Seb S.A. v. Sunbeam Corp.

• Decision Date: 05 February 2007
• Docket Number: No. 06-10157.,06-10157.
• Citation: 476 F.3d 1317
• Parties: SEB S.A., Plaintiff, v. SUNBEAM CORPORATION, Sunbeam Products, Inc., Defendants-Third-Party-Plaintiffs-Appellees, Wing Shing International Ltd. (BVI), Defendant-Third-Party-Defendant, Pentalpha Enterprises, Ltd., Defendant-Third-Party-Defendant-Appellant, Global-Tech Appliances, Inc., Third-Party-Defendant.
• Court: U.S. Court of Appeals — Eleventh Circuit

476 F.3d 1317

SEB S.A., Plaintiff, v. SUNBEAM CORPORATION, Sunbeam Products, Inc., Defendants-Third-Party-Plaintiffs-Appellees Wing Shing International Ltd. (BVI), Defendant-Third-Party-Defendant Pentalpha Enterprises, Ltd., Defendant-Third-Party-Defendant-Appellant Global-Tech Appliances, Inc., Third-Party-Defendant.

No. 06-10157.

United States Court of Appeals, Eleventh Circuit.

February 5, 2007.

Jill A. Pryor, Bondurant, Mixson & Elmore, Atlanta, GA, William Dunnegan, Perkins & Dunnegan, New York City, for Pentalpha Enterprises, Ltd.

Padma G. Hinrichs, Mark F. Bideau, Greenberg, Traurig, P.A., West Palm Beach, FL, Elliot H. Scherker, Julissa ROdriguez, Greenberg, Traurig, P.A., Miami, FL, for Sunbeam Defendants.

Appeal from the United States District Court for the Southern District of Florida.

Before PRYOR and FAY, Circuit Judges, and STEELE,^* District Judge.

PRYOR, Circuit Judge:

The issue in this appeal is on what date prejudgment interest ceased to accrue and postjudgment interest began to accrue on a jury verdict against Sunbeam Corporation and Sunbeam Products, Inc., (collectively "Sunbeam") and in favor of Pentalpha Enterprises, Inc., for breach of contract. In a previous appeal, this Court reversed in part the judgment entered by the district court on the jury verdict, because the calculation of prejudgment interest was erroneous. On remand, the district court determined that prejudgment interest ceased to accrue and postjudgment interest began to accrue on the date of its original judgment. Because we conclude that prejudgment interest ceased to accrue and postjudgment interest began to accrue on the date of the amended judgment, we reverse.

I. BACKGROUND

This controversy based on diversity jurisdiction arose from a complaint filed by SEB S.A. against Sunbeam, Global-Tech Appliances Inc. (formerly known as Wing Shing International Ltd. (BVI)), and Pentalpha for patent infringement. Sunbeam later filed a third-party complaint and a cross-claim against Global-Tech and Pentalpha for indemnification, and Pentalpha filed a counterclaim against Sunbeam for fraud and breach of contract. The cross-claim for indemnification and the counterclaim for breach of contract proceeded to a jury trial.

On January 16, 2004, the jury returned its verdict. On the claim for breach of contract, the jury awarded Pentalpha $6,600,000. The district court entered judgment on February 11, 2004, and awarded Pentalpha $6,600,000 plus $32,909.59 of prejudgment interest for the period from the date of the jury verdict to the date of the judgment.

On appeal, this Court affirmed the jury verdict, but remanded with instructions to award additional prejudgment interest. SEB S.A. v. Sunbeam Corp., 148 F.App'x 774, 801 (11th Cir.2005). The opinion of this Court explained that Pentalpha was entitled to prejudgment interest from June 30, 2001, not the later date of the jury verdict. Id. at 796, 801. The mandate issued on September 12, 2005, and incorporated the opinion by reference.

On December 12, 2005, the district court entered an order and an amended judgment, in which it corrected its error. The district court also determined that prejudgment interest ceased to accrue and postjudgment interest began to accrue on February 11, 2004, the date of its original judgment. Pentalpha objected that Florida law required that prejudgment interest accrue until the date of the amended judgment and Federal Rule of Appellate Procedure 37 required that postjudgment interest begin to accrue on that date.

II. STANDARD OF REVIEW

We review de novo both the interpretation of a federal rule of procedure, Vencor Hosps., Inc. v. Standard Life & Accident Ins. Co., 279 F.3d 1306, 1308 (11th Cir.2002), and the calculation of prejudgment interest, when that calculation depends on the construction of state law, Alphamed, Inc. v. B. Braun Med., Inc., 367 F.3d 1280, 1285 (11th Cir.2004).

III. DISCUSSION

To resolve this appeal, we must address two matters: first, under Federal Rule of Appellate Procedure 37, when postjudgment interest began to accrue; and second, whether prejudgment interest accrued until that date. We address each issue in turn.

A. Under Rule 37, Postjudgment Interest Began to Accrue on the Date of the Amended Judgment.

Pentalpha contends that the district court exceeded the scope of its authority under Rule 37. Pentalpha asserts that, under Rule 37(b), the district court had no choice but to begin postjudgment interest on the date of the amended judgment. We agree.

Rule 37 governs the award of postjudgment interest by a district court after an appeal. See Fed. R.App. P. 37. When the appellate court affirms "a money judgment in a civil case," postjudgment interest "is payable from the date when the district court's [original] judgment was entered," unless the law provides otherwise. Fed. R.App. P. 37(a). When the appellate court "modifies or reverses a judgment with a direction that money judgment be entered in the district court, the mandate [the appellate court issues] must contain instructions about the allowance of interest." Fed. R.App. P. 37(b). "If the mandate is silent about interest, . . . the district court on remand has no choice but to begin postjudgment interest with entry of the postremand judgment." 20A James Wm. Moore et al., Moore's Federal Practice § 337.12[3] (3d ed.2006); accord 16A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3983 (3d ed.1999).

The default rule that postjudgment interest accrues from the date of the amended judgment when the mandate is silent about interest derives from Briggs v. Pennsylvania Railroad Co., 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948), which Rule 37 "codifie[d]." DeLong Equip. Co. v. Wash. Mills Electro Minerals Corp., 997 F.2d 1340, 1341 (11th Cir.1993). The Briggs rule is that a district court "faced with a mandate to award $x . . . may not award $x plus interest from an earlier date." Id. at 1342. A party "who conceives himself entitled to interest from a date other than the date of entry of judgment in accordance with the mandate" should petition the court of appeals to recall and amend the mandate. Fed R.App. P. 37 advisory committee's note; see also DeLong, 997 F.2d at 1341 (amending mandate with respect to postjudgment interest on motion by plaintiff).

The default rule derived from Briggs governs this appeal. In the first appeal, we modified the original money judgment against Sunbeam. Contrary to the assertion of Sunbeam, it is irrelevant that we affirmed the jury verdict, because we modified the amount of prejudgment interest, which "`forms part of the actual amount of a judgment on a claim.'" Ins. Co. of N. Am. v. Lexow, 937 F.2d 569, 572 n. 4 (11th Cir.1991) (quoting FIGA v. R.V.M.P. Corp., 874 F.2d 1528, 1533 (11th Cir.1989)); see also Air Separation, Inc. v. Underwriters at Lloyd's of London, 45 F.3d 288, 290 (9th Cir.1995) (describing prejudgment interest as a "component of a district court's monetary judgment").

Because we did not provide instructions in our mandate or opinion regarding postjudgment interest, the district court had no choice but to begin postjudgment interest on the date of its amended judgment. When the district court determined that postjudgment interest instead began on the date of its original judgment, it exceeded the scope of its authority under Rule 37. "`[T]he appropriate procedure [was for Sunbeam] to file a motion to reform the mandate under [Rule] 37.'" Tronzo v. Biomet, Inc., 318 F.3d 1378, 1382 (Fed.Cir. 2003) (quoting Vickers v. Chiles Drilling Co., 882 F.2d 158, 159 (5th Cir.1989)).

B. Prejudgment Interest Ceased to Accrue on the Date of the Amended Judgment of the District Court.

The remaining question is whether prejudgment interest ceased to accrue on the date of the original judgment, as the district court concluded, or the date of the amended judgment. If prejudgment interest ceased to accrue on the date of the original judgment, there will be a gap of nearly two years for which Pentalpha is not awarded any interest. "In a diversity case we follow the state law governing the award of [prejudgment] interest," Royster Co. v. Union Carbide Corp., 737 F.2d 941, 948 (11th Cir.1984), and Pentalpha contends that Florida law requires that prejudgment interest accrue until the date of the amended judgment. We agree.

The Supreme Court of Florida has held that a plaintiff is entitled to prejudgment interest as a matter of law. Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212, 215 (Fla.1985). The computation of...