (quoting Alexander v. Fulton County, Ga., 207 F.3d 1303, 1326 (11th Cir.
2000)).
Colmar contends that One Beacon, Millenium and AIG failed to present an
adequate foundation to establish the relevancy and probative value of evidence
regarding the denial of the building permit and the installation of pumps by a
subsequent tenant. Specifically, Colmar alleges that establishing a code violation
existed was a condition precedent to the admissibility of the building permit
evidence. Colmar also maintains that foundational evidence that pumps would
have prevented the severe flooding that occurred was necessary to admit evidence
regarding Colmar’s failure to install pumps.
Colmar was a member of the Coffee Exchange. According to the Coffee
Exchange’s rules, Colmar had an affirmative obligation to ensure that its storage
facility was in compliance with federal, state, and local laws. The District Court
admitted the evidence regarding the denial of the building permit for the exterior
truck wells because “there is arguably, under the Exchange rules, a duty to -- of the
tenant to be informed about what was being done to make sure the product inside
the warehouse was safely handled in accordance with the rules.” Since evidence
17
was presented that DERM denied Cramco’s permit to construct the truck wells due
to inadequate pumps and drains, such information was relevant to a determination
of Colmar’s negligence as a warehouseman. The District Court did not abuse its
discretion in admitting the evidence of DERM’s denial of the building permit.
Colmar also maintains that the District Court abused its discretion in
admitting the testimony of the tenant who leased the warehouse from Colmar after
it vacated the premises. The tenant testified that it had required Cramco to install
new catch basins, pumps and drains in the facility’s truck wells. Colmar contends
that such testimony was inadmissible under Rule 407 of the Federal Rules of
Evidence as a subsequent remedial measure. Rule 407 provides:
When, after an injury or harm allegedly caused by an
event, measures are taken that, if taken previously, would
have made the injury or harm less likely to occur,
evidence of the subsequent measures is not admissible to
prove negligence, culpable conduct, a defect in a product,
a defect in a product's design, or a need for a warning or
instruction. This rule does not require the exclusion of
evidence of subsequent measures when offered for
another purpose, such as proving ownership, control, or
feasibility of precautionary measures, if controverted, or
impeachment.
Rule 407 does not apply to a remedial measure that was taken without the
voluntary participation of the defendant. In re Aircrash in Bali, Indonesia, 871
F.2d 812, 816-17 (9th Cir. 1989) (per curiam). See also Mehojah v. Drummond,
18
56 F.3d 1213, 1215 (10th Cir. 1995) (holding that Rule 407 “does not apply to
subsequent remedial measures by non-defendants.”); TLT-Babcock, Inc. v.
Emerson Elec. Co., 33 F.3d 397, 400 (4th Cir. 1994) (holding that “evidence of
subsequent repairs may be admitted where those repairs have been performed by
someone other than the defendant.”); O’Dell v. Hercules, Inc., 904 F.2d 1194,
1204 (8th Cir. 1990) (holding that “[a]n exception to Rule 407 is recognized for
evidence of remedial action . . . under taken by a third party”); Dixon v. Int’l
Harvester Co., 754 F.2d 573, 583 (5th Cir. 1985) (Rule 407 does not bar evidence
of repairs made by a non-defendant); Lolie v. Ohio Brass Co., 502 F.2d 741, 744
(7th Cir. 1974) (Rule 407 has no applicability “when the evidence is offered
against a party . . . which did not make the changes.”) Steele, Texas Emp. Ins.
Ass’n, Intervenor v. Wiedemann Mach. Co., 280 F.2d 380, 382 (3d Cir. 1960)
(holding the rule excluding evidence of repairs made after an accident is not
applicable where the person who made the repairs is not a party to the suit).
The applicability of Rule 407 to repairs made by a non-defendant is a
question of first impression in this Circuit. Today, we join the seven Circuits that
have agreed that such evidence is not barred. Accordingly, we hold that the
District Court did not abuse its discretion in admitting evidence of repairs to the
warehouse made by a non-defendant.
19
D
Colmar argues that the jury’s verdict with respect to damages was
reasonable and should not have been disturbed by the District Court with a grant of
additurs and a new trial. The District Court concluded that the jury’s determination
with respect to ancillary damages for One Beacon, Millenium and AIG was
inappropriate in light of the stipulations by the parties. Additionally, the District
Court held that new trials were necessary to determine the value of the coffee
beans lost by One Beacon, Millenium and AIG because the jury verdict failed to
conform to the evidence at trial. The District Court based this determination on the
fact that “there [was] a genuine issue of fact as to the number of bags that were lost
and damaged for One Beacon” and “[w]hile [AIG, Millenium and Colmar]
stipulated as to the number of bags of coffee destroyed . . ., there is a genuine issue
of fact as to the value of coffee per pound.”
“‘We review a district court's award of damages under a clearly erroneous
standard.’” Simmons v. Conger, 86 F.3d 1080, 1084 (11th Cir. 1996) (quoting
Davis v. Marsh, 807 F.2d 908, 913 (11th Cir. 1987). The granting of a new trial
based upon alleged inadequacy of the verdict is reviewed for abuse of discretion.
Sentry Indem. Co. v. Peoples, 856 F.2d 1479, 1481 (11th Cir. 1988).
20
Great American, Dornoch, and Colmar each stipulated to the value of the
damaged coffee beans that were destroyed. Indeed, with respect to damages, page
sixteen of the jury instructions specifically indicated that jurors should only “assess
for the loss of the coffee lost for Millenium, AIG, and One Beacon.” The jury
ultimately awarded One Beacon, Millenium and AIG damages that were
significantly less than the amounts stipulated to by the parties.
The Supreme Court held in Dimick v. Schiedt, 293 U.S. 474 (1935), that the
Seventh Amendment prevents a court from increasing a jury’s award or
conditioning the denial of a new trial on the defendant’s acquiescence to an
additur. Id. at 486-87. “Courts recognize an exception to Dimick where the jury
has found the underlying liability and there is no genuine issue as to the correct
amount of damages.” U.S. E.E.O.C. v. Massey Yardley Chrysler Plymouth, Inc.,
117 F.3d 1244, 1252 (11th Cir. 1997).
Although the parties stipulated to the number of bags of Millenium and
AIG’s coffee beans that were destroyed, there remained a genuine issue of fact as
to the price per pound of Millenium, AIG, and One Beacon’s coffee beans, and
how many bags of One Beacon’s coffee beans were lost or damaged. The
stipulations were sufficient to support the District Court’s grant of additur for
ancillary damages; however, the same is not the case for actual damages. Indeed,
21
the District Court correctly recognized that a grant of additur with respect to actual
damages was beyond its discretion. Accordingly, the District Court did not err in
awarding additurs to AIG, Millenium, and One Beacon, and did not abuse its
discretion in granting a new trial regarding actual damages.
E
Finally, Colmar argues that the District Court erred when it awarded One
Beacon, Millenium and AIG the “unearned windfall” of prejudgment interest from
October 4, 2000. “Whether a successful claimant is entitled to prejudgment
interest is a question of state law[,]” subject to de novo review. Venn v. St. Paul
Fire & Marine Ins. Co., 99 F.3d 1058, 1066 (11th Cir. 1996).
Unfortunately, there is no Florida case law that we can cite in this diversity
action wherein that state’s courts have determined whether an insurer can recover
pre-judgment interest as of the date of the loss to the insured. In Argonaut Ins. Co.
v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985), the Florida Supreme Court
held that “when a verdict liquidates damages on a plaintiff’s out-of-pocket,
pecuniary losses, plaintiff is entitled, as a matter of law, to prejudgment interest at
the statutory rate from the date of that loss.” Id. at 215. In Argonaut, the Florida
Supreme Court did not indicate when the date of loss occurs.
22
In National Fire Ins. Co. of Hartford v. Fortune Constr. Co., 320 F.3d 1260
(11th Cir. 2003), citing Florida law, this Court stated that “[w]here the judgment
liquidates the plaintiff’s damages, the plaintiff is entitled, as a matter of law, to
prejudgment interest from the date of that loss.” Id. at 1279. National Fire is not
dispositive of the question before us. National Fire involved the application of the
doctrine of equitable subrogation and not the date prejudgment interest is due as a
matter of law.
In National Fire, an insurance company brought an action against a general
contractor alleging assignment of the rights of a subcontractor to recover contract
proceeds received by the general contractor that exceeded the costs of completion
after the insured subcontractor abandoned completion of his construction projects.
Id. at 1264-65. Thus, National Fire asserted its own right to repayment under the
insurance (surety) contract it entered into with the subcontractor. In National Fire,
this Court based its decision on the right to equitable subrogation. Id.
Colmar did not argue before the District Court that equitable considerations
allowed it to disregard the actual date of loss to the insured under a subrogation
contract. In a motion to alter or amend the judgment, Colmar argued that the
award of prejudgment interest was a manifest injustice under Rule 59(e) of the
Federal Rules of Civil Procedure because “it will have been deprived of its
23
constitutionally protected privileges to right to trial by jury and, moreover, pre-
judgment interest has been assessed it in derogation of Florida law governing this
issue.” Colmar did not assert that it was entitled to equitable relief from the
District Court’s prejudgment interest order. “Arguments raised for the first time on
appeal are not properly before this Court.” Hurley v. Moore, 233 F.3d 1295, 1297
(11th Cir. 2000).
Turning to the question of law presented regarding the date prejudgment
interest should be awarded to an insurer that has indemnified its insured pursuant
to a subrogation agreement, under Florida law, “an insurer is entitled to be
subrogated to any right of action which the insured has against third persons who
caused the injury.” Schwab v. Town of Davie, 492 So. 2d 708, 709 (Fla. Dist. Ct.
App. 1986) (citing Indiana Ins. Co. v. Collins, 359 So. 2d 916 (Fla. Dist. Ct. App.
1978)). Because prejudgment interest from the date of loss is merely an element of
pecuniary damages under Florida law, the right to prejudgment interest from the
date of the insured’s loss would logically appear to be part of the insured’s claim
that the insurer is entitled to under the subrogation and indemnification agreement.
To the extent that an insured could have recovered prejudgment interest from the
date of the flooding, its insurer can also recover from that date as well.
24
Therefore, the District Court did not err in awarding One Beacon, Millenium
and AIG prejudgment interest from the date of their insureds’ loss.
CONCLUSION
We AFFIRM the decision of the District Court.
25
KRAVITCH, Circuit Judge, concurring in part and dissenting in part:
I concur in Parts I through III.D of the majority’s opinion, but I respectfully
dissent from Part III.E. In my view, prejudgment interest should be granted from
the time that the insurance companies paid the claims, not from the date of the
flood.
As an initial matter, I disagree with the majority’s contention that appellant
did not properly preserve its objection to the date of loss from which prejudgment
interest is recoverable. In appellant Colmar’s responses to the plaintiffs’ motions
for prejudgment interest, Colmar explicitly argued that prejudgment interest should
only accrue from the date that the appellees paid their respective claims.
The seminal Florida case concerning prejudgment interest is, as the majority
notes, Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985)
(holding that prejudgment interest is compensation to make the party whole and
should be calculated from the date of the loss). Argonaut, even though it is a
subrogation claim, does not discuss how to determine when the date of loss occurs.
The majority cites Schwab v. Town of Davie for the proposition that “an insurer is
entitled to be subrogated to any right of action which the insured has against third
persons who caused the injury.” 492 So. 2d 708, 709 (Fla. Dist. Ct. App. 1986)
(citing Indiana Ins. Co. v. Collins, 359 So 2d 916 (Fla. Dist. Ct. App. 1978).
26
Neither case, however, discusses prejudgment interest or how to calculate when the
date of loss for the insurer occurs.
Although it appears that there is no Florida or Eleventh Circuit caselaw on
point, there is extensive Florida caselaw making the right to recover prejudgment
interest subject to equitable considerations. See Perdue Farms, Inc. v. Hook, 777
So. 2d 1047, 1054 (Fla. Dist. Ct. App. 2001) (“Depending on the equities of a
given case, an award of prejudgment interest may be a windfall to the plaintiff and
an unfair burden on the defendant.”); Volkswagen of America, Inc. v. Smith, 690
So. 2d 1328, 1331 (Fla. Dist. Ct. App. 1997); Broward County v. Finlayson, 555
So. 2d 1211, 1213 (Fla. 1990) (“Interest is not recovered according to a rigid
theory of compensation for money withheld, but is given in response to
considerations of fairness. It is denied when its exaction would be inequitable.”)
(quotations and citations omitted).
The two circuits that have addressed this issue have disagreed as to when
prejudgment interest should accrue. The Second Circuit found that the general rule
is that the insurer is entitled to all of the damages that the insured would be entitled
to. Mitsui & Co. v. American Exp. Lines, Inc., 636 F.2d 807, 823-24 (2d Cir.
1981) (quoting Mobile & Montgomery Ry. Co. v. Jurey, 111 U.S. 584, 593-94
(1884). Alternatively, the Seventh Circuit has held that insurers can only recover
27
prejudgment interest from the time they have actually suffered a loss, i.e., paid on
the claim. American Nat’l Fire Ins. Co. v. Yellow Freight Sys., Inc., 325 F.3d 924,
936-37 (7th Cir. 2003). The Seventh Circuit panel, while noting that generally the
insurer steps into the shoes of the insured, argued that subrogees are only entitled
to indemnification and thus are “entitled to indemnity to the extent only of the
money actually paid....” Id. at 936 (quoting Maryland Cas. Co. v. Brown, 321 F.
Supp. 309, 312 (N.D. Ga. 1971).
Because of Florida’s clear policy of limiting prejudgment interest to prevent
inequities, I believe that the better rule would be to limit recovery of prejudgment
interest to the date that the insurers paid on the claim.
Not only does Florida’s policy of limiting the recovery prejudgment interest
to prevent windfall profits favor calculating the date of loss from the time the
insurers paid their claim, but the Supreme Court of Florida’s decision that a
plaintiff cannot recover prejudgment interest from her loss unless she suffers
actual, out-of-pocket damages also supports the later date of loss. In Alvarado v.
Rice, Florida’s Supreme Court denied the award of prejudgment interest to a
plaintiff for her medical expenses because she had not actually paid those bills.
614 So. 2d 498 (Fla. 1993). The court expressly noted that if the plaintiff had paid
her bills, she would be entitled to interest from the date she paid. Id. at 499-500.
28
This decision demonstrates the compensatory nature of prejudgment interest. It is
available when costs were incurred, but not before.
Here, the appellees did not suffer a loss until they paid the insurance claims
and thus would gain an inequitable windfall if they received prejudgment interest
for the time before they paid on the policies. Therefore, I respectfully dissent from
Part III.E of the opinion.
29